Uber driver – All you need to know about tax

Q: Do I need to have an ABN?
A: Yes.

Q: Do I need to register GST?
A: Yes. I often have Uber clients asking that “I earn less than $75,000 a year, do I still need to register for GST?” The answer is YES.
The ATO regards ride-sourcing services as a taxi service.
For other businesses, the GST registration turnover threshold is $75,000. For taxi drivers, including chauffeur-driven limousines and hire cars, there is no registration turnover threshold. This means that anyone who carries on an enterprise of driving a taxi, chauffeur driven limousine or hire car in exchange for a fare as part of your business, regardless of your GST turnover, must register for GST. (ATO QC22412)

Q: How often do I need to report GST?
A: Quarterly. I have Uber clients asking “can I report GST annually?”. Again, you can elect to report GST annually if you are not required to register for GST. However, as an Uber driver you are required to register GST, therefore, you need to report GST every quarter.

Q: When do I need to submit GST?

If you lodge your quarterly activity statements online or through a tax agent, you may be eligible for a two weeks deferral.

Q: What can I claim?
A: You may be able to claim the below expenses:

• motor vehicle expenses (cents per km/log book)

There are two methods that you can use:

• • Set rate method: if you drive less than 5,000 kilometers in the financial year in the course of earning income, you can choose to simply claim a 66 cent per km deduction for the kilometers you travel while providing ride-source services.
  • Logbook method: If you use this method you can claim the business-use percentage of each car expense (i.e. petrol, insurance, registration, repairs & maintenance, depreciation, lease charges), based on the logbook records of your car’s usage. you need to keep a log book for 12 consecutive weeks to work out the percentage of your car usage for providing ride-source services.
• Parking & tolls
• Telephone & internet
• Printing, postage & stationery
• Client amenities (such as tissues, chewing gum, water for clients)
• Equipment (GPS, mobile phone, car etc)

Q: GST vs. Income Tax
A: These are two types of tax and as an Uber driver you are liable for both.
GST is a flat rate of 10% on most goods and services consumed in Australia. In a nutshell, you are liable to pay 1/11 of your gross fees received from Uber to the ATO, in the meantime you may also eligible for the GST credits on the purchases. Whereas you’re excluding GST Uber driving business net profit will be added to your other income at the year-end to calculate your income tax.

Cash flow tips: you need to set aside a portion of your net business income to pay for your income tax liability at the year-end. Consult a professional to get a detailed advice.