Is Your Vehicle A Work Vehicle? An Explainer Of The Tax Treatment

One of the most common points of confusion we see among clients is whether their vehicle is treated as a car or as a work vehicle for tax purposes.

On the surface, it seems like a small distinction, but the difference can have a big impact on what expenses you can legitimately claim.

Unfortunately, this misconception has caught a number of people out, with a notable example of one individual even having to sell a recently purchased vehicle and replace it with another after learning the hard way that not every ute qualifies as a “work vehicle.”

Let’s unpack the difference so you don’t end up in the same situation.

What The ATO Means By “Car”

The Australian Taxation Office (ATO) has a very specific definition of a car. For tax purposes, a car is a motor vehicle that:

  • is designed to carry less than one tonne of load, and
  • is designed to carry fewer than 9 passengers.

This definition captures most sedans, hatchbacks, station wagons, SUVs, and — importantly — many popular dual-cab utes.

If your vehicle falls into this category, it doesn’t matter if you use it primarily for work or business — it is still treated as a car under the rules. That means your claims are limited, and FBT (Fringe Benefits Tax) rules can apply if the car is provided to employees.

What Counts As A “Work Vehicle”

On the other hand, a vehicle that doesn’t meet the above definition falls into a different category. Work vehicles are generally those that are:

  • designed to carry more than one tonne, or
  • designed to carry 10 or more passengers.

This group includes larger commercial utes, vans, trucks, and minibuses. These vehicles are not considered “cars” under the ATO definition, so they are treated differently when it comes to FBT and deductions.

The Ute Misconception

Here’s where many people get caught out: just because you buy a ute doesn’t mean you automatically get to treat it as a work vehicle with all expenses written off.

If the ute is rated to carry less than one tonne, it’s still classified as a car. That means your claims are restricted, and you can’t simply deduct 100% of costs like fuel, servicing, or finance without proper substantiation.

One of our clients discovered this after purchasing a dual-cab ute, assuming it was a work vehicle. When the truth came out at tax time, they were left with fewer deductions than expected — and ultimately chose to sell the ute and purchase a vehicle that met the correct classification.

The Importance Of Logbooks

Even when your vehicle does qualify as a work vehicle, the ATO requires proof of business usage. This is where the logbook method comes in.

A logbook must record:

  • the date of each trip,
  • the odometer reading at the start and end,
  • the purpose of the trip (business or private), and
  • the total kilometres travelled.

It’s not enough to estimate or reconstruct later — the ATO places a high priority on accurate, contemporaneous records. We’ve seen multiple cases where legitimate business mileage claims were knocked back simply because the logbook was incomplete, inconsistent, or not kept for the required period (usually 12 continuous weeks).

Key Takeaways For Vehicle Deductions

  1. Check before you buy – don’t assume a ute is a work vehicle. Look at the manufacturer’s load capacity and passenger capacity.
  2. Understand the rules – cars and work vehicles are treated differently for tax and FBT.
  3. Keep accurate records – a proper logbook is essential if you want your claims to stand up under scrutiny.

A vehicle can be one of the biggest business expenses you make, so it pays to get the classification right from the start. 

If you’re considering purchasing a new vehicle, it’s always worth checking with us first so we can confirm how the ATO will treat it. A quick conversation upfront can save you from an expensive mistake later.

Professional Services Partnerships & Tax: What You Need To Know

When professional practitioners exit or retire from a partnership, their tax responsibilities don’t simply end with their departure. It’s important to understand that even after leaving a professional services firm, there are ongoing tax obligations that must be met. Neglecting these can lead to errors, oversights, or compliance risks.

First, any assessable distributions from the partnership need to be recorded properly. Even after you leave, your partnership agreement might continue to entitle you to distributions based on the firm’s profits. These payments are taxable in the year in which they are derived, and they must be declared as income—not treated as capital or pension-type payments. Unfortunately, former partners sometimes misclassify or omit such amounts altogether.

