# ATO: Cars and tax



## Jack Malarkey (Jan 11, 2016)

From the Australian Taxation Office's Small Business Newsroom:


*Cars and tax*










From 1 July 2018 the following car threshold amounts apply.

*Income tax*

There's an upper limit on the cost you use to work out the depreciation for the business use of your car or station wagon (including four-wheel drives). You use the car limit that applies to the year you first use or lease the car.

The car limit for 2018-19 is $57,581.

*Goods and services tax (GST)*

Generally, if you purchase a car and the price is more than the car limit, the maximum amount of GST credit you can claim is one-eleventh of the car limit amount.

You can't claim a GST credit for any luxury car tax you pay when you purchase a luxury car, regardless of how much you use the car in carrying on your business.

*Luxury car tax*

From 1 July 2018 the tax threshold for luxury cars increased to $66,331.

The threshold for fuel efficient luxury cars for the 2018-19 financial year remains at $75,526.

In general, the value of a car includes the value of any parts, accessories or attachments supplied or imported at the same time as the car.

*Find out about:*

Car cost limit for depreciation
GST and motor vehicles
Luxury car tax rate and thresholds
When LCT applies


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## Jack Malarkey (Jan 11, 2016)

The source of the Tax Office information above is https://www.ato.gov.au/Newsroom/smallbusiness/Lodging-and-paying/Cars-and-tax/?sbnews20180711.


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## shmiff (Aug 5, 2017)

Thanks Jack Malarkey

Here's a link to methods for calculating vehicle depreciation for rideshare drivers.

http://myuberincome.com.au/driver-guide/tax-related/uber-car-depreciation/

shmiff


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## Jack Malarkey (Jan 11, 2016)

shmiff said:


> Thanks Jack Malarkey
> 
> Here's a link to methods for calculating vehicle depreciation for rideshare drivers.
> 
> ...


Thanks, shmiff. That's an accurate and clear explanation.

Depreciation of cars is an area where the Tax Office's explanations could be improved on.

In my own case, I have self-assessed the effective life of the car I drive for rideshare as 4 years (which is consistent with the advice you have linked to).


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## shmiff (Aug 5, 2017)

According to the current Taxation Rules TR2018/4, the effective life for assessing ATO-standardised depreciation of UberX and UberBlack vehicles on your tax return is eight and six years respectively.

But yes, you can self-assess if you know what you're doing. I don't, so I'll stick with the ATO determinations.


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