As a Deliveroo food delivery rider in the exciting world of sole trading, there are a few important tax considerations you need to take into account.
In this article, we will be providing you with 10 essential tips to help you keep your tax affairs in order and meet your obligations as a sole trader.
Please also join us for a free 30 minute webinar where we will be working through the important considerations as a delivery partner below in more detail. You can register for one of these sessions now here.
1. Getting started on the right foot as a Deliveroo driver?
In Australia, you will need a unique 11 digit business identification number - your ABN - when working as a sole trader with Deliveroo. This is used to track your business activities and details as long as it operates.
Airtax is proud to offer a free ABN application service for all sole traders, which takes no longer than 5 minutes to complete! Get started by signing up here.
2. What is GST registration and do I need to apply?
GST stands for the Goods and Services Tax. It is a consumer-based 10% tax on most goods and services which businesses collect on the income you earn (such as Deliveroo earnings).
There are certain requirements that determine whether you need to apply for GST. Find out more by reading this article.
3. Claiming car expenses
If you drive your car for business purposes, you will be able to claim a car expense deduction. However, you cannot claim trips between your home and work. Read this Help Centre article to find out more.
Furthermore, if you use your car for personal use too, you can only claim a deduction for the income-earning or business portion. This can be completed with the help of a logbook and is discussed further down this article.
4. Claiming deductions for bikes
You cannot claim deductions for bicycles in the same way you would for a car or motorcycle as a bike does not have the same running expenses such as fuel, oil, insurance and registration.
However, as a Deliveroo rider, you may decide to complete your work duties via a bike.
- If the cost of your bike is $300 or lower, you can likely claim an immediate deduction for the whole cost.
- If the cost of your bike is greater than $300, it is important to figure out your business use percentage by keeping a logbook as mentioned below. Using this percentage, you will be able to depreciate the value of your bike as you would a normal asset over a number of years.
You can also claim travel expenses if you use the bike to travel from one workplace to another, or to visit clients or collect supplies to complete a job.
5. How to use a logbook for both cars and bikes
When claiming travel-related expenses such as those relating to your car or bike, the ATO requires that you keep a logbook of distance traveled and the purpose for your travel. This must be kept for a minimum of 12 continuous weeks during the year and can then be used to calculate a business use percentage to use to claim expenses. Each 12 week log book period can then be used for up to 5 years.
Learn more about how to use a logbook and download our free Airtax logbook here.
6. Claiming clothing expenses
It is possible for your to claim the cost of buying, mending, and cleaning work related clothing, provided that they are:
- Protective clothing
- Distinctive uniforms
Read this Help Centre article to find out more.
7. Claiming mobile phone and internet bills
As a Deliveroo rider, it is likely that you will be using your phone to complete your work obligations. This means you may have phone costs and internet bills, which generally can be claimed. You cannot claim the cost of connecting a phone, pager, or any other communications equipment, or any expenses which relate to the personal use of the item.
8. Record keeping for food delivery workers
You should keep the receipts in relation to your business expenses for five years from when you lodge your tax return in case of an audit. This is to ensure that your claims are always substantiated. For more information, check out this Help Centre article.
9. Key income tax return deadlines for FY21
Read this article to understand the tax timeline to ensure that you stay tax compliant with the ATO. Remember, through Airtax, you may be able to access an extended deadline for lodging your income tax returns.
10. Using Airtax to help optimise your tax position
We at Airtax offer a range of services to ensure that you can select one that suits your needs. You can complete it yourself, or purchase one of our phone support calls where you can speak to one of our PwC accountants about your tax return.
- Tax Essential: at $99, this is our lowest cost service for customers who have simple returns, like to complete on their own and don’t need to speak to an Accountant. There are comparison tools and an online help centre to support. Your tax return is reviewed and we will come back to you if we need to confirm anything before lodging with the ATO which helps provide peace of mind.
- Tax Assist: at $179, this is a 30 minute phone call where you can ask us questions regarding certain areas of your return such as the sole trader section, rental properties and more.
- Tax Professional: at $349, this is our most comprehensive call service where you have 45 minutes with one of our dedicated accountants to walk you through an entire tax return from start to finish.