Some of you were perhaps thinking that those inconvenient days of a travel logbook were long gone, revelling in the freedom that modernization provided. However, recently the ATO is cracking down on those who own vehicles for their business because, well, because of modernization.
Our work vehicles are more lavish, modern and comfortable than they perhaps previously were and we understandably use them for leisure trips in addition to necessary travel for work. Whether it be to go away camping, popping to the supermarket, towing the boat or helping someone move, the benefits of a more powerful utility vehicle goes beyond what you might need it for in your daily working schedule.
Generally, utes are no longer Fringe Benefit Tax-free, even if your work vehicle was exempt before. Unfortunately, the usual assumptions that were once placed on working vehicles, the ones you have grown used to over the years, won’t apply. For example, a deviation from your regular route to and from work by more than 2kms will be considered to be private use. Some guidelines allow for minor, infrequent and irregular private use; however, this barely covers more than commuting.
You may be asked to provide a logbook to ensure that you are not avoiding Fringe Benefits Tax or abusing the system by claiming too many expenses back. By creating such a logbook, you are giving the ATO tangible data that they can use to determine how your vehicle is used so that they can support the claims you make.
Weighing up the inconvenience.
In summary, we recommend that where a dual cab ute or work vehicle is owned and you wish to claim expenses either in your business or as an employee, you MUST prepare a 12 week Logbook to prove the percentage portion of business use.
Doing so will give you extra protection if the ATO decides to audit you or argue that you are not entitled to a motor-vehicle claim due to it not being predominately for business purposes.
Ignoring the concept of a logbook entirely or believing that what you “tell us” is business use isn’t going to be enough. Trust us, it’s not going to get you far in a debate with the ATO..
Our team at Glance Consultants are confident that the slight inconvenience of creating a logbook is more preferable than finding out you cannot claim back desired vehicle expenses when it comes to that time of the year because you don’t have one.
We can provide you tools that enable you to accurately record necessary data for the ATO, which thankfully only need to be recorded for a 12 week, continuous period to be accepted for the entire year. Furthermore, unless your business habits change drastically or you buy a new vehicle, this data need only be updated every five years. Please be aware that you need to start this 12-week record in the year that you seek to claim expenses on your vehicle.
The ATO now accepts logbook apps from your phone, making it easier than ever before to log and report business travel use. You can simply download an app such as Driversnote, to track kms to and from specified locations with odometer readings, which you can then easily pass on as proof of your business travel, meeting relevant logbook standards and ensuring that tax time can also be slightly more relaxing.