Purchasing a vehicle as a Sole Trader, depreciation & GST

 Author: Bruce4Tax(Taxicorn)Taxicorn

14 June 2021

I'm sole trader and I am wanting to purchase a new vehicle for $34,990. My vehicle to private use is currently 80% business. I have two questions:1. Can I elect to depreciate the vehicle over 2 years? If so, how would this work?

No - immediate write-off or Div 40 rates ( if you can opt out)

2. I will be borrowing the money to pay for the vehicle, can I claim 80% of the interest payments on the loan for the duration of the loan (until my vehicle is paid off)?

Yes - as long as your log book is valid, and your usage does not change.

3. I have just registered for GST. If I purchase the vehicle prior to 30th June 21, will I be eligible to claim the GST paid in this quarter, even though the vehicle will not be deliverd until next month?

I don't think you have bought it till it is delivered - for example, I have ordered a car, but it was never supplied because it suffered hail damage before delivery. I had to choose another.

ATO says you need the tax invoice, and you do not get that till delivery.

https://www.ato.gov.au/business/gst/claiming-gst-credits/when-you-can-claim-a-gst-credit/