Requirements for keeping a Motor Vehicle Log book
Claims for car expenses made under the log book method must be supported by appropriate log book and odometer records.
For the year in which car expenses are claimed using the log book method, a log book recording each business journey must be kept for a minimum continuous period of 12 weeks at any time in the year.
Odometer records must also be kept showing the odometer reading of the car at the beginning and end of the 12-week period.
The log book must include for each business trip:
- the date the trip began and ended;
- odometer readings at the start and finish of the trip;
- the number of kilometres travelled; and
- the purpose of the journey. (The entry must be descriptive enough to characterise it as a business journey, and to correlate broadly with the distance travelled. An entry of "Business" only is not sufficient.)
In addition, the log book must contain the following:
- when the 12-week period began and ended;
- odometer readings at the start and finish of the 12-week period;
- the total number of kilometres travelled during the period;
- the total number of business kilometres travelled during the period (per the log book records); and
- the percentage of business kilometres travelled (ie out of total kilometres travelled).
Where two or more business journeys are undertaken consecutively during the one day, only one log book entry for that day is required.
Log book entries must be made at the end of the journey or as soon as possible after it.
Once the extent of business use of the vehicle during the 12-week period has been established, an estimate of the business proportion of car expenses can be made for the full year, considering the pattern of use established in the log book period, and allowing for variations in the pattern of use throughout the year for holidays and seasonal factors.
In the years following the log book year, the log book should be used in determining the reasonable estimate of business kilometres travelled during that year.
For non-log book years, odometer readings must be kept at the start and end of the year. Based upon a strict interpretation of the law, a log book is not required to be kept for the next four years, unless instructed to do so by the Commissioner of Taxation, or if additional cars are acquired for which the log book method is to be used.
However, to support the level of business use, we believe it is prudent to complete a new log book if your usage varies by 10% or more.