Attention business owners! Here’s how you can save money on your cars…

Claiming GST Credits

Depending on whether your vehicle is used entirely for your business, or only partially, you may be eligible to claim GST credits (or partial GST credits) for the GST included in the vehicle price.

 

Exceeding the car limit

If your car’s price exceeds the financial year’s car limit, the maximum GST credit you can claim is an eleventh of the car limit. In the 2023-24 financial year, the car limit is $68,108, which means the maximum you can claim in GST is $6,191.

In this case, if you use your car partially for business purposes, then you use the same proportion of the car limit on your activity statement.

There are exceptions to this rule, which can be found at the ATO website.

 

Luxury cars

If the GST-inclusive value of your car is higher than the luxury car tax threshold, you cannot claim any credits on the luxury car tax that you pay.

 

More information on claiming credits for the lease of cars, or purchase of second-hand motor vehicles, can be found at ato.gov.au, which is the source of our information.

 

Although this may be a complicated process, our team at the Bottom Line are ready to help your business save on tax – just reach out to us!