Claiming Work Related Travel Expenses

In last year’s (2015/16) Federal Budget the Government announced substantial changes to the way you can claim tax deductions for the business use of a motor vehicle. There were four methods for calculating work related expense claims made for the 2014/15 tax year :

  • cents per kilometre
  • 12 per cent of original value
  • one-third of actual expenses
  • logbook

As from the 1st July 2015 motor vehicle expense claims are limited to:

  • the 12 per cent of original value of the vehicle method and the one third of actual expenses incurred method will no longer be available (these two methods were used when more than 5,000 km are driven annually for work purposes. Only around 3% of total deductions were claimed using these two methods)
  • the three existing rates for claims per kilometre (which were based on engine size) have been replaced with one rate of 66 cents per km. This rate may be updated by the Commissioner of Taxation from time to time but remains the rate for the 2016/17 tax year.

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