If you’re providing a ride-sourcing service (transporting passengers for a fare through the sharing economy), there’s a lot you need to know to get your tax right.
For income tax:
include the income you earn in your tax return
claim deductions directly related to ride-sourcing.
For GST (if you have a ride-sourcing enterprise):
get an Australian business number (ABN)
register for GST regardless of how much you earn
pay GST on the full fare
only claim GST credits related to ride-sourcing
lodge business activity statements (BAS)
know how to issue a tax invoice (you need to provide one for fares over $82.50 if asked).
Practice good record keeping
keep records of all of your income and expenses.
You can use the ATO app’s myDeductions tool to keep records of receipts and car trips.
How to calculate GST
GST must be calculated on the full fare, not the net amount you receive after deducting any commissions or fees, such as the fee your facilitator charges for connecting you to your passenger (facilitator fee).
If a passenger pays $55 for a fare:
the GST payable is $5
the ride-sourcing facilitator pays you $44 after taking out their facilitator fee ($11)
the $11 fee you pay the facilitator is a tax deduction you can claim.
*You are entitled to a GST credit if you have paid a facilitator fee that includes GST.
You can claim expenses as long as:
they are directly related to the running of your ride-sourcing business
you apportion your expenses if they are for both personal and business use
you keep records (such as receipts) to back up your claims.
Expenses you may be able to claim include:
mobile phone costs
other expenses – to the extent that they relate to work-related travel.
Costs of being compliant as a ride-sourcing driver may be deductible, but only to the extent that they aren’t of a private or capital nature.
What you can’t claim:
fines, such as parking and speeding fines
fuel tax credits