Steered to bigger car share bonuses

A PERCEIVED tax crackdown on car sharing could actually be a windfall in disguise, smaller peer-to-peer rental platforms claim.

The Australian Taxation Office has issued a reminder to car sharers to declare their income, along with a rule clarification that Car Next Door chief executive Will Davies believes will make people richer.

“They’ll actually be handing money back to most people who rent their car out,” Mr Davies said.

“The biggest thing is that the ATO has confirmed they can claim expenses at the business rate of 66 cents for each kilometre that their car is driven by borrowers ... the tax benefits of this are significant.”

Other major factors include both insurance and depreciation as potential deductions for car sharers.

“Insurance for your car can cost $1000 a year or more, which is usually not tax deductible,” Mr Davies said.

“When you rent your car you pay $720 a year as your membership fee, and this replaces your insurance, so your car insurance becomes a deduction.”

He said depreciation would make the biggest difference, as many had not been claiming because they didn’t know how.

Car Next Door spokeswoman Kate Trumbull believes the ATO is keeping a close eye on gig economy giant Uber, which is different than peer to peer.

“It’s more that car sharers are offsetting their own car costs rather than making a whole lot of money,” Ms Trumbull said.

DriveMyCar chief executive Chris Noone welcomes the ATO’s involvement. “Every six to 12 months, the ATO updates the information, which hasn’t really changed since the beginning,” he said. “It legitimises (car sharing) a little bit more and makes the obligations clearer.”

Mammoth Ice Cream owner Luke Poland is set to benefit, after buying a van to transport his gelato bike to event bookings and renting it to others for $8.50 an hour, or $58 a day, when he doesn’t need it.

“We get roughly one booking a day for a few hours and sometimes people book it for a few days,” Mr Poland said, adding that he had 400 bookings over two years but had not made the most of the benefits.

“I have been declaring the income ... but I hadn’t been claiming any depreciation on my van,” he said.

“(With) the ATO’s advice, I realise that I’ve potentially been missing out on thousands of dollars of claimable tax refunds.”