Every year, our clients ask us the same questions regarding vehicle and travel deductions. We’ve decided to compile what we think are our most useful tips to help you understand what you can claim and the different types of expenses.
The tax office will allow you to claim vehicle and other travel expenses that are directly connected with your work. However, normal trips between home and work are considered private travel. But you can claim deductions in some circumstances, as well as for some travel between two workplaces.
Instances wherein you may be able to claim the cost of travelling include:
- Directly between two separate workplaces – for example, when you have a second job
- From your normal workplace to an alternative workplace – for example, a client's premises – while still on duty, and back to your normal workplace or directly home
- If you had shifting places of employment – that is, you regularly worked at more than one site each day before returning home
- From your home to an alternative workplace for work purposes, and then to your normal workplace or directly home
- If you need to carry bulky tools or equipment that you used for work and can't leave it at your workplace – for example, an extension ladder or a cello.
If your travel was partly private, and partly for work, you can claim only for the part that related to work. Generally, you need to keep records of your travel expenses.
If you are claiming a deduction for using your own car (including a car you lease or hire), it is treated as a car expense. If you use someone else's car for work purposes, you may be able to claim the direct costs (such as fuel) as a travel expense. You can claim a deduction for work-related car expenses if you use your own car in the course of performing your job as an employee. You can also claim a deduction for using a car that you owned, leased, or hired under a hire-purchase agreement.
Calculating your deduction
You can choose which of the following four methods for claiming work-related car expenses that gives you the largest deduction for any car and choose different methods for different cars. Some adjustments to your claim may need to be made if the car is jointly owned.
You can find more information on how you can calculate your deduction here.
Other Travel Expenses
You may be able to claim travel expenses you incurred for meals, accommodation and incidentals while away overnight for work - for example, going to an interstate work conference. If you are using a borrowed car or a vehicle other than a car for work purposes, you may be eligible to claim costs you incur (such as fuel costs) as a travel expense.
If you are eligible to claim expenses for using a borrowed car or a vehicle other than a car, you can only claim your actual expenses. If you are eligible to claim for other travel expenses, the amount you can claim depends on whether you receive an allowance for the costs you incurred.
There are specific record-keeping requirements for travel expenses, depending on whether your travel allowance is shown on your payment summary, whether your travel was domestic or overseas, the length of your travel and your occupation.
For more useful tips and advised, contact us on 02 9299 7044 or via firstname.lastname@example.org