Author: Taxduck(Taxicorn)Taxicorn 21 June 2025
Yes. A sole trader is an individual operating a business. Expenses on a car you own if you use for business purposes can be claimed,
Logbook method | Australian Taxation Office
Q2. Yes. Although what the cents/km rate will be in 2026-2027 is unknown.
Use a motor vehicle worksheet. Some expenses will need to be apportioned if incurred before car used for business but expense is for full year - registration and insurance for example. Apportion before adding to worksheet. Other expenses are those incurred after the business use has started - fuel, services, repairs, depreciation, etc. Add full expense to worksheet
Use purchase price as purchase price when calculating depreciation. Apportion depreciation to period car first used for business before adding to worksheet. Use the ATO tool to calculate depreciation.
Depreciation and capital allowances tool | Australian Taxation Office
Once all expenses are listed on worksheet multiply by logbook percentage to obtain claimable deduction.
Under cents/km you only need to keep a record of km travelled. Should keep all records of car expenses and establish a logbook so you can choose which is the best method to claim car expenses for the year.
Author: genkis(Initiate)Initiate 21 June 2025
Thanks heaps Taxduck - much appreciated.:)
Author: genkis(Initiate)Initiate 21 June 2025
Sorry Taxduck … one more scenario if that’s okay …
If I purchased other assets (to test them) before opening the business, but then used them in the business, could I also claim them as business assets or expenses?
For example, using the same time frame as the car purchase, I would be looking at buying a sample of garden beds, various soil components and seedlings to see which system worked the best before opening the business. After opening the business, I would still use the systems or offer them for sale.
Could I deduct these assets (or expenses) once I open my Sole Trader business, even if they were bought 6 months prior to businesses commencement and in a different Financial Year?
Thanks again :)
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