Now let’s review a GST consideration that may apply to ride-sourcing drivers: purchasing a new car for ride-sourcing.

If you decide to buy a new car for ride-sourcing you will be charged GST so you need to keep a record of this.

The GST is recorded in your business activity statement for the period or date that you bought the car. So, if you bought your car in June the GST would be recorded in your April to June BAS. Or if you are reporting monthly it would be recorded in your June BAS.

GST expense claims are subject to a car limit amount which for the 2023-24 financial year is $68,108. The car limit for each year is available on the ATO website.

This means that if you buy a new car for $70,000 you can only claim a GST credit for 1/11th of $68,108 car limit, which is $6,191.

In your business activity statement if you are using the new car 100% for ride-sourcing or business you record the GST amount of $6,191.

If you are not using that new car 100% for ride-sourcing or business use you need to work out the business use percentage.

If the new car is being used 30% of the time for ride-sourcing or business use, as shown in your logbook, you use that percentage to work out the GST in your business activity statement.

For GST on purchases you would record 30% of the GST you paid $6,191 x 30% which is $1,857.30.

Note that if you change your vehicle usage amount, for example halfway through the financial year you start using the vehicle 70% of the time to ride-source instead of 30%, you can claim that increase for the relevant time period. Calculating this is not easy and it is recommended seeking professional assistance if you do this.

Finally, if you decide to end your ride-sourcing business and cancel your GST registration there are other considerations and calculations required. It is advisable you seek professional help from the ATO or a tax adviser to make sure you are adjusting and recording your tax figures correctly.