# Airtax - ATO BAS and Income tax info



## WestSydGuy (Jun 7, 2018)

https://help.airtax.com.au/hc/en-us/articles/360001069035-Tax-Guide-for-Rideshare-Drivers
A handy overview of what can be claimed.

I'd like to double check with @Jack Malarkey about claiming "Occupancy expenses", as an Uber driver, would our home office be considered a principle workspace with a dedicated work area? (Assuming a room is dedicated to an office for Uber paperwork). As we are not an employee, we are an independant contractor, I thought.

Also, if we are renting a house with a garage space used for storing our rideshare vehicle, is this part of "Occupancy expenses" or another area of expenses?

As I've heard of other drivers claiming 10% of their house/flat rent, for home office and garage storage use.


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## Jack Malarkey (Jan 11, 2016)

WestSydGuy said:


> I'd like to double check with @Jack Malarkey about claiming "Occupancy expenses", as an Uber driver, would our home office be considered a principle workspace with a dedicated work area? (Assuming a room is dedicated to an office for Uber paperwork). As we are not an employee, we are an independant contractor, I thought.
> 
> Also, if we are renting a house with a garage space used for storing our rideshare vehicle, is this part of "Occupancy expenses" or another area of expenses?
> 
> As I've heard of other drivers claiming 10% of their house/flat rent, for home office and garage storage use.


@WestSydGuy, I find this question difficult. I'll try to come back with some thoughts in the next day or so.


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## Subaru_X (Apr 27, 2015)

I agree with Jack that the home office issue is a bit of a grey area. I opted to claim 15% of my rent which includes my parking space. A quick google search revealed that the average rate for a parking space in my area is $250-$300 per month. So 15% is in my opinion conservative.

I would err on the side of caution/conservatism when it comes to home office because as Jack mentioned to me in a PM, most of what we do occurs in the car, not at home. 

I believe that it is in our common interest to have a unified position on this matter, which can be referred to if the Man ever comes asking.

One important thing to keep in mind is that if you claim home office expenses that are exorbitant, you aren’t committing an offence - the worst that ATO can do is write you with “WTF is this - remove that”, at which point to just submit an amendment and most likely ATO will be cool with that.


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## Jack Malarkey (Jan 11, 2016)

1. As far as I can establish, the Australian Taxation Office hasn't provided guidance specifically on whether or not rideshare drivers can claim deductions for home office expenses in general and for a proportion of 'occupancy expenses' in particular.

2. Guidance for drivers about available deductions from accountancy services like Airtax typically don't refer to home office expenses.

3. By 'occupancy expenses', I am referring to costs of occupying the office such as mortgage interest or rent; land and water rates and taxes; and building insurance premiums and taxes.

4. By 'running expenses', I am referring to the ADDITIONAL cost of office heating and cooling; additional lighting and cleaning expenses; costs of repairing office equipment or furniture; equipment leasing costs; and office depreciation.

5. I doubt that for a typical rideshare driver a proportion of occupancy expenses is deductible including for parking or garaging.

6. The logic that occupancy expenses are deductible would also lead to a potential capital gains tax liability on sale or other disposal of the home (if owned rather than rented). However, the small business capital gains tax concessions would significantly reduce, or even eliminate, this capital gains tax liability: https://www.ato.gov.au/general/capital-gains-tax/small-business-cgt-concessions/.

7. I think it is likely that a rideshare driver is eligible to claim a proportion of running expenses. An easy way to do this is simply to claim 52 cents per hour that the office is in use for rideshare purposes: https://www.ato.gov.au/Calculators-and-tools/Home-office-expenses-calculator/.

8. The reason I have doubts about occupancy expenses is that the use of the home by a typical rideshare driver would (in my view) be likely in reality to be negligible.

9. The home office is not a typical rideshare driver's place of regular business as the essential aspects of carrying on the business take place in the car rather than in the home.

10. Taxation Ruling TR 93/30 sets out relevant circumstances to consider. In this context, I observe that any home office is unlikely to be clearly identifiable as a place of business or income-earning base; would remain readily suitable or adaptable for use for private or domestic purposes in association with the home more generally; is not used exclusively, or almost exclusively, for business purposes; and is not used regularly for visits by clients (passengers): https://www.ato.gov.au/law/view/document?DocID=TXR/TR9330/NAT/ATO/00001.

11. For general Tax Office guidance, see https://uberpeople.net/threads/ato-running-your-small-business-from-home.338541/.


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## Jack Malarkey (Jan 11, 2016)

High-level overview of the small business capital gains tax concessions, which are relevant to paragraph 6 of the immediately preceding post:

(Australian Taxation Office)

In addition to the capital gains tax (CGT) exemptions and rollovers available more widely, there are four concessions that allow you to disregard or defer some or all of a capital gain from an active asset used in a small business:

15-year exemption - If your business has continuously owned an active asset for 15 years and you're aged 55 or over and are retiring or permanently incapacitated, you won't have an assessable capital gain when you sell the asset.
50% active asset reduction - You can reduce the capital gain on an active asset by 50% (in addition to the 50% CGT discount if you've owned it for 12 months or more).
Retirement exemption - Capital gains from the sale of active assets are exempt up to a lifetime limit of $500,000. If you're under 55, the exempt amount must be paid into a complying super fund or a retirement savings account.
Rollover - If you sell an active asset, you can defer all or part of a capital gain for two years, or longer if you acquire a replacement asset or incur expenditure on making capital improvements to an existing asset.
(https://www.ato.gov.au/general/capital-gains-tax/small-business-cgt-concessions/)


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## Jack Malarkey (Jan 11, 2016)

Jack Malarkey said:


> 1. As far as I can establish, the Australian Taxation Office hasn't provided guidance specifically on whether or not rideshare drivers can claim deductions for home office expenses in general and for a proportion of 'occupancy expenses' in particular.
> 
> 2. Guidance for drivers about available deductions from accountancy services like Airtax typically don't refer to home office expenses.
> 
> ...


I noticed today that the Airtax guide does now deal with the deductibility of home office expenses for rideshare drivers and that it has reached the same conclusion that I did:


















(https://help.airtax.com.au/hc/en-us...96/Airtax_tax_guide_for_rideshare_drivers.pdf). See page 12 of the guide.


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## Subaru_X (Apr 27, 2015)

Nonetheless - In my tax return I claimed 15% of my rent as an expense. The majority of that is parking space for my car. 90% of my vehicle use is for rideshare, therefore 90% of my parking space is expensed.

A quick google search revealed that the average cost to rent a parking space in my suburb is between $250 and $300 per calendar month, which is approximately what I claimed.

While our friends at PWC may be right and claiming occupancy expenses is not our entitlement, we aren't committing any offence by doing so. If the ATO finds the time and resources to challenge my claim, the worst they can do is tell me to remove that bit from my claim. I will still come in well under the tax threshold and will still owe zero $ in income tax.

My advice to my colleagues here is to be aggressive in your returns and claim everything you can think of without actually lying. Rideshare drivers shouldn't pay any tax unless they are grossing >$45-50K per year.


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