The car and the tax man

How to navigate taxable benefit from a company car -- or write off your own vehicle expenses.

Matthew Elder 8 July, 2016 | 5:00PM

New cars today are laden with an array of gadgetry that can both amaze and perplex. There's often a steep learning curve from wow factor to actual utility.

At least the result is fun and fulfilling. But there's another element to vehicle use that is even more intimidating: the tax labyrinth one must navigate in regard to the use of an automobile for work purposes.

If you're self-employed, the process is relatively straightforward. You deduct the portion of expenses for running your car that is related to business use. These costs normally include fuel, oil changes, repairs, tires and even car washes, as well as insurance premiums and loan interest or lease payments. If, for example, one-third of the kilometres driven are for business or professional purposes, you can deduct one-third of those expenses, says Tony Italiano, a tax partner with KPMG.

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Matthew Elder

Matthew Elder