In 2015 Uber took the ATO to the Federal Court appealing against the ATO’s decision to include ride-sharing as a “taxi service” for the purposes of GST. The effect of this inclusion is quite profound in that those drivers providing ride-sharing services must (like those providing taxi services) register for GST as soon as they start driving (rather than needing to have a turnover of $75 000).
Having registered they:
- Must charge GST on the full fare
- Must provide a tax invoice to a passenger where they request it and the value of the fare is over $82.50 (including GST)
- Are entitled to claim GST on business purchases associated with the travel (such as the car itself, fuel, servicing etc.).
However, these claims must be apportioned to take account of any private usage of the vehicle. With ride-sharing now quite popular, we’ve had several enquiries as to the progress of this Court case. We can inform you that the Federal Court has just recently (17 February 2017) dismissed Uber’s appeal. At least according to the Federal Court, ride-sharing is a type of “taxi service” for GST purposes. Therefore Uber drivers and other drivers involved in the ride-sharing industry must comply with the above requirements. For their part, GST-registered passengers are entitled to claim the GST on work-related fares. Where the fare is below $82.50 (most cases) you will not need a tax invoice to claim GST. Where it exceeds this amount, you should request a tax invoice.
With this matter still possibly subject to another appeal by Uber, at this point it is unknown whether the ATO will seek to recoup GST in prior years from drivers who were not GST registered as they await the outcome of court proceedings. Or indeed whether passengers who are GST-registered can seek to claim GST on prior year fares. The decision also raises many questions affecting bookkeepers directly including the effect on past transactions both from the Uber driver’s perspective and from the myriad of transactions that have been posted into software since Uber arrived on these shores. We expect these will be clarified in the near term and we will keep you up to date with developments.