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Speak to any person who commutes for business these days, log books are tedious and unreliable but essential for claiming work related travel expenses with the Australian Taxation Office (ATO). Somewhere caught between a rock and a hard place.
Our Managing Director, Jason Croston, purchased a new car this year and was challenged like any other business owner. He was time poor and dreading the thought of completing yet another logbook, but he also wanted to have accurate record keeping to satisfy ATO requirements.
Being proud of our tech stack capabilities internally for the business, Jason was in a desperate search to find a solution to avoid manually completing his logbook, he stumbled upon Driversnote.
Driversnote is very easy to use – available on web browser or app (Android & Apple), combined with a low barrier to use with the free version, this earns high recommendations by most who utilise it.
For the ease of use and accurate record keeping, the basic package which includes a car beacon, will eliminate the app collecting data from public transport trips/Uber/Taxi. This beacon is easily installed via Bluetooth, then you’re on your way and recording your trip.
While many claim their business-related kilometres through the logbook method and receive a deduction for their actual vehicle expenses, those who are not in possession of a valid 12-week logbook from the past 5 years can only claim through the cents per kilometre method.
The ATO have proposed an increase of 3 cents per kilometre for taxpayers that claim motor vehicle expenses through the cents per kilometre method. The rate will be used in the 2023 financial year - 1 July 2022 to 30 June 2023 and will amount to 75 cents per kilometre - 3 cents up from the previous two years rate of 72 cents per kilometre.
The rate increase is a welcome sight for all who use their personal vehicle for work-related driving, due to rising maintenance costs for vehicles, as well as globally high fuel prices.
Besides a higher cents per km rate for the new financial year, making sure to record your business-related kilometres to ensure you can maximise the deduction receive. Keeping this in mind, individuals can only deduct up to 5000 work-related kilometres but more should you have record kept. Another reason, Jason decided an automatic kilometre tracker to ensure he can claim his maximum deduction.
Countries like Canada and the USA, where the new tax year starts on 1 January 2022 have also increased their mileage rates for the current tax year due to rising ownership and maintenance costs for vehicles.
The US went from a cents per mile rate of 56 USD cents in 2021 to 58.8 USD cents per mile for 2022, totalling an increase of 2,5 USD cents. Canada’s 2022 rate per kilometre went up from 59 CAD cents per km in 2021, to 61 CAD cents, totalling an increase of 2 CAD cents.
At the same time, most European countries show no interest in raising rates for the deduction of using one’s personal vehicle for business purposes. Some, like Sweden and the UK, last updated their rates 15 years and 11 years ago respectively.
While a trade union in Sweden is pushing for an increase in the rates per kilometre, and there was an official petition in the UK for the same, nothing is moving yet.
This only goes to show Australia is doing the right thing to ensure taxpayers are properly reimbursed considering the rising costs of fuel and car maintenance.
While the situation is rather bleak in most European countries, Denmark has already officially announced higher rates for business-related driving from mid-2022, specifically due to soaring fuel prices that all of Europe is currently experiencing.
The Danish authorities determine each upcoming year’s mileage rates in November based on estimations of next year’s costs for owning and operating a vehicle. A per-kilometre rate change during the tax year is a rare occurrence for the country, having taken place only twice before in the last 30 years.
Denmark is also raising its commuting deduction per-kilometre rate. One of few countries worldwide to provide a commuting deduction, Denmark is raising the rate retroactively from 1 January 2022 to alleviate commuters’ daily expenses.
Driversnote is small SaaS startup based in the heart of Copenhagen, Denmark but have assisted more than 1 million users from around the world track their trips. Their team is appreciative of feedback provided by Jason’s experience & we love to support startup businesses like these.
If you would like more information, please reach out to our team or head over to the Driversnote website to connect with their team!
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