Did you know there are tax implications associated with providing free-ride services such as Uber? It’s something many people wanting to become Uber drivers don’t think about but popular second-income earning sources like Uber, Ebay & Airbnb are all subject to income tax.
When it comes to Uber, even if you earn under the $75,000 GST threshold you are still required to register for GST.
That’s right, if you use a car to provide transport to passengers for a payment, under GST law you are considered to be providing taxi travel. This means before you set up your Uber Driving Account, you will need to apply for an ABN, register for GST and submit the GST part on your fare to the tax department as part of your quarterly BAS. You will also need to declare your income on your tax return.
There are some easy steps to think about when you are setting up your Uber Service:
- Apply for an ABN
- Register for GST – you can either do this in conjunction with your ABN application or (if you have an ABN) directly with the ATO.
- Keep a logbook record the business-use of anything you purchase in order to carry out your Uber service. The ATO doesn’t have a templated log-book, but it does provide logbook recording requirements available on its website.
- Get good tax advice! Good advice from the start can help you avoid tax headaches.
As an Uber Driver you will need to lodge your GST and Business Activity Statement (BAS) quarterly, not annually.
Noting these important requirements before you start the process of becoming an Uber Driver can help you avoid any nasty tax surprises down the track.