Companies and trusts can normally claim all their motor vehicle expenses, although private use of their vehicles is generally subject to fringe benefits tax (FBT).

The PSI rules add a special rule for businesses with motor vehicle expenses, specifically for cars. If your personal services are contracted through a company, partnership or trust and the PSI rules apply, your business is only allowed to claim expenses (including FBT payments) for one car if the car is used for private purposes.

If your business has more than one car in private use at the same time, you must choose only one car to claim deductions for. This choice remains in effect for as long as your business has that car.

Where 2 or more individuals work through one company, partnership or trust, the business is able to provide one car to each individual for private use. This only applies if each of the individuals are performing their own work and it is not part of the other individual's work.

Businesses are still entitled to a deduction for car expenses for one or more cars provided to an individual where there is no personal use of the car.