So, all intelligent people, I have recently started a bussines and I use my personal car for going to and returning from work (business). I am working as a locum on ABN. Is it legally required to change the car use from private to business? What are the benefits of doing that? What are the negatives if I do not do that?
Many thanks all
Does Car Registration Needs to Be Changed from Private to Business?
DiLs on 19/01/2021 - 21:12
Comments
For rego, no.
But do inform your insurer.
No, ABN = sole trader, as you're working as a contractor
See the logbook method as per the ATO website if you want to maximise your deduction (but you should compare both methods cents per km and logbook to see which gives you the better outcome)
https://www.ato.gov.au/Business/Income-and-deductions-for-bu…
take heed especially of depreciation (e.g is your car relatively new?)
This will ultimately come down to insurance. If your insurer can show you were using the vehicle for business (i.e. more mileage, greater scope for accident, etc.) and you only had it insured for private use, it is possible that a claim could be denied. It's very unlikely in your scenario, but that is ultimately the issue.
But you do not need to register the car under the business to insure for business use.
Agreed.
An accountant should be able to give you an answer that takes into consideration your legal/taxation position.