The most common method of claiming car expenses is the set rate method aka the ‘cents per kilometre method’. It’s simple, easy and in the eyes of many a taxpayer absolutely brilliant as no receipts or log book are required. All you need is a reasonable basis as to how you arrived at the amount of business/work kilometres you are claiming.
But is a log book really that bad? Sometimes a little bit of paperwork can reap golden rewards. Take the following case for example: Ned who uses his vehicle for work regularly bought a new car under finance for $49,990. The maximum claim he could make using the set rate method is $3,300. It so happened though that Ned maintained a log book for the required 12 week period which showed his work related use of the car was 56%. At year end when Ned had his accountant calculate his motor vehicle claim, it came to an amount of $9,833. Not bad for a little bit of effort.
Ned’s Calculated Car Claim
To ensure you are maximising your claim, call HQB Chartered Accountants. Our highly qualified Accountants can set you in the right direction.
