Uber drivers need to be registered for GST but can’t currently qualify for FBT benefits
A recent Federal Court case confirmed that Uber drivers are carrying on a business of supplying taxi travel because an Uber driver is transporting passengers by a vehicle for a fare – even though no taximeter is installed in an Uber vehicle.
Therefore, all Uber drivers - even those with turnover of less than $75,000 – must register for GST and charge GST on the taxi fare they charge.
Uber drivers can claim tax deductions and GST credits for business expenses (e.g. car, fuel, servicing, smartphone and data usage) – and apportion such claims for items purchased for both personal and business use.
The ATO is currently using data matching – by comparing all payments made through a ride sourcing provider (e.g. Uber) to ride sourcing drivers (e.g. Uber drivers) – to check whether such drivers have declared payments as assessable income on their tax returns.
Please note that the current taxi travel FBT exemption that exempts employers from having to pay FBT on travel undertaken by their employees in a taxi to or from work or due to illness of the employee, does not apply to Uber travel. There is currently consultation on this discrepancy and we will keep you updated on any relevant developments.
If you are deriving income from the ride-sourcing economy, please contact us so that we can help you comply with your GST registration, reporting, lodgement and payment obligations.
Mutuality and not-for-profit organisations
Taxable not-for-profit (NFP) organisations (e.g. certain social clubs, certain business and professional bodies and sporting clubs that are not tax-exempt) use the principle of mutuality to calculate their taxable income.
Mutuality basically means that an organisation cannot derive income from itself and therefore any surplus arising from contributions of members to a common fund will not be assessable income – however income derived from sources outside the group will still be assessable income (e.g. sponsorship and certain grants, proceeds from selling souvenirs to non-members and fees received for advertising in the organisation’s magazine)
Please contact us if your NFP organisation needs to lodge income tax returns and pay income tax. We can help you prepare your income tax return based on the mutuality principle and provide advice about the different concessional tax rules that are available to NFPs.