# New GST and Tax Calculations



## Paul Collins

GST New Calculations.
Note GST is charge on what the rider actually pays.

Fare is $23.10 plus Booking Fee $0.55 = $23.65
GST Payable is 1/11 of $23.65 = $2.15

Taxable income is $23.65 minus GST = $21.50 plus $0.05 gst free income = $21.55
(Income as GST free income is $0.05 Same as a referral bonus etc and is GST free)

über Fees as tax deduction are now $4.62 + $0.55 = $5.17 ( note some debate if this is $0.50 or $0.55)


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## UberDriverAU

Paul Collins said:


> über Fees as tax deduction are now $4.62 + $0.55 = $5.17 ( note some debate if this is $0.50 or $0.55)


If it's $0.50 then you'd need to exclude the $0.05 from your assessable income. You could either do it as:

(1) Include the $0.05 in your assessable income then claim $0.55 as a deduction, or
(2) Exclude the $0.05 from your assessable income and claim $0.50 as a deduction.

The net effect is the same, but (2) makes more sense to me.


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## Paul Collins

UberDriverAU said:


> If it's $0.50 then you'd need to exclude the $0.05 from your assessable income. You could either do it as:
> 
> (1) Include the $0.05 in your assessable income then claim $0.55 as a deduction, or
> (2) Exclude the $0.05 from your assessable income and claim $0.50 as a deduction.
> 
> The net effect is the same, but (2) makes more sense to me.


True, but 2. does not reflect or match the way uber have presented it.


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## Paul Collins

UberDriverAU said:


> If it's $0.50 then you'd need to exclude the $0.05 from your assessable income. You could either do it as:
> 
> (1) Include the $0.05 in your assessable income then claim $0.55 as a deduction, or
> (2) Exclude the $0.05 from your assessable income and claim $0.50 as a deduction.
> 
> The net effect is the same, but (2) makes more sense to me.


So my understanding is the $0.55 taken by uber is GST free and thus why the pay the extra $0.05 Service tax?


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## NZShaker

They way I see it...

Uber charge .55c and then take .55c that's between them and the ATO, a bit like fair splits neither here nor there for us

The problem is they also charge the customer another .05c which now they tell us is a Service Tax, but now its added to our income so we have to pay tax on this service tax.

Just another way we are being fluffed by Uber.


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## UberDriverAU

Paul Collins said:


> So my understanding is the $0.55 taken by uber is GST free and thus why the pay the extra $0.05 Service tax?


So they're charging us $0.55 GST-free, then refunding us $0.05 GST-free. The net effect is a $0.50 GST-free charge. As far as I know Paul, refunds are not considered assessable income. It's giving back money you have paid rather than paying you for a good or service that you supplied. It does not have the character of "income". Another example: if the ATO sends you a tax refund, that's certainly not assessable income. Another example: I prepaid $40 in fuel but only put in $35, the $5 refund I got is also not assessable income.


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## Paul Collins

UberDriverAU said:


> So they're charging us $0.55 GST-free, then refunding us $0.05 GST-free. The net effect is a $0.50 GST-free charge. As far as I know Paul, refunds are not considered assessable income. It's giving back money you have paid rather than paying you for a good or service that you supplied. It does not have the character of "income". Another example: if the ATO sends you a tax refund, that's certainly not assessable income. Another example: I prepaid $40 in fuel but only put in $35, the $5 refund I got is also not assessable income.


Ok, just to confirm the 55 cents they charge the rider is gst inc and the 55 cent fee they charge the drivers is not gst inc.

The 5 cents is gst free like as is referral bonus etc as it is not from an au rider.

So you are saying the net effect is to account for it as 50 cents gst free? ok but not always 50 cents. My accountant just gave me advice to account for every item as uber detail it and yep he think the 5 cents will be income (gst free)


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## Paul Collins

Also the problem is that it is not always 5 cents. 8 and should have been 10.












NZShaker said:


> They way I see it...
> 
> Uber charge .55c and then take .55c that's between them and the ATO, a bit like fair splits neither here nor there for us
> 
> The problem is they also charge the customer another .05c which now they tell us is a Service Tax, but now its added to our income so we have to pay tax on this service tax.
> 
> Just another way we are being fluffed by Uber.


