With the recent expansion of Uber into Australia, many customers are wondering what registrations they need in order to drive on the Uber platform. Read on...
Whether it is Uber, Deliveroo, or Freelancer, there are more and more workers joining the share-economy here in Australia. It provides a great way to earn flexible income on your own terms.
Do I need an ABN to drive on Uber?
If you are a driver for a ridesharing service such as Uber you must register for an Australian Business Number (ABN). At present, rideshare drivers are considered independent contractors based on a range of factors. These include the driver’s ability to choose their own hours and personal ownership of the vehicle. As a ridesharer driver, you are typically operating under a Sole Trader business structure and thus must register an ABN as a Sole Trader.
Do I need to register for GST as an Uber driver?
As an Uber driver, regardless of your income, you must account for GST on all earnings. This means that if you only make $100 total as a driver, you will need to register for GST and declare the income on your tax return. Drivers are also entitled to a range of tax credits and can claim the expenses related to providing their rideshare services. If you want to register for Goods and Services Tax (GST), then you will need an ABN first.
Do I need an ABN to drive on UberEATS?
If you deliver for only UberEATS you do not have to register or pay GST unless your turnover is more than $75,000 a year.
How do I apply for an ABN and register for GST?
You can register an ABN online by completing our online ABN Registration form.
Benefits of applying for an ABN
We outline some benefits and instances whereby it may be beneficial to have an ABN for your business.
Registering for GST
As an Uber driver, regardless of your income, you must account for GST on all earnings. This means that if you only make $100 total as a driver, you will need to register for GST and declare the income on your tax return. Drivers are also entitled to a range of tax credits and can claim the expenses related to providing their rideshare services. If you want to register for Goods and Services Tax (GST), then you will need an ABN first.
Claiming back Goods and Services Tax (GST) on local purchases including Uber platform fees
One clear benefit of registering for GST is the ability to claim back GST on purchases made in Australia. For every $110 of local purchases made it is likely you have paid $10 in GST, and thus would be eligible to claim this as a tax credit. To do this you need to be registered for GST. And to be registered for GST you need an ABN.
Turnover greater than $75,000 in a financial year?
very business must register for GST if you make over $75,000 in a financial year; this process will require an ABN. However, did you know that Uber drivers must register for GST regardless of their turnover?
Commercial Dealings
Due to the above benefits, as well as generally having a better reception from customers and suppliers, we usually advise for businesses to obtain an ABN. It is relatively inexpensive to obtain, and there are no recurring fees. ie it is a one time cost and process.
Withholding in Business Transactions
If you operate outside the Uber ecosystem and don't quote an ABN to B2B customers on your invoice, they must withhold 47% (from 1 July 2017) from their payment they make to you and send the withheld amount to the ATO. There are some exceptions to this outlined on the ATO website here.
Next Steps
All in all, it is generally worth obtaining an ABN when acting as a driver on Uber or any other ridesharing platform such as Deliveroo. It is fairly inexpensive to obtain, has tax and commercial benefits, and it generally allows your business to be ready for other commercial opportunities that arise. We can assist your business with applying for an ABN and registering for GST.
Phone 1300 226 226 to discuss how we can help.
Please note this article is for information purposes only and does not constitute legal advice. Should you have any queries or require more information, please contact the team at ABNAustralia.com.au.