Car Allowance / Tax Question

[Guest dunkyboy]

Hi

I just got an offer of a new job last week which was great news :cool:

as part of the package I am to receive a 15K a year car allowance, I will be working as a Field Service Engineer so need a car to travel around to different clients in the Perth metro area, one of the conditions is that my car must be less than 4 years old, this means that I am going to have to get another car as my current one is 7 years old, does anyone know what the tax implications for this benefit are ?

I have only been in WA for 3 months so am not too clued up on the tax system here.

I am living in Warnbro so if anyone can recommend a good tax advisor in this area that I can discuss this with that would be a big help

 

thanks !!

[Guest smeredith715]

Hi Dunkyboy,

 

I have also just been offered a car allowance as part of my package. I am told that you need to keep a log for the first 3 months to proove that the car is used mainly for work. You then send in a form (not sure which form) to the ATO and you can get a reduced tax rate.

 

I'm sorry I dont know all the in's and out's but i am sure someone will know.

 

Good luck!

[Guest dunkyboy]

I was wondering what the reduced rate would be, I also heard that if you buy a new or ex demo car that you get further tax reductions but I dont know if that is true or not, guess I need to start doing some research :idea:

[Guest Mark X]

Basically the tax office is going to treat your car allowance as a taxable benefit, which means you have to add it on to your income at tax time to create your total yearly taxable income.

 

However you can offset any legitimate vehicle expenses/purchases against that income to reduce your taxable income - however you can only do this if you record expenses and vehicle use in the right way - logbook, keeping receipts, tracking etc.

 

In Australia there is more than one way to deduct vehicle expenses and the one you choose will depend on your personal circumstances.

 

How much work related travel do you expect to do during the year?

 

If you can let me know I can suggest which options might be best for you or there's a short video here that expains the options in more detail - using your car for business?

 

Hope that helps

 

Cheers, Mark

[Joebloggs]

Hi Dunkyboy,

 

I have also just been offered a car allowance as part of my package. I am told that you need to keep a log for the first 3 months to proove that the car is used mainly for work. You then send in a form (not sure which form) to the ATO and you can get a reduced tax rate.

 

I'm sorry I dont know all the in's and out's but i am sure someone will know.

 

Good luck!

 

Same deal for me too, starting a new job in the new year and I had the option of $19200 or $15000 + Fuel card. I have been driving a company car in Australia for 6 years and only done the Log Book twice.

 

The Vehicle allowance is a gross amount and will be subject to tax under PAYG unless you are able to produce a 'Notice of Withholding variation' Form (short version) which you state what percentage of Business/Private Km at Question B6.

 

The max of business Km accepted by the ATO is 95%.... but I am sticking down 85% as from experience I usually use 15% for private use.

 

Really I would advise doing your log book at a time where you are busiest. ie when you are in the field working and not on Holiday or in the office training.

 

Your travel to and from your usual place of work is counted as Private.

 

I just ordered my new car today am well pleased with it.