Buying A Car For Uber

 

As an Uber Driver, your car is your most critical business asset, so the decision to buy a car is an important one. Perhaps you’re looking to start driving but your current car doesn’t meet Uber’s requirements. Perhaps you see yourself driving for Uber longer term so it’s time to upgrade. Or perhaps you just need a new car, and driving for Uber is a fantastic way to help with the cost. In all of these cases it’s important to understand the tax implications of your purchase. This article aims to cover the basics of tax and GST when buying a car for Uber.

 

Car Key

 

First Considerations

A common misconception to clear up right away is that you’ll ‘get it all back on tax’. This is not the case. When you claim a tax deduction, you only get back some of the money you spend. For example, if your taxable income is between $37k and $87k you’re in the 34.5% tax bracket, so you’ll get back 34.5 cents of every dollar you spend. The other 65.5 cents comes directly out of your pocket. If you’re in the $18k-$37k tax bracket you’ll only get back 21 cents in the dollar and pay 79 cents in the dollar yourself. So although you will receive some tax benefits for your new car, the bulk of the cost will come from your pocket.

Another important consideration is that many drivers don’t make as much money as they first expect, especially after taking into account income tax, GST and car running costs. Be sure to evaluate whether you can still afford your car even if you make less than you expect from Uber driving.

If you’re not sure yet whether you’ll drive Uber for the long term, but your current car doesn’t meet requirements, a great option is to rent a vehicle and try Uber first before committing to a car purchase or a loan. There are a number of rental companies that specialise in renting to Uber drivers. We highly recommend Splend for their exceptional member services, including driver training and strategic advice, fuel discounts, and networking opportunities with other drivers.

Here are a few more common questions about buying a car:

  • New or Used?: Tax-wise, it makes no difference. You’ll claim the same percentage rate of depreciation on the purchase price regardless of whether the car is brand new or used.
  • Dealer or Private Seller?: Buying from a dealer is usually a little more expensive because they provide benefits such as a statutory warranty, so you’ll need to decide if this is worthwhile for you. From a tax perspective, if you buy from a dealer the cost of the car will include GST, which you can claim back from the ATO. So if you’re comparing a dealer car to a private sale car be sure to take into account the GST you’ll get back from the dealer car. More on how to calculate this below.
  • Should I Buy Under $20,000?: If you’re buying your car before 30 June 2018 you should take into account the instant asset write-off for vehicles under $20k. But depending on your circumstances the write-off may or may not actually benefit you. If you’re looking at cars in this price bracket be sure to read below to see how this affects you.

 

Financing Your Car

There are many factors to consider in choosing how to finance your car, including affordability of repayments, how long you plan to drive for, and whether your circumstances allow you to apply for a loan. These questions are best discussed with your finance broker, who should be able to provide you with calculations comparing loan options as well as loan vs lease analyses.

The way you choose to buy and finance your car will also affect the way you claim tax deductions. For example, the timing of deductions between a loan and a lease are very different:

  • Buy Car & Take Out a Loan: If you purchase your car directly and take out a loan, your depreciation and interest deductions will be largest in the first year and diminish over time. If you purchase your car from a dealer you’ll also receive a lump sum refund of GST on your next BAS.
  • Lease or Rent a Car: If you lease or rent a vehicle, your tax deductions and GST claims are spread evenly over the life of the lease, rather than being ‘front-loaded’. You’ll claim the GST back on your lease/rental payments quarterly, and claim a tax deduction for your lease repayments for the year (excl GST) on your tax return. Since you don’t own the vehicle directly you won’t be eligible to claim depreciation or the Instant Asset Write-off (more on this below).
  • Salary Packaging: If you salary package a vehicle through your employer, you’ll receive all of your tax benefits through the package. This means you cannot also claim tax deductions for those expenses in your tax return, as this would be ‘double-dipping’. You can still claim GST and tax deductions for any expenses that are not packaged (i.e. paid out of your own pocket), but you must keep a logbook to be eligible.

As you can see, from a tax perspective the biggest difference is that with a loan your tax benefits are ‘front-loaded’, while if you lease/rent a car the tax benefits are spread evenly over the lease/rental period. So when choosing which of these suits you best consider how long you expect to drive for, whether you plan to upgrade the car in few years or car or keep it long term, and your immediate cashflow needs.

