The Victorian State Budget 2017: Winners or Losers
Log Book Method for claiming work related car running and maintenance expenses:
If you use your car for work related travel and such a travel exceeds 5000Kms a year, then the article below shall be of benefit to you. Each financial year we see many clients who do not maintain a log book and lose legally available tax dollars only because they have not maintained proper records. With numerous available apps, softwares, a simple excel or a $6 log book from office works all achieve the same objective! They all are merely tools that aid you in maintaining a log book record for your work related car kilometers. A popular myth is that a log book needs to be maintained throughout the year! Keep reading below to find out what you need to do, in order to ensure proper records are kept to meet the tax obligations in case of a review by the tax office.
If you are carrying out a business operation or your work requires plenty of travel or you receive travel allowance, then you must keep in mind and ensure records are kept of your travel kilometers using a log book. If you are unaware of this method and how you could claim motor vehicle expenses for work then you could potentially be throwing away money that should be back in your own pocket, the log book is explained below.
This method enables you to filter the proportion of business related car expenses from the entire car use that can be claimed on your tax return. In effect a percentage is derived in relation to business/work use Vs personal use of your vehicle. This is the ATO’s standard to claim travel expense that are significant in nature.
While a lot of people tend to get confused on how to classify what is work related, keeping appropriate log book records would simplify the task.
The Logbook must contain the following details:
- Date for each journey
- Start and finish for each journey
- Start and finish odometer reading for each journey
- Total number of kilometers for each journey
- Reason for each journey. (Business Vs Personal)
- Start and finish date for the logbook period.
- Start and finish odometer reading for the logbook period
- Total number of kilometers traveled during the period
- Business use percentage for the period
So, what are “vehicle expenses” in the eyes of the ATO?
Vehicle expenses include:
- Fuel and oil.
- Repairs and maintenance
- Car loan interest
- Car lease payments
- Registration
- Insurance
- And other costs that form part of maintaining a Vehicle.
- Vehicle depreciation
Vehicle expenses do not include:
- The purchase cost of the car
- Parking tickets, speeding and other fines
- Costs associated with beautification of vehicle
The ATO requires you to keep records of continuous 12 weeks period for the financial year to be able to claim the vehicle expenses.
If you are still unsure about the logbook method or have any enquiries, please feel free to contact our team. We will be more than happy to answer any question you may have.
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