Many people today are getting busier, and more people are ordering their food. In fact, ordering food has become a norm, and that’s why there’s been an increase in food delivery companies. If you are interested in starting a food delivery service, though the market here is quite lucrative, you must understand that you are still subject to tax obligations. However, you might already be aware of this. What you might not be aware of, which can be said about many food delivery service providers, is that you can actually receive tax deductions.
Today, we want to share with you how your food delivery service can maximise its tax deductions:
1. Claim Fuel Costs
If you use your vehicle to deliver food and are in a region that does not have a toll, you can claim a tax deduction for these costs. The fuel costs that can be claimed include your fuel purchases, the costs of your maintenance and repair, as well as the costs of the fuel when you are on the road.
For example, you can claim the expenses every time you make a delivery. While you can claim this as an expense, you can do it either on a cash basis or an accrual basis. If you are taxed on a cash basis, then the vehicle expenses you incur can be deducted in the tax year that you incurred these. However, if you are taxed on an accrual basis, you can wait for the expense to be incurred and then write it off.
2. Claim the Cost of the Car
If you use a vehicle that cannot be used for any other purpose, you can claim the cost of this vehicle as an expense. This includes the depreciation amount, the maintenance or repair costs and registration costs.
If you are a sole trader, you won’t be taxed on the cost of your vehicle. However, if you have a business vehicle and are a company, you will be taxed on this. In this case, you can claim the deduction when you are filling out your company tax return.
3. Claim for the Interests
When you are making a delivery, you might be required to pay the expensive costs of using a phone. The costs of these services, including the interest that you pay for your phone are considered business expenses. If you are paying a lot of money on your phone plans, then you can claim a tax deduction for this.
In addition, if you are paying the interest that you pay on the phone plan, you can count it as an expense connected to your delivery business.
The food delivery industry is steadily growing. In fact, more and more people are starting food delivery businesses. Food delivery services, therefore, have become very lucrative and even popular. If you already have a food delivery service and want to maximise your potential tax deductions, you must know which expenses you can claim for your business.
Rideshare Tax offers drivers a way to support their ABN, GST, and other financial obligations to help manage BAS. If you are looking for a rideshare accountant in Australia to help you manage your taxes and more, work with us today!