MV Expenses on ATO Radar
06/03/15 20:17 Filed in: Tax
ATO seems to have increased their audit activities with regards to MV expense claims by doctors. Logbooks in particular are being investigated. When claiming MV expenses under the logbook method – which often gives the best results for tax purposes – one needs to ensure that all requirements have been met. In the first place you should actually have kept a logbook within the last 5 years.
What constitutes ‘business use’ is changing, though. Although normally travel from home to work is not considered business travel, many GPs and some specialists could claim travel from home to the surgery/clinic as business travel if they carried ‘heavy equipment’ : a combination of resuscitation equipment, doctors bag which may include prescription drugs, laptop, first aid equipment and patient files, leads, portable ECG equipment. With increased digitalisation the laptop and patient files may no longer be carried. Doctors should therefore carefully consider if what they now carry from home to their surgery or clinic would still qualify.
In case of an audit ATO may require you to substantiate your claim. Clients often ask: ‘ what is normal to claim’? ‘Normal’ is not relevant, though. You can claim YOUR expenses as they apply in YOUR circumstances, and you must be able to substantiate them!
We have fact sheet available for clients which explains in more detail how to claim under the logbook method. Note that this works the same whether claiming in your own name or through a company or trust. Ask Medical Accounting Services to send you one, if you wish.