No, uber are charging the riders an extra 55 cents and we must show that as being included in the total fare and pay gst on it.

Uber have been doing the split fee incorrectly up until now as it is also a rider charge and has gst on it.


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## UberDriverAU

Paul Collins said:


> Ok, just to confirm the 55 cents they charge the rider is gst inc and the 55 cent fee they charge the drivers is not gst inc.
> 
> The 5 cents is gst free like as is referral bonus etc as it is not from an au rider.
> 
> So you are saying the net effect is to account for it as 50 cents gst free? ok but not always 50 cents. My accountant just gave me advice to account for every item as uber detail it and yep he think the 5 cents will be income (gst free)


In terms of the accounting:

Revenue - (Expense - Expense Refund) + Asset - Liability = $0.00

Booking Fee Paid By Pax - (Booking Fee Taken By Uber - Refund on Booking Fee) + GST on Booking Fee Paid By Pax - GST Owed To ATO = $0.00

$0.50 - ($0.55 - $0.05) + $0.05 - $0.05 = $0.00


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## Paul Collins

UberDriverAU said:


> In terms of the accounting:
> 
> Revenue - (Expense - Expense Refund) + Asset - Liability = $0.00
> 
> Booking Fee Paid By Pax - (Booking Fee Taken By Uber - Refund on Booking Fee) + GST on Booking Fee Paid By Pax - GST Owed To ATO = $0.00
> 
> $0.50 - ($0.55 - $0.05) + $0.05 - $0.05 = $0.00


Apart from when it is different.










I am going.. for the BAS....

Fare + Surge + Booking fee (payment) by 1/11 as GST owed.

Uber fee + Booking fee (deduction) = tax expense (gst free)

Service tax as gst free income.

That way I account for every item and especially when the service tax is not 1/10 ofthenooking fees.


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## Jack Malarkey

UberDriverAU said:


> If it's $0.50 then you'd need to exclude the $0.05 from your assessable income. You could either do it as:
> 
> (1) Include the $0.05 in your assessable income then claim $0.55 as a deduction, or
> (2) Exclude the $0.05 from your assessable income and claim $0.50 as a deduction.
> 
> The net effect is the same, but (2) makes more sense to me.


I think (2) correctly reflects the tax law.


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## Paul Collins

Jack Malarkey said:


> I think (2) correctly reflects the tax law.


Agree apart from when it does not work. Not all my trips got the Service tax.


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## UberDriverAU

Paul Collins said:


> Fare + Surge + Booking fee (payment) by 1/11 as GST owed.


Spot on.


Paul Collins said:


> Uber fee + Booking fee (deduction) = tax expense (gst free)
> 
> Service tax as gst free income.


Uber fee + Booking fee (deduction) - Service tax, is what it should be imo. The "Service Tax" is a refund in my view, we've done nothing to earn it, so it should not be considered income. It's no different to my prepaid fuel example. I paid $40 and got a $5 refund. I don't list $5 as income and $40 as an expense, it's simply a $35 expense.



Paul Collins said:


> Agree apart from when it does not work. Not all my trips got the Service tax.


They need to add it on. Let them know.


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## NZShaker

Not sure if any will agree but my accountant has just told me this, on the example I gave them.

Total Payout : $11.95 this hits my account

Fare: $14.88
Uber Fee $2.98
Booking Fee: +.55
Booking Fee: -.55
Service Tax: +.05

Here is the working out.

Income: $14.88 + .55 + .05 = $15.48
GST: $1.41
Uber Fees $ 3.53 (which is the $2.98 + .55)
Payout: $11.95

Thoughts????


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## Paul Collins

NZShaker said:


> Not sure if any will agree but my accountant has just told me this, on the example I gave them.
> 
> Total Payout : $11.95 this hits my account
> 
> Fare: $14.88
> Uber Fee $2.98
> Booking Fee: +.55
> Booking Fee: -.55
> Service Tax: +.05
> 
> Here is the working out.
> 
> Income: $14.88 + .55 + .05 = $15.48
> GST: $1.41
> Uber Fees $ 3.53 (which is the $2.98 + .55)
> Payout: $11.95
> 
> Thoughts????


