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Tax and vehicle log books

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If you use your car for work, or use a vehicle owned by a business, it is important to keep the right records. Keeping a log book can help you to collate all the information required both for fringe benefits tax (FBT), if relevant, and to make a claim for motor vehicle expenses.

A log book is a written record of your business use of a vehicle. To meet tax law requirements, log books must be kept for a representative period of a minimum of 12 consecutive weeks.. This record can also help with non-tax matters such as identifying the driver in the event of an accident or traffic infringement.

The objective of the log book is to determine the percentage of vehicle use for business purposes. Eligible business use includes driving to meetings and appointments. In most cases, travel from home to a regular place of business is considered private use, unless you have to significantly divert from your usual route to complete work-related tasks.

Details to include in your log book

  • Vehicle details such as the make, model, engine capacity and registration number
  • When the logbook period starts and ends, and the odometer readings at these times
  • Name of the driver
  • Date the journey began
  • Date the journey ended
  • Odometer readings at the start and conclusion of each journey
  • Number of kilometres travelled by the car in the course of the journey
  • Description of the reason for the journey
  • Any nights that the vehicle was home-garaged
  • Total number of kilometres travelled
  • Business and private kilometres travelled
  • Business usage percentage based on the log book

Entries in the log book for each business trip must be made at the end of the journey, or as soon as possible afterwards. You cannot backdate a log book.

The Australian Taxation Office (ATO) estimates that around 70% of log books reviewed have technical errors, such as:

  • claiming the log book was written in a year before the log book was printed
  • completing the entries in the log book on the one day using different colour pens, to give the impression that they were entered on different dates
  • claiming business usage when the trip was actually for private purposes.

If you use more than one vehicle for business purposes, you need to keep a log book for each vehicle. If you replace a vehicle with another and use the new vehicle the same way for business use, you can continue to use the existing log book.

Log books are valid for five years. They must be kept for two years after the latest financial year for which you relied on it for your tax return, or until any dispute with the ATO is resolved.

In addition to the log book, you should keep records of all vehicle-related expenses such as fuel and oil, registration, insurance, lease payments, tyres, services and repairs.

If an employer provides an employee with a vehicle, it is the responsibility of the employer to comply with the income tax and FBT laws. For this reason, it is essential that business owners consider the requirements of log books and implications of private use.

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