claim car depreciation under my company name

[flosed]

Sorry this thread is not related to property.

I bought a car 2011 to 2012 financial year using my company's name. The business of last financial is quiet because I had some other engagement.

I want to use the online calculator like this
http://www.ducafinance.com.au/vehicle-depreciation-schedule-calculator.html

It looks fine to me (I am not good at accounting at all.) Is that OK for ATO

car deprecation will be 1,863.01 * 50%(business usage percentage) = 930.
car usage = 815

My gross income is 12000, net income 800$(after minus all expense including car depreciation and usage)

Just wondering is there any criteria such as car or travel expense /gross income > certain percentage, ATO will investigate your business ?


If there is certain criteria. could you please help to point out. Does the number above looks odd to you?Thanks!

 

[vaughan]

Would fringe benefits tax (FBT) be payable on the "private" portion of the company car usage?

 

[coastymike]

1. fbt will be payable.
2. can be reduced by an employee contribution but will need to determine amount.
3. employee contribution subject to gst so will need to gross up and lodge accordingly.

 

[vaughan]

1. fbt will be payable.
2. can be reduced by an employee contribution but will need to determine amount.
3. employee contribution subject to gst so will need to gross up and lodge accordingly.

So if I buy a car inside company, I'm best to keep it restricted to business use only? FBT and GST on private use would kinda negate any savings by having the car owned by the company.

 

[Aaron_C]

So if I buy a car inside company, I'm best to keep it restricted to business use only? FBT and GST on private use would kinda negate any savings by having the car owned by the company.

That's the whole point of FBT - to ensure that company cars are used for company/business purposes only by removing the tax incentive.

 

[coastymike]

unless a car is used predominantly for business purposes or an exempt vehicle with a 1 tonne load carrying capacity having it inside a company is a waste of time. keep it outside, keep a logbook and you don't have the fbt issues but all the tax benefits. only potential benefit is gst input tax credit but that is limited to about $5k and then when you sell up for gst on the sale price.

 

[flosed]

Thank u guys very much.
Here is what i have done.

I really don't want to deal with fbt as i want to keep it simple,also it's deadline to lodge now.
I calculate the expense using cents per km. This will include depreciation in the cost.
I don't even put it in my company asset. Treat it the same as private car.

I know it's not best way.
I bought the car using private money by company name.My business turn out to be very quiet last year. i plan to conclude it .or sell the car to myself to get rid of it this yeay.

The worst case is ato pick up and ask me pay back. I don't worry it too much as total gross income is around 10k. Net income 1k.

 

[coastymike]

Don't want to deal with FBT ? Well guess what you have a vehicle through a company so you don't have any choice. Audit will mean penalties plus interest when you get caught. Easy detection. ATO searching RTA records for company registration on title, compare to company returns, see if FBT return done. If not then audit. Simple. Good luck sounds like penalties plus interest are going to hurt.

 

[flosed]

thank u for the warning. The ato help line told me i can claim fbt before 1/apr. Not now. I will try to sort out before then.

 

[coastymike]

Exactly you still have a bit of time.

 

[flosed]

thank u for the warning. The ato help line told me i can claim fbt before 1/apr. Not now. I will try to sort out before then.

 

[Rob G.]

Messy area.

1) Cars

2) GST

3) FBT

4) Division 7A

This recipe is beyond a DIY tax return.

Cheers,

Rob