Uber Background
Uber is a ride-sharing platform that originated in California, USA in 2009, and now operates in 58 countries including Australia.
Services Provided in Australia
There are four Uber services available in Australia:
Uber X and Uber XL-ride sharing of private vehicles, UberASSIST-car service for people with disabilities (can accommodate folding wheelchairs, walkers and collapsible scooters), UberBLACK-SUV and luxury hire car vehicles, UberTAXI-standard taxi.
Driver Requirements
Aged 21 years and over, Hold a valid open class driving licence in the state or territory of residence, Have held a licence in any Australian state or territory for at least 12 months, Be listed as an insured driver for the vehicle that is planned to be driven, Pass a driving record and criminal history check, Have 100 points of ID for driver screening.
Vehicle Requirements
Minimum requirements:
Must be a 4-door model No more than 8 seats (including the driver’s seat) Not older than 9 years Subject to a vehicle inspection by an accredited third-party inspector Registered and CTP insured Have no cosmetic damage or commercial branding.
To drive with Uber X:
▪ The car must be in excellent condition with no cosmetic damage, ▪ The driver is required to be listed on the vehicles property damage insurance policy, even if they are not the vehicle owner or main policyholder,
The car must seat 4-7 passengers plus the driver, and Have functioning windows and air conditioning.
Cannot include taxis, ex-taxis, government, branded or rebuilt vehicles.
Example of motor vehicles include Ford Falcon, Holden Captiva, Honda Accord, Hyundai Accent.
To drive with Uber Select:
The car must have leather or vinyl interiors with no tears or damage, Example of motor vehicles include Alfa Romeo, Audi A4.
To drive with Uber XL:
The vehicle must be a 4 door SUV or large passenger van, Seat 6-7 passengers plus the driver.
Example of motor vehicle-Ford Territory, Holden Captiva, Fiat Freemont, Dodge Journey.
To drive with Uber Assist:
The vehicle must be able to accommodate folding wheelchairs, walkers, collapsible scooters and other assistive devices.
Examples of motor vehicles include Ford Falcon, Holden Commodore, Honda Civic, Hyundai Sante Fe.
What if the Uber driver does not have their own vehicle?
Uber offers a marketplace for drivers who do not own their own motor vehicle. The driver has the option to rent, rent-to-own or purchase a motor vehicle through vehicle rental, and leasing and financial providers (these are independent of Uber).
Specific Tax Deductions for Uber Drivers
Uber facilitator fee (20%-28% of every fare-depending on the Uber service used) Mobile phone and charger Mints and water for passengers Magazines for passengers Uber driver registration costs (application fees, medical and police checks once the driver has started the official application process). Costs incurred before becoming an Uber driver (or before the official application process has started) are not deductible.
Tolls and parking Cleaning-car washing, vehicle carpet cleaning Stationery Internet Sunglasses Hi Visibility clothing Bank fees for separate business bank account Bookkeeping and accountant’s fees Motor vehicle – Depending on records kept the logbook or cents per kilometre method can be used if the vehicle is owned/leased/hired by the driver.
If the vehicle is borrowed from a family member or friend an appropriate percentage of the running costs incurred can be claimed (fuel).
Ride Share Drivers Association Australia membership fees
*all expenses must be proportioned for business and private usage.
Expenses that cannot be claimed:
Cost of a normal driving licence Parking and speeding fines Clothing other than safety clothing Meals and drinks purchased whilst on shift.
Uber Income Statement
Uber provide drivers with a monthly income statement. The driver is required to log into their account on the Uber website to obtain these monthly statements.
The monthly statement shows the following:
The fare, which includes the gross fare, airport fees, tolls, booking fees, split fare fees, Other income, such as referral payments, The Uber service fee, On-trip mileage. On trip mileage should not be relied on for calculating total kilometres travelled as this does not include the kilometres travelled between one job to the next.
It is essential to sight these statements when preparing BAS and individual tax returns for the taxpayer.
An example of a monthly Uber statement is shown on the following pages. Please note the difference between the November 2017 and December 2017 statements regarding the information supplied for GST.
ATO Requirements and Issues
The ATO gave ride-sourcing drivers until 1 August 2015 to register for an ABN and GST. There is no requirement to backdate their registration. However, drivers may choose to backdate if they want to claim input tax credits or if they have been collecting GST. The $75,000 GST registration threshold does not apply.
If a driver earned ride sourcing income prior to 1 August 2015 they will still need to account for this income on their individual income tax return. The ATO will only apply compliance before 1 August 2015 if there is evidence of fraud or other significant matters.
When applying for an ABN the category to use is 46239 Road passenger Transport or 46231 which covers Taxi Services. The business description should be ‘ride sourcing’ or ‘ride sharing’.
If an ABN is already registered for another enterprise that the taxpayer undertakes then that ABN must be used.
