The tax office has issued a series of alerts about the tax obligations of taxpayers who work for ride-sharing services, like Uber, to supplement their income.
The ATO has now issued fresh warnings about its compliance approach to drivers who are not meeting their obligations.
“We are getting data from financial institutions and directly from facilitators, so we know who you are, and we know if you aren’t correctly meeting your obligations,” said assistant commissioner Tom Wheeler.
“If drivers that we have been in touch with continue to ignore our prompts and don’t apply for an ABN and register for GST for their ride-sourcing enterprise, we will register them for GST and backdate that registration to the date of their first ride-sourcing payment. They will be required to lodge and pay all outstanding tax obligations,” he said.
“Penalties and interest may also be applied,” he said.
Common mistakes the ATO comes across include taxpayers who are not apportioning expenses between private and business use; claims for GST credits over the luxury car tax thresholds; and claims for fuel tax credits, which ride-sharing drivers are not entitled to.
Ride-sharing services have been an increasing area of focus as they grow in popularity in Australia. Earlier this year, mid-tier firm RSM warned taxpayers that the ATO is monitoring organisations’ taxable fringe benefits, with a specific focus on ride-sharing services.
“With the disruption of the taxi industry, a significant number of employers are now using Uber and other ride-sharing services for their employees’ travel,” said Rami Brass, national head of tax at RSM Australia.
“Under the FBT Act, a taxi is defined as a ‘vehicle that is licensed to operate as a taxi’. Therefore the Section 58Z exemption cannot apply, as Uber drivers are not lawfully required to hold a license to operate as a taxi.”
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