“Can I claim a vehicle expense for my business if I don’t own the car, but it belongs to my partner?”

In my practice as a CPA in Hamilton, I get asked this question by many small business owners.  To clarify, “partner” refers to a husband, wife, boyfriend, girlfriend, fiancé or common law spouse.  The point to take away is that YES, the CRA allows you to claim expenses on a vehicle that is in your partners name.  The important thing to remember is to keep good records of the Kilometers. 

Are you looking for a handy template to keep track of vehicle expense records? Check out the blog with both vehicle and home office expense sheets you can download for use.

How to claim vehicle expenses for business use

According to the CRA, you must keep track of the km that you used for business, as well as the total km driven.  In other words, record the mileage every month for both personal and business use for the vehicle.

First, to determine a rate that can be applied to mileage used, you will divide the km for business by the total km on the vehicle.

Second, ensure all expenses claimed for business have been paid by YOU and not your partner. It is good practice to keep track of all receipts for your records.

Vehicle expenses that may be claimed

Here are the types of expenses you can deduct:

  • Fuel (gasoline, propane, oil)
  • Maintenance and repairs
  • Insurance
  • Licence and registration fees
  • Capital cost allowance
  • Eligible interest you paid on a loan used to buy the motor vehicle
  • Eligible leasing costs

When it comes to claiming vehicle expenses it is crucial that you keep good records of the Kilometres driven for business purposes.  The Canada Revenue Agency is strict record keeping regarding vehicle expenses for business.

Best apps to track vehicle Kilometers

Do you have a question about business expenses or small business accounting?  Reach out to Susan Ivanovics CPA by email susan@susanivanovicscpa.com, or by phone: (289) 520-0706