Topics on work-related expense claims (7)



Information that must be entered in the logbook:

For a logbook to be valid, it must be kept in English and record the following:

  • the date the logbook period begins and ends;
  • the odometer readings at the start and the end of the logbook period;
  • the total kilometres the car travelled during the period;
  • the total kilometres the car travelled for income producing purposes (this must also be shown for each journey – refer below); and
  • the total kilometres travelled for income producing purposes expressed as a percentage of the total kilometres travelled. Refer to S.28-125.


The following information must specifically be recorded at the end of each business journey (or as soon as possible afterwards):

  • the day the journey began and ended;
  • the odometer readings at the start and end of the journey;
  • the number of kilometres travelled on the journey; and
  • why the journey was made (the description should capture the nature of the trip rather than just being generic, e.g., ‘Ten client visits in Melbourne area’ instead of just writing ‘business trip’).

If two or more consecutive business journeys are made in the car on the same day, it is acceptable for them to be recorded as a single journey. Refer to S.28-125(3).


TAX TIP – Small (yet ultimately unhelpful) win for the taxpayer

Before the Tribunal, the ATO had argued that, in addition to the inconsistencies and lack of contemporaneity of Mr Reid’s logbook, it also contained journeys that were not sufficiently descriptive to enable the entries to be classified as a business journey. For example, the logbook in question simply recorded a business journey with the description of “customer visit”.


In its final decision, the Tribunal did not accept this ATO criticism of the taxpayer’s logbook, finding that given the nature of the taxpayer’s employment the description of “customer visit” was sufficient to identity the journey as a business journey.


Despite this, the Tribunal remained of the view that Mr Reid’s log book had still not been kept in accordance with S.28-125(2) and accepted the Commissioner’s amendment to only allow the much lesser car expense claim under the cents per kilometre method.


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Tags: Deductions

Written by Panbo Ye

I help people discover POWERFUL unknowns in Tax Ideas | Wealth Strategies | Retirement Planning | Finance Solutions!

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