 

Looking for a Finance Broker?

A finance broker can do this for you free of charge, help find a lender who fits your circumstances and budget, and manage the loan application process for you. DriveTax works with a broker understands Uber, is experienced in matching drivers with the right loan, and has helped many of our clients through the process of financing their car. Email us here for more information on this service or to arrange a chat.

 

 

Claiming GST

If you purchase your car from a dealer, the purchase price will include GST which you can claim back on your next Business Activity Statement (BAS), provided you are registered for GST on the date of purchase. The amount of GST you’ll get back will be a little less than 1/11th of the price of your car (because some on-road costs don’t include GST) multiplied by your business-use percentage. Note that a logbook isn’t required for GST claims, instead the ATO allows you to make a reasonable estimate of your business use percentage. The logbook is required for your end of year income tax though, more on this below.

Remember that to be eligible to register for GST, you have actively started the Uber application process to prove that you are ‘running a business’. If you plan to purchase a car and you haven’t yet registered for GST, we recommend that you first start the Uber driver application process if you haven’t already to prove your eligibility. Then head to our GST Registration page and fill in the form, and we will submit your GST Registration application to the ATO for you for free. You can read more information for new drivers here.

Other Situations:

  • Purchase from Private Seller: If you purchase a car privately, there is generally no GST on the purchase price, as the seller is not registered for GST. This means there is no GST to claim back on the purchase of the car, because you did not pay any GST in the first place.
  • Lease or Rent: On your quarterly BAS you’ll claim back the GST on your lease/rent payments multiplied by your business use percentage.
  • Salary Packaging: In a salary packaging arrangement your employer owns the car and pays the expenses, so they are the ones to claim the GST credits. However this is taken into account when working out the amount that is deducted from your pay, so you still indirectly receive the benefit of the GST credits. If you pay for fuel, cleaning or any other running costs out of your own pocket (i.e. outside of the salary packaging) you can claim the GST on these expenses on your BAS.

 

Claiming Tax Deductions

Instant Asset Write-Off

If you purchase your car before 30 June 2020, the purchase price excluding GST is $29,999 or less (including all on-road costs, even if paid separately) and you have kept a valid ATO-compliant logbook, then you will be eligible for the Instant Asset Write-Off. This means you can claim a tax deduction for the whole cost of your car up front.

Keep in mind though that you may not get to use this whole tax deduction. If your tax deductions (including the write-off) are more than your Uber income for the year, this creates a loss, which means you’ll pay no tax on your Uber income for the year. However you cannot claim the remaining loss against your employment and other taxable income unless your Gross Uber Fares for the financial year are over $20,000 (excl GST). If they are not, then your loss will be ‘carried forward’. This means it can only be claimed against Uber profits in future years, or if your Gross Uber Fees exceed $20,000 (excl GST) in a future year then the loss can be claimed against your other taxable income.

It’s important to recognise that the Instant Asset Write-Off comes with a sting in the tail. When you sell the car or stop driving for Uber you must pay income tax on the sale price/market value of the car, subject to your logbook percentage (you can read more on tax on selling your car below). Therefore we only recommend claiming the Instant Asset Write-Off if you plan to drive for Uber for a number of years, or if you have a high Uber tax bill in the current year to make the Write-Off worthwhile. If you have your tax return prepared by DriveTax we will always explain your options and discuss the trade-offs before claiming the Instant Asset Write-Off. If you’ve bought a car an eligible vehicle, we recommend having your tax return prepared by DriveTax or another registered tax agent and discuss the consequences of this claim to make sure you don’t get caught by surprise in the future.

Other Car Purchases

If your car costs $30,000 or more (excl GST), you purchase after 30 June 2020, or you choose not to claim the Instant Asset Write-Off, then you’ll claim normal small business depreciation instead, which is 15% of the purchase price in the first year, and 30% of the written down value every year after that.

