Using your vehicle for work? Find out what expenses could be tax-deductible and a way to keep track of them.
What vehicle-related expenses could be tax deductible? This is a recurring question for many small businesses, especially during the start-up phase. Whether you’re a tradie starting your own plumbing business, or an employee for a courier service, one of the first things that come to mind is work claims. With a dedicated ute or small car, it suddenly seems like every single drive is claimable. However, costs associated with operating a vehicle or truck are only tax deductible under certain circumstances. This may seem puzzling at first, but claiming vehicle expenses really isn’t all that complicated.
Simply put, if you run a business that travels between two places of work, carries specialised tools or equipment, delivers or collects supplies, attends work-related conferences, or visits clients and suppliers for meetings, you may be able to claim these trips as business expenses.
However, if your business has employees that use your business vehicles for private use (including driving to and from work) then you may need to pay Fringe Benefits Tax (FBT) on the private use. Maintaining a logbook may assist in reducing the FBT liability. We strongly recommend you consult your accountant or tax adviser.