Correct.


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## NZShaker

Paul Collins said:


> Correct.


That would also mean we should be adding fair splits to our income and exp as well??

I know I haven't I will need to go through the last yr and sort thaty s**t out..i did mention this to my accountant today with a opps...lucky not a lot of monies just a pain to go back through


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## Paul Collins

NZShaker said:


> That would also mean we should be adding fair splits to our income and exp as well??
> 
> I know I haven't I will need to go through the last yr and sort thaty s**t out..i did mention this to my accountant today with a opps...lucky not a lot of monies just a pain to go back through


Yep, split is the same but uber are not paying us the gst on it. There are at fault as it should be exactly like the booking fee.


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## UberDriverAU

NZShaker said:


> Not sure if any will agree but my accountant has just told me this, on the example I gave them.
> 
> Total Payout : $11.95 this hits my account
> 
> Fare: $14.88
> Uber Fee $2.98
> Booking Fee: +.55
> Booking Fee: -.55
> Service Tax: +.05
> 
> Here is the working out.
> 
> Income: $14.88 + .55 + .05 = $15.48
> GST: $1.41
> Uber Fees $ 3.53 (which is the $2.98 + .55)
> Payout: $11.95
> 
> Thoughts????





Paul Collins said:


> Correct.


Question: How can your income be more than the customer has paid? 
Answer: It can't be.

The accounting equation has got to balance gents:


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## Paul Collins

UberDriverAU said:


> Question: How can your income be more than the customer has paid?
> Answer: It can't be.
> 
> The accounting equation has got to balance gents:
> View attachment 128696


Because the 5 cents is direct from uber as income (gst free) same as a referral income.

Income for tax is...
Total Fare + Booking Fee + Service Tax - GST.
Income: $14.88 + .55 + .05 = $15.48 - GST $1.40 = $14.08 ( Note GST is only on fare + Booking fee = $15.43)
Expenses: Uber Fee $2.98 +.55 = $3.53
Net income = $10.55 (for taxation)

Same as yours above. $14.03 - $3.48 = $10.55 as taxable income. The rider paid $15.43
GST liability is $1.40

Uber has been accounting for the Split Booking Fees incorrectly and so have 99.9% of drivers.

1. The Split Booking Fee is paid by a rider and must be added to the Total Fare to calculate the correct GST, since that is actually what the AU rider paid. I do not think any drivers have been doing this. The positive Split Booking fee is income for taxation purposes.
2. The Split Booking Free as the negative is a tax deduction (GST Free as it is taken by a non AU entity, uber) and should be added to the uber fee for taxation purposes as a tax deduction.

Uber need to do exactly what they are now doing with the Booking Fee as with the Split Fee as they both have GST as thhat is what the rider is paying, so if there is a $1.10 Split fee, then 11 cents should be paid to the driver as the Service tax.












Jack Malarkey said:


> I think (2) correctly reflects the tax law.


I am not 100% sure of that. Tolls are interesting. They have GST on them yet the Toll Fee paid to drivers would not as it is income from a non AU entity. Mmmmm....


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## UberDriverAU

Paul Collins said:


> Because the 5 cents is direct from uber as income (gst free) same as a referral income.


Except it's not the same. What good or service has been provided to derive this income? Absolutely nothing. There is no connection between anything we've done and the "Service Tax +$0.05".


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## Paul Collins

UberDriverAU said:


> Except it's not the same. What good or service has been provided to derive this income? Absolutely nothing. There is no connection between anything we've done and the "Service Tax +$0.05".


Same as incentives and referrals income. GST free and still income.


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## UberDriverAU

Paul Collins said:


> Same as incentives and referrals income. GST free and still income.


Negative. For incentives we make ourselves available during specified hours and take the requisite number of trips, and for referrals we're doing some marketing for Uber (getting riders and drivers on board the platform). What activity are we doing to earn the "Service Tax"?


