Claiming Motor Vehicle Expenses

If you use your motor vehicle for business purposes, you can claim the costs of using your motor vehicle on your tax return.

From the 1st July 2015, there are only two methods available to claim motor vehicle expenses for 2015-2016 (and later years). You may choose from the cents per kilometer or the logbook method.

What are examples of business use for family day care?

Examples of business use for family day care includes:

  • grocery shopping for family day care meals
  • shopping for resources
  • before and after school pickup and drop-offs
  • taking children on an outing or excursion
  • attending scheme meetings
  • attending training and self eduction courses

Method 1: Cents per kilometer method

There have been some changes to the cents per kilometer method. Previously,  there were separate rates based on the size of the engine of the vehicle you drove (with larger engine sizes getting a greater cents per kilometre deduction). This is no longer applicable.

Under the revised method, individuals use 66 cents per kilometre for all motor vehicles for the 2015–16 income year – up to a maximum of 5,000 business kilometers per vehicle.

You don’t need written evidence to show how you worked out your business kilometres however you need to prove how you calculated your mileage e.g. by producing a diary which contains records of excursions, school pick ups and drop offs, etc.

Method 2: Logbook method

Under this method, you claim motor vehicle expenses based on the “business-use percentage” for the car.  In order to calculate the “business-use percentage” – you need to keep a logbook with the odometer readings for at least 12 weeks.

This log book needs to include:

  • the odometer readings include opening and closing kilometers
  • total kilometers travelled
  • business kilometers travelled
  • private kilometers travelled

Expenses you can claim include – running costs of the motor vehicle, decline in the value of the motor vehicle, interest incurred on financing the acquisition of the vehicle, fuel and oil costs, services, repairs and maintenance (including tyres and batteries), licensing and registration costs, car washes and insurance.

As a Family Day Care Educator, it is a requirement to record transportation of children – why not combine this reporting requirement and the log book entry and have a single record to fulfill both requirements? No duplication, and you can record this on-the-go!

Trial now!

Your log book calculation is valid for a 5 year period – unless the nature of your business changes or the activities and frequency thereof changes. For example – if you start doing weekend care, your frequency of business travel has increased and therefore you would be in a position to increase the business use %. However to do this, you would need to keep a log book for at least another 12 weeks

If you have more then one vehicle and use both for family day care then you will need to keep a logbook for both vehicles.

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