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Edited version of private advice
Authorisation Number: 1051617483901
Date of advice: 11 December 2019
Ruling
Subject: Motor vehicle expenses - deduction
Question
Am I able to claim a deduction for car expenses incurred during the course of my employment when in receipt of a car allowance?
Answer
Yes. You are able to claim a deduction for car expenses incurred during the course of your employment when in receipt of a car allowance. The general rules for claiming a deduction are found in section 8-1 of the Income Tax Assessment Act of 1997. Section 8-1 of the Income Tax Assessment Act of 1997 allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income except where the outgoings are of a capital, private or domestic nature.
A deduction is not allowable merely because an allowance is received. To be deductible, an expense must be actually incurred and meet the requirements in section 8-1 of the Income Tax Assessment Act 1997 as outlined above. You can claim a deduction for work-related car expenses if you use your own car in the course of performing your job as an employee. If the travel was partly private, you can claim only the work-related part. Generally, travel from home to work is not deductible. However, a deduction is allowable between home and work if costs can be attributed to the transportation of bulky equipment rather than to private travel between home and work.
For more information see our pages:
Calculating car expenses: QC 31951
Work related car expenses: QC 59092
Car and travel expenses: QC 57987
Please note - The car allowance will need to be included as assessment income under 'Allowances' on your tax return.
This ruling applies for the following period:
Year ending 30 June 2019
The scheme commences on:
1 July 2018
Relevant facts and circumstances
You are a service engineer/technician employed by XX.
You use your own car for work and your job requires you to visit various sites within the XXXX metropolitan area for service and maintenance of building management systems /heating, ventilation and air conditioning equipment.
You are required to carry an 8 foot ladder, electrical tools and replacement equipment including controllers, sensors and wire spools home from work with you each night.
Occasionally you are required to attend building sites to service equipment after hours as part of your employment.
There are no dedicated storage facilities for equipment required as part of your job at any sites you attend as part of your employment.
You receive an annual car allowance of XXXX from your employer.
You maintain a log book to enable you to claim the work related portion of your car expenses.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 8-1
Income Tax Assessment Act 1997 section 28-12
Income Tax Assessment Act 1997 section 28-90