Other Situations:

  • Lease or Rental: You can claim a tax deduction for the cost of your lease/rental repayments (excl GST) for the year multiplied by your logbook percentage. You cannot claim the cost of buying the car itself, because technically it is the lease/rental company who purchased the car, not you.
  • Salary Packaging: You cannot claim a tax deduction for salary packaged expenses, because you have already received the tax benefit through the salary packaging. You can claim any expenses you pay for out of your own pocket (i.e. outside of the salary packaging) as long as you have kept a logbook.

In all of the above situations you MUST keep a valid ATO-compliant logbook to claim these deductions. Otherwise you cannot claim the instant write-off, depreciation, loan interest, fuel or any other car running costs, and you’ll instead be limited to just the cents per kilometre method, which is a maximum tax deduction of $3,300. See our blog post on Tax Deductions for Uber Drivers for more information on keeping a logbook.

 

Selling A Car

If you are selling your old car, trading it in or you stop driving for Uber, and you claimed that car as a business asset for Uber (i.e. you claimed depreciation and other tax deductions), then you must pay tax on the sale. Alternatively, if your old car was never used for Uber, or was only used briefly tax doesn’t apply.

If your car is considered a business asset, you’ll pay GST of 1/11th on the sale price on your next BAS (even if you sell the car privately). Then, on your end of year tax return, you must make a ‘balancing adjustment’ on the difference between the depreciated value of car in your tax return and it’s actual sale price. This is best explained with an example:

  • Purchase price = $10k
  • Depreciation claimed over time owned = $3k
  • Written down value = $10k – $3k = $7k
  • Sale Price = $8k (excl GST)
  • Depreciation Overclaimed = $8k – $7k = $1k = taxable Balancing Adjustment to be taxed at your marginal tax rate

In the eyes of the ATO, you have claimed $3k of depreciation but based on the sale price we now know it actually only depreciated $2k. Therefore you must declare the $1k of depreciation that you ‘overclaimed’ as taxable income to bring things back into balance. This works in reverse too. If you sell your old car for less than its written down value this means you have under claimed depreciation, so you can claim a tax deduction for the difference.

A note for those thinking of claiming the Instant Asset Write-Off on a new car. Once you claim the Write-Off, the written down value of the car is immediately reduced to $0, as you’ve claimed all the depreciation up front. This means that when you either sell the car or stop driving for Uber, the taxable balancing adjustment will be the whole sale price/market price of the car, subject to your business use percentage of course. This can add quite a chunk to your tax bill, especially if you’re not claiming a new car to offset it. We recommend you always seek tax advice before claiming the Instant Asset Write-Off.

 

Other FAQ’s

  • Name and ABN on the Invoice: For GST purposes, for a purchase over $1,000 your ‘identity’ must appear on the invoice. This can be either your name and address, or your ABN. Otherwise you cannot claim GST on the purchase of your car.
  • Invoice for a Private Sale: The ATO understands that when buying a car privately you won’t get a formal tax invoice. You should instead write your own receipt for the purchase of the car, showing the name, address and contact details of both you and the seller, the purchase date, price, and registration number or VIN number. Both of you should sign and date the receipt. You should also keep copies of bank statements or bank cheques or other proof of payment.
  • Buying in a Spouse’s Name: The ATO’s rules are inconsistent on this. For income tax the ATO accepts that spouses often register assets or pay expenses on behalf of each other or in each other’s names for various reasons. So as long as the vehicle is genuinely for your Uber driving you can still claim depreciation in your tax return. The same is true for any running costs that your spouse pays for. GST is different, for expenses over $1,000 you can only claim GST credits if your name appears on the invoice. Therefore if you are purchasing a car from a dealer and wish to claim for GST you should make sure the car is in your name.
  • Business or Private Registration and Insurance: The ATO doesn’t care whether you register or insure the car as business or private, you can claim tax deductions either way. You should find out the requirements of your insurance company and the road traffic authority in your state to determine how you should register and insure your car.

 

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The information in this article is general in nature and does not take into account your personal circumstances. If you’d like to know how this article applies to you, please contact us to arrange a consultation, or talk to your accountant. 

