How to claim your work-related car use at tax time


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Do you use your car for work? If so, you should claim a tax deduction for all those journeys you undertake while on business (excluding the commute between home and work).

Until recently, there were four ways of working out your tax deduction for work-related car use, of varying degrees of complexity. However, from the current tax year there are only two:

Cents per kilometre

work related tax deduction car

This is the simplest method but is available only if you use your car for less than 5000 business kilometres a year. Basically, you claim a set figure per business kilometre travelled. In the past, there were different rates depending on how powerful your car's engine was. Now there is only one rate - 66c per kilometre.

Log book

You basically claim a proportion of all your car-related expenses, including fuel and servicing. It generally produces a bigger deduction but the need to keep receipts, log books, etc, can be a burden.

Depending on what you have done in the past, when you complete your 2015-16 tax return you might have to choose a new method.

That might seem a long way off but, remember, if you adopt the log-book method you will need to keep a log for a typical 12-week period before the end of the tax year, and you'll have to save all your receipts. So you probably should start now.

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Mark Chapman is director of tax communications at H&R Block, Australia's largest firm of tax accountants, and is a regular contributor to Money. Mark is the author of Life and Taxes: A Look at Life Through Tax.