Currently there are four methods which can be used to claim motor vehicle expenses: the cents per kilometre method, the log book method, the 1/3rd of actual expenses method and the 12% of cost method.
The last two methods mentioned are rarely used and the 2015 Federal Budget proposes to remove them from use – leaving the cents per kilometre method and log book method.
Each of the remaining methods have specific documentation and record keeping requirements and you should familiarise yourself with these, especially if you are required to switch from one of the other methods.
The second significant change to claiming motor vehicles expenses relates to the cents per kilometre method. There are currently three separate rates to be applied depending on the engine size of the vehicle owned and used – these will be replaced by a single rate of 66 cents per kilometre up to 5,000 kilometres per year.
These changes are expected to commence on 1st July, 2015…