Buying Car under Business Name for a Sole Trader

t0087669 on 28/04/2022 - 12:41

In Victoria, I am a sole trader working as consultant.

I am buying a new car and wanting to use the instant asset write off to reduce tax burden.

Now I am at the stage of receiving the rego form for the car dealership but was told in order to register under business name I need a business account / business customer number from Vicroads.

Then I contacted Vicroads, but it seems rather complicated to get business account. Need to write a offical letter using company letter head saying I’m the authorised person to make this decision then I’ll receive the invite to set up for the account. And was told it’s mainly for company that is incorporated and also need ACN (which I don’t have, I only have ABN). I’m not really a company, just a sole trader invoicing the consulting job that I did.

My question is, do I need to register the new car under business when purchasing it? Or I can purchase under my personal name, since the car will be mix private and business use. And I can still claim the asset write off / GST credit / expenses with the business portion?

Thank you

Automotive

Comments

  • Domicron on 28/04/2022 - 12:57
    +10

    Ask your accountant.

    • SF3 on 28/04/2022 - 13:29
      +1

      Accountant to said to seek OzB comments for help.

  • SF3 on 28/04/2022 - 13:00

    Now I am at the stage of receiving the rego form for the car dealership

    Sorry, but maybe you should have check and organised all this, rather than at 11th hour.

  • fredz0r on 28/04/2022 - 13:01
    +2

    Best to speak to your accountant. If the Invoice is in the business name with abn it shouldn't matter how the vehicle is registered. You submit the invoice at tax time to claim your tax credit. Depending on your business you may need to prove that you use the vehicle 100% for business and having the vehicle registered would help with that claim. most dealerships can submit a new business application on your behalf, you will just need to fill the application form in and provide business identity requirements.

    • Soluble on 28/04/2022 - 13:16
      +1

      This, when I purchased my car under the company, the dealership set most of it up. My other vehicle at a different dealer ended up in my personal name because the dealership said it was 'easier' and I didn't understand it all at the time

  • MITM on 28/04/2022 - 13:20
    +3

    You're a Sole Trader - ie trading under your personal name - no company involved.
    So just register it for private use and keep a record of when it is used for business (eg the log book method for ATO) for a 12 week period to give you an annualised business use %.
    Add up all your vehicle receipts for the year and claim the % used for business running costs. Also use this % to claim the asset write off of the purchase price.
    And if you're registered for GST, claim back business % of GST.

    Doesn't work if you buy a vehicle in the last quarter of the tax year - you'll have to claim it the next tax year.

  • rooster on 07/06/2022 - 10:03

    I don't understand why it has to be purchased in the last quarter, just because you have to show a 12 week logbook.

    Surely I could make a stat dec that the vehicle use is 100% , or I could provide the logbook for the previous vehicle that shows the percentage use. The Logbook is valid for 5 years ?

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