By | 2019-04-02T18:18:36+00:00 April 3rd, 2018|Tax|50 Comments

About the Author:

Hi, I'm Jess. I'm a CPA Accountant and Registered Tax Agent, and I specialise in tax preparation and advice for Uber drivers. As a regular rider in Melbourne, I’ve chatted to many drivers who are facing their first ABN tax return, are confused about their tax obligations, or aren’t sure what to do at tax time. I'm on a mission to relieve the confusion and build a go-to service for Uber drivers across Australia.

50 Comments

  1. Jose April 6, 2018 at 10:54 am - Reply

    Hi Jess

    Thank you for your information on buying and/or selling a car for Uber. It has cleared up several points for me.

    Much appreciated.

    • Jess April 6, 2018 at 5:02 pm - Reply

      Thankyou for the great feedback Jose! – Jess

  2. Mahmudul Hasan May 29, 2018 at 8:58 am - Reply

    Hi Jess, this is an informative article for the Uber drivers. However, what rule applies for the following situation?

    A person bought a car on finance:
    Purchase price (say) 15k
    He paid an initial amount of $1000
    Took loan on the remaining amount i.e. 14k

    Can he claim the gst of $1000 in BAS and the instant deduction of 900 (1000-gst)? I assume he can also claim the interest and bank charge for the remaining loan amount. What will be the depreciation schedule for this situation?
    Thanks a lot!

    • Jess May 29, 2018 at 1:05 pm - Reply

      Hi Mahmudul, (I’ll assume when you say finance you mean a loan with principal and interest). Regardless of how much you borrow, you still claim a deduction/depreciation and GST for the whole price of the car. How much you pay deposit/cash and how much is borrowed doesn’t matter, you still bought a whole car, so you can claim it all (subject to your logbook of course). So in your example $15k would still be the purchase price to claim for GST and the instant write-off, even though $1k was cash and $14k was loan. Then you would claim a tax deduction for any interest paid on the $14k loan. Remember there is no depreciation if you claim the write-off, it’s one or the other. – Jess

  3. Mahmudul May 31, 2018 at 11:39 am - Reply

    Hi Jess,

    Many thanks for the nice and clear explanation. I think DriveTax is a great place for the rideshare drivers! Good luck!

    • Jess May 31, 2018 at 11:03 pm - Reply

      Very kind feedback Mahmudul, thankyou! – Jess

  4. Sally June 12, 2018 at 1:40 am - Reply

    Hi Jess,

    I have inquiry in regards to the timing of a new car purchase. If I buy a car from a dealer on say the 18th of June so I only have the car for two weeks of the financial year and drive it for two weeks only for Uber and no private use. Does that mean I can claim 100% of the GST paid on the purchase in the current quarter for the BAS. Also can I claim 15% depreciation on the cost of the car on my tax return for the financial year. Thanks Sally

    • Jess June 12, 2018 at 4:54 am - Reply

      Hi Sally, yes you can claim the whole GST in your June BAS, and also 15% depreciation in your 2018 tax return. The small business depreciation rules are very advantageous when you buy a car right before the end of the year! Remember for depreciation you will need a 12 week logbook that starts before the 30th of June, so you will have to wait until the 12 weeks are complete before you can lodge your tax return. This isn’t required for your BAS, the ATO allows you to make a reasonable estimate of your Uber usage instead so the logbook isn’t required, it’s only the tax return you’ll need to wait for. – Jess

  5. Sally June 12, 2018 at 11:14 pm - Reply

    Hi Jess,

    Thanks very much for the great advice and could you explain more about how the small business depreciation schedule works. For how many years can you claim depreciation on a car and what are the percentage rates. Thanks Sally

    • Jess June 13, 2018 at 2:01 am - Reply

      HI Sally, all businesses with turnover below $2 million are eligible. You can claim 15% of the GST-exclusive cost in the first year (regardless of when during that year you bought it), and 30% of the written down value every year after that. There is no set time period, this continues indefinitely and the value will get smaller over time. Once the balance of all your assets reaches $20,000 you can write of the remaining balance at once. There are also particular rules when you sell the vehicle. You can read more on the ATO website here. – Jess