Also, retirement payments or deferred entitlements under partnership agreements require careful treatment. These are often profit allocations rather than pensions or superannuation. Misunderstandings about how these entitlements are structured lead to mistakes. It’s essential to check the specific partnership or retirement deed involved so you correctly classify and report these payments.

Another area that sometimes causes confusion is the capital account. This reflects your investment or share of equity in the partnership, which may result in capital gains or losses when you exit. However, not all losses are necessarily deductible, and not all gains qualify for discount. Proper record-keeping is required to determine what can be claimed, especially where there have been adjustments to the capital account around the time of exit.

Some practitioners also overlook obligations tied to related service entities or arrangements that involve associated entities (sometimes called service trusts or “Phillips arrangements”). If you’ve been involved in or benefited from such arrangements, you’ll need to ensure you understand how deductions and income allocations work in those cases.

To make sure you’re compliant when exiting a partnership:

  • Review your partnership agreement and final financial statements.
  • Seek advice early from a tax professional familiar with such setups.
  • Keep detailed records of all payments and correspondence post-exit.
  • Accurately report all income and distributions, including payments you’re entitled to but may not yet have physically received.
  • Correctly classify payments related to retirement and ensure capital gains or losses are properly calculated.

Leaving a firm might feel like the end of certain responsibilities—but in tax terms, many obligations persist. Getting the details right not only keeps you compliant but also protects you from unexpected liabilities down the line.

Looking for more tailored guidance about your situation? Why not speak to one of our trusted team to find out how we could help?

Home-Based Businesses And Claiming Deductions

If you run your business from home, you’re not alone—and you may be entitled to valuable tax deductions. 

The ATO allows deductions for the portion of your home expenses that relate directly to your business. 

Let’s break down the essentials so that you know what you might be able to claim on your tax return.

  1. What Counts as a Home-Based Business?

A home-based business is one where a part of your home is used for business—whether that’s a dedicated study or even a corner in your living space. 

The key rule is: only the business-use portion of expenses is deductible.

  1. Two Types of Expenses

  • Running expenses cover day-to-day costs like electricity, internet, phone, cleaning, and repairs. You can claim these even if your workspace isn’t a distinct “office” room.
  • Occupancy expenses include rent, mortgage interest, council rates, and insurance. These are only deductible if your workspace acts like a true “place of business”—for example, it’s used exclusively, clearly separate from your personal living space, or used by clients.

  1. How to Calculate Your Expenses

The ATO offers a few easy-to-use methods—choose whichever best suits your situation:

  • Fixed-rate method: Claim 70 cents per hour worked from home. This covers energy, phone, internet, stationery, and computer consumables. Just keep a record of your working hours.
  • Actual cost method: Claim your actual expenses (but only the business portion), provided you have the receipts to back it up.
  • Floor area method: If you have a designated workspace, apportion occupancy costs based on the floor area used for business and the time it’s used.

  1. Other Important Considerations

  • Depreciation: You can separately claim depreciation for business-use items like laptops, phones, or office furniture—regardless of whether you use the fixed-rate method.
  • Capital Gains Tax (CGT): If you sell your home and have claimed occupancy expenses, a portion may not be covered by the main residence exemption.
  • Records: Keep detailed records—including diaries of hours worked (if using fixed-rate), receipts, and calculations—for at least five years.

Understanding and claiming the right home-based business deductions can mean real savings—if you do it the right way. Keep it simple: choose the method that works best for your business, track everything, and only claim your fair share of the expenses.

Your accountant can help you choose the best method for your situation and ensure you’re both compliant and maximising your entitlements. Why not speak with one of our trusted team, and find out how we can help you and your business today?

The Key Documents You Need For Your Individual Income Tax Return (When Seeing Your Accountant)

Tax time often sneaks up faster than expected, and a little preparation can make your appointment with your accountant far more efficient—and stress-free.

Bringing the right documents ensures nothing is missed, and you can feel confident that your return is accurate and complete. Here’s a handy checklist of what to gather before your meeting.

