Common Misconceptions About Uber Tax
- I am not really a business
Some Uber drivers are regarding driving as their hobby rather than their job. If you are making money from your commercial activity, it means that it is more likely to be treated as business. For Uber drivers, you are making commercial return from your driving, so your income is taxable.
2. If I only accept cash, ATO will not notice it
In order to minimize the taxable income that should be reported to ATO, many small businesses are relying on the “cash only”. But ATO has comprehensive and sophisticated data-matching system to analyze your real turnover. Furthermore, if you are much lower than the benchmark in your market, this may catch the attention or raise a red flag for the ATO.
3. I can hide my income from ATO
The Uber application will record all your activities. Even your name and plate number can be easily found on the app. For the ATO, it is not hard to determine how much your actual earning is and they can investigate your bank account if they want to. Therefore, try to report all your income as this would be a better way to avoid penalty.
4. I don’t have to register for GST
If the turnover of your business is higher than $75,000, you need to register GST for the business; however, if you are an Uber driver, no matter how much your turnover is, you must register GST with ATO from your first dollar amount. Furthermore, you can also claim GST credits on your work-related purchases.
- I can claim all my car expenses
You will be able to claim a part of the car expenses depending upon the different purposes of using the car including private use and business use. Car expenses should be apportioned based on purposes and you can claim only for business use.
6. I can claim all amount of working related deduction
Not all work-related expenses are eligible to be claimed as a deduction from ATO. The following deductions CANNOT be claimed:
- costs of a normal driver license
- fines (parking, speeding, etc.)
- clothing other than safety clothing
- meals, drinks, etc. purchased or consumed whilst on shift
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