When to use this method
Only use this method if you are a sole trader or partnership (where at least one partner is an individual) claiming for a car.
The cents per kilometre method:
- uses a set rate for each kilometre travelled for business
- allows you to claim a maximum of 5,000 business kilometres per car, per year
- doesn't require written evidence to show exactly how many kilometres you travelled (but we may ask you to show how you worked out your business kilometres, for example diary records)
- uses a rate that takes all your vehicle running expenses (including registration, fuel, servicing and insurance) and depreciation into account.
Rates
Use the rate for the income year for which you are claiming a deduction.
How you use this method
To work out how much you can claim, multiply the total business kilometres you travelled by the rate.
You also need to:
- apportion for private and business use
- understand the expenses you can claim
- keep the right records