  1. Identification and Personal Details
     If it’s your first visit, bring along photo ID such as a driver’s licence or passport. Your accountant may also need your tax file number (TFN) and bank account details, so any refunds can be deposited directly.
  2. Income Records
     Most income details are pre-filled by the ATO these days, but it’s still a good idea to bring:
  • Your most recent income statement (formerly called a payment summary or group certificate) from your employer.
  • Any pension or government payment summaries (e.g. Centrelink, Veterans’ Affairs).
  • Records of interest earned on bank accounts.
  • Dividend statements from shares or managed funds.
  • Details of any capital gains or losses from selling property, shares, or other investments.
  • If you run a side hustle or freelance, bring business or contractor income records.
  1. Deduction Information
     This is where tax savings are often found. Gather receipts, invoices, or statements for:
  • Work-related expenses such as uniforms, protective clothing, tools, or professional subscriptions.
  • Vehicle and travel records, like logbooks or kilometres travelled for work purposes.
  • Home office expenses, especially if you work remotely. This can include internet, phone, and electricity.
  • Education and training costs directly related to your current job.

The ATO is particular about evidence, so make sure you’ve kept receipts or digital copies. Even small amounts add up.

  1. Other Offsets and Deductions
     Don’t forget items beyond work expenses, such as:
  • Donations to registered charities (with receipts).
  • Private health insurance statements.
  • Income protection insurance premiums (if not paid by your super fund).
  • Contributions you’ve made to your superannuation that may be tax-deductible.
  1. Last Year’s Tax Return
    If you’re switching to a new accountant, bringing your previous year’s return can provide helpful context and ensure that nothing is overlooked.

Our Final Tip: Organisation Pays Off
 The more organised you are, the smoother your appointment will run. Creating a folder—physical or digital—where you drop in relevant records throughout the year can save you a last-minute scramble.

Meeting with your accountant isn’t just about ticking off compliance—it’s an opportunity to discuss strategies to improve your financial position. With the right documents in hand, you’ll get the most value out of your tax return appointment.

Fuel Tax Credits: What You Need to Know About the Latest Rate Changes

If your business relies on fuel, it’s important to stay up to date with changes to fuel tax credit rates. Recently, two changes came into effect:

  • 1 July 2025 – rates for heavy vehicles travelling on public roads changed due to an increase in the road user charge.
  • 4 August 2025 – rates changed again following an increase in the Consumer Price Index (CPI).

Because rates vary depending on the type of fuel, when it was acquired, and what activity it was used for, making accurate claims can feel a little tricky.

Making Your Claim Simple

If your business claims less than $10,000 in fuel tax credits each year, the ATO has made things easier. You can simply use the rate that applies at the end of your BAS period to calculate your claim.

For more accuracy (and to save time), you can also use the ATO’s fuel tax credit calculator. This tool helps work out your entitlement based on simplified fuel tax credit rates.

Tips When Completing Your BAS

To avoid missing out or making errors, keep these points in mind:

  • Check your apportioning – make sure you’re correctly splitting fuel use across eligible and non-eligible activities so you claim the full amount.
  • Lodge online – using ATO online services, a registered tax practitioner, or BAS agent can give you extra time to lodge and pay.
  • Keep good records – hold on to receipts for fuel purchases and note how fuel is used in your business.

Fuel tax credits can provide a valuable boost to your cash flow, but only if you get them right. If you’re unsure, your accountant or BAS agent can guide you through the process and help ensure you’re maximising your claim.

Capital Gains Tax On A Rental Property: A Quick Guide

If you’re thinking about selling your rental property, one of the most important things to prepare for is Capital Gains Tax (CGT). 

Many property investors underestimate how significant CGT can be—but with the proper planning and advice, you can manage your tax position effectively and avoid surprises at tax time.

When CGT Applies

A CGT event occurs as soon as you sign the contract of sale, not at settlement. This means the timing of your sale determines the financial year in which your gain or loss is reported. If you’re considering selling close to the end of the financial year, the contract date could impact your taxable income.

