Australian Tax Deductions for Small Food Delivery Businesses
Operating a small food delivery business such as; Door Dash, Uber Eats, Deliveroo, Menulog; generally involves lots of additional expenses. The Tax system allows for certain deductions that can help reduce your taxable income. Here’s a brief overview of what you can claim.
You can claim a tax deduction for most expenses you incur in carrying on your business if they are directly related to earning your income. This includes day-to-day operating expenses and purchases of products or services for your business. For example, if you purchase a new thermal bag to keep food warm during deliveries, this could be claimed as an operating expense.
Certain capital expenses, such as the cost of depreciating assets like bikes, scooters, vehicles and electronics used in your business, can also be claimed. If you're an employee, the amount of your deduction and when you can claim it will depend on the type of expense. For instance, if you bought an electric bike for your deliveries, you could claim the depreciation of the bike over time. If you're a small business then deductions up to $20,000 are available for the 23/24 year.
As a food delivery business, you likely use a vehicle (in your case, an electric bike) for your deliveries. Expenses related to running a vehicle, such as tolls, parking, and registration or renewal of your vehicle licensing, can be claimed.
If you had to buy a uniform for your delivery business. So long as it meets the uniform tax requirements, the cost and also the laundry can be claimed as a deduction.
Service, commissions, or licensing fees paid to the platform you deliver for can be claimed.
Expenses related to safety equipment, such as hi-vis vests, can also be claimed.
GST & ABN Registration
If you're not employed as an employee but rather an independent contractor or small business you will need to register for an ABN.
As for GST, normal tax rules apply, and you only need to register for GST if you earn more than $75,000 per year, which most drivers won’t. So generally speaking, GST registration for your food delivery business is not required.
Remember, there are 3 golden rules for what the Taxation Office accepts as a valid business deduction:
The expense must have been for your business, not for private use.
If the expense is for a mix of business and private use, you can only claim the portion that is used for your business.
You must have records to prove it.
For record keeping, you need to check out Deduction Grabber, which will help you track your expenses and deductions. When it’s time to do your tax return, GoTax will put you on the right path.
Always consult with a tax professional like Gotax to ensure you’re claiming all eligible deductions and complying with all relevant tax laws.
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