ATO Motor Vehicle Rate Update.
The ATO have reviewed and increased the cents per kilometre deduction rate to 72 cents (up from 68 cents) for the Financial Year starting 1st July 2020.The cents per kilometre method currently allows taxpayers to claim a maximum of 5,000 business kilometres per car per year, without requiring written evidence. It must be noted that although written evidence is not required, if audited you may be asked to show how you worked out your business kilometres such as diary records.In regards to audit activity, work related car expenses have been on the ATO’s radar in recent years. In addition, the impact of Covid-19 and government restrictions will likely reflect a reduction in work related car expenses being claimed for the 2019-20.
Please me if you would like to discuss how the above rate change may effect you or any other motor vehicle deduction queries.