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I have been consulting to various industries under my company (a PTY LTD company) for quite some time. I draw a monthly salary from my company. My company owns and maintains a company car for business purposes.
Consulting occupies most of my time with across a range of industries and clients, however to help during quieter periods between clients my plan was for the company to make better use of the car and set-up ridesharing under the companies name (with me as it's Director and the driver).
My salary would not change and I would not be claiming any personal expenses because my company would carry these expenses. The whole idea is a better use of the car and my time. However I was recently informed that the ATO would not allow my company to claim any of the vehicle related expenses before calculating the company tax liability at the end of the financial year and I must also set-up as a sole trader to do any ride-sharing.
I am very confused by this advice. I can't see anywhere, including in the law (I'm a regulatory specialist) and on the ATO website why my proposal would not be allowed.
Can someone please explain the reason for this information coming out of the ATO?