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Tax time tips for your new vehicle

blog large image - Tax time tips for your new vehicle

Tax time tips for your new vehicle

With the EOFY just around the corner, it’s always a good idea to think about how you can maximise the benefits of this time of year to get the most out of your new vehicle purchase. As long as you use your vehicle for work, you should be able to claim back some costs. At Mantello Suzuki Roxburgh Park, we love helping customers find the perfect car for their needs and always pride ourselves on our extensive vehicle expertise.

Lots of vehicle owners make costly mistakes when it comes to their car-related claims – whether it’s being penalised by the ATO for an accidentally misleading claim, or just not realising they’re eligible at all. 

We’ve put together our top tips to help you increase the benefits from your new vehicle at tax time. 

Instant asset write-off

In 2015, the Australian government introduced an instant asset write-off scheme that allows small businesses claim the depreciation amount in one hit, rather than over a few years. The depreciation amount is the value your vehicle is likely to lose over time. 

So, if the vehicle you have it mind costs up to $150,000 and is purchased before 1st July 2021, your business can claim depreciation immediately. The depreciation limit is $59,136 for 2020-21 – rising to $60,733 for 2021-22. Depreciation is calculated at a standard 25% of the value of the car.

Are you eligible? 

Lots of people don’t realise that anyone can claim on a vehicle used for business purposes – not just tradies with utes and farmers with tractors. Business owners and sole traders are eligible and the amount you can claim depends on what percentage of the vehicle you use for business purposes. 

You’re eligible to claim for expenses if you’re using your own vehicle for various reasons, including:

  • You carry bulky tools or equipment like drills and ladders.

  • You travel between two workplace employment locations.

  • You have to travel between your usual workplace and a client’s premises. 

Claiming expenses

Did you know that you can claim expenses if you personally own the car you’re using for work? You can do this in two ways:

  • Claim cents per kilometre, up to a maximum of 5,000 kilometres per year calculated at a standard rate of 68 cents per kilometre. 

  • A logbook claim is based on the business use percentage of each car expense according to a logbook that has been kept for at least a 12-week period. The logbook must record all business journeys made over a 12-week period, odometer readings, total distance travelled, and reasons for the journey. 

To justify your claim, make sure you keep all of your receipts throughout the year, including insurance, servicing, and repairs. 

Time is running out!

If you’re considering the purchase of a brand-new car for commercial use, it’s a great time of year to be taking advantage of EOFY sales and the ability to claim temporary full expensing on top. But time is running out!

Once you’ve checked out the ATO’s website and spoken to your accountant, come in and see us at our Roxburgh Park showroom to avoid missing out. We’re a family business that have been selling new and used cars since 1976. Our commitment is to selling great vehicles and providing expert service to every single customer. 

If you would like more information about purchasing a new or used Suzuki vehicle, contact the friendly Mantello Suzuki team today.