Quick Tax and GST Guide for Uber Drivers Australia to Stay out of Trouble With ATO in 2017


 

If you’re an Uber driver in Australia, it is important that you know what your tax obligations are. This is an educational guide that will jog you through some of the things that you should know. Please note that this is not a tax advice, you should seek tax advice from a registered tax agent.

 

This tax and GST (goods and services tax) guide is important for drivers of all rideshare companies in Australia. Below is a list of some of the Rideshare companies in Australia:

 

  • Uber
  • Gocatch
  • Shoffer
  • GoCar
  • HiOscar

 

The Australian Tax Office describes a taxi as a vehicle that is available to the public for hire, whereby fares are paid by passengers for the transport. The state and territory laws that regulate the transportation of passengers have specific definitions of the term taxi.

 

Just because a vehicle is a taxi for GST purposes does not mean it is also a Taxi for state and regulatory purposes. What this means is that a rideshare vehicle is considered a Taxi by ATO for tax purposes.

ATO Uber ezydriver

 

Where is this Tax Guide Not Applicable?

 

  • In situations where there is no intent of profit such as car-pooling arrangements that aren’t commercial and where the passengers contribute money for fuel.
  • In situations where more than one person has access to one vehicle, driving themselves.
  • When using vehicles that are not cars such as motorcycles
  • In cases where private transport for particular purposes such as weddings or funerals

 

Minimum Rideshare Driver Requirements for Tax Purposes

 

It is very important to note that driving for Uber does not make you an employee there, you are a driver partner and therefore solely responsible for your tax obligations. Uber doesn’t withhold any taxes since you’re independent.

 

As an Uber driver, you’re required to have an Australian business number (ABN) since you’re not an employee but a contractor. You can register for your ABN and GST online and if all the information is in order, the ABN will be issued instantly. You can register for GST at the same time you are registering for an ABN.

 

Uber Driver’s GST Obligations

 

The ATO states that Uber provides travel services since it transports passengers in return for fares. You are therefore required to register for GST regardless of how much you make per year.

 

This is because you’re carrying on an enterprise (business), providing taxi services in the enterprise. An enterprise is an activity performed in the form of a business or in a business-like manner, providing things like receipts or invoices when you’re done.

 

Are Uber Services Taxable?

 

Under GST legislation, Uber are taxable since they provide taxi services through ride sharing. Uber passengers are not affected by the taxation, but if you require to claim back the GST on your ride simply ask for a tax invoice.

 

Uber GST Claims & refunds ezydriver

 

Can one claim GST credit for a fare charged to me or my employee by a ride-sourcing driver?

 

GST credit can be claimed for the fare charged to a person in the event that the person is registered for GST and the Uber ride was a part of running the enterprise.

 

In the event that one reimburses their employees for the fares charged to them, GST credit can also be claimed.

 

Note: fares above $82.50 require one to have a tax invoice in order to claim the GST credit.

 

What is the GST component when claiming GST credit?

 

The GST component is an eleventh of the fare.

 

$53 Expense x 1/11  =  $4.82 (Claimable GST)

 

Does Uber give the passenger a tax invoice?

 

Not if the fare is less than $82.50, but one can request for it. It will come in the form of a receipt, sent to you via email. If the fare exceeds $82.50, it is a must to get a tax invoice, delivered directly to your mobile device.

Uber issues invoices via its dashboard, simply login to your Uber account and one can see the Invoices there.

 

Claiming GST Credits on Expenses Incurred for Uber

 

In the event that there was GST included in the price of any goods or services for a business, GST credit can be claimed. Below are some of the goods and services:

 

  • Registration
  • Insurance
  • Fuel
  • Repairs
  • Tyres
  • Car maintenance
  • Car leaning
  • Mints and water

 

One must have the receipts.

 

How to Calculate Business Use Percentage

 

This can be done on completion of the 12-week logbook. One can divide the business kilometres by the total kilometres and then multiply by 100. If one travels four thousand kilometres and only 1,200 of these were for business, the calculation would be as below:

 

1,200 ÷ 4,000 × 100 = 30

This means that the vehicles business use was 30% and one can claim 30% for vehicle expenses for the financial year.

It is very important to keep a logbook since it makes it easier to calculate the business use percentage, and makes it easier to provide evidence as required by ATO. The tax deduction claim is based on that percentage.

Keep a record of all Uber driving expenses

 

Records are important in the event that one wants to make any deduction claims. Using a logbook, one can keep a record of all the kilometres covered and make claims on vehicle related expenses.

 

Understanding the Uber Income Statement

 

 

 

BAS Calculations

 

 

 

How to lodge One’s BAS?

 

If one needs to know how much they should save, it is best to refer to a tax agent or use a calculator. It is always best to save extra when in doubt, just make sure that you don’t owe ATO any money.

 

It is important to keep business records using a business system such as Xero to manage finances. One can link the system to their Uber account, including any receipts from Uber. This way, one can get their Uber driver BAS and TAX right.

 

Frequently Asked Questions

 

What if I don’t get a tax invoice and I need to claim a GST credit?

 

Riders only require tax invoices when their fares exceed $82.50, and if it is not immediate, the driver has up to 28 days to give it to you. If the driver does not meet his deadline, one can contact ATO for advice. In most cases, credit card details are sufficient enough. Always get the vehicle number plate to report to ATO.