Calculating Your Gain or Loss

Your capital gain (or loss) is the difference between your sale proceeds and the cost base of your property. The cost base isn’t just the purchase price—it also includes things like legal fees, stamp duty, agent’s commissions, and capital improvements. On the other hand, you’ll need to reduce this figure by any depreciation or capital works deductions you’ve already claimed over the years.

For example, if you bought a property for $750,000, spent $30,000 on acquisition costs and $6,000 on improvements, but claimed $40,000 in deductions, your adjusted cost base would be $746,000. If you then sold the property for $900,000, your capital gain would be $154,000.

The CGT Discount

If you’ve owned the property for more than 12 months, you may be entitled to the 50% CGT discount as an individual. This can halve the amount of your gain that’s included in your taxable income—making timing an important part of your tax planning.

What If You Lived There Before?

If the property was once your main residence, you may qualify for a full or partial exemption. For example, if you lived in the property before renting it out, or if you only rented out part of it, you could reduce the taxable portion of your gain. This is where accurate records and dates become critical.

Other Key Considerations

  • Co-ownership: If the property is jointly owned, each owner reports their share of the gain or loss.
  • Pre-CGT properties: If you bought before 20 September 1985, the property may be exempt—but improvements made after this date could still trigger CGT.
  • Losses: If you sell at a loss, you can’t claim it against regular income, but you can carry it forward to offset future capital gains.

Why Advice Matters

The way you calculate your gain, apply exemptions, and time your sale can make a big difference to your final tax bill. Small errors—like forgetting to adjust for depreciation claims—can be costly if the ATO reviews your return.

Don’t wait until after the sale to work this out. If you’re planning to sell, let’s review your figures in advance. Together, we can model the potential tax outcome, explore whether exemptions or discounts apply, and make sure you’re in the best possible position before signing the contract.

Get in touch before listing your property, so you can sell with confidence, knowing exactly where you stand on Capital Gains Tax.

5 Tripping Hazards You Could Encounter During Tax Time

Even the most financially savvy Australians can fall into hidden tax traps. 

On the surface, many tax matters seem straightforward, but subtle complexities in the law can turn an innocent oversight into a costly mistake. That’s why it’s often encouraged for you to look beyond the obvious and be alert to areas where the ATO takes a closer look.

  1. Work-Related Deductions
     Work expenses are one of the most common sources of error. While individuals may assume they can claim items like home office equipment, travel, or clothing, the rules are strict. For example, conventional clothes—even if only worn for work—are not deductible, and travel from home to work is generally private in nature. Over-claiming can attract unwanted ATO attention.
  2. Investment Property Expenses
     Australians love property investment, but rental deductions can be a minefield. Common traps include incorrectly apportioning loan interest when part of the borrowing is used for private purposes, or claiming repairs that are actually capital improvements. The ATO also closely monitors holiday rentals, particularly where private use isn’t properly accounted for.
  3. Capital Gains Tax (CGT)
     Selling assets such as shares, investment properties, or even cryptocurrency can trigger capital gains tax. A common trap is assuming the main residence exemption automatically applies to all home sales, or forgetting to declare gains from digital assets. Even timing the sale incorrectly can cost thousands if concessions are overlooked.
  4. Superannuation Contributions
     Super is a powerful wealth-building tool, but contribution caps are strictly enforced. Accidentally exceeding concessional or non-concessional caps can result in extra tax and penalties. Another trap is assuming contributions are deductible without meeting the required notice and acknowledgment process.
  5. Side Hustles and the Sharing Economy
     Income from platforms like Airbnb, Uber, or online freelancing is taxable. Many individuals mistakenly assume that if payments are small or irregular, they don’t need to be declared. The ATO now receives data directly from these platforms, so undeclared earnings are quickly flagged.

The Bottom Line

Tax in Australia is full of complexities, and even those with a good grasp of the basics can stumble. The safest way to avoid these traps is to seek professional advice early, especially before making big financial decisions.


