In the past I have kept a log book and claimed a percentage of all car expenses as a tax deduction for business use. This includes fuel. I was wondering what people do for an EV for this. Or how do you track the power costs for recharging the car. Or do you use some other method to claim car expenses. Granted the costs aren't significant compared to fuel expenses but any dollar saved in tax is a good thing for me.
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Tax and driving an EV
- Thread starter WA-T3sla
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- Australia New Zealand
Mark E
Member
HankLloydRight
No Roads
That will understate the actual power usage due to charging inefficiencies between the wall and the battery.
HankLloydRight
No Roads
Why not just take the standard cents per mile deduction? You'd surely come out ahead than tracking actual expenses.
Oops.. Just saw this is in Australia and New Zealand, so I don't know if this is allowed.
Oops.. Just saw this is in Australia and New Zealand, so I don't know if this is allowed.
TesAus
Member
pretty sure that is still an option and I think is a flat rate whereas historically it was banded by engine size.
I'm not sure the cents per km would work as from memory the options are for a conventional engine or rotary engine and varies by capacity. In any case this would result in an extremely low calculation. Claiming for actual costs would allow approx $15k/yr to be claimed in depreciation alone, plus a percentage of any interest paid on a loan, insurance, rego etc. not sure how claiming for a leased vehicle works these days.
i first thought a check of total kWh used for the year would be ok but then there are lots of variables associated with that. Eg if on a tou plan what rate to apply, what about charging away from home using a free charger at shops etc., what about solar. Any value claimed would be subjective and subject to query under audit.
i first thought a check of total kWh used for the year would be ok but then there are lots of variables associated with that. Eg if on a tou plan what rate to apply, what about charging away from home using a free charger at shops etc., what about solar. Any value claimed would be subjective and subject to query under audit.
If you really wanted to be precise, you could log the percentage of battery charged and calculate how many kwh you pumped into it. Your elec bill will tell you how many cents per kwh you are charged. That would be your expense and claim your deduction from there. But it sounds like being penny wise and pound foolish. I am proposing to claim the depreciation and wear the elec cost myself.
HankLloydRight
No Roads
That's what Mark E suggested above, and would not be accurate because the car consumes about 10% more energy from the wall to charge the battery (due to heat and inefficiencies). And there are more inefficiencies when drawing power out of the battery.
One would need an inline watt meter on the charging outlet to measure the actual power used going into the battery. Something like this: elite true power meter - home power monitor (this is what I use, sensing the actual power draw during charging).
Dborn
Confirmed
I think the tax office specifies a per km rate on the basis of small medium and large car. This is a large car. So just use the tax office rate and multiply by your km usage. You will come out way ahead. If I recall correctly a small car is around 60c. The rate takes all expenses into account, such as rego, depreciation fuel, insurance, etc. remember, this is a large car that happens to be electric.
Just Google the ATO site.
Mynrma.com.au also has a calculator. Just use a car of comparable size and horsepower, add your insurance premium, estimate your electricity cost per 100 km based on an average of 25c per unit ( power shop figure), so approx 20 units so $5, and the calculator does the rest.
Just Google the ATO site.
Mynrma.com.au also has a calculator. Just use a car of comparable size and horsepower, add your insurance premium, estimate your electricity cost per 100 km based on an average of 25c per unit ( power shop figure), so approx 20 units so $5, and the calculator does the rest.
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Well for the sake of argument, you could always separately metre your wall charger. Then 100 per cent of your actual costs will cone on a separate bill. QED.
Mark E
Member
Yes just reading the usage will ignore charging losses, however you can easily account for that and you have a firm basis for the calc which should stand up under audit. Since the average energy use can be shown as around 200Wh per km you could use that - especially if you use the trip meter readings to justify it. Add 10% for efficiency losses and then multiply the lot out by your percentage business use from your logbook and the total km for the year. Use your average electricity price - in my case, simple since I'm using off peak only.
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Electricity is such a small part. Do the logbook and claim depreciation, etc. For electricity I have a power meter (aeon labs via a vera3) which logs to a detailed spreadsheet so I can calculate time of use. It doesn't amount to much. The meter cost more than what I'll claim this year!
I can't see the cents per km being worthwhile for anyone, unless you do really low biz use. Do your logbook.
I can't see the cents per km being worthwhile for anyone, unless you do really low biz use. Do your logbook.
Gabz
Member
I can't remember what i did last year 500km claim via logbook but wasn't sure which rate... just remember the accountant asking me if it was a rotary or normal engine.. and i said neither.
Dborn
Confirmed
Rotary is reasonably close......... Actually, as i recall, that too comes from the ATO web site.
Electricity is such a small part. Do the logbook and claim depreciation, etc. For electricity I have a power meter (aeon labs via a vera3) which logs to a detailed spreadsheet so I can calculate time of use. It doesn't amount to much. The meter cost more than what I'll claim this year!