  6. soheeb July 27, 2018 at 2:41 am - Reply

    hi Jess

    I have a question on GST and vehicle depreciation

    I purchased a vehicle in November 2016 for $98,000 inc gst and other tax (LCT).
    In April 2018 I started doing Uber with this car and decided that this car will be 100% for uber business. (as I have another car for personal use)

    question 1. Can I claim any GST in my Jun18 BAS? I think I cannot claim any GST

    Question 2 how do I depreciate my vehicle?
    below is my understand
    maximum depreciation car value – $57581
    Opening Bal Year Start Day End Day NO. of Days Rate amount comments
    $57,581.00 1 28/11/2016 28/11/2017 365 15% $8,637.15 Cant Claim as not used for business
    $48,943.85 2 28/11/2017 25/04/2018 148 30% $5,953.72 Cant Claim as not used for business
    $42,990.13 2 26/04/2018 30/06/2018 65 30% $2,296.73 Dep claim for FY17-18
    $40,693.40 3 01/07/2018 30/06/2019 364 30% $12,174.57 Dep claim for FY18-19
    $28,518.83 4 01/07/2019 30/06/2020 365 30% $8,555.65 Dep claim for FY19-20
    $19,963.18 5 01/07/2020 30/06/2021 $19,963.18 Dep claim for FY20-21

    please provide your advise

    thanks
    mobeen

    • Jess July 27, 2018 at 3:36 pm - Reply

      Hi Mobeen, you are correct that you can’t claim GST on the purchase of your car as you weren’t registered on the day you bought it. To calculate the depreciation on your car you must first use the regular depreciation rate of 25% diminishing value apportioned by days up until the date you started driving for Uber. This will give your opening value. Then you can use small business depreciation rates from that point onwards, so that’s 15% DV up to the June 18 (you don’t have to apportion for days with small business depreciation, you just claim the whole 15%, and then 30% each year after that. – Jess

      • Mobeen July 30, 2018 at 5:53 am - Reply

        Hi Jess

        Thanks for the advice

  7. Paul August 11, 2018 at 1:53 pm - Reply

    Hi Jess,
    Assuming a car for Uber round $12000 and working 10-16 weekend driving. Which way is most beneficial way to acquire a car to claim deductions on a car? Cash, car loan or lease payments? Are lease payments fully deductables like loan interest?
    Thanks for your help.

    • Jess August 11, 2018 at 7:32 pm - Reply

      Hi Paul, I con’t answer this question for you because it depends on many personal factors, including your own cash flow requirements, how long you expect to drive for, the cost of the car, your marginal tax rate, how much you’ll earn and a number of other factors. Purely from a direct tax perspective, buying a car (with or without a loan) gives you more of an up front deduction, while with renting or leasing the deductions are spread evenly over the term of the lease. Yes lease payments are deductible, but you must have a logbook. – Jess

  8. Navdeep kumar October 9, 2018 at 1:53 am - Reply

    Hi Jess,

    I am working full time and drive under on part time basis .

    I am looking to buy car so can you please suggest what is the best way to do and can able to claim the most of it.

    Thanks
    Nav

    • Jess October 9, 2018 at 6:28 am - Reply

      Hi Nav, everything I could write to answer your question is already written above in the bog post. I this explains what you need. – Jess

  9. Diana Martin October 25, 2018 at 7:59 am - Reply

    Hi Jess,

    Thank you for this informative articles, me and my husband is doing Uber, we are planning that we buy a car that we will both use for Uber (shifting). Can we both claim GST % if we have both our names in the invoice? Your reply is greatly appreciated. – Diane

    • Jess October 26, 2018 at 10:08 am - Reply

      HI Diana, yes that’s no problem. Just note that when you keep your logbook you will need to keep track of each of your separate kms within the one logbook (it cannot be two separate logbooks). At the end of the 12 weeks you’ll be able to calculate the car’s percentage as x% your use + x% his use + x% combined private use = 100%. Then you can each claim your respective shares of the expenses in each of your tax returns. – Jess

  10. Eden October 30, 2018 at 10:54 am - Reply

    Hi Jess,

    I would like to check if I buy a car under private use and started driving Uber, can I still claim the small business depreciation?

    Thank you.

