Vehicle Log Books and ATO Deductions for Melbourne Plumbers

Two Methods, One Clear Winner for Most Plumbers

The ATO allows two ways to claim car expenses: the cents-per-kilometre method and the logbook method. The cents-per-kilometre method is simple, no logbook required, just a reasonable estimate of business kilometres, capped at 5,000km per year at a rate set annually (88 cents per km for 2025-26). For a Melbourne plumber running between jobs in Werribee, Cranbourne and the CBD in the same week, 5,000km is often used up by March.

The logbook method has no kilometre cap. Once you've established your business-use percentage through a properly kept 12-week logbook, you apply that percentage to every actual running cost, fuel, insurance, registration, servicing, depreciation, loan interest, for the full year. For a tradie doing genuine kilometres, this method almost always produces a larger and more accurate deduction. The cost is administrative: the logbook has to be done properly, and it needs to be kept for exactly the right period.

How to Keep a Logbook the ATO Will Actually Accept

• 12 continuous weeks, not scattered days, a single unbroken run
• Representative of the year, don't cherry-pick your busiest fortnight; the ATO expects the period to reflect your normal travel pattern
• Every trip recorded, start and end odometer readings, date, purpose of the trip (job address or client name is sufficient), and kilometres travelled
• Business vs private clearly distinguished, a detour to pick up the kids doesn't count, even if you're driving the work ute
• Valid for five years, provided your work pattern doesn't materially change; a new vehicle, new job sites, or a different type of work resets the clock

Apps like the ATO's own myDeductions tool, or GPS-based logbook apps, make this far less painful than a paper diary in the glovebox, and they produce a defensible digital record if the ATO ever asks questions.

What Counts as a Running Cost

Once your business-use percentage is locked in, apply it to:

• Fuel and oil
• Registration and CTP insurance
• Comprehensive and third-party insurance
• Servicing, repairs and tyres
• Interest on a vehicle loan, or lease payments if leased
• Decline in value (depreciation), subject to the car limit for passenger vehicles

Tolls and parking tied to a specific job, CityLink on the way to a Docklands commercial fit-out, parking at Reece in Richmond, are typically claimed in full against the specific trip, separately from the logbook percentage, since they relate to identifiable business trips rather than general running costs.

GST Credits on the Vehicle

If you're GST registered, the business-use percentage established by your logbook also determines your GST credit claim on the vehicle purchase and running costs. Hold a valid tax invoice for the purchase and for ongoing running costs, servicing receipts, fuel dockets, insurance invoices, and claim the GST component through your BAS at the same business-use percentage.

Utes that are one-tonne-plus or otherwise fall outside the tax definition of a "car" are treated differently for depreciation purposes and are not subject to the passenger vehicle depreciation cap. This affects how much can be claimed upfront versus depreciated, and whether instant asset write-off applies, get this confirmed against the vehicle's specific compliance plate details before purchase, not after.

Company-Owned Vehicles and FBT

If your plumbing business operates through a company and the company owns the ute, private use by a director or employee can trigger Fringe Benefits Tax. Utes that qualify as "eligible work-related vehicles" (not designed principally for carrying passengers, limited private use) can access an FBT exemption for home-to-work travel and minor private use, but this needs proper documentation, not just an assumption that it applies.

Sole traders and partners don't have this issue, since FBT only applies to benefits provided to employees (including working directors of a company), a genuine sole trader claims vehicle costs through the logbook/cents-per-km methods directly against business income instead.