Here at Southern Business Solutions, we specialise in small business and getting great tax outcomes for our clients. If you are an Uber driver, here are some key tax tips you must be aware of.
REPORTING INCOME IN YOUR TAX RETURN
The income you earn from driving for Uber is assessable income and must be reported in your income tax return.
Expenses incurred in driving for Uber will be tax deductible. These may include expenses that relate to holding, maintaining or operating any assets used to provide the ride services.
Deductions can be claimed for the business use proportion of the following:
- commissions, licensing or service fees paid to Uber.
- passenger costs such as water and mints or fuel for the car
- vehicle licensing or registration
- mobile phone bills
- safety equipment (such as hi-vis vests)
- costs of cleaning, servicing and repairing the vehicle
- tax agent/accountants fee
- bank fees (if you maintain a separate account for your Uber work)
DEDUCTIONS CANNOT BE CLAIMED FOR:
- costs of a normal drivers licence
- fines (parking, speeding, etc)
- clothing other than safety clothing
- meals, drinks, etc purchased whilst on shift
- costs of becoming an Uber driver – once you’ve started the official application process, such as medical and police checks, application fees etc. Costs incurred before becoming an Uber driver, or before the application process starts (such as attending information nights) are not deductible
CLAIMING A DEDUCTION FOR BUSINESS USE OF YOUR CAR
A deduction for business use of your car can be claimed through two different ways:
- Cents per kilometre:
- Claim 66c per kilometre from 1 July 2016
- This method is only available for distances up to 5,000km. You can’t claim more than 5,000 business km’s
- This method incorporates all car expenses including petrol, servicing, depreciation, etc. You can make no further claim.
- Your claim is based on the business use percentage of each car expense, which is determined by a log book that must have been kept for a minimum 12 week period.
- This log book must be updated every 5 years.
- You can claim all expenses that relate to the operation of the car, at your percentage of business use, as established from your logbook.
CLAIMING $20,000 INSTANT ASSET WRITE-OFF FOR CAPITAL ASSETS
As an Uber driver, the ATO sees you as self-employed. This enables you to have access to all the tax concessions available to small businesses, including the $20,000 instant asset write-off for capital assets which is recently been extended to be available until 30 June 2018. That means you can immediately deduct the cost of any plant, tools or equipment you use in your business, including items such as computers and even motor vehicles provided the cost is less than $20,000 (very handy for Uber drivers buying second hand cars).
REGISTERING FOR GST
If you’re an Uber driver, you must register for GST with the ATO and charge GST on all your fares, from the first dollar. You can also claim GST credits on your work-related purchases. A BAS form will need to be submitted every quarter.
Being registered for GST because of your Uber activity may impact on the GST status of other business activities you undertake. So, if you run a small business as a sole trader with a turnover of less than $75,000, you may have to start accounting for GST in relation to that business as well as your Uber driving.
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