As we know the ATO is always looking at ways of cracking down on deductions for tax payers and small business owners. Recently there has been a series of cases initiated by the ATO in relation to car expenses where there has been discrepancies in the recording of log book entries. In order to be able to claim motor vehicle expenses as a deduction, the log book must be completed according to legislative requirements.
In a recent case, Reid v Commissioner of Taxation [ 2019] the taxpayer was found to have made several errors in the recording of entries in the log book. These included:
- inconsistencies between the day of the week and the date used;
- the same odometer reading on different dates;
- dates stating "customer visits" when the employer's records showed that he was either sick or on annual leave; and
- repeated dates
As such the motor vehicle deductions were denied.
So what are the correct LOG BOOK requirements
1. The log book must be kept for a 12 week continuous period;
2. Show the date the business journey started as well as the date the business journey finished;
3. The odometer reading at the start of the business travel and the odometer reading at the end of the business travel; and
4. The total kilometers traveled.
If you would like to know more about motor vehicle deductions and what can be claimed, the click this link or call on 0414 877 781