Uber, Ola and other taxi service VS GST

I have been asked many times by Uber Drivers weather they are considered taxi drivers or not. But why would they ask that?  Well, because there is a compulsory GST registration requirement for Taxi Drivers under Australian Tax Office GST laws.

ATO says “If you drive a taxi, and carry on an enterprise, then you must register for goods and services tax (GST) irrespective of your turnover. For other businesses, the GST registration turnover threshold is $75,000. For taxi drivers, including chauffeur driven limousines and hire cars, there is no registration turnover threshold. This means that anyone who carries on an enterprise of driving a taxi, chauffeur driven limousine or hire car, must register for GST, unless they are an employee for pay as you go withholding (PAYG withholding) purposes.[1]

So I ask my clients – Do you drive a taxi? They say “NO Taxi” “Only Uber”. Now the question is that -Is Uber a taxi service or not?

Under recent case UBER B.V. v FC of T, Federal Court of Australia, 17 February 2017 [2] it was decided that the services provided by the driver under Uber actually fitted within the Lawful meaning of “Taxi Services”

So if I am an Uber driver [3]:

Should I charge GST when providing Uber Services?

Yes, If you drive Uber you should charge GST. Or as a matter of fact pay GST out of the earnings you get from Uber.

Can I claim GST credits from the costs and expenses for my Uber business?

Yes, You can claim GST credits on your expense for example fuel, repairs and maintenance of the Car. You may need apportion the expenses between your business and private usage of the car. Best way is to keep a logbook.

Do I need to register for ABN if I am providing Uber Services?

Yes you must register for ABN as it is a business.

What category should I register my Uber business under when applying for ABN?

If you own the vehicle used for providing Uber Services then you can use code 46231 Taxi Services. If you do not own the vehicle, you can use 52991 Taxi Driving Services (except owner/driver).

What If I do not register for GST ?

Well if you do not register for GST the Commissioner of taxation can register you and backdate your GST registration. You may also be subject to a penalty for Failure to Register. The Commissioner is also able to make an assessment of your net GST amount for a tax period.

Can I claim Fuel Tax Credits?

No  If you drive a light vehicle which travels on a public road, such as a taxi, car or small van you are not entitled to claim fuel tax credits and if you have registered by mistake you must cancel that.

What about tolls? Can I charge clients?

Yes you can charge clients the amount of tolls but you must also show that as your income and pay GST charged on tolls to ATO. But you can also claim the GST credits on the Tolls you have paid.

If you would like to submit your GST and declare your business income with ATO please contact us.

[1] https://www.ato.gov.au/business/gst/in-detail/gst-issues-registers/taxi-industry—issues-register/?page=2

[2] http://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2017/2017fca0110

[3] https://www.uber.com/en-AU/