One-third of actual expenses
This method is not available from 1 July 2015.
If you use this method before 1 July 2015:
- you can claim one-third of your car expenses
- your car must have travelled more than 5,000 business kilometres during the income year
- you must have written evidence of your fuel and oil costs, or odometer readings on which your estimates are based
- you must have written evidence of all your other car expenses.
You must also keep records that show:
- your car’s odometer readings at the start and end of the period during which you owned or leased it during the income year
- the car’s engine capacity, make, model and registration number
- how you worked out your business kilometres and any reasonable estimate you made.
Kosta’s vehicle expenses totalled $9,000 for the income year. These costs were for:
- fuel and oil
- registration and insurance
- interest on a loan to buy the vehicle
- repairs and maintenance
- depreciation or lease payments.
Kosta met all the other requirements for claiming under this method. He worked out he could claim $3,000, as follows:
End of example
Changes from 1 July 2015
From 1 July 2015, the one-third of actual expenses method has been abolished. This means you will not be able to use this method to claim your car expense deductions in your 2016 and future tax returns.
From 1 July 2015, if you want to claim:
If you use this method, you can claim one-third of your car expenses; however, your car must have travelled more than 5,000 business kilometres during the income year.