Case Study | Plumber Saves $1,598 Tax

Case Study | Plumber Saves $1,598 Tax



Thomas is a plumber who wants to save tax so he can buy a new car.


  • Thomas’s car was stolen 3 months ago and he is still waiting for an insurance payout.
  • During this 3-month period Thomas borrowed his wife’s vehicle and travelled 5,000 work related km.
  • Thomas’s wife also uses the vehicle for work purposes (average 5,000 km pa).


Accountant’s Advice: Tax Planning Strategy 5 | Jointly Owned Motor Vehicle

The ATO have confirmed that even when a vehicle is only registered in their spouses name a taxpayer is still considered to be the joint owner or lessee of the motor vehicle and eligible to claim expenses. This means where a husband and wife jointly own a motor vehicle and they both separately use that vehicle for an income producing purpose (work or a business), then each taxpayer will be entitled to claim a deduction using the cents per kilometre method (up to 5,000 work or business kilometres).


Thomas saves $1,598 tax (5,000 @ $0.68 = $3,400 @ 47%).

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"You’d be stupid not to try to cut your tax bill and those that don’t are stupid in business"

- Bono: U2