By Joe Smith
Most of you will know by now that Uber is coming to Gladstone – it was only a matter of time before they expanded their operations outside of the major cities! And while many people will be interested in earning some extra cash, they should also be aware of their requirements for tax purposes.
The ATO classes Uber and any other ride sourcing as taxi travel. This means that anyone wishing to operate a service through Uber must get an Australian Business Number (ABN) and register for GST regardless of how much income they earn from it. There is no threshold that applies regarding ride sourcing and the requirements for GST registration.
As with any other business, full records of all income and expenses should be kept. Then the expenses should be apportioned as only the percentage that relates to your business activity can be claimed as a tax deduction. As well as this, GST can only be claimed on the portion of expenses that relate to your business activity.
Business Activity Statements (BAS) will also be required to be lodged on a monthly or quarterly basis and payments made to the ATO as required. And then you will have to declare your business income on your tax return for each financial year that you operate a ride sourcing service. My advice here would be speak to an accountant before you begin operating.
The key thing with this and any other business is that you put funds aside to cover any amounts due for GST and tax. Not all of the money that you receive from your business operations is yours to keep. And with the ATO constantly improving their IT and data matching abilities they may be able to identify exactly how much income that you earn!
The ATO can also check vehicle and boat registrations which they can use to identify any differences in the income you earn and the lifestyle you lead. And keep in mind that they can also check Facebook, Instagram and other social media too.
If you are thinking of starting a business and would like our assistance please call UHY Haines Norton on 4972 1300 or email email@example.com