New rules from the ATO now limit the methods of claiming motor vehicle expenses to the cents per kilometre method and the log book method – and if you’re choosing the log book method then there’s a few things you should know!
You can pick up a pro forma logbook from most stationery stores and each record is valid for 5 years, but should be reviewed regularly to ensure the business percentage calculated remains appropriate.
The ATO website lists the requirements of a logbook to include:
- when the logbook period begins and ends
- the car’s odometer readings at the start and end of the logbook period
- the total number of kilometres the car travelled during the logbook period
- the number of kilometres travelled for each journey recorded in the logbook (if you made two or more journeys in a row on the same day, you can record them as a single journey). You will need to record the
- start and finishing times of the journey
- odometer readings at the start and end of the journey
- kilometres travelled
- reason for the journey
- the business-use percentage for the logbook period
- the odometer readings at the start and end of each income year you use the logbook method
You will see that I’ve drawn attention to the “Reason for the Journey” above – you should ensure that your explanations are detailed as this is an area the ATO are looking into and insufficient details may result in an unfavourable adjustment to your logbook – we don’t want that!!