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Tax Treatment for Uber Drivers

Posted 24 April 2019 under TaxTim's Blog

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Tax Treatment for Uber Drivers

If you are an Uber driver, you use your own vehicle/s to generate your income and you determine your own working hours, you will be treated as being self-employed  (i.e. an independent contractor) for tax purposes.

Since you do not earn a salary, you should be registered as a provisional taxpayer with SARS.

Tips for Uber drivers to assist with your tax claims 

Below are some actual expenses you could incur while generating income on your vehicle/s that you will be able to claim: 

* Vehicle Maintenance: e.g. cleaning 

* Vehicle Repairs                                                                                         

* First aid kit

* Parking fees                                                                                               

* Vehicle Tracker

* Vehicle licenses/registration                                                                       

* Roadside assistance plans

* Bottled water, snacks and amenities for customers (Uber Black)             

* Petrol / Oil

* Road toll fees                                                                                             

* Vehicle Insurance

* Floor mats/Seat covers                                                                              

* Vehicle: tool kit, triangle breakdown warning sign, tire pressure gauge, portable battery jump pack etc.                                                                                                                                                                                        

It is very important that you keep all slips/invoices/receipts should SARS request any documentation 

If you have an additional driver, driving your car/s you will be able to claim their salary on your tax return.

Phone and phone related deductions:

You can’t run your business without your smartphone, so naturally the expenses that you incur are deductible. 

These expenses can include but are not limited to:

* Phone chargers, dash mounts and battery power banks     

* The billing charges of your carrier (Vodacom / MTN / Telkom / Cell C etc.)  

Remember if you are using your phone for personal use too, you are only allowed to deduct expenses on the business use portion. It may be easier therefore, to purchase a new phone for business use only so that all phone costs are tax deductible and there’s no need to apportion the expense.

*You can depreciate the phone for the first 3 years of use.

Please see our Wear and Tear Calculator to assist with your workings.

Completing your Logbook:

Your logbook must include all business kilometres you drove. This would include, waiting for a trip, collecting a passenger and also driving a trip. Unfortunately, Uber only supplies you with information on the actual Uber trip such as client pickup to drop off. You therefore must capture the rest of the business kilometres yourself by keeping a logbook in your vehicle. Should you use the vehicle for personal use, it is very important that you capture details of your private mileage too. You can use an excel spreadsheet to capture the data. Please remember to capture your opening and closing odometer reading (i.e. starting and ending kilometres on your odometer) for the tax year in your logbook too.

E.g. John drives 12 000 km from 1 March 2018 to 28 February 2019. 

Uber Actual trip online km: 7000 km

Collecting a passenger:      1500 km

Waiting for a trip:                  500 km

Business km:                      9 000 km

Private km:                         1 000 km

Total km:                           10 000 km

Claimable km: 9 000 km

Please make use of our handy Travel Allowance Calculator to assist with your workings.

Below are some Uber related Questions we have received to our Helpdesk:

1. I used an Uber yesterday - can I claim the VAT on it?

You unfortunately can’t as Uber drivers are mostly not registered VAT vendors and SARS does not regard road travel as a vatable expense.

2. I usually have lunch at home, can I claim my travel from home to my next trip as business travel or should it be shown on my logbook as private travel?

Yes, you can claim the trip from your home to your next trip as a business travel expense seeing as you are regarded by SARS as an independent contractor.

3. I own an Uber-X and I buy sparkling water, mints and truffles for my passengers to eat during their trip, can I claim this back on my tax form?

If you have the slips to prove that you paid for you it, you can claim this as an expense on your tax return. 

4.One of my passengers and her husband had a fight outside my vehicle and he smashed my window. Can I claim the window replacement as a tax deduction on my return if my insurance fixed this for me?

Since your insurers reimbursed you, and therefore the expense was not paid directly from your pocket, you are unfortunately not able to claim a deduction for it from SARS.

5. I don’t use my own vehicle to drive passengers, but I pay my sister to use her vehicle, as it’s newer and more reliable. Am I able to claim the amount that I pay her each month, or can I only claim whatever expenses I incurred while driving the vehicle like fuel and tyre replacements?

Yes, you can claim your rental fee that you pay your sister each month, you can also claim the fuel and the tyre replacements that you pay for your sister’s vehicle to stay reliable.

6. My car insurance is extremely high – the insurer said that the reason it’s so high is because I use my vehicle for business purposes, is this true or am I being ripped off? Can I claim the instalment on my tax return?

It sounds right as insurers can increase your insurance based on what you use your vehicle for, as using it for business would be one of those triggers. You can however claim the entire expense (12 months instalments) on your tax return as a deduction.  Please request the annual contributions statement from your insurer as back up for SARS.



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