Motor Vehicle Expenses

by Maria
(Toronto, ON)

Driving Your Personal Vehicle For Business Use

Driving Your Personal Vehicle For Business Use


My brother recently opened a sole proprietor business. He uses the family car registered under the name of his common law partner for business purposes.

For tax purposes, can he claim motor vehicle expenses in proportion to the business use, even though the vehicle is not registered under his name or his business name?

Also, can he claim insurance expenses if the coverage does not include business use?

If he cannot claim insurance because the coverage is only for personal use, can he still claim the other motor vehicle related expenses, gas, repairs, etc. and just leave out insurance expenses?

Looking forward to your reply, thanks in advance.

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Hi Maria,

A similar type of question on business use of your personal vehicle was asked previously by an Canadian incorporated company. The rules for Canadian sole proprietors are different than for Canadian incorporated companies.

Take some time to read my article on How to Claim Business Vehicle Expenses when you are a sole proprietor in Canada.

In the article, I discuss the risks of driving a personal vehicle for business without the proper insurance in British Columbia.

As you live in Ontario, I'd check with an auto insurance broker, to ensure your brother fully understands the risks he is taking by not having business insurance on the car.

Another article you may want to read is How to Claim Input Tax Credits Relating to Business Use of Your Personal Vehicle. The information only applies if you are a GST/HST registrant.

You can find more information on the site relating to vehicles and vehicle expenses by keying "personal vehicle" in the search box found at the top of many pages on this site.

P.S. I would like to remind you there is a difference between information and advice. The general information provided in this post or on my site should not be construed as advice. You should not act or rely on this information without engaging professional advice specific to your situation prior to using this site content for any reason whatsoever.

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