Uber drivers, Deliveroo riders and alike, these are all you need to know.
15/12/2016

Since beginning last year, Uber has taken Australia by storm. The Australians have discovered a new way of earning side income in such way that is flexible with their time and needs. Earning income is easy with Uber, thus it is important for Uber drivers to understand how income from Uber is managed and taxed. From our Perth accountant experience handling Uber tax, we would like to share with you some of the important points worth noting below.

Being an Uber driver does not mean you are an employee of Uber, but a contractor, a business of your own. The Uber themselves also mention that they do not withhold any taxes on behalf of the drivers, thus the drivers are responsible for their own tax obligations. This puts a lot of pressure for the driver to manage tax affair correctly. Mismanagement and lack of knowledge may lead to the driver paying a whole lot of tax. It is best to leave your tax return Perth to your local Perth accountant to ease the burden, as they would have gained much more understanding and knowledge, minimising your tax liabilities and maximising your refund. Plus, you can claim your tax return Perth accountant fee for your deductions.   

Firstly, any money you earned from Uber driving counts as your income and must be declared on your tax return Perth. Secondly, all Uber drivers are required to register for GST, even though your income is less than the $75,000 income threshold. This means, 10% of your income will need to be submitted to the ATO as the GST portion. Registering for GST also means the driver must lodge a quarterly Business Activity Statement (BAS) and pay GST obligations. You may choose to lodge your BAS yourself. But if we may advise, it would save more time to get your Perth accountant to prepare and lodge them quarterly, rather than doing it yourself and having to make a lot of adjustments at the end of the year. You will also benefit from lesser quarterly tax liabilities, saving that fund for your on-going Uber expenses. It is also wise to be prudent and save some of your Uber income to pay for end of year tax, so it will now catch you by surprise, especially for first-year Uber drivers. If you’re not sure on how much you should save or how to lodge the quarterly statements, come in to your local Perth accountant office to chat and get a general overview of how the quarterly GST liabilities works.

On the bright side, there are some expenses that you may be able to deduct in your tax return Perth as an Uber driver. Such as: registration, insurance, repairs, tyres, car maintenance and cleaning costs. On your first year, you might be able to claim the Uber application fee, medical and police check costs. Other deductions claimable also include your on-going expenses, such as parking expenses, car interior cleaning costs, passenger amenities, mobile phone, music subscription and stationery costs. In order to claim all these, you must keep your receipts, just like your ordinary work related deductions. You should also keep a logbook of your miles to allocate the work related portion of your car use. Still unsure if any of your expenses are claimable?  Call STC Partners, Perth accountant to be sure in maximising your deductions.

What about Deliveroo? What about Foodora? The implications of tax on these businesses are generally the same. The difference is just in the vehicle they are riding. Thus, the same rules apply to the food delivery riders. As contractors, the riders must also declare their income in their tax return Perth. We could not stress enough how important it is to get you tax affair right and organised with being your own contractor. Thus, better safe than sorry and contact your Perth accountant to assist with your tax planning and tax return Perth.

The articles published by STC Partners are for your general guidelines only. Please contact our Perth accountant for a specific query.