From August 2015 the ATO confirmed all Uber drivers are required to register for GST, meaning drivers must account for GST on all their fares and can claim GST back on most of their expenses by submitting a quarterly Business Activity Statement (BAS).
The ATO has recently advised that it will be collecting data to identify individuals engaged in providing ride-sourcing services during the 2016/17 and 2017/18 financial years.
It will be targeting over 60,000 drivers registered in Australia, most of them Uber drivers, by obtaining information from banks and other financial institutions.
Mark Chapman, tax communication director at H&R Block, is urging Uber drivers to register now before they get caught, and believes the ATO will be taking no prisoners.
“The ATO is cracking down on Uber drivers who have not complied with their stipulation that Uber drivers must be GST registered,” he said.
He also reminded Uber drivers that their gross Uber income must be declared on their income tax return, and that they can claim deductions for all costs which relate exclusively to their Uber activity.
Mr Chapman warns that Uber drivers who aren’t complying with tax laws, by failing for register for GST for instance, or not including ride-sourcing income on their tax return, are playing with fire and are likely to be caught up in the ATO’s current compliance sweep.
As a result, they may face penalties and interest, or even prosecution. He advises that affected drivers should be proactive in getting their tax affairs up to date before the ATO come knocking.