If you use your motor vehicle for work purposes, in most cases, you are able to make a claim for this in your tax return. Whether you’re a tradie, a courier driver, a small business owner or a ride share driver, it's important to keep a logbook that meets the Australian Taxation Office (ATO) requirements to determine the work-related use percentage of your vehicle. A correct logbook will allow you to claim additional deductions for motor vehicle expenses on your tax return. In this post, we'll cover the ATO's requirements for logbooks and provide you with an Excel template to make the process easier.
What is a Logbook and Why is it Important?
A logbook is a record of all your motor vehicle trips during a continuous 12-week period, including the date of the trip, the odometer reading at the start and end of the trip, the purpose of the trip, and the distance travelled. It's important to maintain an accurate logbook as it allows you to calculate a percentage that your car is work-related, which you can use to claim a deduction for motor vehicle expenses on your tax return. Without a logbook, the ATO will disallow any claims for work-related expenses using the logbook method.
What are the ATO requirements for a logbook?
To be an ATO approved logbook, it must:
Cover a continuous period of at least 12 weeks
Be completed before the end of the financial year in which you intend to claim the deduction
Contain the following information for each trip:
Date of the trip
Odometer reading at the start and end of the trip
Kilometres travelled
Reason for the trip (including the destination, if applicable)
4. Include all work-related trips, even if they are only partially work-related
5. Once completed, be kept for a minimum of 5 years
Updating Your Logbook
As mentioned earlier in this post, a logbook can be used for up to five years before a new one needs to be created. However, it is important to note that if there is a significant change in the amount of work-related usage of the vehicle, whether an increase or decrease, you will need to start a new 12-week logbook to reflect this change. This can be challenging in some situations, and a time-based logbook may need to be kept, particularly for seasonal drivers.
Top Tax Tips for Logbook Keeping
Maintaining a correct logbook can be a daunting task, but it's essential to ensure you claim the right deductions on your tax return. Here are some tips to help you maintain an ATO-approved logbook:
Start your logbook on the first day of a new 12-week period to ensure you capture all work-related trips.
Record all trips in your logbook, including those that are only partially work-related.
Record the odometer reading at the start and end of each trip, and the total distance travelled.
Record the purpose of each trip and the destination, if applicable.
Keep your logbook up to date, and record trips as soon as possible after they occur.
Check your logbook regularly to ensure you haven't missed any trips.
Remember to keep receipts for all motor vehicle expenses you plan to claim.
Excel Logbook Template
To make maintaining a logbook easier, we've created a Microsoft Excel template that you can download and use. The template includes columns for the date of the trip, the start and end odometer readings, the reason for the trip, and the distance travelled. It also includes an expense page that can list all of the expenses relevant to a period. This can either be printed on two A4 pages, or it can be converted to a Google Sheet for on the go record keeping. You can download the template below.
Maintaining a correct, ATO-approved logbook is essential to claim deductions for motor vehicle expenses on your tax return. Remember to keep all the necessary information for each trip, including the odometer readings and the purpose of the trip. Using the Excel template provided can make the process easier and more accurate. If you have any questions or concerns about maintaining a logbook, give us a bell at Maurer Taxation so we can help you get the best result from your tax return.
P: 0438 960 990
