MOTOR VEHICLES AND TAX TIPS
With the end of financial year just around the corner, why not maximise your tax benefits with claiming for your windscreen replacements for your vehicles. That crack you’ve been driving around with for ages will only get worse and that chip repair, well you know that will eventually turn into a crack.
At D & C Auto Glass, we are known in the industry for our incredibly fast personalised service, on the road guarantees and value for money on windscreen replacement and workmanship. Repairing or replacing a windscreen can be such a drain to a business especially when they need to get their team back on the road and that is why many businesses choose to work with us.
We can also go through your insurer, insurance broker or fleet provider.
Having mobile units that service the entire Perth metro area, we are there when you need us the most; short wait times, super quick turn around times for replacements as well as extra care for the vehicles and their drivers. We created D & C Auto Glass in 2010 with our customers in mind, helping those (that need it) to navigate the industry and to put their trust in us.
Each windscreen has it’s own challenges and price is determined by the vehicle’s make, model, year, whether the glass has technology like heads up display, cameras, lane guidance, rain sensors. It could also be a heated or acoustic windscreen so prices vary considerably; and some models have up to 9 different windscreens that we have to verify so if we are asking a lot of questions or ask for photos—be patient with us—this would be the reason why. Once we know what models are in your fleet, it is no longer a problem as we keep a record of the vehicles.
We asked Steven A. Windsor FMAAT, FCCA, Business Advisory Manager for Pascoe Partners Accountants, what to look out for this year when trying to get the maximum benefits for our business vehicles. These are Steven’s suggestions.
Small businesses can claim expenses in relation to motor vehicles as a tax deduction. However, there are some rules that need to be followed to get the maximum claim and not fall foul of the Tax Office.
General running costs like fuel, servicing, licences and insurance costs are all tax deductions to the extent the vehicle is used in the business. To get the greatest tax deduction, it is recommended that a logbook is kept to justify the business percentage. Logbooks should be kept for 12 continuous weeks and are valid for five years provided there is no significant change in the business use. The logbook does not have to be completed within a financial year to be valid in that year.
Motor vehicles provided to employees may also be subject to Fringe benefits Tax. There are a number of exceptions around those garaged on the employer’s premises, using vehicles to transport bulky tools, carrying capacity of more than 1 tonne and minor personal use. It is best to get advice specific to your circumstances if you provide vehicles to employees.
In the 2021 and 2022 financial years, eligible small businesses can claim a 100% tax deduction for the cost of a vehicle. To claim in 2021, the vehicle must have been delivered and available for use by the 30th June. Regardless of taking delivery on, say the 29th June, a full tax deduction for the cost may be claimed this financial year. Again we suggest you seek advice for your particular circumstances.
Businesses registered for GST can claim back the GST paid on motor vehicle expenses. Be careful with licences and insurance as there are some components on those costs, such as stamp duty, which are GST free. GST on the purchase of a motor vehicle can be claimed to the extent it is used in the business, but is subject to maximum limits. GST registered businesses have to charge GST on the trade in which is not subject to any limits.
Motor vehicle expenses tend to attract some attention from the Tax Office, so we suggest you get some advice to make sure you are doing things right.
If you would like any further information about your vehicles or advice from our accountant featured in this article, Steven can be contacted at Pascoe Partners Accountants, A Level 2, 100 Havelock Street West Perth WA 6005 T (08) 9322 3400.
If you would like more information about how we can help, we would love to be able to collaborate with you and service you and your business for your auto glass requirements offering a personalized fast customer service experience.
Please let me know if you would like to discuss this opportunity in more detail and we can get you set up on our system (with no upfront cost) to ensure a smooth and fast service when you need it most.