As a ride-sourcing driver who supplies taxi travel in Australia for payment (even if that payment is made through a third-party facilitator) it is the supplier who is liable for GST.
There is no GST on commission/service fee) commissions on overseas suppliers of ride sharing systems (Uber
From 1 December 2017 Uber changed the way in which its service fee is charged. They now use an Australian company who are registered for GST. This means that the Uber service fee now has a GST element which can be claimed on the BAS.
If Uber drivers receive a bonus or top-up payment from an overseas facilitator this is GST-free. These GST-free payments may include:
Marketing and promoting the facilitator to potential customers for which a bonus payment from the facilitator, for example when a new customer quotes the driver’s reference code or another identifier.
Operating during certain times, such as peak hours for which a top-up payment is paid by the facilitator. It is not part of the fare and is in addition to the fare paid by the passenger.
If registered for GST for ride-sourcing enterprise and another enterprise is carried on, GST must be paid on the other enterprise (unless it is GST-free or input taxed). This applies regardless of which enterprise was started first, regardless of which is the main enterprise, and if the earnings from the other enterprise or both enterprises are less than $75,000.
GST and Uber Summary
GST must be calculated on the gross fare, Cancellation fees are subject to GST, Bonus or top-up payments are GST free, If a new vehicle is purchased the GST may be claimed-based on a current valid logbook, Motor vehicle expenses such as insurance and registration have an element that is GST free, Uber service fee is subject to GST from 1 December 2017, Bottled water is GST free.
Ride-Sourcing ATO Data Matching Program Protocol
The ATO has developed this program to address the compliance risks of the registration, lodgement and reporting of businesses offering ride sourcing services as a driver.
The ATO will obtain the following data items from the source entities for the 2016-2017 to 2018-2019 financial years:
Details of the payments that drivers have received from ride-sourcing facilitators and /or the ridesourcing facilitators financial institutions, including details of periods when no payments were made, Vehicle registration details of all drivers that are registered with a ride-sourcing facilitator and are who can provide ride-sourcing services.
The ATO has commenced contacting taxpayers who have been identified through the data matching but have not complied with the ABN and GST regulations, and/or reported the income earned through ride-sourcing activities. Registered Tax Agents are also advised by the ATO of these measures if the taxpayer is already a registered client under the Registered Tax Agent numbers. It is then our duty to contact the client and advise the necessary action required.
The ATO also obtains data from all State and Territory motor vehicle registration bodies. This identifies all motor vehicles that are sold, transferred or newly registered where the transfer and/or market value exceeds $10,000.
This can then be checked with the information supplied by taxpayers including motor vehicle claims for GST and income tax purposes. This can also be used when motor vehicles are disposed of and the correct reporting of GST has occurred.
It is estimated that records of up to 60,000 individuals will be obtained. The ATO first commenced ride sourcing data matching in the 2013-2014 year and has continued to date.
Alternatives To Uber
GOCATCH
This is a nationwide taxi and ride-sharing booking platform.
GOCAR
GoCar is an Australian-owned ride-sharing platform. Drivers are charged a 15% commission compared to 20% for Uber.
UBEREATS
UberEats is an online platform launched by its parent company Uber for delivering food to customers.
Customers order food via the UberEats app or UberEats website, which is then prepared by the chosen food outlet and delivered to the customer’s address.
Customers are required to set up an account and provide payment details. Once the order has been delivered the payment is processed.
Deliverer requirements
Must be 18 years or older Bicycle, scooter, motorbike or motor vehicle Valid insurance policy for scooter, motorbike or motor vehicle Safety equipment for bicycle, scooter and motorbike- lights, helmet, high visibility and protective clothing Sun protection Smartphone Availability in peak demand times of 11am-2pm and 5pm-9pm.
Deliverer Income: Deliverers are paid per delivery Customer tips are wholly retained by the deliverer.
Deliverer Expenses: Mobile phone-apportioned for private usage Bicycle, scooter and motorbike expenses such as fuel, insurance, registration, repairs and maintenance.
Motor vehicle expenses such as fuel, insurance, registration, repairs and maintenance (if valid logbook kept). Alternatively, the cents per kilometre method may be used to claim for a motor vehicle.
Safety equipment and high visibility/protective clothing.
ABN, GST and Income Tax Obligations
ABN is required as they are conducting an enterprise, GST registration is required if turnover exceeds $75,000, If the taxpayer is already registered for GST for another enterprise, then the Uber Eats income will also be accountable for GST (even if the Uber Eats income is less than $75,000).
If the Uber Eats taxpayer also drives for Uber, then GST registration is compulsory regardless of turnover.
If the taxpayer has another enterprise and the combined income exceeds $75,000 then GST registration is compulsory.
Once registered for GST the taxpayer must lodge BAS in accordance with ATO guidelines.
The Uber Eats income and expenses are declared at Item 15 on the individual income tax.
As a Small Business Entity there are concessions available through the tax return