At H&R Block, we specialise in getting a great tax outcome for our clients. If you're an Uber driver, here are some key tax tips you need to be aware of.
Reporting income in your tax return
The income you earn from driving for Uber is assessable income and must be reported in your income tax return.
Expenses incurred in driving for Uber will be tax deductible. These may include expenses that relate to holding, maintaining or operating any assets used to provide the ride services.
Claiming work related tax deductions
Deductions can be claimed for the business use proportion of the following:
- commissions, licensing or service fees paid to Uber.
- costs of becoming an Uber driver - once you've started the official application process, such as medical and police checks, application fees etc. Costs incurred before becoming an Uber driver, or before the application process starts (such as attending information nights) are not deductible
- passenger costs such as water and mints or fuel for the car
- vehicle licensing or registration
- mobile phone bills
- safety equipment (such as hi-vis vests)
- costs of cleaning, servicing and repairing the vehicle
- tax agent/accountants fee
- bank fees (if you maintain a separate account for your Uber work)
Work related tax deductions cannot be claimed for:
- costs of a normal drivers licence
- fines (parking, speeding, etc)
- clothing other than safety clothing
- meals, drinks, etc purchased whilst on shift
Claiming a deduction for business use of your car
There are two ways to claim a deduction for business use of your car:
- Cents per kilometre:
- Claim 72c per kilometre from 1 July 2020 or 68c per kilometre for earlier years.
- You can only claim for 5,000 kms using this method, even if you have travelled more than this.
- This method is only available for distances up to 5,000km. Even if you cover more than 5,000 kms business, you can only claim up to 5,000 kms (for each car) using this method.
- Your claim is based on the business use percentage of each car expense, which is determined by a log book that must have been kept for a minimum 12 week period.
- This log book must be updated every 5 years.
- You can claim all expenses that relate to the operation of the car, at your percentage of business use, as established from your logbook.
Claiming an Immediate Deduction for Capital Expenses
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 temporary full expensing of capital items available until 30 June 2022 (this will be extended to 30 June 2023 under the 2021-22 budget proposal). 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 irrespective of the cost (very handy for Uber drivers buying new or second hand cars).
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.
If you need help or advice, please visit our office locator and find your local H&R Block office.
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