Ride sourcing is the next big thing. More and more people are jumping on the bandwagon, and ride sourcing has become a great way to earn some extra cash.
While that’s great, there are some aspects of Uber that could get you in a bit trouble. Some Uber drivers are misinformed about what needs to be done to operate legally as a sub contractor and not an employee of Uber. The Australia Taxation Office has evoked data matching technology to pinpoint Uber drivers that haven’t declared whole income’s and is working to better educate Uber drivers on this topic.
It been ruled that while you may not be an actual Taxi, you operate a taxi service. Which means you must pay GST on all rides/fares accepted. Not only that, but you are required to follow the guidelines set out in the GST law which could include fundamentals like an ABN and activity statements.
The Australia Taxation department urges Uber drivers to understand the consequences if they’re caught with insufficient documentation. The ATO has released a few guide lines to be certain that everyone is on the same page and educated on the issue.
- Keep Records.
Receipts, a log book or a diary will work to keep your records safe and updated. You are required by law to keep your records for 5 years or more.
- Get an ABN – Australian Business Number
An ABN is a unique 11-digit number that recognises you and your business.
- Register for GST
The Goods & Services Tax usually involves a 10% increase of most goods, services and other items and it is usually the responsibility of the business owner to register for it. The ATO have some great information about GST for small businesses on their website.
- Pay GST on all your fares
There are four quarters in which you should report your GST. The ATO is emphasizing the need for Uber drivers to pay GST on all of fares as it only leads to your best possible outcome. If you don’t pay GST and you earn more then expected, you could end up with a hefty fine.
- Lodge Activity Statements
An Activity Statement is a form submitted to the ATO by all businesses to report their taxation obligations. Activity Statements don’t have to be hard. There are some easy tutorials out there, even one claiming to reduce yur paperwork to two minutes. Even then, you can always hire an accountant.
- Include income from Ride Sourcing in your Tax Return|
Earned income should always be included in your tax return, this way you can claim deductions you’re entitled to and GST credits.
At this point in time, the ATO’s primary goal is to educate Uber drivers be`ore taking any further action. If you have any questions or need help applying for those above, we are happy to help at Forward Focus. Send your enquiry to email@example.com or give us a call now on 08 9474 6333.