Uber Tax Deductions

As owner operators of their own small business, Uber drivers have access to a wide range of legitimate tax deductions.

Vehicle costs and running expenses are the most significant along with direct expenses paid to Uber. There are also a number of incidental expenses to be considered, many of which will depend on the Uber driver’s specific circumstances.

Some expenses may only be partly deductible; the tax rules require that part business part personal expenses be apportioned, with evidence (such as diaries, log book) to support the basis of appointment.  Examples of apportionable expenses commonly include vehicle, computer and phone expenses, although it is possible in some circumstances that the available evidence points to 100% business usage.

The following checklist is not advice, or confirmation that every expense is allowable in your situation. It is best used is as a memory jogger before talking to an accountant, or when setting up accounting systems to make sure every legitimate expense is captured.

If you think we’ve missed something obvious, let us know here, and we’d be happy to add it to the list for the benefit of all readers.

Whilst Uber driving may be in some ways unique, tax rules and principles apply regardless of industry. Some expenses, although listed, may in certain circumstances NOT be deductible. Professional advice is always recommended.

For a driver registered for GST, all expenses are reported for tax purposes excluding GST.

Note that salary-packaged car expenses cannot be further claimed at the individual level.

Motor vehicle costs

Car expenses can be claimed under two possible methods. The choice of method is exercised on an annual basis, and can be changed from one year to the next.

Log Book method

The log book method requires keeping a diary for a minimum period (12 weeks starting but necessarily ending within the financial year) in order to determine the business percentage of total kms travelled.

The percentage is then applied to all motor vehicle costs, including depreciation. Log books are valid for 5 years, unless circumstances change.

Business kilometres are measured by each driving session (not each trip) starting from, and ending at home or wherever the car is parked “off-duty”.  See further Log Book Method

Set rate cents per Km

Without a log book or if detailed records of running costs haven’t been kept,  a set rate per business kilometre can be claimed, to a maximum of 5,000 kilometres. Some evidence of the kilometres travelled (such as a diary) must be available to support the claim.

If a log book has been kept as well (as above) the higher-value claim can be selected.

Business trips start start from, and end at home or wherever the car is parked “off-duty”. See further the cents per km method here.

Depreciation

For drivers who own their vehicle, depreciation can be a significant tax claim. Depreciation is a claim based on a percentage of the vehicle cost spread over a number of years – which is the vehicle’s assumed effective life.

Effective life can be self-assessed based on the manner and conditions of a vehicle’s usage, or in accordance with standard rates determined by the Tax Office.

See how to work out depreciation here. In common with all vehicle costs, depreciation claims must be adjusted by the business use percentage under the log book method.  (Depreciation and vehicle running costs are not claimable under the per km rate method).

Business depreciation is subject to an upper value limit which is adjusted annually. See Luxury car limit.

The purchase of a vehicle can be considered under the small business accelerated depreciation concession ($20,000 until 30 June 2018 under current rules). See notes on depreciation here.

Uber drivers deductible expenses checklist

(not exhaustive or definitive)

  • Vehicle costs (adjusted by business percentage)
    • Depreciation (if owned)
    • Lease fees (if leased)
    • Licence
    • Insurance
    • Interest (on loan to acquire vehicle)
    • Fuel, oil, repairs, tyres
    • Cleaning & cash washes, detailing (general costs)
    • Vehicle incidentals – e.g. seat covers
  • Accounting, bookkeeping fees
  • Accounting software subscriptions
  • Bank fees – Uber business account
  • Business cards
  • Personal Superannuation Contributions (subject to conditions)
  • Protective clothing/ safety (e.g. hi-vis, not normal street clothing)
  • Cleaning (rider-caused)
  • Passenger amenities – newspaper, mints, tissues etc
  • Tolls and parking (in the course of driving passengers)
  • Specific driver-related costs – medicals, (not drivers licence, or personal grooming)
  • Phone and internet – business portion
  • Home Office costs (normally a percentage claim)
  • Stationery
  • Uber fees
  • Income protection insurance

For more ideas see Tax Deductions

 

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This page was last modified 2017-12-13