I can't see the cents per km being worthwhile for anyone, unless you do really low biz use. Do your logbook.
Cents/km is definitely not worthwhile in my circumstance. Business use is just under 70% so claiming depreciation etc is the way to go. Power use I am guesstimating would be only about $400/yr giving potential saving on tax of about $140, so like you say the cost of properly metering the charging cost outweighs the tax saving.
Mark E
Member
Depreciate from the LCT (77k) at 20% each year multiplied by your business use from your logbook.
D1 - Work-related car expenses | Australian Taxation Office
I meant is there anything in the latest budget for small business that changes this?
Cents-per-km is going to reduce to 66c; log book method remains; other methods are going away. I haven't found any further details on depreciation rates but I suspect they will stay the same.
I've just finished my logbook today, need to calculate it now to see what my biz use looks like after all that Canberra driving.
I've just finished my logbook today, need to calculate it now to see what my biz use looks like after all that Canberra driving.
I just got the below from my account, so I thought you may all find it helpful.
Expanding accelerated depreciation for small business - immediate write-off and small business pool
The government will significantly expand accelerated depreciation for small businesses. It will do this by allowing small businesses with aggregate annual turnover of less than $2 million to immediately deduct assets they start to use or install ready for use, provided the asset costs less than $20,000 (currently, an immediate write-off is generally available for assets costing less than $1,000). This will apply for assets acquired and installed ready for use between 7.30pm (AEST) 12 May 2015 and 30 June 2017.
Assets valued at $20,000 or more (which cannot be immediately deducted) can continue to be placed in the small business simplified depreciation pool (‘the pool’) and depreciated at 15% in the first income year and 30% each income year thereafter. The pool can also be immediately deducted if the balance is less than $20,000 over this period (including existing pools).
The government will also suspend the current ‘lock out’ laws for the simplified depreciation rules until 30 June 2017. Currently, these ‘lock out’ rules prevent small businesses from re-entering the simplified depreciation regime for five years, if they opt out.
From 1 July 2017, the thresholds for the immediate depreciation of assets and the value of the pool will revert back to existing arrangements (which are currently based on a ‘less than $1,000’ threshold).
Claiming car expense deductions - modernising the existing car expense claim methods
Currently, an individual (or a partnership which includes at least one individual partner) can claim car expense deductions in respect of a car owned or leased (e.g., by the individual) using one of the four methods in Division 28 of the ITAA 1997 (i.e., the ‘cents per km method’, the ‘12% of original value method’, the ‘one-third of actual expenses method’ or the ‘log book method’).
From the 2015/16 income year, the government will modernise the methods of calculating work-related car expense deductions, as follows:
Expanding accelerated depreciation for small business - immediate write-off and small business pool
The government will significantly expand accelerated depreciation for small businesses. It will do this by allowing small businesses with aggregate annual turnover of less than $2 million to immediately deduct assets they start to use or install ready for use, provided the asset costs less than $20,000 (currently, an immediate write-off is generally available for assets costing less than $1,000). This will apply for assets acquired and installed ready for use between 7.30pm (AEST) 12 May 2015 and 30 June 2017.
Assets valued at $20,000 or more (which cannot be immediately deducted) can continue to be placed in the small business simplified depreciation pool (‘the pool’) and depreciated at 15% in the first income year and 30% each income year thereafter. The pool can also be immediately deducted if the balance is less than $20,000 over this period (including existing pools).
The government will also suspend the current ‘lock out’ laws for the simplified depreciation rules until 30 June 2017. Currently, these ‘lock out’ rules prevent small businesses from re-entering the simplified depreciation regime for five years, if they opt out.
From 1 July 2017, the thresholds for the immediate depreciation of assets and the value of the pool will revert back to existing arrangements (which are currently based on a ‘less than $1,000’ threshold).
Claiming car expense deductions - modernising the existing car expense claim methods
Currently, an individual (or a partnership which includes at least one individual partner) can claim car expense deductions in respect of a car owned or leased (e.g., by the individual) using one of the four methods in Division 28 of the ITAA 1997 (i.e., the ‘cents per km method’, the ‘12% of original value method’, the ‘one-third of actual expenses method’ or the ‘log book method’).
From the 2015/16 income year, the government will modernise the methods of calculating work-related car expense deductions, as follows:
- The ‘12 per cent of original value method’ and the ‘one-third of actual expenses method’ (which are used by less than 2% of those who claim work-related car expenses) will be removed.
- The ‘cents per kilometre method’ will be modernised by replacing the three current (cents per kilometre) rates based on engine size, with one rate set at 66 cents per kilometre (in respect of all cars). The Commissioner will be responsible for updating the rate in following years.
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