February 27, 2020

It seems to be the case that many Rideshare business people get their claim for motor vehicle expenses wrong.  This comes as a result of not quite understanding the way the tax laws work when claiming your car and these impacts both the Income Tax you pay and the GST you will be required to pay, each quarter.

Motor vehicle tax deductions are determined by a LOG BOOK.  Without a log book you don't have a deduction.  This is the way it works......

ALL the expenses relating to your car in a year/quarter are collated.  ALL expenses means ALL expenses, whether you think the expenses is for your business or not.  For instance, you fill up with fuel to start your Uber shift or you fuel up the car to go to church on Sunday, these are treated the same.  So, at the end of each quarter all those expenses: fuel, repairs, registration, insurance, cleaning, tyres, and loan repayments; effectively any dollar you spend between those number plates, counts.

Once those expenses are collated and added, you then apply your Motor Vehicle log book percentage rate to all those expenses to work out what GST you can claim back and what amounts are tax deductible for your Income Tax.

For Instance:  ALL my car costs for the quarter amount to $1100.  That's made up of $1000 plus $100 GST.  Your Log Book says you use your car for half the time for Uber activities, that's 50%.  This now means you can claim 50% of ALL the expenses including 50% of the GST.  See our Tips on "What is a Log Book" if you need more information.

What is not correct is just claiming the fuel and expenses you spend on your Uber shift.

If unsure - ask - all eCashbooks users have access to specialists in this area to clarify the use of our systems.


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