ATO busts common myths under the cents per kilometre method

The ATO has highlighted several misconceptions that commonly lead to incorrect claims under the cents per kilometre method for claiming deductions for car expenses.  Common errors include:

• Claiming travel between home and work, which is generally private and non-deductible;

• Automatically claiming 5,000 kilometres without the appropriate records (for example, being unable to show how the business kilometres were worked out);

• Claiming car expenses for a vehicle provided under a novated lease through a salary sacrifice arrangement;

• Separately claiming the decline in value of a car and other expenses when using the cents per kilometre method; and

• Using both the cents per kilometre and logbook methods for different periods during the income year.

Harper Group Pty Ltd – Chartered Accountants Frankston - Ph 9770 1547

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Please note we at Harper Group Pty Ltd are not licensed to provide financial product advice under the Corporations Act 2001 (Cth) and taxation is only one of the matters that must be considered when making a decision on a financial product, including on whether to make superannuation contributions. You should consider taking advice from the holder of an Australian financial services licence before making a decision on a financial product.