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Crack Down on Car Work-related Expenses

The ATO is concerned about taxpayers making mistakes or deliberately lodging false claims for work-related car expenses. ATO Assistant Commissioner Kath Anderson warns the ATO will be keeping a close eye on claims for these expenses in tax returns for the 2017/18 year. Last year (2016/17), around 3.5 million Australians made a work-related car expense claim, totalling approximately $8.8 billion!

To avoid attention from the ATO you need to understand when you can claim and can’t claim car expenses.

When You Can Claim:

You can claim a deduction for work-related car expenses if you use your own car in the course of performing your job as an employee, for example, to:

  • Carry bulky tools or equipment (such as an extension ladder or cello) which your employer requires you to use for work and cannot leave at work

  • Attend conferences or meetings

  • Deliver items or collect supplies

  • Travel between two separate places of employment, provided one of the places is not your home (for example, when you have a second job)

  • Travel from your normal workplace to an alternative workplace and back to your normal workplace or directly home

  • Travel from your home to an alternative workplace and then to your normal workplace or directly home (for example, if you travel to a client's premises)

  • Perform itinerant work

  • If you receive an allowance from your employer for car expenses, it is assessable income and the allowance must be included on your tax return. The amount of the allowance will usually be shown on your payment summary

When You Can't Claim:

Most people can't claim the cost of travel between home and work because this travel is private.

You can’t claim car expenses on your tax return if you were reimbursed for the same costs by your employer. Only claim it if you paid for it yourself.

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