A Shout Out to all the Uber Drivers - Here are a Few Facts You Really Need to Understand
Uber drivers are subject to some rules that are not the same as every other business operator. It is important therefore to understand what you will have to do if you are considering driving for Uber. If you require specific assistance then please give me a call on (07) 5439 1600 or book an appointment by CLICKING HERE.
Uber or Taxi? Does it even matter for the purposes of your tax?
The short answer is, yes it does matter because the Tax Office have specific rules for taxi's which define a taxi as a 'vehicle made available for public hire that is used to transport passengers for fares'. It would be difficult to argue Uber vehicles were therefore anything other than a taxi and Uber drivers must comply with the same "tax" rules as other taxi drivers.
- You must register for an ABN.
So what do those rules mean?
As an Uber driver you are carrying on an enterprise, or business and are required to have an ABN whether registered as a sole trader, company or trust.
As an aside, you should also understand the risk and tax implications of each of the possible structures for your business. Please let me know if you want more information and I will send you our checklist to different business structures.
- You must register for GST.
Unlike other businesses where a turnover threshold is applied before GST registration becomes compulsory, ALL taxi drivers (which includes Uber drivers) are required to be registered for GST.
- You must keep appropriate records.
The ATO require all records relating to your business to be kept for 5 years. That date starts from the date of your Income Tax assessment so if you lodge your tax returns late then you will have to keep records for longer.
The good news is that you can keep your records electronically. That means Uber drivers, who all seem pretty tech savvy to me, can scan or photograph their records and file them on the cloud, their phone, or use other electronic media. Back ups are always a very good idea too but once electronically captured you generally won't have to keep the actual paper record.
Records that you should keep are copies of all fare receipts, expense receipts for your business costs, bank statements, and other business related documents such as loan agreements and other legal contracts.
- You should open a separate business bank account.
A fundamental of any business enterprise should be a separation between your personal finances and those of the business. It is therefore absolutely critical you have a separate bank account for your business transactions. That way, you will have a discrete record of all deposits received and withdrawal/payments made and there is a better chance your accounts will be accurate.
- If your vehicle is not used 100% for Uber business then you must also keep a logbook to calculate the business use of your vehicle.
A logbook records the business and personal use for your vehicle. Unless you have two cars then it is highly unlikely your Uber vehicle will be accepted to be 100% business so a log book is essential to prove your claim for your vehicle costs. Without it the ATO may not allow any expenses for your vehicle and that could mean a lot of unnecessary tax to pay.
As a general rule, you will need to keep a logbook for 3 months every 5 years or when your vehicle or usage changes.
This is just a brief summary to help guide you through your Uber journey. If you would like specific advice for your situation just give me a call on (07) 54391600 or CLICK HERE to make an appointment with one of our qualified advisers.