    Kind regards,
    Eden

    • Jess October 30, 2018 at 7:23 pm - Reply

      Hi Eden, yes absolutely. We would need to first calculate how much the car depreciated before you started using it for business purposes using the standard rate of 25% apportioned by days. This will determine the opening value to use for the small business depreciation once you start driving for Uber. – Jess

      • Eden October 31, 2018 at 7:06 am - Reply

        Hi Jess,

        Thanks for the explanation. Could you explain more on how to calculate the 25% apportioned by days? For example if I did not drive Uber for 100days since I bought the car, does it mean (0.25*100)*the cost of the car? Thank you.

        • Jess October 31, 2018 at 3:42 pm - Reply

          Hi Eden, that’s .25 x 100/365 x the cost of the car. I’m sorry I can’t go into more detail here as it’s hard to explain, but actually it sounds like you have the gist of it! – Jess

  11. Eden November 3, 2018 at 3:18 am - Reply

    Thank you very much Jess!

  12. Adam November 8, 2018 at 1:36 am - Reply

    Hello

    If i buy a used car today for $7k and write it off upfront and use it 100% for business. what happens if i sell or stop using the car this financial yr or next and convert it to personal use?

    Thanks in advance

    • Jess November 11, 2018 at 8:59 pm - Reply

      Hi Adam, if you can claimed 100% write-off and then sell the car then you must pay income tax on the sale price x your logbook percentage. The same is true if you stop using the car for business purposes, you will pay income tax on the marker value of the car x the logbook percentage. – Jess

  13. Leslie January 18, 2019 at 3:13 am - Reply

    Hi Jess

    Thanks so much for this very informative post. May I ask you a few questions here?

    I am currently using my own car for rideshare and most likely I will keep using this car for rideshare until I buy a new car in FY19 Q4. So this means I will keep using my current car for rideshare in 3 out of 4 quarters in FY19 (from July 2018 to March 2019) and may start using a new car from FY19 Q4. I am going to buy a car under $20K for instant write off within FY19.

    So I was assuming that I will have to claim two car’s depreciation when doing tax return for FY19.

    1. Old car – can I claim the depreciation for thw whole year, or maybe 75% of whole year depreciation given I used it in 3 out 4 quarters?

    2. New car – I was assuming I can do instant write off. However, for cash flow consideration, I am going to apply a car loan with principal plus interest, will this have any impacts on instant asset write off?

    3. I kept a logbook for I started driving with Uber in last year. I understood it could be used for 5 years.Can I apply the busienss portion rate of this logbook to my new car? What if the business portion for my new car will be higher? Because previous I only had one car so have to use it for some private trips but now I will mainly use the new car for rideshare only.

    I look forward to hearing from you soon

    Many thanks

    • Jess January 18, 2019 at 4:03 pm - Reply

      Hi Leslie,
      1) This depends on what kind of depreciation you use. With traditional depreciation you must apportion by number of days, or with the small business depreciation method it is just a flat rate for the whole year. You can read more here.
      2) Taking our a loan or finance does not impact the instant asset write-off.
      3) You can continue to use the same logbook when you change cars, or you choose to start a new one if your percentage of usage will increase
      I hope this answers you questions! – Jess

      • Leslie February 8, 2019 at 1:44 am - Reply

        Hi Jess,

        Somehow I didn’t receive the email notification for your reply so I just looked it again and found your answer.

        You really helped me a lot.

        Thank you so much!

        Leslie

  14. Shelby January 22, 2019 at 12:42 pm - Reply

    Hi Jess,

    Simply put; if I buy a car for $10,000 and use it only for Uber, how much can I get back on tax for it?

    • Jess January 22, 2019 at 1:14 pm - Reply

      Hi Shelby, the amount you get back will be $10,000 x logbook percentage x marginal tax rate. If you the car only for Uber and keep a valid logbook to prove it, then this will be $10,000 x 100% x your marginal tax rate. Your marginal tax rate depends on how much you earn from Uber and from all other sources. No simple answers when it comes to tax! – Jess

  15. Gie February 19, 2019 at 6:55 am - Reply

    Hi Jess,

    My husband bought a car for $26,990 including GST. Unfortunately, he registered for GST after he bought the car. He took a loan of $27,516 including bank fees which will be amortized for 5 yrs. If he cannot claim input tax for GST, can he just add it into the cost of the car and claim depreciation instead? What will be the treatment for the bank fees which was capitalized into the loan?

