Driver duty: everything Uber drivers need to know about tax time

It’s that time of year again. The time of year when the government makes their solemn request that you pay your civic share in exchange for the goods and services we often take for granted.

When it comes to an Uber driver tax return, there are numerous things you can do to ensure that you get the absolute best result from your lodging.

So, without further ado, let’s take a look at how you can optimise your end of financial year (EOFY) lodgement so that you don’t get stung too hard on your earnings:

Your earnings are tax deductible

As a driver, your income is accessible and must be reported in your EOFY lodgement. This can relate to any expenses regarding operating, maintaining or holding any assets used to offer the customers a ride.


What can you claim?

• You can claim many deductions for the business use percentage, including:
  
  

  • Service fees, licencing and commissions paid to Uber;

  • The expenses related to becoming a service provider: when you begin the application process and experience costs like police checks, medical checks etc. Unfortunately, you cannot claim any deductions on expenses that occurred before you began the application process;

  • Costs for providing passengers with mints, water and other goods;

  • Parking;

  • Tolls;

  • Mobile phone expenses;

  • Costs of repairing, maintaining or cleaning your car;

  • accounts/tax agent fees;

  • Safety equipment for the vehicle;

  • Bank fees (if your driver account is separate from your regular account.

• And the things you can’t claim on

  There are a number of factors where you cannot claim a deduction, these include:

  • Price for a normal state-provided licence;

  • Clothing that is not related to OH&S procedure.

  • Fines for parking infringements or speeding;

  • Food and drink purchased for yourself whilst driving;

• Can you claim a deduction for using your own vehicle?

  There are two ways in which you can claim a deduction for using your own vehicle, including:

• Cents per kilometre

  • You can claim up to 72 cents per kilometre from 1 July 2020 and 68 cents per kilometre for prior years;

  • This method only allows you to claim up to 5,000 kms despite how much you may have driven;

• Logbook

  • You can make a claim based upon the business use proportion of every car expenses, and to do this you must have kept a log book for detailing each expense for a minimum of 12 weeks;

  • You have to update this log book every five years;

  • You are able to claim all expenses related to using your vehicle, at your proportion of business use, once these are established in your logbook.

  Claiming immediate deductions on capital expenses

  The ATO understands that in this business you are self-employed. This provides you access to all the deductions available for small business owners, including capital items allowable to 30 June 2022.

  Thankfully, this allows you to request immediate deductions on the cost of any equipment you use to operate the business, including motor vehicles regardless of how much they cost.

  Registering for GST

  Drivers have to register for GST and charge GST on each and every fare from the very first time you pick someone up. This allows you to also claim GST credits on your work-related expenses. To do all this, you have to lodge a business activity statement (BAS) every quarter.

  Note: If you are registered with GST for Uber driving, this may impact other business ventures you are involved in. This means you may have to account for both businesses (Uber included!).

  You can call in the pros

  Of course, a professional GST lodgement is always the safest and most efficient way to get an outstanding return, and with quick and easy lodgings available for such great prices, it’s easy to see why so many providers choose this option.