Do I need an ABN as an Uber driver?
Becoming a ride-share driver has turned into a very popular business opportunity for those seeking self-employment. As the taxi industry has floundered, ride-share services like Uber, DiDi, and Ola have boomed, becoming one of the most popular ways to get around. This in turn has attracted more drivers looking to either make a living off the service or make some extra cash on the side.
Before you can start out as a driver however, there are some tax obligations you must prepare to fulfill. Here is what you need to do before starting out as an Uber driver.
So do I need an ABN?
Yes, you will need an ABN. As you will be operating as a contracted business, not an employee of Uber, you will be required to register for an ABN for taxation purposes. This is on the basis that you are:
- Providing a commercial taxi service,
- Are intending to profit from this service
- Are offering this service on a regular basis
Before you begin driving for Uber, or any other ride-share provider, you must register for an ABN.
How do I register for an ABN?
Registration is simple at ABNAssist.com.au. All you will need is to fill out a simple form, providing your details, and we will register you for an ABN. As you are registering to become an Uber Driver you should select “Sole Trader” on the ABN form. This is because you are likely starting as an Uber driver by yourself, making you a sole trader.
If you have any questions regarding registration for ABN, feel free to contact our friendly agents. As registered Tax Agents we are able to assist you in making registration easy. We also have a registration package for ride-share drivers, including Uber drivers, to make registration even easier. More on that later.
Do I need to register for GST?
All Uber, Didi, Ola, etc, drivers are required to be registered for GST before they begin operating as a ride-share driver. Unlike other small businesses who only need to register after they reach the $75,000 turnover threshold, ride-share drivers must register for GST from day 1.
As you will be registered for GST you must charge for GST on every sale. GST is an additional 10% on the sale price of the service your provided. You will also need to report your earnings including GST quarterly on a BAS.
The benefits of registering for GST
Even though it is mandatory to register for GST, you will still receive some benefits in return. Many of these comes in the form of GST credits. GST credits is an amount you can receive back from GST you paid in order to generate revenue. This will be all the GST you paid in your business activities, including:
- GST paid on the Uber commission can be claimed back as a GST credit, increasing your earnings from your operations as a rideshare driver.
- Some GST spent on car maintenance and other car related expenses can also potentially be claimed. However, you should talk to your accountant about how much you can actually claim.
By registering for GST, you have the potential to increase the earnings you make in your operations as an Uber driver. You should talk to an accountant about how you can get the most out of your work as an Uber driver.
BAS vs Tax Return
When you register for GST you will be required to lodge a business activity statement (BAS) once every quarter. You will also be required to submit an annual tax return for your business. Both require similar, but slightly different information from each other whenever you fill them out.
A BAS requires you to report your businesses earnings and expenses including GST. When reporting you will report the total earnings including GST, and you will report the total GST collected. Generally, the total GST collected will be 1/11th of total earnings. The same is then repeated on your expenses.
A Tax return is where you report your income. As a Sole Trader this is likely to be the profit you made from driving for Uber plus any other sources of income. You will then be required to pay taxes on that. You may also be able to claim further deductions here. Talk to your accountant to find out more.
The Ride-Share registration package
To make registration easier for all ride-share drivers, including Uber drivers, we have created a registration package encompassing all required registrations with the ATO. This provides you with a one stop shop for registering for an ABN and registering for GST. All you need to do is fill out a simple form and we will handle the rest. Most ride-share drivers can be registered within 24 business hours. If you require your registration date to be backdated, we can also assist with that.
To assist ride-share drivers further we will also answer any questions you may have regarding your registration. Our registered Tax Agents are ready and willing to assist you in order to make your registration simple and easy.
For an easy, headache free registration for your ride-sharing service, submit your application today!