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Car Allowance and Deductions

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Newbie

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Hi,

 

I recieved approx $4,000 in car allowance this 2017/18 financial year, although only started recieving my car allowance from 1 December 2017. For the July - November period i was using my own vehicle for work related purposes but not as frequently as i was from December onwards. 

I drove a total of 33,000km for the FY of which 28,000km was work related. I have kept a log book for the entire financial year.

 

My total car related expenses for the financial year for the work related portion (petrol, rego, servicing, insurance, depreciation) is around $7,000

 

I have recieved conflicting advice on what i can and cant claim for.

Am i right in saying that because it is an allowance, rather than a reimbursement i can claim it all as a tax deduction?

 

Please let me know if you require any further information and any advice would be greatly appreciated

 

Thanks

1 ACCEPTED SOLUTION

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Most helpful response

Devotee

Replies 0

Hi @pepsi1336,

 

Thanks for your questions - you've clearly been doing your research!

 

You mentioned reimbursement in your question. You're considered to have received a reimbursement if your employer has paid you back for costs you've incurred - in this instance, because you haven't personally incurred the costs (your employer has) you can't claim a deduction. 

 

Allowances are different. These are additional amounts paid to you (usually under an industrial award) in anticipation of expenses you will incur.

If you've received an allowance for car expenses and kept a logbook demonstrating your business versus personal use, you can claim deductions including:

It's worth noting that deductions can only be used to reduce your assessable income and help us work out your taxable income - they're not necessarily refundable expenses. You'll need to keep records relating to your deductions for up to five years after you've lodged your return in case we ask you for more information.

 

Hope that helps!

1 REPLY 1
Highlighted

Most helpful response

Devotee

Replies 0

Hi @pepsi1336,

 

Thanks for your questions - you've clearly been doing your research!

 

You mentioned reimbursement in your question. You're considered to have received a reimbursement if your employer has paid you back for costs you've incurred - in this instance, because you haven't personally incurred the costs (your employer has) you can't claim a deduction. 

 

Allowances are different. These are additional amounts paid to you (usually under an industrial award) in anticipation of expenses you will incur.

If you've received an allowance for car expenses and kept a logbook demonstrating your business versus personal use, you can claim deductions including:

It's worth noting that deductions can only be used to reduce your assessable income and help us work out your taxable income - they're not necessarily refundable expenses. You'll need to keep records relating to your deductions for up to five years after you've lodged your return in case we ask you for more information.

 

Hope that helps!