Changes to Motor Vehicle Deductions
19 Jun 2015
There has been some tough changes to the allowable methods
available in calculating deductible motor vehicle expense.
Previously, taxpayers had the option of using either set rate
per kilometre, log book, one third of actual expenses or 12% of the
cost of motor vehicle (up to statutory car limit) to calculate
their motor vehicle expenses.
The Federal Government announced in the recent budget that the
one third of actual expenses and 12% of cost of the motor vehicle
options will be scrapped from 1 July 2015.
They also announced that the set rate per kilometre method
will be varied down to a flat rate of 66 cents per kilometre
travelled (irrespective of the engine displacement). This will
reduce the set rate kilometre deduction by up to $500 for those
travelling in excess of 5,000 kilometres per financial year.
Given the abolishment of these methods, coupled with scaling
back of the set rate per kilometre method, PKF Mack is encouraging
clients to complete a motor vehicle log book to establish a
business use percentage over the required 12 week continuous
period. Once completed, this logbook will be valid for five years
or until you complete another.
If you are interested in completing a log book to maximise
your motor vehicle deductions, please contact your
PKF Mack Partner
and we will arrange for one to be delivered to
you with further information.