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Motor vehicles and logbook requirements

Motor vehicles and logbook requirements

Daniel Pegdon

In most cases, having a valid car logbook is beneficial for both: claiming a personal tax return deduction for work related travel cost using your own car and calculating the taxable value of a car fringe benefit, when the car is provided by an employer.

Record keeping requirements in this area are strict, therefore, we believe it is a good opportunity for us to detail or remind you of your record keeping requirements under this method.

Logbook requirements
A separate logbook must be kept for each vehicle for a continuous 12-week period and must contain:
  • When the log book period begins and ends.
  • The car’s odometer readings at the start and end of the logbook period.
  • The total number of kilometres the car travelled during the logbook period.
  • The number of kilometres travelled for each journey.
  • The odometer readings at the start and end of each subsequent income year your logbook is valid for.
  • The business-use percentage for the logbook period based on the business use of the vehicle.
  • The make, model, engine capacity and registration number of the car.
The 12-week period may overlap two income years provided it includes part of the year. In general, a logbook will be valid for five years assuming business use is consistent throughout this period.

What needs to be recorded in a logbook?
For each trip, the following must be recorded:
  • The date the trip began and ended
  • Odometer readings at the start and end of each trip
  • Kilometres travelled during the journey
  • The purpose of the trip
These entries must be made as soon as possible after the trip. Simply stating ‘business trip’ may not suffice and the ATO expect some more information in relation to the journey to establish whether the purpose of the trip was for business or private purposes. It is best practice to include further details (e.g. name of client, supplier etc.).

If the 12-week period is not representative of the whole year, you may have to adjust your business percentage (i.e. upward or downward). If your pattern has changed substantially during the year, the logbook may no longer be valid, and you may need to keep a new log book.

Is travel from home to work business related?
It should be noted that except in limited circumstances, a trip that starts or ends at your home is generally considered private in nature. Some examples in which a journey that starts or ends at home may become business related includes:
  • Home is your place of business (this does not include a home office).
  • Carrying essential bulky tools and equipment that are unable to be stored at your worksite.
  • Travelling to or from an alternative place of work.
In the event of an Australian Taxation Office (ATO) review/audit, a copy of the log book will ordinarily be required to be provided as part of substantiating your business usage and ensuring you hold a valid log book is critical to supporting your claim.
Applications exist on mobile devices that you may be able to utilise provided they can satisfy all the requirements above to calculate business usage on trips over a 12-week period. The ATO have an application, myDeductions, which may assist you in meeting these requirements.

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More information
For more information on motor vehicles and logbook requirements, please contact your local Moore Australia advisor.