loader image

Home > Blog > Claiming a tax deduction for motor vehicle and fuel expenses

Claiming a tax deduction for motor vehicle and fuel expenses

Date: 15 July 2022

As a business owner you can claim a tax deduction for expenses for motor vehicles, including fuel. The Government has put together this information for the 2022-23 financial year.

MOTOR VEHICLES

From 1 July 2022, the following car threshold amounts apply for the 2022–23 financial year.

Income tax:

  • The car limit for 2022–23 is $64,741.
  • This is the maximum value that can be used to calculate depreciation on the business use of a car first used or leased in the 2022–23 income year.

Goods and services tax (GST):

  • If you purchase a car and the price is more than the car limit, the maximum GST credit you can claim (except in certain circumstances) is one-eleventh of the car limit, which is $5,885 in 2022–23.
  • You can’t claim a GST credit for any luxury car tax you pay when purchasing a luxury car, regardless of how much you use the vehicle to carry on your business.

Luxury car tax (LCT):

  • $84,916 for fuel-efficient vehicles, in line with an increase in the motor-vehicle purchase sub-group of the Consumer Price Index (CPI).
  • $71,849 for all other luxury vehicles, in line with an increase in the “All Groups” CPI.
  • Remember, the LCT value of a car generally includes the value of parts, accessories or attachments supplied or imported at the same time as the car.

Resources:

Cents per kilometre method

Car cost limits for depreciation

GST and motor vehicles

Luxury care rate and thresholds

When LCT happens

FUEL

If you claim fuel tax credits, you must apply the lower rates for fuel acquired from 30 March 2022.

Each time you complete your BAS, the easiest way to ensure you are using the correct rate is to use the ATO’s fuel tax credit calculator.

The lower fuel tax credits rates result from halving fuel excise for six months, from 30 March to 28 September.

During the temporary rate reduction period, businesses using fuel in heavy vehicles for travelling on public roads won’t be able to claim fuel tax credits. This is because the road user charge exceeds the excise duty paid, which reduces the fuel tax credit rate to nil.

Resources:

Fuel tax credit tools

Rates – Business

Fuel tax credit business records – overview

Know More

EOI – Payday Super Workshops

EOI – Payday Super Workshops

Our Payday Super workshops have been well received across our Glen Innes and Tamworth offices, and the responses have been extremely positive. Sessions have been well attended, with clients leaving feeling more informed, confident, and prepared for the changes ahead....

read more
Armidale Keynote Event – Leading on the Edge

Armidale Keynote Event – Leading on the Edge

Last week, we were proud to host the Leading on the Edge Keynote Event in Armidale as part of R+M’s 75‑year celebrations. Held at the Armidale Ex‑Services Memorial Club, the event brought together clients and business leaders from across the New England North West....

read more
Payday Super Reforms

Payday Super Reforms

Payday super reforms (Australia) commence 1 July 2026. Employers will need to pay Super Guarantee (SG) contributions at the same time as wages, rather than quarterly. What’s changing • Super must be paid on payday: employers must pay SG at the same time as wages...

read more