Proposed measure on deduction for work-related car expenses

The government has announced proposed changes relating to the tax deduction for work-related car expenses.

Currently, there are four different methods by which taxpayers can access the work-related car expenses deduction based on cents per kilometre, logbook method, the 12% of original value method, and one-third of actual expenses incurred. According to Assistant Treasurer, Mr Frydenberg, the last two methods will be discontinued.

In addition, with respect to the cents per kilometre method, the current scale is based on engine size (small 65 cents per km, medium and large 76 and 77 cents per km). The government proposes to use a flat rate of 66 cents per km instead.

Mr Frydenberg notes that the proposed changes relate to expenses claimed for cars people own, not salary packaged cars taxed under the FBT rules.

Source:CCH