Important Changes in Deductions

Important Changes in Deductions

As the tax season unfolds, it’s imperative for small business owners and those using vehicles for business purposes to stay informed about the adjustments that impact their deduction claims.

Here’s what you need to know:

Cents-Per-Kilometre Method: 

This year, the cents-per-kilometre method for claiming car expenses has changed. In the 2023 income year, the rate has increased from 72 cents to 78 cents per kilometre. It’s crucial to note that this rate now encompasses all vehicle running expenses, including registration, fuel, servicing, insurance, and depreciation. Individual claims for these costs are not applicable for those utilising this method, as the 78 cents per kilometre covers them comprehensively.

Car Limit for Business Owners: 

The car limit, which is the maximum value used to calculate the depreciation of passenger vehicles (excluding motorcycles or similar vehicles), has also increased. The car limit for the 2023 income year has been set at $64,741. This limit pertains to vehicles designed to carry a load of less than one tonne and fewer than nine passengers.

Work from Home Business Expenses: 

Operating a business from home holds unique considerations. For the 2023 income year, the ‘fixed rate method’ has been revised, increasing from 52 cents to 67 cents per hour worked from home. Moreover, taxpayers are no longer mandated to maintain a dedicated home office space to avail of this method. This approach now covers various essentials such as electricity, gas, stationery, computer consumables, internet, and phone usage. Additionally, taxpayers can claim separate deductions for expenses outside the hourly rate, including the decline in value of depreciating assets like laptops or office furniture.


At Simmons Livingstone, we stand ready to assist you in comprehending these changes and their implications on your financial strategies. Our dedicated team is committed to guiding you through these transitions, helping you make informed decisions that align with your objectives.

Call us on 1800 618 800 or via email at

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