More Questions About BAS, GST And Their Implications For Rideshare Drivers
As a Rideshare driver you have many unique GST and BAS obligations that you must fulfil. We outlined a number of these in part 1 of this article. Coming with these unique obligations are some great tax deductions that you will be able to claim come tax return time. To help drivers increase their return on their time as a ridesharing driver we have outlined a number of these deductions and how to claim them.
As a rideshare driver you should always consult your accountant to ensure that you are lodging correct deduction claims on your tax return.
What Deductions Can I Claim for my Car?
There are two methods available to you for claiming motor vehicle expenses, the Logbook Method and the Cents Per Kilometre method. You can choose whichever one gives you the biggest tax deduction.
If you have kept a valid logbook (More information below on what is considered a valid logbook), you can claim a percentage of your vehicle running expenses. Expenses you can claim a % of under this method include:
- Servicing, repairs, tyres and other maintenance costs
- Cleaning costs
- Depreciation on the purchase price of your car (if you own your car)
- Interest (if you have a loan on your car)
- Rental/hire/lease fees (if you lease/rent your car)
Cents Per Km Method
If you haven’t kept a valid logbook you’ll be restricted to using the Cents per Kilometre Method.
You can claim 68 cents per kilometre up to a maximum of 5,000 km per year. This gives a maximum tax deduction of $3,400. You don’t have to have specific records of your kilometres, rather you can make a ‘reasonable estimate’ based on your patterns of work, diary notes, records from the company you drive for, etc. Note that you can claim the kilometres in between trips as well as kilometres while you have a passenger. You can also claim kilometres between home and your first trip, and from your last trip back home again.
If you’ve been driving more than just a small amount then $3,400 may be much less than your actual car expenses. This would give you a lower tax deduction and therefore a bigger tax bill. We recommend unless you are just an occasional driver you should keep a logbook so that you don’t miss out on claiming all of your expenses.
What is a Valid Logbook
A valid logbook records ALL travel for that vehicle for a representative, continuous 12-week period to determine the business percentage with can be used to claim all expenses for the same car for up to 5 years provided it is still representative of the actual use.
- You don’t need to record each rideshare trip, just each rideshare shift.
- The logbook must go for 12 continuous weeks. It’s okay if the 12 weeks go past the 30th of June (e.g. you keep your logbook from May-July). But you must start before the 30th of June for it to count for the current year.
- You must record the date, and the odometer reading of your car at the start and end of each shift/session of driving.
- You should start your logbook when you leave home and switch on the app and stop when you arrive back home or switch off the app. Your kms to and from home, and your kms in between trips can all be included.
- We recommend the Zions Pocket Logbook, which you can buy from Officeworks and newsagencies for less than $7. Using an app is also fine, as long as you are still recording your odometer readings – sometimes a low-tech option like a book is still a great solution.
- It’s important to note that the kilometre records that Uber sends you are not enough to meet the ATO’s requirements of a logbook, because they don’t show your car’s odometer readings. They also don’t include your kms in between trips, so you’ll be missing out on tax deductions!
Other Rideshare Tax Deductions
Other costs that may be deductible include:
- Fees or Commissions paid to your rideshare provider
- Other Fees – medical tests, police check, driver accreditation, driver training etc
- Rider Amenities – water, mints, newspapers, tissues etc
- Tolls – you can claim tolls while on trips and tolls in between trips as well
- Cleaning Costs – for specific passenger related incidents you can claim the whole amount, but general cleaning costs must have your logbook percentage applied.
- Safety Equipment – hi-visibility clothing and sunglasses.
- Equipment and Accessories – dashcam, seat covers, mobile phone holder
- Mobile Phone – you can claim a percentage of your mobile phone bill
- Home Office Expenses – stationery, computer expenses, a percentage of your home internet bill
- Music Apps
- Bank Fees – but only if you have a separate bank account just for Uber
- Accountant’s Fees
Costs that are not deductible include:
- Clothing – clothing is personal expense
- Personal Hygiene costs – deodorant, haircuts etc
- Meals – you cannot claim for food or coffee for yourself
- Fines – even if directly related to ridesharing
- Driver’s Licence – your normal drivers’ licence is considered a private expense
If you have expenses that you’re not sure are deductible, keep the receipts anyway, and let your accountant advise you at year end whether they can be claimed or not.
How to fulfil your tax obligations as a rideshare driver
To get the most out of your tax deductions you must fulfil your rideshare driver tax obligations. Ensure that you are registered for GST and are lodging your BAS accurately on BASLodge.com.au. With BASLodge.com.au we will check your BAS ensuring that you have completed it correctly and will offer any assistance you may require in completing the form.
Once tax time comes around you should ensure that you have completed your income reporting correctly and have talked to your accountant about deductions you may be eligible to receive.
If you need any further assistance contact BASLodge.com.au today.