Uber loses case against ATO, All Uber drivers now required to pay GST
For the past 18 months, Uber has been arguing its case against the ATO in a bid to have their drivers free from paying GST to the ATO. Uber’s argument against the ATO was that the service they were providing was not a Taxi Service.
Unfortunately for Uber the court rejected their argument, on the grounds that it believed the service they were providing was no different than a taxi service and stated that it was essentially a modern day taxi service.
As a result of the court’s decision to reject Uber’s argument, all Uber driver’s will now be required to pay 10 % GST on every dollar they earn as well the 25% percent commission fee already imposed on them from Uber.
One of the factors, for the court in making their decision was whether Uber was providing a taxi service. Businesses that have an annual turnover of less than $75,000 do not generally collect GST. However, the rule does not apply to those providing a taxi service.
As per the court’s ruling, essentially labelling Uber as a taxi service, all drivers now would be required to pay GST, no matter if they turned over more or less than $75,000 annually. Uber believes that their drivers should not have to pay GST unless they are turning over $75,000 annually.
The government now faces a difficult decision on how to best keep up with the technological advancements in the industry. Outdated tax laws are needed to be updated; one of the decisions to be made is whether the GST exemption of $75,000 should extend out to all Uber and Taxi drivers.
If you are an Uber Driver and still unsure regarding the new GST laws, our qualified team at A One Accountants will be more than happy to help clarify any concerns you may have. Uber uses modern technology but have quite a few compliance requirements which in turn result in various expenses for the Uber driver.
Also the car being used by the driver is his own and this could be on a lease or also rented. We at A One Accountants can rightfully identify the deductions for you and help you understand the tax measures in a better way.
If you haven’t yet registered your ABN (Australian Business Number) or have any queries regarding this, our qualified team will be more than happy to help set that up for you. We have prepared numerous Uber BAS’s as well as tax returns.