 If you’re unsure whether your tax affairs are watertight, it’s better to ask the question now than explain it later to the ATO. Our team is here to guide you through the detail, protect you from hidden pitfalls, and give you peace of mind. Contact us today to protect your financial future.

From Teen Scam Artists To Fake ABNs – What Is Operation Protego’s Goal?

GST refund fraud isn’t just a headline – it’s a serious issue undermining the integrity of Australia’s tax system. 

The Australian Taxation Office (ATO) continues to crack down under its sweeping initiative, Operation Protego, targeting schemes that exploit GST refund mechanisms – particularly through fake businesses and inflated invoice claims.

A Recent Case: Teen’s 400K Scam

In a striking recent example, 19-year-old Mbari Bounis Ambri was sentenced in Brisbane’s District Court for orchestrating a GST refund scheme that defrauded the ATO of nearly $400,000. 

Ambri created a fake Australian Business Number (ABN) and submitted false GST claims. His direct efforts netted him AUD 50,634, while the bulk – $345,065.65 to be precise – was obtained through 27 fraudulent claims lodged by others using his setup.

The court heard Ambri used the proceeds to fund personal luxury items and transfers to others. After serving 617 days in remand, he was handed a 4.5-year prison sentence – with a non-parole period of roughly 1.5 years – and was ordered to repay the funds obtained from his direct claims.

Why This Matters

This isn’t an isolated case. Operation Protego has identified thousands of offenders – over 57,000 participants – and fraud losses exceeding $2 billion. 

Sentencing outcomes range from hefty fines to prison terms, some stretching up to 7.5 years. The ATO emphasises that “GST fraud is not a victimless crime” and asserts its ongoing commitment to detect, prosecute, and recover fraudulent refunds. 

Our Key Takeaways

  • Don’t be tempted by “get rich quick” social media schemes offering easy GST refunds – fraud is risky, illegal, and increasingly detectable.
  • Ensure any GST claims are legitimate, well-documented, and supportable.
  • If you suspect misconduct – whether by clients or colleagues – encourage voluntary disclosure. Early cooperation with the ATO can significantly reduce penalties.

GST refund fraud inflicts real damage – not only financially, but to the public trust in our tax system. If you’d like help reviewing your processes or client BAS lodgements, we’re here to support you.

Rental Interest Expenses & Apportioning It Correctly: Tips & Tricks

If you own a rental property, there’s a good chance you’re claiming interest expenses as part of your tax deductions. It’s one of the most common (and often one of the largest) claims for landlords. 

But there’s a catch – you can only claim interest to the extent that it relates to earning assessable rental income.

That means in many situations, you’ll need to apportion (split) your interest expenses between deductible and non-deductible portions. 

Getting this wrong can lead to over-claiming, which may result in amended returns, penalties, and unwanted ATO attention.

Let’s walk through when and how interest needs to be apportioned – and some common pitfalls to avoid.

When Do You Need to Apportion Interest?

The ATO outlines several situations where apportioning is necessary:

1. Co-ownership of the Property

If you own a rental property with another person, you generally split interest expenses according to your legal ownership share.

  • Joint tenants each own an equal share, so deductions are split 50/50.
  • Tenants in common may own unequal shares (e.g. 70% / 30%), and interest must be split accordingly.

Even if one person pays all the loan repayments, the deduction is still based on ownership unless there’s a legally enforceable agreement stating otherwise – and the payments match that agreement.

2. Mixed-Purpose Loans

If your loan was used partly for the rental property and partly for something private – such as buying a car or funding a holiday – you’ll need to work out what proportion relates to the property.

For example:

  • Loan amount: $400,000
  • $380,000 used for rental purchase, $20,000 for personal expenses
  • Total interest for the year: $35,000
     Deductible interest = $35,000 × (380,000 ÷ 400,000) = $33,250

The non-deductible portion ($1,750 in this example) can’t be claimed. And if the loan is refinanced or repayments alter the mix, you’ll need to adjust the calculation each year.

