Logbook Essentials

The Australian Taxation Office (ATO) requires certain individuals and businesses to keep motor vehicle logbooks for tax purposes. The logbook is used to record the business use of a vehicle over a period of 12 continuous weeks, and this information is used to determine the percentage of business use for tax purposes. You will be required to keep a logbook if:

• You are a sole trader or an employee who uses their own vehicle for work or business related purposes in order to calculate the business use of your vehicle expenses to be claimed as a tax deduction; or

• You drive a vehicle registered to a company or trust and need to calculate the private use of the vehicle in order to determine the Fringe Benefits Tax ( FBT) payable on the vehicle.

To meet the ATO's requirements, the logbook must include the following information for each journey:

• The date of the journey

• The starting and ending odometer readings for the journey

• The reason for the journey (details need to be more specific than just personal or work/business)

• The distance travelled for the journey

• The start and end locations for the journey

• Any additional details about the journey that may be relevant (such as the names of clients or business contacts visited).

It's important to note that the logbook must be kept for a continuous 12-week period, and the information recorded should be accurate and complete. After the initial 12-week period, the logbook can be used for up to five years, as long as the pattern of use remains consistent. A new logbook will be needed each time a new vehicle is purchased regardless of when the last was recorded.

If you are unlucky enough to be selected for an ATO audit your logbook will be scrutinised for:

• Falsification

• Recreation

• Misunderstandings of private trips

• Lack of odometer records

• Being representative of travel undertaken.

They will check your logbook against:

• E-tag /toll records (for trips outside of work hours including weekends)

• Fuel records

• Immigration records (for trips recorded for business purposes when the driver was in fact out of the country)

• Service records.

Logbook records can be maintained in a logbook purchased from a newsagency or an app, designed for that purpose, downloaded to your phone.

If you are needing to keep a logbook because you drive a vehicle provided by a business, you might like to read our blog Fringe Benefits Tax Deep Dive: Motor Vehicles.

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Disclaimer: This is general information only and is not advice of any sort. No warranty or representation is provided by Accounting Heart Pty Ltd as to the accuracy, currency or completeness of the information contained in this blog. Readers of this blog should not act or refrain from acting in reliance upon any information contained herein and must always obtain appropriate taxation and / or other advice as may be appropriate having regard to their particular circumstances.