    • Jess February 19, 2019 at 2:32 pm - Reply

      Hi Gie, that’s right, if he wasn’t registered for GST at the time of purchasing the car then the whole $26,990 will be depreciated. For the loan borrowing costs these are claimed equally over five years or the life of the loan, whichever is shorter (apportion for days in the first and last year). – Jess

  16. Grant February 25, 2019 at 5:25 am - Reply

    Hi Jess, I will take possession of a car on the 27th Feb. I then need to get CTP upgraded and a vehicle inspection, then a Book Hire Service Licence from Qld TMR. Hopefully I will be driving before the end of March. Can I estimate use to claim the GST on the vehicle for the 3Q BAS even if, for some delay, I don’t begin driving before the end of March 2019? I’ll need to do a BAS regardless?
    Secondly, I will use your services to do my BAS returns but is it necessary for a NIL BAS return? Do you make the GST claim separate to the BAS? As it’s my first BAS I’m not sure of the procedure. I read one of your posts saying to call the ATO but can’t see where on MyGov the document ID form could be found?

    • Jess February 25, 2019 at 12:34 pm - Reply

      Hi Grant, a logbook is not required for a BAS, so it will be fine to estimate your Uber percentage. Depending on the timing of when you start driving, and if your BAS due date allows, you might like to wait and see how your first week or two of driving stack up to help you estimate the percentage for your Q3 BAS? But if not, your best estimate is acceptable. I do recommend doing a Nil BAS yourself, but from what you’ve described you’ll have a bunch of expenses in your Q3 BAS that you’ll be wanting to claim, so Q3 wouldn’t be a Nil BAS for you at all. A Nil BAS is only for if you had no income and no expenses to claim GST on. But for the sake of answering your question, in MyGov you need to go to Activity Statements and click on the particular BAS. The Document ID should be listed there towards the top, or you can just lodge the Nil BAS from that very screen, I believe as an option towards the bottom?. I hope this answers your questions. – Jess

  17. Scott March 10, 2019 at 6:32 pm - Reply

    Hi Jess,
    If I rent a car for uber work and use it for nothing else, will I be able to offset the whole rental cost as a tax deduction? Assuming I pay more tax per week than the rental cost.

    • Jess March 11, 2019 at 2:54 am - Reply

      Hi Scott, if you make an overall loss from Uber, you can only claim that loss against your other taxable income if your Gross Fares for the year were more than $20,000. If your Gross fares were under this amount, then you can’t claim the loss in your current year tax return. Instead those losses will be ‘carried forward’ and can be offset against profits in future years. To put it another way, if you earn less than $20,000 per year then you can never claim more than you earn. – Jess

  18. Luke Mackay March 18, 2019 at 10:33 am - Reply

    Hi Jess, thanks for providing such useful information in your article! I bought a new vehicle in Nov 2018 for $25,000 inc. GST & on roads however I didn’t register for GST or start driving for rideshare until Feb 2019. Is there any way I could claim still claim back the GST on the vehicle purchase price? I wasn’t aware you had to already be registered for GST before buying. Thanks in advance 🙂

    • Jess March 18, 2019 at 1:58 pm - Reply

      Hi Luke, I’m afraid you’re out of luck, there is no way to get the GST back later. To claim the GST you must be registered for GST on the day of purchase, and you can’t register for GST until you are actively running a business (which in this case generally means you actively start Ubering). Sorry it’s not better news! – Jess

  19. Kenny March 25, 2019 at 12:11 am - Reply

    Hi Jess.. kenny here..I works with uber eats as a part timer.i am earning $60000 per year from my first job..so far I have earned $17000 from uber eats.. what’s the best scenario to minimise the tax.
    I can’t use my car depreciation value for tax purposes because it has been 100% depreciated last tax year.
    Here is possible income and expenses from uber
    INCOME : $23000
    EXPENSES (inclu rego,insurance,fuel,phone, maintenance) : $7000
    What I would like to know is
    Should I buy car to minimise the tax.. if so how much value of car has to be

    Thanks

    • Jess March 25, 2019 at 2:58 am - Reply

      Hi Kenny, I’m sorry I cannot give personal tax advice here. The only information I can confirm for you is the information in this article above. – Jess

  20. Dom March 25, 2019 at 7:21 am - Reply

    Hi Jess,

    You mentioned in the article that a person can use their salary packaged vehicle for Uber driving. Are you sure? This is exactly what I want to do, but didn’t think it was allowed from an insurance perspective.

