Uber-Driving and tax – what you need to know

When you drive for Uber you are not an employee, you’re a contractor and when you’re a contractor, you’re responsible for your taxes. You’re now actually in business for yourself!

When you’re not an employee, you have to be careful that you get the right advice and get your administration set up to manage everything that is now Uber

 

Uber drivers should use a Tax Agent

 

This is a direct quote from Uber:

All Uber partners are independent contractors, so we do not withhold any taxes and partners are entirely responsible for their own tax obligations.”

The ATO’s Uber tax implications are as follows:

  1. Any money you make driving for Uber counts as income, which means you must declare it on your Tax return.
  2. Even if you earn less than the $75,000 GST income threshold, all Uber drivers must get an ABN and register for GST.

 

Do Uber drivers pay GST?

 

From August 2015, the ATO confirmed all Uber drivers are required to register for GST. This means you are liable to pay the GST portion of your Uber fares using the ATO’s Business Activity Statement lodgment program.

Uber is challenging this “ATO GST Uber tax” issue in the courts but for now, if you drive for Uber, the law is you must register for GST.

Uber drivers should register for GST then start to lodge quarterly a BAS statement and pay GST to meet their tax obligations. If you don’t do this, you’re asking for trouble with the ATO. Uber won’t help you – with personal tax, you’re on your own.

How do I pay the ATO’s Uber tax?

 

If you’re an Uber driver, you’ll need to declare the income you’ve generated in the financial year on your tax return.

 

Tip#o 1. Don’t spend all of your Uber income put a percentage into another bank account to pay Uber Income tax at the end of the year.

 

If you drive for Uber and work another job, it’s especially important to save a percentage of your Uber earnings. Why?

Because as your income goes up, your tax bill goes up .If you don’t put money away for that, it can be a nasty surprise at tax time.

During your first year driving for Uber, you should put aside 30 or 40 % of what you earn from Uber. This is a good base to use, it will cover you for most of your extra tax in most cases.

 

If you drive for Uber and work another job, it’s especially important to save a percentage of your Uber earnings. Why?

Because as your income goes up, your tax bill goes up. If you don’t put money away for that, it can be a nasty surprise at tax time.

During your first year driving for Uber, you should put aside 30 or 40 % of what you earn from Uber. This is a good base to use, it will cover you for most of your extra tax in most cases.

You’ll also be required to lodge a business activity statement (BAS).

Need help predicting how much you should save? It’s not simple talk to a tax agent and when in doubt, save a bit extra.

 

Tip #2. Don’t try to hide any of your Uber income

 

Can I just spend my extra income, and leave it off of my tax return?

Can I hide that income from the ATO?

Who’s going to know?

They know!   The ATO have sophisticated systems for estimating your income.

Driving with Uber, your earnings can easily be checked with Uber. Your activity as an Uber driver is out there for the world to see. Your name and plate number are shown right on the Uber app. The ATO can easily determine your actual income from Uber. It isn’t too hard for the ATO to check if Uber drivers are declaring (or under reporting) their income. The likely consequences for people who hide their Uber income are Tax repayments, fines and interest charges. We advise that you be honest and transparent with the ATO.