Motor vehicle 5,000 km claim requirements set by ATO

There are two ways to claim a tax deduction for your car. The first way is to maintain a log book, which will last for five years, and this is by far the best way if you use your car a lot for work.

The second method is to claim 5,000 km or less if you use your car for work. Having kept a log book, the Australian Taxation Office (ATO) has made it clear that should you do the second method it will be necessary to be able to substantiate it with details of the reason why you use your car for work and also how you calculated the 5,000 km, or less.

This is nothing new and has always been the case, however, the ATO have given fair warning that this year unless you can document the 5,000 km or less, your claim will be rejected.

A diary would be sufficient, and this need not be done daily but can be done monthly or even quarterly, but it needs to be accurate.

I personally believe that most people have been honest in claiming the 5,000 km or less, but this is not what the Commissioner of Taxation thinks, I'm not sure why but be warned he's not a happy chappy. 

Last updated: 4th July 2018