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As far as the Tax Office is concerned, Uber drivers are taxi drivers. They’ve just enforced rules that lump the disruptive ridesharers in with a special class of independent contractors who have to pay GST and withhold tax from all their takings.That’s only the beginning of their obligatory gauntlet, though.
Many Uber drivers have never had to be a small business before. Many won’t know what they have to do to stay legally compliant and able to keep taking fares for years to come.
They have to register for GST
Because Uber drivers are taxi drivers now, they have to register for GST no matter what their annual turnover is. That means they have to collect 10% GST on all fares they offer. That in turn means the 10% comes out of their cut from Uber, not Uber’s share of the fare – is this fair? Regardless, it’s their lot now.
Uber drivers need to chart where and when GST is paid. They need to communicate and net off their GST liability on a quarterly BAS.
Most Ubers won’t have ever lodged a BAS before – it’s not something you can just pick up and do right away. You can help with this.
Regardless of their new found status as Taxi drivers, Uber drivers have always needed to work out their taxable income from their Uber activities and put it in with any other work they have performed for income during the year.
Since they now a need to worry about GST and BAS, then there is extra opportunity to look after their income tax affairs as well. Consider all the allowable deductions that Uber drivers can claim.
Their phone, car, and fuel expenses need a closer look. Many Ubers will be using their car privately as well, so they’ll need a hand properly apportioning business and private use. It’s not uncommon for Ubers to receive tips here and there – they’ll need help accounting for those. Given the Tax Office spotlight on disruptive services, it’s a good idea to ensure corners aren’t being cut.
Taxpayers Association – Nathan Hewitt