# Accounting GST App for BAS



## RobMan68 (Oct 17, 2017)

I am an Accountant in Melbourne and have also been a software developer for the past 30 years. I was considering building an app to help drivers account for income and expenses (fuel, tolls, rego, mobile phone etc) and to calculate their BAS every quarter.

What do you think? Any comments welcome.

Thanks
Rob


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## weekendnightdriver (Sep 5, 2016)

RobMan68 said:


> I am an Accountant in Melbourne and have also been a software developer for the past 30 years. I was considering building an app to help drivers account for income and expenses (fuel, tolls, rego, mobile phone etc) and to calculate their BAS every quarter.
> 
> What do you think? Any comments welcome.
> 
> ...


Have you ever benchmarked AirTax?
What's the difference between your plan and them?


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## AvengingxxAngel (Jan 5, 2017)

RobMan68 said:


> I am an Accountant in Melbourne and have also been a software developer for the past 30 years. I was considering building an app to help drivers account for income and expenses (fuel, tolls, rego, mobile phone etc) and to calculate their BAS every quarter.
> 
> What do you think? Any comments welcome.
> 
> ...


An app for this would be great.


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## Paul Collins (Dec 12, 2016)

RobMan68 said:


> I am an Accountant in Melbourne and have also been a software developer for the past 30 years. I was considering building an app to help drivers account for income and expenses (fuel, tolls, rego, mobile phone etc) and to calculate their BAS every quarter.
> 
> What do you think? Any comments welcome.
> 
> ...


Hi Rob
What is your view on uber drivers and PSI?


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## RobMan68 (Oct 17, 2017)

Paul Collins said:


> Hi Rob
> What is your view on uber drivers and PSI?


Hi Paul
The income is not PSI 
This is because its the vehicle that is generating the income not someone's skill and knowledge (such as a computer programmer)

Rob


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## UberDriverAU (Nov 4, 2015)

RobMan68 said:


> Hi Paul
> The income is not PSI
> This is because its the vehicle that is generating the income not someone's skill and knowledge (such as a computer programmer)
> 
> Rob


What percentage of Uber income comes from the driver's labour? We're not talking about self driving cars here, there is a person in the driver's seat who provides their labour and skills to complete the task.


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## Paul Collins (Dec 12, 2016)

RobMan68 said:


> Hi Paul
> The income is not PSI
> This is because its the vehicle that is generating the income not someone's skill and knowledge (such as a computer programmer)
> 
> Rob


Thanks and I agree as it seem obvious that over 50% of the net Uber income is for the use of the car especially when we consider that a driver must drive to a pickup and is impossible for that part of any trip.

You may be interested in this thread.

https://uberpeople.net/threads/what-business-structure-are-you-using.211919/


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## RobMan68 (Oct 17, 2017)

UberDriverAU said:


> What percentage of Uber income comes from the driver's labour? We're not talking about self driving cars here, there is a person in the driver's seat who provides their labour and skills to complete the task.


If more than 50% of the income received for a contract (each fare is a contract) was for your labour, skills or expertise, then all income from that contract is classified as PSI. The fare paid is for using the car from point A to point B which requires a driver. Its not PSI in my view.

Even if it was PSI, it means that some additional rules apply. One only main rule related to Uber drivers is that you can't split the profit. Since most Uber drivers are sole traders, they can't split the profit anyway! So no big deal


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## UberDriverAU (Nov 4, 2015)

RobMan68 said:


> If more than 50% of the income received for a contract (each fare is a contract) was for your labour, skills or expertise, then all income from that contract is classified as PSI. The fare paid is for using the car from point A to point B which requires a driver. Its not PSI in my view.


I understand what the rule is. My question is how can you form a view as to what percentage of a trip's income is for labour when you don't know any of the details about the vehicle used or the revenue made from each trip? Surely whether a particular trip is to be counted as PSI depends on the details of that trip. If I scored a 10x surge job on NYE and made ~$400 from a single trip (30 mins, 30 kms) and I drive a cheap and cheerful car and the vehicle expenses totaled $10, would it still be your view that this trip should not be counted as PSI because labour didn't form greater than 50% of the income?


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## Paul Collins (Dec 12, 2016)

UberDriverAU said:


> I understand what the rule is. My question is how can you form a view as to what percentage of a trip's income is for labour when you don't know any of the details about the vehicle used or the revenue made from each trip? Surely whether a particular trip is to be counted as PSI depends on the details of that trip. If I scored a 10x surge job on NYE and made ~$400 from a single trip (30 mins, 30 kms) and I drive a cheap and cheerful car and the vehicle expenses totaled $10, would it still be your view that this trip should not be counted as PSI because labour didn't form greater than 50% of the income?


True, and then there are trips like the one I just did, drive 15 km to then do a 3 km trip and have to travel 15 km back all for $5.61. I may have well been throwing gold coins out my window as this trip was made at a loss and the car costs would be more perhaps double the income.