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## Jack Malarkey

The Australian Taxation Office has this to say:

*What to exclude from your assessable income*

Not all payments you receive are assessable income for your business tax purposes. The following amounts are not assessable and do not need to be included in your assessable income:

...

goods and services tax (GST) you have collected
(https://www.ato.gov.au/Business/Inc.../What-to-exclude-from-your-assessable-income/)


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## Paul Collins

I have it confirmed from uber that no payments made under any term are inc of GST to AU drivers. This includes Tolls.



UberDriverAU said:


> Negative. For incentives we make ourselves available during specified hours and take the requisite number of trips, and for referrals we're doing some marketing for Uber (getting riders and drivers on board the platform). What activity are we doing to earn the "Service Tax"?


Either you account for the service tax as gst free income or you take it off the booking fee deduction(expense). 
Once agin no payment by uber is inc of gst no matter how it is paid.


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## Jack Malarkey

Paul Collins said:


> I have it confirmed from uber that no payments made under any term are inc of GST to AU drivers. This includes Tolls.


Here's an extract from an email Uber sent to all its Australian drivers on 11 July 2016:


















End of Financial Year Tax Update

Hi Jack,

...

Below we have put together a list of common questions we receive regarding income tax and GST.

...

All the best,

Uber Operations Team

FAQ's

...

*Who pays the GST?*

All fares are inclusive of any applicable taxes so if you do register for GST, you will be responsible for paying the GSTto the ATO. By way of example, if the total cost of a ride you provided was $11, $1 of this will be GST. The easiest way to calculate the amount of GST you would need to set aside for each total trip cost is to divide by 11.

*Do fares include GST?*

All fares are inclusive of any applicable taxes so you are responsible for any applicable GST payable to the ATO.

If you are registered for GST, you can offset against your taxable supplies any GST which you pay on your items of expenditure. These are called input tax credits. Items where you may be able to claim a tax credit include fuel and servicing costs for your vehicle, for example.

...


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## NZShaker

Im just going to do what my accountant told me as per my example...be it right or wrong

They have a better understanding of GST and income than I do.


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## Jack Malarkey

NZShaker said:


> Im just going to do what my accountant told me as per my example...be it right or wrong
> 
> They have a better understanding of GST and income than I do.


I am confident that in practice the Australian Taxation Office will accept any approach that gives a reasonable approximation of what it considers the correct approach provided it's consistently applied.


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## UberDriverAU

Jack Malarkey said:


> I am confident that in practice the Australian Taxation Office will accept any approach that gives a reasonable approximation of what it considers the correct approach provided it's consistently applied


Especially if the net result is identical.


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## Paul Collins

Jack Malarkey said:


> Here's an extract from an email Uber sent to all its Australian drivers on 11 July 2016:
> 
> 
> 
> 
> 
> 
> 
> 
> 
> 
> 
> 
> 
> 
> 
> 
> 
> 
> End of Financial Year Tax Update
> 
> Hi Jack,
> 
> ...
> 
> Below we have put together a list of common questions we receive regarding income tax and GST.
> 
> ...
> 
> All the best,
> 
> Uber Operations Team
> 
> FAQ's
> 
> ...
> 
> *Who pays the GST?*
> 
> All fares are inclusive of any applicable taxes so if you do register for GST, you will be responsible for paying the GSTto the ATO. By way of example, if the total cost of a ride you provided was $11, $1 of this will be GST. The easiest way to calculate the amount of GST you would need to set aside for each total trip cost is to divide by 11.
> 
> *Do fares include GST?*
> 
> All fares are inclusive of any applicable taxes so you are responsible for any applicable GST payable to the ATO.
> 
> If you are registered for GST, you can offset against your taxable supplies any GST which you pay on your items of expenditure. These are called input tax credits. Items where you may be able to claim a tax credit include fuel and servicing costs for your vehicle, for example.
> 
> ...


All correct. I have comformation from uber that no payments made to drivers include GST for any item.


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## lespaul

Paul Collins said:


> All correct. I have comformation from uber that no payments made to drivers include GST for any item.


i'm confused! If Uber collects the payment from the customer which includes GST, then passes payment onto the driver without including the GST, then surely Uber are left holding the GST??


