Uber has taken Australia by storm with many Australians using Uber as a means of earning extra income and getting to places. But there may be serious Uber driver tax return problems ahead unless you do it right.
Side income is easy with Uber, as long as you own a car you can be an Uber driver. But there are important things in regard to how you handle your taxes.
If you start to drive for Uber without some good tax planning, you could soon have an ATO tax debt in the thousands, even tens of thousands of dollars.
When you drive for Uber you are not an employee, you are a contractor.
However, ATO is looking at the issues, and considering the possibility of those contractors becoming deeming employees. If this is the case, then the viability of UBER having a presence in Australia would be dimmed.
When you are not an employee you should be aware of your tax duties as they can get messy. It is recommended for contractors to go to tax agents for help.
From Uber themselves:
“All Uber partners are independent contractors, so we do not withhold any taxes and partners are entirely responsible for their own tax obligations.”
The ATO’s Uber tax implications are straightforward at a basic level: Any money you make driving for Uber counts as income, meaning you must declare it on your Tax return. Even if you earn less than the $75,000 GST income threshold, as an Uber driver you need to register for GST, and the registration must be on a quarterly basis
Please remember the following when you are doing the UBER tax return
- That you need to keep all the valid invoices for 5 years, as ATO can audit you within that period.
- Please maintain a valid log book to be able to claim all of the vehicle-related deductions, like petrol, repair, interest, and others .
- If you do provide tissues or lollies to customers, you might be able to claim them if you meet the criteria, please talk to us if you do want to.
- Please ensure that you claim the mobile phone, internet, and other work-related pro-rata expenses on a pro-rata basis.
Though recently there has been an uproar from Uber drivers to be considered employees, Uber is still willing to pay off class actions to keep Uber drivers contractors.
So as a contractor, you need to be aware of your tax duties. At Endurego, John has dealt with many Uber drivers and has helped them get their taxes in order so they don’t have a massive ATO debt. Call to book an appointment with us at 0410829900