    Say I have an accident in a salary packaged vehicle (from my other employer) whilst undertaking an income-generating Uber venture, would I be covered?

    What about being able to change a salary packaged vehicle insurance and registration to ‘business’? Please confirm. Thanks, that would be amazing if I could do that.

    • Jess March 26, 2019 at 12:39 am - Reply

      Hi Dom, I can only comment on what’s allowed from the ATO’s perspective, and the ATO pay no attention to whether your registration and insurance is business or private, it’s tax deductible either way. Your specific novated lease company or insurance company may or may not allow you to drive for Uber or cover you, you would have to check with them. I also can’t say what your state’s road authority requires regarding the registration, so you’ll need to check with them. Sorry I can’t help with these questions! – Jess

  21. Michael April 10, 2019 at 12:17 pm - Reply

    Hey Jess, Good afternoon
    My question is a get new car on June 28 2018 l di used my car for private business, but in July 2019 started with Uber
    Can claim any GST or any deduction ?

    Thanks

    • Jess April 10, 2019 at 2:16 pm - Reply

      Hi Michael, I’m sorry but no, you can’t claim any GST on the purchase of your car because you were not running an Uber business and registered for GST on the date you purchased the car. – Jess

  22. Roy watmab April 12, 2019 at 4:43 am - Reply

    Hi Jess,

    Thanks for the article. This is really helpful.

    I bought a car for 25,500 excluding gst In August 2018. Can you confirm that I will be able to deduct the whole amount of the car in 2018-2019 financial year?

    • Jess April 12, 2019 at 7:21 am - Reply

      Hi Roy, as long as you have a valid logbook, yes you will, because the balance of your assets will be below $30,000 at the 30th of June 2019. – Jess

  23. David April 16, 2019 at 2:08 am - Reply

    Hi Jess,

    My last question. 🙂

    I have confirmation from the ATO my ABN/GST registration is effective from 18 Jan 2019.

    In January 2019 I bought a brand new car from a dealer for Uber and personal use.

    I commenced Uber driving on 31 January 2019.

    Please note I negotiated the car deal on 15 Jan 2019 and paid a $2,000 deposit.

    Rego was paid on 18 January 2019 and the balance of the purchase ($70,000) was paid on 18 January 2019.

    Because I paid the final monies on 18 January (which I have a receipt for) my read is I can claim the car costs for GST and tax purposes this fiscal?

    I’m aware the car limit for 2018-19 is $57,581.

    Your feedback will be appreciated.:)

    • Jess April 19, 2019 at 12:16 am - Reply

      Hi David, GST is calculated on a cash basis, which means that the GST credit occurs on the date you make the payment. This means that as long as you have evidence of the date you made the payment, and that it was made after you were registered for GST, then you can claim the GST credit. In your case you won’t be able to claim the GST on the deposit, but you can on the balance payment. As an alternative, if you have evidence that you started the Uber application process earlier than the 18th of Jan, you may like to consider contacting the ATO and changing the start date of your ABN and GST registration. You are eligible for an ABN and GST from the date you started the application process. I suggest searching your email inbox for the word Uber, and scroll back to see when you first started receiving emails about the registration process, this will show you the earliest date you can be registered from. – Jess

      • David April 20, 2019 at 12:00 pm - Reply

        Hi Jess,

        Wow! Thank you for clarifying the purchase date question but also the tip about from when I started the application process. Not concerned about the deposit because the car is over the $57,581 limit but I did pay insurance (which has GST in it) before 18 Jan so will def check my records or even email Uber to get the commencement date! 🙂

        Whilst I feel comfortable doing my own upcoming first BAS, especially after your guiding tips, if I find anyone who wants an expert to do it for them I will definitely recommend you.

        Thanks once again for your guidance and fantastic blog.

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