You can claim a deduction for work-related car expenses if you use your own car in the course of performing your job as an employee, for example, to:
If you receive an allowance from your employer for car expenses, it is assessable income and the allowance must be included on your tax return. The amount of the allowance will usually be shown on your payment summary.
Most people can’t claim the cost of travel between home and work because this travel is private.
There are some changes to work-related car expense deductions from 1 July 2015.
The government has simplified the car expense deductions for 2015–16 and future income years. From 1 July 2015, the one-third of actual expenses method and 12% of original value method have been abolished.
The two methods available from 1 July 2015 are:
Cents per kilometre method – The cents per kilometre method is available for use with some changes. Separate rates based on the size of the engine are no longer available from 1 July 2015. Under the revised method, individuals use 66 cents per kilometre for all motor vehicles for the 2015–16 income year. The Commissioner of Taxation will determine the rate for future income years.
Logbook method – Your claim is based on the business-use percentage of the expenses for the car. Expenses include running costs and decline in value but not capital costs, such as the purchase price of your car, the principal on any money borrowed to buy it and any improvement costs.
To work out your business-use percentage, you need a logbook and the odometer readings for the logbook period. The logbook period is a minimum continuous period of 12 weeks.
You can claim fuel and oil costs based on either your actual receipts or you can estimate the expenses based on odometer records that show readings from the start and the end of the period you had the car during the year.
You need written evidence for all other expenses for the car.