If you operate more than one self-employed business, you can deduct vehicle expenses for each business separately, but only for the portion of driving that relates to each specific business activity. The Canada Revenue Agency (CRA) requires you to track mileage by business and prorate your total vehicle costs accordingly. You cannot claim the same vehicle expense twice, and you must maintain clear records showing which kilometers were driven for which business purpose. When you use one vehicle to support multiple income-producing activities, the CRA expects you to be transparent about how you're splitting the expenses. This is where many self-employed Canadians run into trouble. If you claim 100% of your gas, insurance, and maintenance costs against Business A when 40% of your driving was actually for Business B, you're inflating your deductions and setting yourself up for a CRA review. The key principle is that you can only deduct expenses that are directly tied to earning income from that specific business. Maintain a detailed log that shows the date, distance, destination, and business purpose for each trip. This doesn't need to be fancy, but it must be contemporaneous (recorded close to when the trip happens).
No. You can only deduct the portion of vehicle expenses that relates to each specific business. If you drive 5,000 km for Business A and 3,000 km for Business B out of 10,000 total km, you claim 50% of costs for Business A and 30% for Business B. The remaining 20% is likely personal use and non-deductible.
No. You can use one vehicle to support multiple businesses, but you must track the mileage separately for each business and allocate expenses proportionally. One vehicle, multiple allocations.
The CRA expects you to maintain a detailed mileage log showing the date, distance, and business purpose of each trip. If you cannot provide this documentation, the CRA may disallow portions of your claim or assign a reasonable business-use percentage based on your records.
You must split each type of expense proportionally across all businesses based on your overall business-use percentage. You cannot selectively assign individual expenses to different businesses unless the expense is truly specific to only one business activity.
Keep all mileage logs, receipts, and allocation calculations for at least six years from the date you file your tax return. The CRA can request these records during an audit to verify your claimed deductions.