Motor Vehicle Expenses for Businesses

As a business owner, you may be able claim a tax deduction for expenses for motor vehicles – cars and certain other vehicles – used in running your business.

For income tax purposes the ATO defines a car as a vehicle that is designed to carry less than nine people and has a carrying capacity of under one tonne. Other vehicles include motorcycles and vehicles that carry nine or more people or have a carrying capacity of more than one tonne – these are most commonly larger utes and minivans. To claim a deduction for your businesses expenses the vehicle must be owned, leased or under a hire-purchase agreement with the business.

What can you claim?

The most common motor vehicle expenses you can claim at tax time are:

·         Fuel and oil

·         Repairs and maintenance

·         Lease payments

·         Insurance

·         Registration

·         Depreciation/Decline in value of the vehicle

In most cases, you must have a valid logbook.  The logbook is used to determine your business use percentage/portion that you can claim.

How to claim a deduction depends on your business structure.  For more information please contact us or visit the ATO.