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Re: car limit

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Newbie

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Hi I have a client that is a company and operates as a corporate courier, has purchased a limosine under the company name and was wondering if the gst can be claimed on the whole amount  over the car limit which was $79800? and can the cost be depreciated or does the $57581 limit apply?

 

Thank you

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Best answer

Community Support

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Hi @AtcatFinancial

 

Thanks for your patience.

 

If you use a motor vehicle solely in carrying on your business and you're registered for GST, you’re generally entitled to claim a GST credit for the GST included in the price of the vehicle, provided you have a tax invoice.

 

However special rules apply for cars with a value exceeding the car limit. Where you have purchased a car and the price is more than the car limit, the maximum amount of GST credit you can claim is one-eleventh of that limit. For 2019-20, car limit is $57,581. As the cost of your car exceeds this limit, the maximum GST credit you can claim is $5,234 (that is, 1/11 × $57,581). This limit also applies to cars which are fuel efficient.

 

For more information, refer to the link that @TaxedoMask has correctly provided.

 

There are some circumstances where you can claim a GST credit for the full amount of GST included in the price of a car even if the car costs more than the car limit, however none of these circumstances are applicable to you.

 

Hope this helps.

 

Thanks, ChrisR

3 REPLIES 3
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Community Manager

Replies 0

HI @AtcatFinancial,

 

We will look into this one and let you know.

 

KylieS

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Devotee

Replies 0

GST claim is capped at the car limit - see here. $57,581 limit = $5,234 GST - which is the maximum you can claim.

 

The cost base used for depreciation would be your 79,800 less the GST claimed ($5,234)

Highlighted

Best answer

Community Support

Replies 0

Hi @AtcatFinancial

 

Thanks for your patience.

 

If you use a motor vehicle solely in carrying on your business and you're registered for GST, you’re generally entitled to claim a GST credit for the GST included in the price of the vehicle, provided you have a tax invoice.

 

However special rules apply for cars with a value exceeding the car limit. Where you have purchased a car and the price is more than the car limit, the maximum amount of GST credit you can claim is one-eleventh of that limit. For 2019-20, car limit is $57,581. As the cost of your car exceeds this limit, the maximum GST credit you can claim is $5,234 (that is, 1/11 × $57,581). This limit also applies to cars which are fuel efficient.

 

For more information, refer to the link that @TaxedoMask has correctly provided.

 

There are some circumstances where you can claim a GST credit for the full amount of GST included in the price of a car even if the car costs more than the car limit, however none of these circumstances are applicable to you.

 

Hope this helps.

 

Thanks, ChrisR