The Australian Taxation Office (ATO) has recently updated their website to advise and/or remind taxpayers that when they rent, hire or share their car through a ‘peer to peer’ car sharing platform (i.e., such as Car Next Door, Carhood or DriveMyCar Rentals,) they may:
- need to declare all income as assessable income;
- be entitled to claim certain expenses as income tax deductions (e.g., membership fees for the relevant car sharing platform, availability fees and car expenses under either the log book method or the cents per kilometre method);
- need to pay goods and services tax (GST) on amounts earnt and claim GST credits for expenses where the taxpayer is registered or required to be registered for GST; and
- need to keep records of the income received and of the expenses claimed as deductions and GST credits.
The ATO has also advised that if a car is owned jointly, then income must be declared and expenses claimed in proportion to taxpayer’s share of ownership.
If you have a query regarding the above issue, or want further information, please contact one of our tax accountants on (02) 9223 9166 to discuss. Alternatively, you can submit an online enquiry form.