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  • Claiming motor vehicle expenses as a sole trader or partnership

    If you operate your business as a sole trader or partnership (when at least one partner is an individual) you can claim a deduction for the business use of a motor vehicle your business owns, leases or hires under a hire purchase agreement.

    If you use the motor vehicle for both private and business purposes, you must exclude any private use of the vehicle from your claim.

    How you calculate your deduction depends on whether your vehicle is a car or other vehicle.

    Cars

    A car is defined as a motor vehicle (excluding motor cycles or similar vehicles) designed to carry a load less than one tonne and fewer than nine passengers. Many four-wheel drive vehicles are included in this definition.

    When you work out your deduction, you can use the cents per kilometre method (up to 5,000 business kilometres per car) or the logbook method.

    When choosing a method for your deduction, you:

    • can use different methods for different cars
    • can change methods from year to year
    • must keep appropriate records.

    Before 1 July 2015

    If you are completing a 2014–15 or earlier years return you may be able to use other methods that were available before 1 July 2015.

    Next steps:

    See also:

    Other vehicles

    Other vehicles (that are not cars) are motorcycles or vehicles with a carrying capacity of:

    • one tonne or more, such as a utility truck or panel van
    • nine passengers or more, such as a minivan.

    When working out your claim, you need to use the actual costs of your motor vehicle expenses. Actual costs are based on receipts for all expenses incurred. You can use a logbook or diary to separate private from business-related trips.

    Last modified: 20 Nov 2018QC 33877