The new gig economy reporting regime means that share and new gig economy platforms such as; Uber, Airbnb and Deliveroo will all be required to report information of every transaction to the ATO, in the same way the taxable payments reporting system (TPRS) is being currently applied across a number of industries.
Transactions associated with ride-sourcing or a short-term accommodation service will be first in line for the reporting regime, with share economy platforms required to report these transactions from 1st July 2022.
All other share economy transactions will fall under the new reporting regime from 1 July 2023.
The ATO will specify the frequency of the reporting but has indicated that it will begin requiring reports on a biannual basis.
The Treasury released draft legislation on Tuesday 6th July outlining that all electronic platforms that allow entities to make supplies available to an end-user consumer through the platform will be covered by the new regime.
This also includes platforms such as a website, internet portal, gateway, app, store or marketplace.
The requirement will generally not apply if the transaction only relates to a supply of goods where ownership of the goods permanently changed, where title to real property is transferred, or the supply is a financial supply.
The measure, first raised in the 2019-20 Mid-Year Economic and Fiscal Outlook, comes after the Black Economy Taskforce found that without a reporting regime in place, it would be difficult for the ATO to gain information on compliance of sharing economy participants unless targeted audits were used.
It also argued that a reporting regime would send a clear signal to sharing economy participants that in most cases payments would be taxable.
The impending changes will send a strong message to participants of the gig economy.
The new regime means that if you are a participant of the gig economy and whether it was intentional or unintentional that you didn’t report a certain amount of income or transaction, those days are over.
Participants of the gig economy will have nowhere to hide once the reporting regime takes hold which will lead to a level playing field with other sources of income such as wages.
Tax Advice For Uber Drivers In Australia
Uber has become a popular way for Australians to earn additional income. However, drivers can find themselves potentially getting into serious tax related problems unless they do it right.
The concept of being an Uber driver is unique and gives drivers a flexible opportunity to earn additional income for anyone who owns a good quality car.
When driving for Uber there are important things to consider regarding how you manage your taxes.
If you start to drive for Uber without some good tax planning, you could soon have an ATO tax debt in the thousands, even tens of thousands of dollars.
There is no need to worry, if you spend a bit of time planning and you stay organised you will be able to ensure you’re on track for a friendly relationship with the ATO.
Uber tax and GST
When you drive for Uber you are not an employee. You’re a contractor. Here’s why that is important: When you’re not an employee, you have to be careful that your tax affairs are managed correctly. That’s why most Uber drivers should use a tax agent.
From Uber themselves:
All Uber partners are independent contractors, so we do not withhold any taxes and partners are entirely responsible for their own tax obligations.”
The ATO’s Uber tax implications are straight-forward at a basic level:
- Any money you make driving for Uber counts as income, meaning you must declare it on your Tax return.
- Even if you earn less than the $75,000 GST income threshold, as an Uber driver you need to register for GST. (More on that below…).
Uber and GST
Drivers need submit the GST portion of your Uber fares to the ATO in addition to the tax you pay for the income you earn as a driver.
So, right from the start Uber drivers should:
- Register for GST and pay GST on fares
- Lodge quarterly a BAS statements
If you fail to do this, you’re asking for trouble with the ATO and Uber is unlikely to help you out of your personal ATO troubles – it’s not like the State Transport fines that Uber sometimes covers for you.