Any information stated by Car Next Door is general advice and does not take your individual circumstances into account. You will need to fully consider your individual situation and if necessary seek professional advice.
The ATO has published very helpful advice for people who rent out their cars. Read this carefully for clear guidelines on how to declare your income and expenses from sharing your car on your tax return.
Declaring income from renting out your car
The income you earn from renting out your car is considered to be assessable income and should be declared on your tax return. You can also claim certain expenses, like your membership fee and car expenses, as income tax deductions.
The ATO has published:
- a guide to the sharing economy and tax;
- tips for declaring sharing income and claiming deductions in your tax return; and
- some very helpful tips and examples showing how to claim deductions for costs relating to sharing your car.
This information is a must-read if you are sharing your car.
The ATO is taking a keen interest in the sharing economy, and has made it clear that any income that you earn from renting your car out should be declared. This is the case even if you’re not running your car sharing as a business or even with an intention to make a profit.
You can also speak with your accountant to get advice relevant to your situation.
Goods and Services Tax (GST), Australian Business Numbers (ABN) and companies
We recommend you speak to your accountant about registering for GST, starting a corporate entity or registering an ABN. As with income tax, there's no one-size-fits-all solution. Your accountant will be able to provide you with professional advice for your individual situation.
If you're already registered for GST, let us know so we can adjust the tax rates for your car. We can't update past invoices, but if you show your accountant all your past invoices they will be able to make sure you are reporting GST correctly.
I'm registered for GST and need to collect GST
Great! If you know that you are GST registered please email us at email@example.com and we can update your owner profile to make sure you are collecting GST on reservations. Please include in your email:
- A note that you are GST registered and want to change your GST settings on your car profile
- Name of the entity that is GST registered
- Your ABN
- Identifying details so we can find your owner profile
If you are a car borrower this does not affect you.
What to do to be ready for tax time
- Read the ATO guides linked above
- Keep a record of your car’s odometer when you start sharing it, and at the start and end of each financial year. Put a reminder in your calendar to check it on 30 June every year.
- Keep receipts for any money you spend on your car - whether it’s going to the car wash, refueling or paying for your rego renewal.
- Download a financial year summary showing your Car Next Door income and expenses
- Check your car's stats dashboard to see your income and total Borrower kilometres from the last financial year
With this information, you’ll be able to choose the most beneficial method for claiming expenses on your tax return.
If you're not sure about your tax obligations, speak to your accountant.
What income you need to declare in your tax return
What costs you can claim in your tax return (including depreciation)
How to apportion your expenses between personal and income-producing use
Tax requirements for sharing a car that is owned by someone else or jointly owned
Can I claim a Car Next Door loss against my salary and other income?
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