Tax Deductions for Uber Drivers
[This article explains range of potential tax deductions for Uber drivers and rideshare drivers.]
At Tax Accounting Advice, we specialise in getting a maximum tax outcome for your business. If you’re an Uber driver here are some key tips you need to be aware of.
Work related tax deductions
Following deductions can be claim for the business use proportion (logbook percentage):
• Commissions, licensing or service fees paid to Uber.
• Costs of becoming an Uber driver – but only once you’ve started the official application process, such as medical and police checks, application fees, etc.
• Rider Amenities or passenger costs such as water and mints.
• Tolls, you’ll need to print your toll account and highlight the relevant trips. Uber will give you a toll figure which you can use instead, but it won’t include any tolls between trips, only while on trips.
• Parking – for amount less then $10 write a diary note. Maximum amount that you can claim is $200 per year.
• Vehicle licensing or registration.
• Mobile phone bills.
• Safety equipment (such as hi-vis vests).
• Cost of cleaning – for general cleaning costs, such as car washes apply your logbook percentage. In case of any specific passenger incidents you can claim the whole amount.
• Tax agent/accountants fee.
• Bank fees (if you maintain a separate account for your Uber work).
Deduction for business use of your car
There are two ways to claim a deduction for business use of your car:
Set rate or Cents per kilometer:
• This rate is set at 66c per kilometer. For prior years check with your accountants.
• This method is only up to a maximum of 5,000 km.
• The set rate incorporates all car expenses including petrol, servicing, depreciation, etc. You can make no further claim
• On the statements you receive from Uber you’ll see ‘kilometers traveled’, but these are only the kilometers while you had riders in your car. For tax purposes, you can also claim the kilometers between rides, kilometers from home to your first fare, and kilometers from your last fare back home.
If you have kept a logbook, for a minimum 12 week period, you’ll be eligible to claim a percentage of your vehicle running expenses, including:
• servicing, repairs, tyres and other maintenance costs;
• interest on your car loan (if applicable);
• depreciation on the purchase price of your car;
Your claim is based on the business use percentage of each car expense, which is determined by a log book; kept for a minimum 12 week period. This log book must be updated every 5 years.
Claiming $20,000 instant asset write-off for capital assets
As an Uber driver, the ATO sees you as self-employed. That means you have access to all the tax concessions available to small businesses, including the $20,000 instant asset write-off for capital assets which is available until 30 June 2019. 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).
Costs that are not deductible include
• costs of a normal drivers licence;
• Fines (parking, speeding, etc);
• Clothing other than safety clothing;
• Meals, drinks, etc. purchased whilst on shift;
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. You will need to submit a BAS form 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.
[This article has been prepared for the purposes of general information and guidance only. It should not be used for specific advice or used for formulating decisions under any circumstances. If you would like specific advice about your own personal circumstances please contact ATO or your Tax Agent.]