Claiming car expenses will change dramatically from 1 July 2015.
The one third expenses and 12% of cost methods will be removed. Further, the cents per kilometre method will be reduced to a single rate of 66 cents per kilometre regardless of engine size. Now, individuals will only be able to choose between the cents per kilometre method or logbook method to claim car expenses.
Tactica recommends that you complete a logbook for your vehicle if you have been claiming the one third or 12% cost method in order to expand the possible deductions available for 2016. This is done by maintaining a logbook for a continuous 12 week period and specifying business and personal travel.
For the log book to be valid the log book must record the following:
- The date the log book begins and ends;
- The odometer readings at the start and the end of the period;
- The total kilometres travelled during the period;
- The total kilometres the car travelled for income producing purposes;
- The total kilometres travelled for income producing purposes expressed as a percentage of the total kilometres travelled.
The following entries must be made at the end of each journey or as soon as possible afterwards:
- The date the journey began and ended;
- The odometer readings at the start and end of the journey;
- The number of kilometres travelled on the journey; and
- A clear description of the reason the journey was made.
There are several ATO approved digital apps available that help you maintain a Logbook. We suggest exploring the various apps when to help complete your logbook. Two of these apps include ATO Vehicle Logbook and Logbook Me.
If you would like more information about changes to logbook deductions please contact Tactica Partners on 9387 5637.
Please Note: Many of the comments in this article are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.