Motor Vehicle Depreciation Claim Using The Small Business Tax Concessions


From the 1st of July 2012 a small business will be able to claim a $5000 immediate tax deduction in the YE 30th June 2013 when purchasing a new or used motor vehicle. The remainder of the depreciation is claimed at 15% in the first year, and 30% in the years following the purchase.

For those cars which are financed, the car must be capable of being depreciated e.g. hire purchases and chattel mortgages. Cars financed under a lease arrangement are unable to receive the benefit (with the exception of luxury cars because they are treated as being a hire purchase for tax purposes, irrespective of the contract executed).


Flynn’s Courier Service is a small Malvern based business entity and in the 2012-13 income year purchases a small second hand vehicle for $14,000 to assist with deliveries. The vehicle is only used for business purposes. Flynn’s Courier Service calculates its start year deduction in the following way:

$5,000 + 15% × ((100% × $14,000) − $5,000) = $6,350

In the 2012-13 income year, Flynn’s Courier Service can claim a deduction of $6,350 for the motor vehicle.

Hillyer Riches is a specialist tax accounting firm in Caulfield. We provide accounting services for clients in Malvern, Glen Iris and Mount Waverley areas. For more information email



Hillyer Riches Management Pty Ltd is a Corporate Authorised Representative (No 466483) of Capstone Financial Planning Pty Ltd. ABN 24 093 733 969. AFSL / ACL No. 223135.This document contains general advice only and is not personal financial or investment advice. Also, changes in legislation may occur frequently. We recommend that our formal advice be obtained before acting on the basis of this information.

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