The car sharing services work by making private cars publicly available in a similar way to other car hire services – it's like AirBNB for cars. Combined, DriveMyCar and Car Next Door state that over $13 million has been paid out to car owners renting through the service.
The community or peer to peer rental can be confusing as many people taking part see it as private.
The ATO has taken an interest as some people utilising these services are counting the extra income as a hobby – income from a hobby is not assessable and does not need to be included on your income tax return.
But, the ATO is keen to point out that income from sharing services is not a hobby and needs to be declared.
The upside is that if you earn income from these activities you might be entitled to claim deductions for things like platform membership fees, availability fees, cleaning fees and car running expenses.
We can help you get your tax position right. Just give us a call us in Ballina or Byron Bay on 02 6686 3000.