Can I also use the same ABN for Uber which I use to earn other income in a different industry?

 

If one is already registered for GST with another company they conduct business with in a different industry, they must get another one, one for the company, and one for themselves.

 

Are Uber drivers eligible for all small business concessions and what deductions can be claimed?

 

Uber drivers carry on an enterprise, and if they bought an asset for $20,000 or less, excluding GST on or after 1st July, one can claim a deduction for the asset in the current financial year tax return.

 

If the vehicle purchased is for both personal and professional use, the GST credit should be claimed for the kilometres used during business. It 50% of the kilometres are for private use and the other 50% for carrying passengers, one can only claim the 50% while carrying passengers to cover expenses.

 

As a driver, do I have to issue a tax invoice?

 

Yes, for all fares exceeding $82.50 including GST. If Uber does not do this for the driver, they can use a tax invoice book that has their ABN on it. Uber has to have your GST registration details in order to issue the tax invoice on your behalf.

 

What is the GST treatment of bonus and top-up payments?

 

GST is a tax on consumption in Australia only. Any bonuses, referral fees or payments from overseas are GST free as they aren’t consumed in Australia. (As at the time of this document in February 2017, Uber payments for Australian drivers is done by their overseas company).

These GST-free services include:

  • Uber marketing and promotions for which one gets bonuses on signups
  • During surge periods where the additional payment isn’t part of the fare

 

What are the GST consequences of delivering goods through Uber?

 

UberEats is a foreign company, but if a consumer orders food through it in Australia, it is consumed in Australia and therefore subject to GST.

 

What is the GST treatment of cancellation or no show fees?

 

In the event that a rider books a ride and then cancels it, they are subject to cancellation fee. This cancellation fee is subject to GST since it was for the benefit of a customer in Australia.

 

If I’m registered for GST because of ride-sourcing, what about other activities that I undertake?

 

If a person has registered GST for their Uber and they carry on another enterprise, GST is applicable, unless they are GST free or input taxed. They can claim GST credits for expenses related to the other enterprise.

 

If I have not made any sales, do I need to lodge a BAS return?

 

Yes, even in the event that one did not drive.

 

What is a BAS return?

 

A return that is filed with the tax office. It includes:

 

  • Sales made (including the GST)
  • Business expenses (purchases) including GST

 

Do I need to pay any money with my BAS return?

 

It will depend on the difference between the GST on sales and the GST on purchases. If it is positive, one pays the tax office, and if negative, one is refunded.

 

When does a BAS return need to be lodged?

 

At the end of each quarter, 31 March, 30 June, 30 Sept and 31 Dec. the actual time depends on whether one does their BAS returns themselves, or if they use a tax agent.

 

What is the difference between ‘GST on purchases” and ‘eligible tax deductions’ for tax purposes

 

Most expenses that can be claimed for tax purposes can also be included as ‘purchases’ in one’s BAS return with two exceptions:

 

GST-free goods

  • basic food
  • exports
  • some health services

 

These purchases do not include GST so one cannot claim any GST back in their BAS return.

 

Wages paid to employees do not include GST and should not be included as ‘purchases’ in the BAS return.

 

When you cannot claim a GST credit

One cannot claim a GST credit:

 

  • Without a valid tax invoice
  • For purchases that do not have GST in the price
  • For wages you pay to staff (there is no GST on wages)
  • For motor vehicles priced above a certain limit

 

Goods and services that don’t have GST in their price include:
GST-free items

 

  • Input-taxed items (such as bank fees and loan interest)
  • Purchases from a business that is not registered for GST (and therefore cannot charge GST).

 

Example 1: GST calculated on full fare

If you are registered or required to be registered, GST must be calculated on the full fare, not the net amount you receive after deducting any fees or commissions.

For example, if a passenger pays $55 and the facilitator pays you $44 (after deducting an $11 commission) the GST payable is $5 (not $4).

Example 2: GST credits on business purchases

GST credits on your business purchases can be claimed, but must be apportioned between your business and private use.

For example, if you use your car 10% for ride-sourcing and 90% for private purposes, and you:

  • buy a new car to use for your ride-sourcing activity for $33,000 (including $3,000 GST) – you may claim a GST credit of $300
  • pay $110 for fuel (including $10 GST) – you may claim a GST credit of $1
  • pay $220 for a service (including $20 GST) – you may claim a GST credit of $2.

You may be able to claim a proportion of GST credits for other business purchases you make.

 

 

The information contained in this site is general and is not intended to serve as advice. No warranty is given in relation to the accuracy or reliability of any information. Users should not act or fail to act on the basis of information contained herein.

 

Related Posts

 

Start Driving for Uber Australia

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Join to drive Uber in Brisbane

How does Uber Work

How Much do Uber Drivers Earn- Income Calculator

Calculate Uber GST 

Uber vs Taxi Fare Estimator

Estimate Uber Trip Fare – Calculator

 

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Disclaimer:
ezydriver provides basic tips to guide you need to know about driving for UBER through our experiences and experiences of other drivers. This blog is made by riders and fans of the disruptive innovation that is Uber. Our aim is to spread awareness and share its awesomeness with other riders and make more money through this sharing economy. This blog is not affiliated in any way with Uber and No misrepresentation intended. Reference in this website to Uber or any other specific commercial company, products, process, service, or manufacturer, does not constitute an affiliation to said entity.
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