You have finally decided to buy a vehicle for your trade business. Whether it is a ute for the job site or a van for hauling gear, it feels like a no-brainer. But before you hit the dealership, there is something you should know: the Australian Taxation Office (ATO) does not see your car the way you do.
Using a company car for personal trips, like errands or weekend getaways, can increase your tax liability if you do not keep careful records.
What You Can Claim
The ATO allows you to claim vehicle costs for business use, but only for the portion that relates to running your business. That means if you are using your car 70% for work and 30% for personal use, you cannot claim the full cost. And yes, they want proof.
Common deductible expenses include:
- Fuel and oil
- Repairs and servicing
- Loan interest
- Registration and insurance
- Depreciation or lease payments
But you will only get those deductions for the business-use portion.
Why a Valid Logbook Matters
Without a valid logbook, you are in trouble. The ATO does not just take your word for it. They want to see real, recorded evidence of how you use the car. The logbook method involves recording every work-related trip over 12 weeks, including dates, odometer readings, trip purpose and distance travelled.
That 12-week sample remains valid for five years, provided your work pattern does not change significantly. If it does, you will need to redo the logbook.
It is a bit of admin upfront, but it can lead to substantial savings over time. You do not want to guess your way through a tax audit.
- ATO Logbook Rules – read them here.
Ditch the Paper – Use a Logbook App
Logging trips on paper is a pain, especially if you are juggling job sites, suppliers and late finishes. Thankfully, apps like Driversnote and myDeductions by the ATO make it easy to stay compliant. They automate mileage tracking, generate ATO-compliant reports and sync with your phone.
Use an app, log as you go and save yourself from a spreadsheet-induced headache later.
Take note: There is a standalone iOS app named “ATO Vehicle Logbook” available in the Apple App Store, created by a third party (developer: John Lyons). It is not produced by the ATO itself. The app costs around AU $1 and allows manual entry of trips, reports business-use percentages, and exports CSV files. While ATO compliant, it is not officially published or supported by the ATO.
Business Vehicle = Smart Move (If You Track It Right)
Buying a vehicle through your business is a common tax strategy, but only when you adjust for private use and back it up with a valid logbook. At Infuse Advisors & Accountants, we are here to keep things practical, efficient and compliant so you can focus on growing your trade, not getting tangled in tax.
Put your logbook where your money is. Chat to Infuse about smart vehicle tax strategies today.
