The world has changed so dramatically in the last 20 years that at times it can be difficult to keep up. The internet has changed the way that people socialise, communicate and do business. We have well and truly entered a “globalized” age where there are no more boundaries between countries and people. You can log into ebay and order a product from a seller in another country you will never meet in a totally different currency.
With this scale of change there are going to be companies/businesses that prosper and those that suffer. The story which has been dominating the press of late has been that of Uber.
Uber is a ride sharing service between people like you and I. For those of you who don’t know how it works basically people share rides for a fee, with a smartphone application (app) assisting in linking the two users. Payments are made electronically with no cash changing hands and Uber charges a “finders fee,” which is a fixed percentage of the fare.
As you could imagine, this is causing a raft of issues within the taxi industry. There has been a severe backlash against the government for allowing Uber to continue trading despite lobbying from the taxi industry to try and shut it down. However recent announcements from the Government indicate it’s here to stay. Depending on your opinion on the matter, this could be a good or a bad thing. Many people thought the industry was a little stagnant and required competition to “shake it up.”
The main issue the Government is concerned about is the tax and GST which should be collected from the drivers providing this service. The ATO are determined to catch out unsuspecting individuals who use online services to generate income but don’t report it in their BAS statements or tax returns. The ATO have invested serious funds into a system that can data match information between banks and other external sources. It is always better to approach them before being approached.
Recent updates regarding the tax office ruling indicate that Uber are rigorously denying that drivers are classified as providing “taxi services” and need to remit GST on the income generated from driving with them. Their reasoning being that the laws being applied were written long before ride sharing and online services were available. If you are considering this or have already started work an Uber driver please contact us so we can discuss the activities and your position.
Snr Accountant – Optima Partners