Work Related Deductions

Jun 15, 2022

Work Related Expenditure

The ATO will pay particular attention this year to work related deductions. It is important that claims for work related expenses are reflective of your current working circumstances noting the changes in work conditions brought on by the pandemic.  If expenses are used for both work related and private purposes, then a private percentage must be calculated or estimated and the reduced expenditure claimed. 

Ensure when claiming actual expenses incurred or a portion thereof, that you are able to substantiate these with either records or receipts and supporting calculations where relevant.  

Work Related Car Expenditure

The ATO has increased its audit activity surrounding motor vehicle logbooks. If you do not have or do not use a logbook, it is important to act now. The absence of a logbook may result in the ATO considering your vehicle to be used 100% for private purposes. Given that there may have  been a shift in working arrangements during the pandemic, the expectation is that travel claims  are likely to be less.

If you incur expenses associated with running a motor vehicle in order to perform work duties, such as attending conferences, delivering or collecting supplies or travelling between alternate workplaces, you can deduct these expenses against your income.  Generally, you cannot claim the cost of car expenses you incur for travel between your home and your regular place of work, unless you are transporting bulky tools and equipment. 

Motor vehicle expenses can be claimed under one of two methods, either the cents per kilometre method or the logbook method. 

The cents per kilometre method allows a deduction of 72 cents per kilometre for the 2021/22 financial year and 75 cents for the 2022/23 financial year, up to a maximum of 5,000 kilometres.  You do not need to retain any receipts of expenditure under this method but are required to provide evidence of how you calculated your business kilometres.

Under the logbook method you can claim a percentage of actual motor vehicle expenses incurred.  A logbook is required detailing odometer readings of both work related and private travel over a continuous 12-week period.  The percentage is calculated on the basis of total business kilometres divided by the total kilometres travelled.  The logbook is valid for 5 years unless there is a change in your circumstances such as changing jobs. 

We are here to assist so please contact us if we can clarify further.

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