3. Private Use of the Property

If you (or friends/family) use the property for any part of the year, you can’t claim interest for that period.

Say you rent the property for 9 months and use it privately for 3 months – only 75% of the interest is deductible. If only part of the property is rented (e.g. you rent out one room via Airbnb), you’ll also need to apportion based on both time and space.

4. Part-Year Rentals

If the property is only genuinely available for rent for part of the year – for example, due to renovations or because you didn’t list it on the market – interest must be apportioned to cover only the rental period.

How to Stay on the Right Side of the ATO

Here are some tips to make sure your claims are correct and easy to substantiate:

  • Keep clear records of loan purpose, rental periods, and any private use.
  • Separate loans for private and investment purposes wherever possible – it makes apportionment simpler.
  • Document co-ownership agreements if your ownership or repayment arrangements differ from the norm.
  • Be consistent in how you calculate apportionment from year to year.

Why Accuracy Matters

Interest deductions can be substantial, and the ATO keeps a close eye on property-related claims. Overstating deductions – even by mistake – can lead to costly adjustments. On the flip side, under-claiming means you could be missing out on legitimate tax savings.

Getting apportionment right ensures:

  • You claim the maximum allowed deduction without crossing compliance lines.
  • You have the documentation to support your claim in case of a review.
  • You avoid unexpected tax bills down the track.

Apportioning rental interest expenses might not be the most exciting part of property investing, but it’s an essential one. If your property isn’t purely rented 100% of the time or your loan isn’t solely for the rental, there’s a strong chance apportionment applies.

If you’re unsure how to calculate your deduction – especially with mixed-purpose loans or complex ownership structures – it’s worth getting tailored advice. 

We can help you work through the numbers so you can claim confidently, compliantly, and in full.

When Should A Business Register & Pay For GST?

If you run a business in Australia, understanding your Goods and Services Tax (GST) obligations is essential. GST is a broad-based tax of 10% on most goods, services and other items sold or consumed in Australia. 

But when exactly does a business need to register for and pay GST?

1. Your Business Has Reached the GST Turnover Threshold

The most common trigger for needing to register for GST is if your business has a GST turnover (gross income excluding GST) of $75,000 or more per year. For non-profit organisations, the threshold is higher — $150,000 per year.

You must register within 21 days of reaching this threshold. Even if you’re not quite there yet, it’s important to monitor your income regularly so you don’t get caught out.

2. You’re Starting a Business and Expect to Earn Over the Threshold

If you’re starting a new business and expect your turnover to exceed $75,000 in the first year, you should register for GST right away. For example, if you already have contracts or sales lined up that will push your revenue over the threshold, it’s best to register early and include GST in your pricing from day one.

3. You’re a Ride-Sourcing or Taxi Driver

Regardless of how much you earn, if you’re providing taxi or ride-sourcing services (like Uber), GST registration is mandatory from the very first dollar. This is a specific exception to the usual $75,000 rule.

4. You Want to Claim GST Credits

Some businesses choose to register voluntarily, even if their turnover is under the threshold. Why? Being registered allows you to claim GST credits on business purchases — that is, to recoup the GST you’ve paid on items and services for your business. For example, if you buy office equipment or supplies, you can claim the GST component back if you’re registered.

5. You’re Involved in Importing, Exporting or Online Sales

GST also applies to many imports, and can be relevant if you sell goods or digital products to Australian customers from overseas. If you’re an overseas business selling to Australian consumers, you may need to register for and pay GST — even without an Australian presence.

What Happens After You Register?

Once registered, you’ll need to:

  • Add 10% GST to the price of your taxable goods and services.
  • Report your sales and purchases by lodging Business Activity Statements (BAS).
  • Pay the GST you collect, minus any credits you’re entitled to.

If you’re unsure whether you need to register or want help managing your GST obligations, speak with your accountant or BAS agent. Staying compliant from the start can save a lot of hassle down the track.