You can claim a deduction for motor vehicles expenses that are part of the everyday running of your business – but you can only claim the business portion if your vehicle is for both business and private use.

Depending on whether you’re a sole trader, partnership, company or trust and the type of motor vehicle you drive (for example, a car, ute or motorcycle), you may be able to use the:

  • cents per kilometre method – for claims up to 5,000 business kilometres per car, at a rate of 72 cents
  • logbook method – where you need to keep a logbook for at least 12 continuous weeks and work out the percentage of business use for each expense
  • actual costs method – where you can only claim the actual costs of expenses incurred based on receipts.

If you use the logbook or actual costs methods, you can generally claim a deduction for depreciation. For the 2020–21 income year, the limit you can use to work out your claim is $59,136, or the cost of the vehicle if it’s under this amount.

You need to keep records showing how you calculated your claim for five years.

Remember, registered tax agents and BAS agents can help you with your tax.