Cars and taxes are a constant source of confusion for business owners in Perth. One of the most misunderstood areas is the ATO car log book. While it might seem like a small compliance detail, your log book is the key that unlocks higher tax deductions for car expenses – or the reason they are denied altogether.

In this fourth part of our “Taxes and Cars” series, we look at what the ATO requires in a valid tax log book, how to prepare one correctly, and the traps that catch out business owners across Western Australia.

What is needed for a valid WA tax log book?

A compliant log book to claim motor vehicle tax deductions must record:

1. Start and end of the log book period – a continuous 12 weeks.
2. Odometer readings – at the start and end of the period, plus each business trip.
3. Details of each journey – date, start and finish locations, kilometres, and business purpose.
4. Total kilometres – both business and private, for the 12 weeks

The log book is not meant to track every trip forever. Instead, it builds a picture of your “normal” driving patterns that can last up to five years, provided those patterns don’t materially change.

Example: Perth business development manager

Take the example of Sarah, a business development manager for “WestSteel Supplies,” a fictional construction materials company in Osborne Park. A typical day might include:

• Date: 12 August 2025
• Trip: Home in Cottesloe to client site in Henderson
• Purpose: Meeting with Clive Christler of Coral Coast Constructions to finalise steel supply contract
• Distance: 41km

Because Sarah drove directly from home to meet a client, the trip is deductible. Contrast that with her normal commute the next morning:

• Date: 13 August 2025
• Trip: Cottesloe to WestSteel Supplies office, Osborne Park
• Purpose: Ordinary commute
• Distance: 12km

That trip is not deductible, as it is ordinary home-to-work travel. The distinction matters. The ATO allows home-to-client or home-to-site travel as deductible because it is travel directly linked to producing assessable income. But driving to your regular office from home is private – no matter how far it is, or how much business planning you do in the car on the way.

Later that day Sarah records:

• Date: 13 August 2025
• Trip: Osborne Park office to Subiaco café
• Purpose: Business development lunch with prospective client – Mick Iriving of Andersen Shipbuilders
• Distance: 7km

That trip is deductible, even though it involves food and hospitality, because the purpose of the trip itself was business development.

Note: if Sarah was driving a one-tonne ute or a commercial vehicle, a log book is not required for FBT purposes – but good records are still recommended for income tax and GST substantiation.

Residential rental properties – not deductible travel

A common trap in Perth is assuming that travel to your residential rental property can be claimed in a log book. The rules are clear: it cannot.

Since 1 July 2017, individuals cannot claim travel deductions to residential rental properties – even if you own multiple rentals. The only exception is if you are genuinely in the business of property management or property development.

How long does a log book last?

A valid log book can be used for five years, provided your driving habits remain consistent. However, life changes can cut this short:

• Move house – If Sarah relocated from Cottesloe to Fremantle, her daily travel patterns would shift. A new log book is required.
• New job or role – If Sarah became a state sales director covering the Pilbara and Southwest, her travel would increase dramatically. A new log book is required.
• Business model changes – If WestSteel switched from face-to-face sales to online sales, a new log book would be required.

The 12-week period – getting it right

The log book period must be at least 12 continuous weeks and must be representative of your typical driving.

For example, suppose John, a Malaga engineering consultant, drives very little for most of the year but takes a 3,200km round trip from Perth to Exmouth each September to service a regional mining client, and that trip only happens once every few years. If John only keeps a log book during that time, it will show 100% business use – but it won’t reflect his actual pattern of use. The ATO would expect him to keep a log book across a period that includes normal weeks, so the percentage is balanced.

Log books that span financial years

What happens if your 12-week log book crosses over 30 June?  Say you keep a log book from May through to July 2025. That log book is valid for both the 2024–25 and 2025–26 tax years.

The critical point is that the business-use percentage established by the log book applies from the date you start the log book. If you began in May 2025, the rate can be used for the remainder of the 2025 tax year (ending 30 June 2025) and continue through the 2026 tax year – and beyond, for up to five years – unless your circumstances change.

The ATO confirms this approach in its guidance: Work out your business use percentage – logbook method (QC 33507).

Mobile apps as log book replacements

In the past, log books were scribbled in paper diaries kept in glove boxes. Today, technology has streamlined the process. GPS-based mobile apps automatically record journeys, calculate distances, and allow you to categorise trips as business or private with a quick swipe.

The ATO accepts properly generated app reports as compliant log books, provided they contain the required details. For Perth businesses managing multiple vehicles, this can standardise compliance across the fleet and save hours of manual record-keeping.

What is a tax deductible log book travel trip? 

Deductible trips include:

• Driving from your office to a client’s office, factory, or site.
• Travelling from home directly to a client site or prospect meeting.
• Trips to suppliers, warehouses, or industry conferences.

Non-deductible trips include:

• Ordinary commuting between home and your usual place of work.
• Detours for personal errands – school pick-ups, shopping, gym.
• Travel to your own residential rental property (unless you are a property manager).

For Perth-based businesses, this means driving from Subiaco to a client in Rockingham is deductible, but your morning drive from City Beach to the Subiaco office is not.