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## UberDriverAU (Nov 4, 2015)

Paul Collins said:


> True, and then there are trips like the one I just did right drive 15 km to then do a 3 km trip and have to travel 15 km back all for $5.61


Indeed there are. The point is though, I don't think it's possible to make a blanket statement that no Uber income can be PSI if none of the details are known. The mere fact that a vehicle is used isn't enough detail, as the ATO's public ruling demonstrates (See examples 4 & 5).


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## RobMan68 (Oct 17, 2017)

The rule was introduced to prevent people splitting personal income to others via a sole trader or other entities (companies etc).
Like I said before UberDriverAU, for most drivers, the PSI rules are irrelevant as they operate as a sole trader. Normally more than 50% of the costs would be using the M.V so for me it would not be PSI (Most other accountants would not consider it PSI either).

Anyway that's my last comment on the matter.
Thanks


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## Paul Collins (Dec 12, 2016)

RobMan68 said:


> The rule was introduced to prevent people splitting personal income to others via a sole trader or other entities (companies etc).
> Like I said before UberDriverAU, for most drivers, the PSI rules are irrelevant as they operate as a sole trader. Normally more than 50% of the costs would be using the M.V so for me it would not be PSI (Most other accountants would not consider it PSI either).
> 
> Anyway that's my last comment on the matter.
> Thanks


 Thanks. In my case I have a company that owns the car so if I am forced to act as a sole trader, my company will charge the sole trader and in fact I will be income splitting regardless if it is PSI incone or not


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## UberDriverAU (Nov 4, 2015)

RobMan68 said:


> Like I said before UberDriverAU, for most drivers, the PSI rules are irrelevant as they operate as a sole trader.


I thought so too RobMan68, however certain income tax deductions are not allowed by sole traders where income is PSI, and are allowed where it's not PSI.


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## Paul Collins (Dec 12, 2016)

UberDriverAU said:


> I thought so too RobMan68, however certain income tax deductions are not allowed by sole traders where income is PSI, and are allowed where it's not PSI.


Such as?


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## UberDriverAU (Nov 4, 2015)

Paul Collins said:


> Such as?


https://www.ato.gov.au/business/per...t-to-do-when-the-psi-rules-apply/sole-trader/

You cannot claim the following deductions against your PSI:


rent, mortgage interest, rates or land tax for your home (or your associate's home)
payments to your spouse, or other associate, for support work such as secretarial duties
expenses that you would generally not be able to deduct as an employee.


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## Paul Collins (Dec 12, 2016)

RobMan68 said:


> The rule was introduced to prevent people splitting personal income to others via a sole trader or other entities (companies etc).
> Like I said before UberDriverAU, for most drivers, the PSI rules are irrelevant as they operate as a sole trader. Normally more than 50% of the costs would be using the M.V so for me it would not be PSI (Most other accountants would not consider it PSI either).
> 
> Anyway that's my last comment on the matter.
> Thanks


Can I ask what your advice is to Uber Drivers that are using a Company or Trust, as we are under pressure from the ATO to register a new ABN as a sole trader and redo all previous BAS and tax returns?


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## RobMan68 (Oct 17, 2017)

This conversation is jumping topics. UberDriver is correct. If it is deemed PSI then those deductions he/she (sorry don't know your gender) are disallowed.

Basically the rule is that IF the income is deemed PSI, then it must end up in the tax return of the person deriving the PSI regardless of which entity it was invoiced in. That seems odd Paul that the ATO would ask that. There is nothing stopping anyone operating through a company. It is how the income is tax thats more relevant (i.e. in the company or individual via PSI).


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## Paul Collins (Dec 12, 2016)

RobMan68 said:


> This conversation is jumping topics. UberDriver is correct. If it is deemed PSI then those deductions he/she (sorry don't know your gender) are disallowed.
> 
> Basically the rule is that IF the income is deemed PSI, then it must end up in the tax return of the person deriving the PSI regardless of which entity it was invoiced in. That seems odd Paul that the ATO would ask that. There is nothing stopping anyone operating through a company. It is how the income is tax thats more relevant (i.e. in the company or individual via PSI).


Yep, ATO have 'demanded' that all drivers who are using a company or Trust to register as a sole trader and redo all past BAS and tax returns from the first Uber trip. In my case Jan 2016. So strange as my company has been paying the GST as required and as I said, the company actually owns the car. I am fighting with the ATO at present as are many others over this.

On and on your app idea. Yep there probably is a place for an AU app. I would suggest also making it for people intending to drive as to the ATO and insurance requirements and possibly each state govt requirements. If you are a driver and someone signs up using your driver code, which you could build into the app, $100 per signup, so extra potential revenue there.


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## RobMan68 (Oct 17, 2017)

If the account with Uber was in the company's name and used the company's ABN, it would be hard for the ATO to argue that the income belongs to anyone else but the company. Retrospectively changing the income derivation would seem irregular in my view since the company is a separate legal entity in the eyes of the law. Anyway I might look into that one next week.


