Your car is an important, and potentially the most significant, deduction in your Uber and ridesharing business. Rideshare Tax will help you get this right as there is a bit of information to understand.
Why do you need a logbook?
Since your car may be used for both work and personal purposes, you must maintain a logbook to keep track of the Uber and ridesharing business use of your vehicle. Your logbook will tell us the proportion that your car is used for your ridesharing business, and then we can correctly calculate the deductible amount of car-related expenses for both your Uber GST and Uber tax returns.
What the ATO expects from you.
The ATO requires you to keep a logbook of 12 weeks with regular business use. You must record:
- The date and odometer reading at the start and the end of the 12 weeks.
- Your odometer readings at the start and end of your ridesharing working day to work out your business travel. This means you can include your travel:
– from home to your first passenger,
– then from your last passenger back home,
– and the kilometres between passengers too.
- Your odometer reading at the start and end of all personal trips.
After 12 weeks you will have the total number of kilometres you have travelled, as well as the total business kilometres. Divide your business kilometres by the total kilometres travelled, and you have your business use percentage.
Please note: If you drive for multiple rideshare companies and have the Uber driver app on as well as the Didi, Ola, Shebah driver apps on, then all your travel is considered as business use of your car.
To ensure that your logbook remains valid you must also:
• Record the odometer reading at the start and end of each financial year.
• Update your logbook every five years. (Or earlier if your business use changes)
• Let us know about long periods when you didn’t use the car for work.
Does all that sound a little too hard?
Don’t worry! Rideshare Tax has you covered on this critical step. The Rideshare Tax app has an inbuilt digital logbook to ensure your logbook complies with ATO requirements. Once your logbook is complete, the app will automatically calculate your business use percentage and apply that to all your motor vehicle expenses. All you have to do is enter your motor vehicle costs in full, and we do the rest for you.
Do you drive your car 100% for your Uber and ridesharing business?
You still need to keep a logbook and show all the trips you’ve made.
What happens if you don’t have a ridesharing logbook?
BAS / GST
For GST purposes, the ATO will accept a reasonable estimate of your business use percentage. If you don’t have a logbook, then don’t panic. You can still estimate your business use percentage.
For your end of year tax return, it is best to keep a ridesharing logbook so you can claim the maximum deductions possible from your ridesharing business.
If you do not have a valid logbook, you may not be able to claim all of your motor vehicle expenses and your claim will be capped at the maximum of 5,000 kilometres a year with the cents per km method. This works out to a maximum of $3,300 (5,000km x 0.66c per km). This is why we encourage all our Rideshare Tax clients to keep a logbook.
Keep all your receipts!
You must also keep evidence of all the car expenses you are claiming, such as receipts. Keeping just a logbook is not enough to prove and make a claim in your Uber BAS and Uber tax return. So make sure you keep everything in a safe place.
Do you need a hand with lodging your BAS or tax return?