Logbook Method – ATO Compliance

by | Sep 20, 2023

If you are using a vehicle for business, it is important to keep a detailed record of its use in order to claim vehicle expenses for tax purposes. If you are a sole trader using the logbook method, the ATO requires proof of distance travelled in the form of a logbook that must cover a 12 week period (one year) in the financial year.

If a non-commercial vehicle is purchased in a company or trust, a logbook can be used to determine the percentage the car was used for private and business use throughout the year. The reason for detailed logbook entries is to reduce business owners claiming tax benefits vehicle purchases that are only being used for private purposes. Logbooks also help minimise time spent making private use adjustments in accounts when bookkeeping.

Logbooks can be kept using a spreadsheet or through a mobile app for convenience.

Here are a few popular ATO compliant logbook apps:

The ATO app includes a free logbook keeping function in the myDeductions tool. Sole traders can use this tool to record expenses and work-related trips within the app. As the data is stored locally, it is important to use the back up feature in case you lose your device. • Free • GPS tracking • Apple and Android
Driversnote offers a free option that allows users to log up to 20 trips per month. Trips can be edited and details such as odometer readings can be added. Reimbursements are automatically calculated with updated ATO mileage rates. • Free and paid version • GPS tracking • Multiple cars or employers •Downloadable mileage report • Apple and Android

DriverDirect offers GPS or manual tracking and expense recording including receipt photos. Fuel finder and mechanical service centre finder included in the app.
• Paid
• GPS tracking
• Multiple vehicles
• Expense recording
• Business and private use split
• Downloadable reports
• Apple and Android

GOFAR offers fast and effortless tracking for those who prefer less admin time. Their paid subscription comes with a leave-in device that automatically tracks trips and adds them to the app along with vehicle monitoring. Expenses such as fuel can be recorded and reports are downloadable. • Paid • GPS tracking • Expense recording • Business and private use split • Downloadable reports • Apple and Android

What to record in your logbook:

Your logbook must contain:
✅ When the logbook period begins and ends
✅ The car’s odometer readings at the start and end of the logbook period
✅ The total number of kilometres the car travelled during the logbook period
✅ The number of kilometres travelled for each journey. If you make two or more journeys in a row on the same day, you can record them as a single journey
✅ The odometer readings at the start and end of each subsequent income year your logbook is valid for
✅ The business-use percentage for the logbook period
✅ The make, model, engine capacity and registration number of the car

For each journey, record the:

Reason for the journey (such as a description of the business reason or whether it was for private use
✅ Start and end date of the journey
✅ Odometer readings at the start and end of the journey
✅ Kilometres travelled

What is the Logbook Method?

The logbook method is a way for businesses and individuals in Australia to determine their tax-deductible car expenses accurately. It allows you to claim deductions based on the business use of your vehicle. To use this method, you must maintain a logbook that records your vehicle’s usage over a continuous 12-week period. This logbook should detail all your journeys, including when and why you made them.

Logbook Timeframe

If this is the first year you have used the logbook method, you must keep a logbook for at least 12 continuous weeks during the income year. That 12-week period needs to be representative of your travel throughout the year.

If you started to use your car for business-related purposes less than 12 weeks before the end of the income year, you can continue to keep a logbook into the next year so it covers the required 12 continuous weeks. Each logbook you keep is valid for five years, but you may start a new logbook at any time.

Two or more cars:

If you want to use the logbook method for two or more cars, the logbook for each car must cover the same period. The 12-week period you choose should be representative of the business use of all cars.

 Have any questions?

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– Team BKSP