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In the 2015-16 Federal Budget, the government announced that it will simplify the car expense deductions for individuals. Under current arrangements, there are four methods for claiming car expenses:
To simplify the rules, from 1 July 2015 the government will abolish the one-third of actual expenses method and 12% of original value method. The cents per kilometre method (with the existing 5,000km cap) and the logbook method (with unlimited kms) will remain.
The cents per kilometre method will be simplified to use a standard rate of 66 cents per km rather than a rate based on the engine size of the car.
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