Any information stated 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 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. If you'd like personalised advice, we recommend Bell Partners - they are experts in car-sharing tax and offer a one-hour consultation for a tax-deductible fee of $385.
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.
We have also put together a summary on how to enter your car-sharing 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 the 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've 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 the 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.
Get personalised advice
If you’re looking for guidance on how the tax rules apply to your situation, book a consultation with an experienced tax consultant who understands car sharing. We recommend Bell Partners, who have been working with us for a while.
Bell Partners can help with questions like:
- whether your income is business or personal - and why it matters
- how to calculate and claim depreciation
- whether you should keep a logbook or use the cents-per-kilometre method
- if you’re running a car-sharing business, what structure will be most tax-effective
You’ll complete a questionnaire in advance so that you can make the most of the advice from the team.
There’s a tax-deductible cost of $385 (including GST) for this consultation.
To book, email firstname.lastname@example.org.
What to do to be ready for tax time
- Read the ATO guides linked above
- Read our advice on entering income and expenses in your tax return
- 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, refuelling or paying for your rego renewal.
- Download a financial year summary showing your car-sharing 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.