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## UberDriverAU

lespaul said:


> i'm confused! If Uber collects the payment from the customer which includes GST, then passes payment onto the driver without including the GST, then surely Uber are left holding the GST??


GST is not money you hold, it is money you owe.


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## lespaul

UberDriverAU said:


> GST is not money you hold, it is money you owe.


same for the rider?


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## UberDriverAU

lespaul said:


> same for the rider?


Nope. A rider who has taken a personal trip and paid for it will never have to think about it again. Where people seem to get confused is with some of the terminology that gets thrown about: "includes GST", "GST collected", etc. If I buy a pizza using 11 x $1 coins, which one of those $1 coins is the GST? The answer is none of them are, because "the GST" is actually a liability for the pizza seller. He could use any one of those coins to settle his $1 GST debt to the ATO, or he could use completely unrelated funds to settle the debt. He's not going to get into trouble for using the "wrong" $1 coin. GST isn't held and remitted, it's owed and settled.


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## lespaul

UberDriverAU said:


> Nope. A rider who has taken a personal trip and paid for it will never have to think about it again. Where people seem to get confused is with some of the terminology that gets thrown about: "includes GST", "GST collected", etc. If I buy a pizza using 11 x $1 coins, which one of those $1 coins is the GST? The answer is none of them are, because "the GST" is actually a liability for the pizza seller. He could use any one of those coins to settle his $1 GST debt to the ATO, or he could use completely unrelated funds to settle the debt. He's not going to get into trouble for using the "wrong" $1 coin. GST isn't held and remitted, it's owed and settled.


but we all know, even riders know, that rideshare services are subject to GST. I know that most things I buy have a GST component in the price. If they don't, the seller is obligated to say "ex-gst". So what do our friends at Uber say? You're going to say they say prices are "ex-gst"? But why do Uber get away with not having to advertise it?


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## UberDriverAU

lespaul said:


> but we all know, even riders know, that rideshare services are subject to GST. I know that most things I buy have a GST component in the price. If they don't, the seller is obligated to say "ex-gst". So what do our friends at Uber say? You're going to say they say prices are "ex-gst"? But why do Uber get away with not having to advertise it?


They say it "includes GST where applicable". As we now know for certain, GST is always applicable for Uber trips. If you advertise a price to consumers, the presumption is that GST is included and you won't have to pay extra for GST. There would be strong grounds for a misleading and deceptive conduct lawsuit if anyone tried that on.


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## JimmyAU

Guys, I plan to start driving from July 1, just a bit anal, I want to do things right and I need advice, re: BAS statements , do I need an ABN?
What I'm trying to see is there a link/page somewhere for Aussie drivers , any accountants across it?

Also if I may, can i ask what insurance companies "allow" ridesharing?

How do I register for GST?
Any info/help greatly appreciated. Cheers!


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## Jack Malarkey

JimmyAU said:


> Guys, I plan to start driving from July 1, just a bit anal, I want to do things right and I need advice, re: BAS statements , do I need an ABN?
> What I'm trying to see is there a link/page somewhere for Aussie drivers , any accountants across it?
> 
> Also if I may, can i ask what insurance companies "allow" ridesharing?
> 
> How do I register for GST?
> Any info/help greatly appreciated. Cheers!


JimmyAU, yes you do need an ABN and you need to register for GST, which is payable from the first dollar. You can register here: https://abr.gov.au/For-Business,-Super-funds---Charities/Applying-for-an-ABN/.

You need to read carefully these guidelines from the Australian Taxation Office: https://www.ato.gov.au/Business/GST...rough-ride-sourcing-and-your-tax-obligations/.

Regarding insurance companies, try Allianz, NRMA (part-time rideshare only), RACV and GIO. They need to designate your policy as covering rideshare.


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## JimmyAU

ok thanks, so i understand ABN can be got online, but far as GST registration, is that something i let my Accountant do?


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## Jack Malarkey

JimmyAU said:


> ok thanks, so i understand ABN can be got online, but far as GST registration, is that something i let my Accountant do?


You can register for GST as part of the ABN application process. The online form will guide you through this.


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## JimmyAU

cheers


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