How do I claim car expenses?
Can I claim car expenses when I drive my car from home to work? The answer is NO because the travel is private even if you do minor tasks on the way to work, such as deposit cash in the bank or collecting the mail.
You can claim car expenses if or when:
- You travel between two places of employment and neither of them is your home
- You drive from home to a work-related workplace that is not your usual workplace, i.e., for a conference, meeting, or inspecting work at the site.
- You must use your vehicle to carry bulky or heavy tools to and from work and you are not able to store them at work
There are two ways to claim car expenses:
Cents per kilometre method
- In the 2021/2022 tax year, the rate is 72 cents per km
- Can only claim up to 5,000 business kilometres per year
- No logbook is required but a diary needs to be kept on the purpose and distance of the business journey
- This is to work out the business percentage of car expense
- You own the car and have paid for the car expenses
- Keep all the invoices and receipts of the car expenses, such as petrol, registration, insurance, and services.
- Logbook needs to be recorded for each journey for a continuous period of at least 12 weeks and must be updated every five years:
- Odometer reading at the beginning and end of the journey
- Kilometres travelled
- Purpose of the journey
Please contact us if you need more detail on this.