Here are 4 things to keep in mind when claiming motor vehicle expenses – such as fuel, oil, servicing and registration – for your business.
If you operate your business as a sole trader or partnership (where at least one partner is an individual), the method you must use to calculate your deduction depends on the type of vehicle. For cars, you must use either the cents per kilometre or logbook method. For all other vehicles, you must use the actual costs method, where you claim the actual costs of expenses you incurred based on receipts.
If you use the logbook or actual costs method, remember you can only claim the business-use portion of your motor vehicle expenses.
If you are a company or trust, you must use the actual costs method to work out the deductions you are entitled to, regardless of the type of motor vehicle you use.
If you use the logbook or actual costs method, you can only claim depreciation or decline in value for the business-use portion of the motor vehicle. The maximum you can claim as a deduction for the depreciation of your car is $60,733 for the 2021–22 financial year or the cost of the vehicle (whichever is less). You may be eligible to claim depreciation under the temporary full expensing rules.