There are a number of methods that tax deductions can be calculated for car usage or the fringe benefits value of a car. One of these methods requires a logbook to be completed.
The purpose of the logbook is to help determine what proportion of the usage of the car is business use. For an individual, this will then give you a percentage of your overall expenses that are tax-deductible. For an employer, it will tell you what percentage of use of the car is subject to fringe benefits tax. It is important to understand though that even if you complete a logbook, you don’t necessarily have to use the logbook method for claiming your tax deductions.
What Goes Into A Logbook?
Your logbook must contain:
- when the logbook period begins and ends
- the car’s odometer readings at the start and end of the logbook period
- the total number of kilometres the car travelled during the logbook period
- the number of kilometres travelled for each journey. If you make two or more journeys in a row on the same day, you can record them as a single journey
- the odometer readings at the start and end of each subsequent income year your logbook is valid for
- the business-use percentage for the logbook period
- the make, model, engine capacity and registration number of the car.
For each journey, you need to record the:
- reason for the journey (such as a description of the business reason or whether it was for private use)
- start and end date of the journey
- odometer readings at the start and end of the journey
- kilometres travelled.
Other Important Notes For Logbooks
- The log book must be maintained for at least 12 continuous weeks and will be valid for up to five years. If your circumstances change though, you should complete a new log book.
- If you have two cars that you use and wish to keep a log book for both cars, then the 12 week period must be the same for both cars.
- You will need to keep evidence of all of your car expenses (including receipts). You can estimate fuel costs but will need to keep odometer readings.
A logbook cannot simply be written up at the end of the time period (12 weeks). The ATO have access to data (such as toll history) and will match what they find against your logbook. If they discover a discrepancy, all of your car expenses claimed as a tax deduction may be completely disallowed.
