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Re: Instant asset write-off for a car

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Newbie

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I work part time as an employee and part time as self-employed. I currently use our private car for my travel when self-employed (travelling between distributors and been clients). I think if I buy a new/used car for my self-employed work, I can use the instant asset write-off for the portion of that vehicle I use for my business. E.g. if I buy a car for under the $30,000 threshold (let's say $10,000) and use it 60% business and 40% private use, can I declare 60% of the asset ($6,000) as a business expenses this tax year? And I think I can still claim the 68 cents/km on top of that, is that correct?

Could you also explain or refer me to material on how the deprecation on that asset needs to be considered in future tax returns. Thank you!
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Taxicorn

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@Bizbeth 

 

Yes, you can claim the business use of the vehicle.

 

No, you can't claim the cents per km because of the amount includes depreciation of the vehicle.

 

You would need to keep a logbook to claim all other running expenses at that business use.

 

Depreciation is not considered if you are writing the asset off as you have already received the cost of the car x business use.

 

 

 

 

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Taxicorn

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@Bizbeth 

 

Yes, you can claim the business use of the vehicle.

 

No, you can't claim the cents per km because of the amount includes depreciation of the vehicle.

 

You would need to keep a logbook to claim all other running expenses at that business use.

 

Depreciation is not considered if you are writing the asset off as you have already received the cost of the car x business use.

 

 

 

 

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ATO Certified

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Hi @Bizbeth,

 

Thanks for your question!

 

@macfanboy is correct, but I'd just like to provide some additional information.

 

If you have a look at our guide to depreciating assets, you'll see under the "Cars" heading that if you use the cents per kilometre method, you can't also claim a deduction for the car under the simplified depreciation rules.

 

This is because the instant asset write off is part of the simpler depreciation rules, and any claim you make under the instant asset write off would be considered as depreciation.

 

With respect to your obligations on future tax returns, you should have a look at this guide on the simpler depreciation rules. If you do choose to use the instant asset write off then you must apply all of these rules, not just individual elements, so it helps to be familiar with them.

 

Hope this helps,

 

Rachael B.