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ATO writes to 60,000 Uber and other ride-sharing drivers asking them to get tax affairs in order

Nassim Khadem
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One-third of drivers involved with ride-sharing services such as Uber are yet to register for GST or to fully declare their income.

Assistant Commissioner Tom Wheeler said more than 100,000 individuals have received a payment for a ride-sharing service since the Australian Taxation Office started collecting data in August 2015, but about one third of them still have not registered for GST and/or fully declared income.

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A Federal Court judgment on Uber raises GST issues over the entire sharing economy. Vision courtesy ABC News 24.

The ATO has written to 60,000 drivers looking to make extra cash by transporting passengers on popular ride-sharing services, reminding them of their obligations.

Uber and other ride-sharing drivers must be registered for GST following an ATO ruling that took effect in August 2015. Before that they had been able to avoid GST payments by arguing they fall under the $75,000 turnover threshold at which GST applies.

Uber legally challenged the ruling, saying they were not like a taxi service, but in a landmark decision in February the Federal Court agreed with the ATO that Uber drivers were like a "taxi" and thereby have to register for and pay GST even if they fall under the threshold. 

Mr Wheeler said the ATO had written to 60,000 drivers since August 2015, and would continue to write to other drivers who come onto their radar.

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"We are seeing numbers of drivers growing, but there's quite a significant churn rate," he said. "Our monitoring tells us that only half of these 60,000 drivers received a payment for driving in the recent January to March 2017 quarter."

A large number of those drivers were registered for GST and meeting their obligations, but some drivers were yet to register. "The ATO has more work to do in educating drivers about their tax obligations and making sure they comply," Mr Wheeler said.

The ATO collects more than 650 million pieces of data each year and has recently started receiving information directly from ride-sourcing facilitators – financial institutions and individuals using ride-sharing apps providing credit card details to companies like Uber.

"This also means that if you misreport your income, red flags will be raised in our systems and we'll start asking questions," Mr Wheeler said.

Since the sharing economy was a new part of the economy, he said the ATO would give people extra time to "get their tax affairs in order".

But if ride-sharing drivers were still not registered towards year's end, and/or hiding income, the ATO may need to take compliance action including reviews and audits.

If you misreport your income, red flags will be raised in our systems and we'll start asking questions

Tom Wheeler, ATO Assistant Commissioner

"If you're providing ride-sourcing services and do not have an Australian business number and GST registration, you should make this your first priority," he said.

"By reporting your ride-sourcing income and GST you can also claim tax deductions and GST credits in respect of your business expenses, such as your car, fuel, servicing and your smartphone and data usage." 

At tax time often claims made for work-related expenses were for items that were for both business and private use. Mr Wheeler reminded taxpayers that "you can only claim the part that relates to your business use".

Employers letting their staff use ride-sharing services, rather than a licensed taxi, could be liable for Fringe Benefits Tax. (FBT). Uber, which has long argued it is not a taxi service, told Fairfax Media that it now hopes the ATO will treat it like a taxi for FBT purposes.

The story was corrected to remove a reference that said Ingogo was a ride-sharing service.

Follow Nassim Khadem on Facebook and Twitter.

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