Buying a work van or food truck: GST credits, the car limit and the $20,000 write-off

The price on the windscreen isn’t the real cost of a work vehicle. Depending on how your business is set up, GST credits, depreciation, the instant asset write-off, stamp duty and fuel tax credits can move the true cost up or down — and they change your cash flow in the months after you buy. This guide walks through the rules that matter most for couriers, tradies, food truck owners and other mobile businesses, using the ATO’s current thresholds.

It’s general information, not tax advice. Your accountant should confirm how each rule applies to your vehicle and your business.

Can I claim the GST on a work van?

If your business is registered for GST and the vehicle is used for business, generally yes. The ATO says you’re generally entitled to claim a GST credit for the GST included in the vehicle price, provided you have a tax invoice.

Two catches:

1. Private use. If the vehicle is used partly privately, you can only claim the business proportion. The ATO says you must include only the proportion of the cost that relates to business use at label G10 on your activity statement.
2. The car limit. For vehicles that count as “cars” and cost more than the car limit, the GST credit is capped at one-eleventh of the limit. For 2026–27, the ATO puts that maximum at $6,353.

The GST credit comes back through your BAS, so a big vehicle purchase can reduce what you owe for that quarter — or produce a refund. Time it with your bookkeeper. Our page on BAS time for mobile traders explains the due dates.

What is the car limit, and does it apply to my van?

The car limit caps the cost you can use to calculate depreciation on a car. The ATO’s 2026–27 figure is $69,883 (it was $69,674 for 2025–26).

Crucially, the ATO says the car limit applies to passenger vehicles (other than motorcycles) designed to carry fewer than nine passengers and a load of less than one tonne. That means:

Vehicle	Car limit likely to apply?
Sedan, SUV or wagon	Yes
Dual-cab ute designed to carry under one tonne	Often yes
Ute or cab-chassis designed to carry one tonne or more	Usually no
Delivery van designed to carry one tonne or more	Usually no
Minibus designed for nine or more passengers	No
Food truck on a light-truck chassis	Usually no

“Designed to carry” means the manufacturer’s rated payload, not what you actually carry. Check the specifications — some dual-cab utes sit either side of the one-tonne line depending on the model.

How does the $20,000 instant asset write-off work?

The instant asset write-off lets eligible small businesses immediately deduct the business portion of an asset’s cost, rather than depreciating it over several years. The key rules, according to the ATO:

• Eligibility. Your aggregated turnover must be less than $10 million, and you must use the simplified depreciation rules.
• Threshold. The threshold is $20,000, and the ATO’s new legislation page says the government has permanently increased it to $20,000 from 1 July 2026, with the measure now law.
• Full cost under the limit. The ATO stresses that the entire cost of the asset must be less than the limit — even if you only use part of it for business.
• Timing. The asset must be first used or installed ready for use in the income year you claim it.

For most mobile businesses, a whole van or food truck will cost more than $20,000, so it goes into the small business pool and is depreciated instead. But plenty of the gear around it — a generator, a coffee grinder, a pressure washer, diagnostic tools, a drawer system bought separately — may fall under the threshold. See generator and equipment finance and ute and van fit-out finance.

Buying a van before the end of the financial year? See if you qualify for funding — a one-minute form, and your credit file stays out of it.

What about stamp duty and on-road costs?

Most states and territories charge motor vehicle duty when a vehicle is registered or transferred. Revenue NSW, for example, says duty is due when you register a new vehicle, transfer registration or register an imported second-hand vehicle in NSW for the first time, and that Service NSW collects it. Rates and exemptions differ by state and by vehicle type, so check with your state revenue office.

Add duty, registration, compulsory third party insurance and any comprehensive insurance to your project cost. The truck-stop calculator has a line for exactly these costs, so the funding covers the real number.

Fuel tax credits: heavy vehicles and generators

Fuel tax credits are often overlooked by small mobile businesses. The ATO’s rules:

• Heavy vehicles. Vehicles with a GVM greater than 4.5 tonnes can claim fuel tax credits for fuel used on public roads, reduced by the road user charge.
• Light vehicles. Vehicles with a GVM of 4.5 tonnes or less can’t claim for fuel used on public roads. They can only claim for fuel used off public roads or on private roads.
• Generators. The ATO lists electricity generation by a commercial, stationary or portable generator as an eligible activity.
• Registration. You must be registered for GST when you acquire the fuel and for fuel tax credits when you claim.

If you’re choosing between a large van and a light truck, the heavy vehicle line also brings different licensing and regulation. The National Heavy Vehicle Regulator defines a heavy vehicle as one with a GVM or aggregate trailer mass of more than 4.5 tonnes. See courier van finance for more on sizing a vehicle.

Illustrative example: three purchases, three outcomes

These examples are illustrative only.

A courier buys a new delivery van designed to carry more than one tonne for $58,000 including GST. She’s registered for GST and uses the van only for business. The car limit doesn’t apply, so she can generally claim the full GST credit on her next BAS, and the van is depreciated through the small business pool because it costs more than $20,000.

A mobile dog groomer buys a dual-cab ute rated under one tonne for $78,000 to tow her grooming trailer, and uses it partly privately. The car limit applies, capping the cost used for depreciation and the GST credit, and both are reduced further for private use.

A coffee van owner replaces a noisy petrol generator with a new inverter generator costing well under $20,000. His business turnover is under $10 million, so the generator may be immediately deductible, and he keeps generator fuel receipts separately for fuel tax credits.

Tax rules don’t decide the purchase

It’s easy to let tax drive the decision — buying a van in June “for the write-off” when the business doesn’t need it yet. A deduction reduces tax on profit; it doesn’t make an unnecessary purchase free. Buy the vehicle the business needs, when it needs it, and let the tax rules make it a little cheaper.

Keep the paperwork together

Put the tax invoice, finance documents, registration papers and any logbook in one folder, digital or paper. The ATO expects business records to be kept for five years, and you’ll need them for GST credits and depreciation.

Fund the van, keep the cash flow smooth

A new work vehicle is a big commitment, and the tax timing affects your next few BAS statements as much as the purchase itself. Once you know what you’re buying, tell us about it. Asking is quick and credit-check free, and your details go to one real person — not blasted out to a dozen lenders.

Please fill it in accurately, including whether the vehicle is new or used and how it’ll be used. It helps us match you to the right option the first time.

See if my van purchase qualifies →