Cars & Tax – WHAT YOU NEE TO KNOW.

From 1 July 2022 the following car threshold amounts apply for the 2022–23 financial year.

Income tax:

  • The car limit for 2022–23 is $64,741.
  • This is the maximum value that can be used for calculating depreciation on the business use of a car first used, or leased, in the 2022–23 income year.

Goods and services tax (GST):

  • If you purchase a car and the price is more than the car limit, the maximum GST credit you can claim (except in certain circumstances) is one-eleventh of the car limit, which is $5,885 in 2022–23.
  • You can’t claim a GST credit for any luxury car tax you pay when you purchase a luxury car, regardless of how much you use the car in carrying on your business.

Luxury car tax (LCT):

  • $84,916 for fuel-efficient vehicles in line with an increase to the motor-vehicle purchase sub-group of the Consumer Price Index (CPI).
  • $71,849 for all other luxury vehicles, in line with an increase in the “All Groups” CPI.
  • Remember, the LCT value of a car generally includes the value of any parts, accessories or attachments supplied or imported at the same time as the car.

Unsure of what you can claim? Get in touch with the team today to chat through your needs!

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