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. 

Short answer:

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:

This information is a must-read if you are sharing your car.

We have also put together a summary on how to enter your Car Next Door income and expenses. If there are any discrepancies between our advice and the ATO's, please go with the ATO, as we are not notified when they update their guidelines and advice.

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. Please submit a ticket through the Help Centre and include:

  • 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

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.

 

What to do to be ready for tax time

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.

Related articles

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? 

Interested in renting out your car? Get your car earning money for you now!

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