Tip of the Week
Mileage Logs for Business Use of Automobiles
All business kilometers used for company vehicles should be recorded in a log. You can keep it in your vehicle, along with a pen, so it is easy to take a quick second to write down the odometer readings. This way you will be able to prove to CRA what amount the vehicle was used for business. It is better than the alternative of having conflicts with the government on the automotive expenses and GST claimed by the company.
If you have a corporation and you use a personal vehicle for business use, the best way to handle this is to keep a mileage log of the business kilometers and be reimbursed by the company for them. Generally, the current allowable reimbursement is $0.61/km for the first 5,000 kilometers of business use per year. The rate then drops to $0.55/km for any business use over this amount. By doing this the company cannot claim any further fuel, repairs, insurance, etc. paid in relation to your personal vehicle as this is what the reimbursement is for.