Uber, UberEats, Airbnb and Airtasker – Your Tax Obligations
60% of working Australians earn money from sharing economy services. The sharing economy allows people to use the internet to rent out their property, resources, time or skills. The most common being Uber, UberEats, Airbnb and Airtasker.
What a lot of people are unaware of is the income derived from these services is taxable and must be included in your annual tax return. Workers are running an enterprise and must apply for an ABN and in some cases must be registered for GST.
In this article we will concentrate on the tax obligations for Uber, UberEats and Airtasker. You can find information about the tax obligations for Airbnb here.
Income earned from ride-sourcing is assessable income and must be reported in your tax return. In turn expenses incurred in running the ride-sourcing business will also be deductible. This may include expenses that relate to holding, maintaining or operating any assets used to provide the service. If the assets are also used for private purposes, deductions have to be calculated by apportioning expenses based on the percentage of total use that relates to the income earned.
Typically, the following income tax deductions may be claimed:
- Any licensing or services fees paid to Uber
- Rider amenities such as water, mints, magazines
- Tolls and parking fees (not charged to rider)
- Vehicle registration*
- Mobile phone bills*
- Cost of cleaning, servicing and repairing the vehicle*
- Tax Agent/accountants fees
- Music apps*
- Bank fees
(* percentage of business use)
UBER GST OBLIGATIONS
The Australian Taxation Office states that all those who are providing ride-sharing services must apply for an ABN and register for GST. They have also stated that you must account for GST from the first dollar of turnover. This is different to most small businesses which only need to account for GST when their turnover reaches $75 000.
Some things to remember when accounting for GST:
- GST must be calculated on the full fare, not the net amount received after deducting any fees or commissions.
- GST credits on expenses can be claimed, but must be apportioned between business and private use.
- GST credits cannot be claimed if no GST was included in the price of the business related purchase.
- Being registered for GST because of Uber activity may impact on the GST status of other business activities undertaken.
This also applies to other ride-sharing services eg Taxify, Shebah
For more information see https://www.ato.gov.au/General/Ride-sourcing-and-tax/Income-tax-and-ride-sourcing/
Income earned from UberEats is assessable income and deductions can be claimed. You will be required to apply for an ABN.
The GST position for UberEats workers is potentially different to Uber drivers. Because they are not providing taxi-like services, they do not need to register and account for GST unless they earn more than $75 000. But if the UberEats worker also drives for Uber GST will be applicable. This also applies to other food delivery services eg Deliveroo, Foodora
Income from providing services through Airtaker is taxable and deductions can be claimed for all expenses incurred in earning assessable income. If turnover exceeds $75 000 or if workers are already registered for GST because of other business activity (including ride-sharing), GST must be accounted for.
Other skills-based online marketplaces – Fiverr, Gumtree
If you have questions about undertaking any work in the sharing economy or need help with bookkeeping and tax compliance we are here to help. You can contact us on 07 31189505 9am-5pm Monday to Friday.