Travelling by your car to work 

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If you’re required to use your car for work, you are entitled to a deduction for the costs which you incur (only work related). This specifically excludes the cost of the commute from home to work, except in very limited circumstances (see below).

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Typical situations where you might be able to claim for using your car for work include:

• Traveling between workplace sites during the working day

• Traveling directly from one job to another where you have a second job (provided you don’t go home first)

• Traveling to a business related meeting with a client, supplier or prospect

• Traveling to a work-related course

 

There are two ways you can make this claim:

• Cents per kilometre. You can claim a flat rate of 66c per kilometre for every business kilometre you cover. You’ll need to keep a diary of all work-related journeys so you can work out how many kilometres you’ve travelled for work. This method can only be used for claims up to 5,000 km’s per vehicle. In case you haven’t kept records on your routine work related travels, contact TaxCrop for help!  

 

If you change your car part way through the year, you can claim 5,000km’s for both vehicles. Or else, make sure you use your second car after first 5,000 work related kilometers!

Generally, if you travel more than 5,000km’s per year in a particular vehicle, you’ll need to use the logbook method in order to maximize your claim.

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• Logbook. This is a way of claiming the actual expenses you’ve incurred in running your vehicle for work, such as fuel, servicing, insurance and depreciation. Deduction claims usually work our larger using the logbook method but the record-keeping requirements are more onerous. For a start, you’ll need to keep a logbook – but only for a representative twelve week period. In the logbook, you’ll exhaustively record all your journeys – business and private – so that at the end of the logbook period, you can work out the proportion of business use for your vehicle. That proportion can then be applied to all your car expenses over the year (and over the next four years too since, once you’ve done it, the logbook is good for five years). Then, you’ll need to keep records, such as receipts or invoices, for everything you spend on your motor vehicle, so you can claim the appropriate business percentage of that expense when you come to complete your tax return.

 

You can’t claim a deduction for home to work travel. This is regarded as private expenditure. There can be exceptions, may be you need to carry bulky goods or you started working at home and then you are needed to be at the regular workplace! 

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Other travel related expenses

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To the extent you incur a cost which isn’t reimbursed by your employer, there are lots of other items you can claim. Remember all these must be work-related and mustn’t be connected to your journey from home to work:

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• Bridge/tunnel tolls

• Public transport fares

• Airfares

• Car parking

• Taxi fares

 

You can’t claim the cost of fines for speeding, parking infringements or other motoring offences.

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In addition there are provisions for overnight meal and accommodation expenses. Obviously these expenses should be in relation with your work. In case you get an allowance from your employer on these, the allowance is taxable but a deduction can be claimed for costs incurred. 

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Other situations which can lead to travel deductions

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As well as work-related travel, you might also be able to claim travel (using the same rules outline above) in these situations:

• When you attend a work related course or conference. If the conference is local, you can claiming mileage or transport costs. If the course is interstate (or overseas), you can claim airfares, accommodation and meals

• Visiting a tax agent. When you get your tax return done (or visit your agent for tax advice), the fee you pay is tax deductible and in addition, you can claim any related travel expenses.

You can always contact TaxCrop to check what you can do to maximize your deductions. 

Onething you must remember is, come the tax time it is hard to improve your deductions. Let us build your case. So, better contact us sooner rather than later. And good thing is, talking to us doesn’t cost you a penny!

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