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## Paul Collins (Dec 12, 2016)

RobMan68 said:


> If the account with Uber was in the company's name and used the company's ABN, it would be hard for the ATO to argue that the income belongs to anyone else but the company. Retrospectively changing the income derivation would seem irregular in my view since the company is a separate legal entity in the eyes of the law. Anyway I might look into that one next week.


That is the issue. The Uber contact is only with the individual, however they did accept my company abn, have been paying into my company bank account and issue receipts to riders with my company name and abn on it.
All insurance and car rego docs provided to Uber were also in my company name.

Did you see my notes on your app idea?
I have sold just over $500k in apps now, so I do have experience in it.

I have had several conversations with the ATO and now have a case manager on it and applied for a special ruling.


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## RobMan68 (Oct 17, 2017)

Oh that makes more sense then. The income must be declared on legal title. If your name is on the Uber account (instead of the company) then the income would be deemed yours. However the receipt is issued with the company name! Very strange. 

What complicate's if further is the vehicle in the company name. That's a messy one.


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## Paul Collins (Dec 12, 2016)

RobMan68 said:


> Oh that makes more sense then. The income must be declared on legal title. If your name is on the Uber account (instead of the company) then the income would be deemed yours. However the receipt is issued with the company name! Very strange.
> 
> What complicate's if further is the vehicle in the company name. That's a messy one.


Yep. As I said I can still rent the vehicle at market rates ( inc all expenses and petrol) from my company and move income anyway, so I do not see the point in the ATO position.

Uber even ask what is your Compny/Legal Name on the receipt settings.


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## RobMan68 (Oct 17, 2017)

Just read the sms post. Seems very generic to me.

No i didn't see the message about the app.


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## Paul Collins (Dec 12, 2016)

RobMan68 said:


> Just read the sms post. Seems very generic to me.
> 
> No i didn't see the message about the app.


It was generic but others have received a direct messge that the ato will backdate the date of the abn registration and it is also what they want to do to me in every conversation I have with them.

On and on your app idea. Yep there probably is a place for an AU app. I would suggest also making it for people intending to drive as to the ATO and insurance requirements and possibly each state govt requirements. If you are a driver and someone signs up using your driver code, which you could build into the app, $100 per signup, so extra potential revenue there.


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## UberDriverAU (Nov 4, 2015)

Paul Collins said:


> On and on your app idea. Yep there probably is a place for an AU app. I would suggest also making it for people intending to drive as to the ATO and insurance requirements and possibly each state govt requirements. If you are a driver and someone signs up using your driver code, which you could build into the app, $100 per signup, so extra potential revenue there.


Personally, I'd avoid "driver codes" when offering a professional service. They come across as cheap and tacky, and ultimately all drivers end up paying for it through higher Uber service fees.

Something else you would need to be careful with RobMan68, is the driver-Uber relationship is subject to the "Netflix Tax" amendments to the GST law. If drivers provide their ABN and GST details to Uber, then all of Uber's fees are GST-free, and if drivers don't provide these details then all of Uber's fees are inclusive of GST. So you would need to know whether such details had been supplied to correctly calculate the net amount of GST owing to the ATO each month or quarter.


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## Paul Collins (Dec 12, 2016)

UberDriverAU said:


> Personally, I'd avoid "driver codes" when offering a professional service. They come across as cheap and tacky, and ultimately all drivers end up paying for it through higher Uber service fees.
> 
> Something else you would need to be careful with RobMan68, is the driver-Uber relationship is subject to the "Netflix Tax" amendments to the GST law. If drivers provide their ABN and GST details to Uber, then all of Uber's fees are GST-free, and if drivers don't provide these details then all of Uber's fees are inclusive of GST. So you would need to know whether such details had been supplied to correctly calculate the net amount of GST owing to the ATO each month or quarter.


True. I was thinking if it was a free app then some revenue source is required and as people whould get useful information and function, they might be happy to know that the app creator, an Uber Driver, got $100.


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## Jack Malarkey (Jan 11, 2016)

I seem to recall that in the questions and answers that the Tax Office provided following the ride-sourcing webinar, they indicated that they did not consider ride-sourcing income to be 'personal services income' (PSI) as defined.

My difficulty is that these questions and answers are no longer available online. I wish I had saved a copy. Has anyone done this or at least have access to a copy so they can check whether or not my recollection is correct?

I also suspect that if the Tax Office had considered rideshare income to be personal services income, they would have said so in its tax advice: https://www.ato.gov.au/general/ride-sourcing-and-tax/. They have not done this.

This would have been relevant for a sole trader even if there is no company or trust involved for deductions such as payments to a spouse for cleaning the car.

I doubt that the Tax Office would require a factual and forensic analysis of each trip and its relative cost structure. Rather, it would resort to the overall factual circumstances and give weight to the fact that the driver is providing expensive equipment in the form of a car and smartphone.

Sometimes in this kind of matter, 'lore' in a practical sense can be as important as 'law'.

That said, I think it would be prudent for someone potentially affected to seek a private ruling. I am not affected myself as I operate as a sole trader and don't seek to claim deductions for expenses of the kind that would be denied by a conclusion that the rideshare income was personal services income.


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