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  • Claiming motor vehicle expenses as a sole trader

    If you operate your business as a sole trader you can claim a deduction for the business use of a motor vehicle your business owns, leases or hires under a hire purchase agreement. Motor vehicle expenses include:

    • fuel and oil
    • repairs and servicing
    • interest on a motor vehicle loan
    • lease payments
    • insurance
    • registration.

    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 of 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 or the logbook method. When choosing a method for your deduction, you:

    • can use our work-related car expenses calculator to work out which method gives you the best result
    • can use different methods for different cars
    • can change methods from year to year
    • must keep appropriate records.

    If you are completing a previous year's return you may be able to use other methods available prior to 1 July 2015.

    Other vehicles

    Your vehicle is considered not to be a car if it is:

    • a vehicle with a has a carrying capacity of one tonne or more, such as a utility truck or panel van
    • a vehicle with a carrying capacity of nine passengers or more, such as a minivan
    • a motorcycle.

    If your vehicle is considered not to be a car, you can only claim the actual cost of your motor vehicle expenses. You must keep records of these expenses.

    Next steps:

    See also:

     

    Last modified: 08 May 2018QC 33877