UBER drivers gst consequences
The Australian Taxation Office (ATO) announced on the 20th of May 2015 that people who gain income through shared economy websites like Uber are themselves running a taxi business. Hence, making them applicable to pay taxes and have deemed them to register for Goods and Service tax (GST).
In most cases regarding income, you are only required to register with the GST after your income exceeds or reaches the $75,000 threshold. Similarly, small businesses don’t require you to register with the GST until you reach the $75,000 threshold. Unlike GST laws for small business, taxi service GST laws are significantly different. Under taxi GST laws a taxi driver if working for an inter price is required to register with the GST from the very first dollar it earns rather than after reaching the $75,000 threshold. Uber drivers are now required to lodge quarterly BAS lodgings. UBER DRIVERS BAS LODGEMENT signifies that they will have to pay 1/11th of the gross fair conducted on each ride.
Basics Of Goods and Service tax (GST)
Goods and Service tax (GST) applies a 10% tax rate on all goods and services. This means that after you have registered with the GST you will be required to collect 10% for GST charges every time you provide a service for a customer. What this means for Uber drivers is that after registering with the GST they will have to include 10% of GST charges on every ride provided to a customer. For example, if you give someone a ride for $11 out of this net sum you will be required to pay the GST $1 (10%) of the overall gross payment. This has become an issue for many Uber users as it is deducted before the Uber driver’s license fee.
Furthermore, a warning notice was submitted towards Uber drivers that if they fail to comply with GST laws they may be fined $3600.
“If those providing ridesharing have not obtained an ABN and not registered for GST, then we will undertake compliance activities – that means reviews and audits – and assessments may be raised.”-ATO Deputy Commissioner James O’Halloran
What You Should Do
With the new GST crackdown which makes it essential for Uber taxi drivers to get an Australian Business Number (ABN). This has become quite a lot more than what unknowing individuals signed up for. The safest and most capable means of handling this situation is by referring to a tax adviser to help guide you through this new unknown territory. Consult with a tax adviser, figure out if you really can operate as an enterprise, if so, then you should get registered with the GST after getting an ABN. You can get both of these at the same time if you register online. ATO will send a notice to you in writing specifying your GST registration details and the from which your registrations becomes effective.
One you are registered with the GST, for UBER DRIVERS BAS LODGEMENT will become mandatory on a quarterly basis. It is advised hiring a tax agent to help guide you through your various GST obligations and help you claim the most lucrative sum of GST credit.