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Edited version of your written advice
Authorisation Number: 4140047360579
Date of advice: 21 February 2017
Ruling
Subject: Losses for vehicle hire.
Question
Are you entitled to a deduction for the cost of vehicle hire incurred in the course of your work?
Answer
Yes.
Expenses incurred by you to carry out their duties driving a vehicle for payment are incurred in gaining or producing assessable income and, therefore, are allowable deductions under section 8-1 of the ITAA 1997.
This ruling applies for the following period:
Year ending 30 June 2017
The scheme commenced on:
1 July 2016
Relevant facts and circumstances
You are a self-employed professional driver.
You hire a vehicle on a weekly hire basis.
You have been receiving insurance payments which represent the difference between what you were earning before an incident and the amount you are now able to earn.
As part of the agreement with the insurer you are required to work a certain number of hours per week, which at present has been the maximum you have been able to work due to your injury.
Because of your injury you are unable to work a full shift, and as you pay for the hire on a weekly basis, you are paying more for the vehicle hire than you earn driving it.
You have incurred a loss for the financial year, which is the difference between what you paid to hire the vehicle, and the income from driving it.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 8-1
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