Can My Business Own My Car & How Much Can I Claim?
Depending on your job, business travel requirements can be anything from minimal to frequent. For this reason, there are a few options available for claiming on business vehicle expenses. Have a read to see which solution best fits your current situation.
Claim Fuel Costs
Suited to: those who take occasional business trips in their own car.
There are two ways that fuel costs are generally measured. These are to either claim for fuel costs of the business trips or to claim on a per-kilometre mileage rate.
Whichever way you choose, you will need to measure travel distance to make your claim. Currently, the mileage rate is 79 cents per kilometre for up to 14,000 kms. If you’re unsure of the distance or forgot to measure, you can always use Google Maps to determine the length of your trips.
Suited to: those who regularly use their car for business purposes.
This would require you to transfer the car ownership into the business. You would then pay all running costs through the business and keep a logbook for three-month periods. With this logbook you can determine the percentage of costs that are claimable.
The benefit of keeping a logbook is that it gives you a business use percentage. This can be applied to all car related costs including; fuel, repairs, tyres, insurance, road user charges, and depreciation.
Note: you can also claim the business use percentage of the GST on the above expenses and the acquisition price.
Suited to: company owners with low value vehicles.
If your business is a company, it may be worthwhile having the company own your car and then paying Fringe Benefit Tax (FBT).
This is particularly beneficial if you own a low-value vehicle that’s used minimally for business and mostly for private running. Under company ownership, you end up with a low FBT cost that enables all vehicle running costs and GST to be claimed.
The team at Osbornes is always available to listen to your questions and provide assistance. If you want to learn more or need further help with accounting needs, get in touch!