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Ride sharing drivers reminded of requirement to apply for ABN and register for GST by the ATO

The Australian Taxation Office (ATO) has reminded 120,000 ride sharing drivers of their tax obligations over the past 18 months.

Assistant Commissioner Tom Wheeler said the ATO is still working to educate ride sharing drivers, but now focus is shifting to drivers who are ignoring their obligations.

“We know that most drivers do the right thing, and we are now focusing attention on the minority of drivers that are not currently meeting their obligations,” he said.

“People earn income from ride-sourcing through a range of providers. While it is different to traditional taxi travel because it is run through a facilitator via an app or a website, ride-sourcing is considered taxi-travel for GST purposes.”

“Our message to taxpayers is that if you have a ride-sourcing enterprise you must get an Australian Business Number and register for GST as soon as you start driving. You also need to include the income on your tax return at tax time.”

“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.”

“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. Penalties and interest may also be applied.”

Wheeler said that drivers should be aware they can also claim tax deductions and GST credits in respect of their business expenses, such as fuel, servicing, and smartphone and data usage.

“You can claim expenses as long as they are directly related to the running of your ride-sourcing enterprise and you apportion your expenses if they are for both personal and business use.”

“The most important thing for drivers is making sure you are keeping good records to help you stay on top of your tax obligations and make sure you claim the right deductions.”

The ATO advised ride sharing drivers of mistakes to avoid:

  • Not apportioning expenses between private and business use
  • Claiming GST credits over the luxury car tax thresholds – the GST credit that can be claimed is limited to 1/11 of the ‘car limit’ which is currently $57,581
  • Claiming fuel tax credits – ride sourcing drivers are not entitled to fuel tax credits.

Drivers can apply for an ABN and register for GST at the same time at abr.gov.auExternal Link

For more information on ride-sourcing and GST obligations, visit ato.gov.au/ridesourcing

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James Harkness

James Harkness

James Harnkess previous editor at Dynamic Business

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