NTAA news: for the 2019 income year, the rate that is applied for 68 cents per business kilometre travelled.

he ‘cents per kilometre’ method broadly allows an individual taxpayer to claim up to a maximum of 5,000 business kilometres per car, per year without the need to keep any written evidence (e.g., receipts) of car expenses.

The ‘cents per kilometre’ method broadly allows an individual taxpayer to claim up to a maximum of 5,000 business kilometres per car, per year without the need to keep any written evidence (e.g., receipts) of car expenses.

Importantly, taxpayers making a ‘cents per kilometre’ claim are required to demonstrate that they worked out the number of business kilometres they claimed on a reasonable basis. Taxpayers claiming under this method will generally fall into one of two categories, being either those who undertake a regular or irregular pattern of work-related travel.

For example, Eliza claims a cents per kilometre deduction for 4,800 business kilometres.

Regular pattern of work-related travel — Eliza can demonstrate her employer required her to make a 60 kilometre round trip to the warehouse to pick up supplies twice a week, 40 weeks in the year. This type of explanation would generally be sufficient to justify the claim made by Eliza due to the regular travel pattern.
Irregular pattern of work-related travel — if instead, Eliza’s employer required her to deliver goods to clients on an ad hoc basis to ever changing locations, she would need to make a note (e.g., in a diary) of each trip. Simply relying on her memory to say she made 80 trips of about 60 kilometres each would not be considered a reasonable basis for determining that she travelled 4,800 business kilometres during the income year, primarily due to the irregular pattern of travel.

Also, remember that, for the 2019 income year, the rate that is applied (up to the 5,000 business kilometre maximum) is 68 cents (up from 66 cents in 2018) per business kilometre travelled.

Editor: The NTAA’s Tax Hot Spots II seminars running around the country in October look at the ATO’s current crackdown on work-related expense claims, along with many other ‘hot’ tax issues. Importantly, diary records in the format of the ‘Record of regular or irregular work-related trips diary’, are included on the NTAA’s Tax Hot Spots II 2019 Software.