WHY YOU SHOULD KEEP TRACK OF KILOMETRES

Billions of dollars in tax deductions are likely to be missed this year as employees, sole traders and other business owners fail to claim enough work-related kilometres.

Taxpayers are avoiding motor vehicle logbooks and instead opting for simpler tax deduction methods allowed by the Australian Taxation Office, but accountants warn this practice potentially halves their deductions.

Logbooks only need to be filled out for 12 weeks once every five financial years unless circumstances change, and April 7 was exactly 12 weeks before June 30.

Mileage tracking company GoFar has examined work-related travel data from the ATO, Bureau of Statistics and industry reports and estimates up to $9bn is underclaimed annually.

“People don’t bother with logbooks because they are busy and recording kilometres is a time sink,” GoFar CEO Danny Adams said.

“The main under-claim is probably the 720,000 Aussies who claim exactly 5000km.

“If you claim 5000km or less you don’t need to keep a logbook, so it’s much easier.

“While a few of these (720,000 Aussies) may actually be driving exactly 5000km — and some may even be padding the claim — most are knowingly deciding to miss out in order to reduce the burden of paperwork.”

The ATO increased its cents per kilometre rate from 68c to 72c this financial year, and its 5000km limit equates to a maximum $3600 deduction. However, couriers, drivers and others often spend much more on fuel, repairs, insurance, registration, depreciation, loan interest and lease payments.

CLAIMING CAR EXPENSES

The Australian Taxation Office says people cannot claim for trips between work and home, but can claim for:

• Performing work duties;

• Attending work-related meetings;

• Travelling between two places of employment if neither is their home.