Australians with a second job or a lucrative side-hustle be warned – the tax office has you in its sights.
ATO Targets Ride-Share Tax Debt
The Australian Taxation Office (ATO) has recently intensified its efforts to collect unpaid taxes from ride-share drivers in Australia, with $40 million owed by approximately 10,000 drivers. The ATO has implemented a data matching system to cross-reference financial information and ensure that correct tax payments have been made. It is worth noting that some drivers have multiple debts included in the $40 million.
Ride-share drivers are considered self-employed and are therefore responsible for various costs, including vehicle insurance, workers’ compensation, superannuation, and income tax. The ATO program for ride-share drivers dates back to 2015, but the recent focus on unpaid taxes has sparked debate around the responsibilities of both drivers and ride-share companies like Uber.
Some argue that these companies should be required to retain tax obligations on behalf of drivers and pay the money directly to the ATO.
Key Takeaways
- ATO is chasing $40 million from 10,000 taxi and ride-share drivers in Australia, using data matching to ensure correct tax payments.
- Ride-share drivers are considered self-employed and responsible for costs including vehicle insurance, workers compensation, superannuation, and income tax. Uber drivers are required to be registered for GST from the first dollar earned.
- A recent survey of about 1000 ride-share and delivery drivers found 45% earned less than the hourly minimum wage of $21.38. Transport Workers Union (TWU) argues companies like Uber should be required to retain tax obligations on behalf of drivers and pay the money to the ATO.
- ATO declined to comment on the amount of unpaid tax collected and says data is not used for automated action or activities. TWU accuses ATO of having ‘warped priorities’ and argues there is no point going after drivers who earn below the minimum wage.
Unpaid Taxes Collection
The Australian Taxation Office (ATO) is currently chasing unpaid taxes from taxi and ride-share drivers in Australia, with the total amount owed by 10,000 drivers reaching $40 million.
The collection process involves the use of data matching to collect and compare financial information for correct tax payments.
The ATO does not distinguish between taxi and ride-share plans, and the same driver with multiple debts is included in the $40 million.
Ride-share drivers are considered self-employed and responsible for costs including vehicle insurance, workers compensation, superannuation, and income tax.
Uber drivers are required to register for GST from the first dollar earned, with the GST calculated as 11th of each fare.
Despite the ATO’s efforts, it declined to comment on the amount of unpaid tax collected and stated that the data is not used for automated action or activities.
Ride-Share Driver Obligations
Ride-share drivers are responsible for various costs, including vehicle insurance, workers compensation, superannuation, and income tax. As self-employed individuals, they have to bear the financial burden of these expenses.
In order to operate as a ride-share driver, one must have a registered and insured vehicle, and pay for their own workers compensation and superannuation. Additionally, they are required to pay income tax on their earnings, and must register for GST if they earn over a certain threshold.
While ride-share drivers have the flexibility to work on their own terms, they also carry the financial risk of running their own business. They are not entitled to benefits such as sick leave, annual leave, or other employee entitlements.
Therefore, it is important for ride-share drivers to understand their obligations and budget accordingly to ensure they are meeting their tax and financial responsibilities.
Arguments and Opinions
Arguments and opinions surrounding the pursuit of unpaid taxes from ride-share drivers vary, with some advocating for companies to retain tax obligations on behalf of drivers and others arguing that drivers are responsible for their own taxes.
The Transport Workers’ Union (TWU) has argued that companies like Uber should be required to retain tax obligations and pay the money to the Australian Taxation Office (ATO) on behalf of their drivers. This would shift the responsibility of tax payments from the individual drivers to the ride-share companies themselves.
The TWU has also criticized the ATO’s pursuit of unpaid taxes from ride-share drivers, accusing the agency of having ‘warped priorities’ and targeting drivers who earn below the minimum wage.
Uber, on the other hand, has argued that driver-partners are self-employed and responsible for their own taxes, including income tax and GST. Uber’s stance places the burden of tax payments squarely on the individual drivers, who are required to register for GST from the first dollar earned and to calculate and pay GST on the 11th of each fare.
The ATO has maintained a program for ride-share drivers since 2015, but declined to comment on the amount of unpaid tax collected.
Despite the varying arguments and opinions, the issue of unpaid taxes from ride-share drivers remains a contentious one, with both drivers and ride-share companies facing potential consequences for non-compliance with tax obligations.
Conclusion
In conclusion, the ATO is actively targeting unpaid taxes from ride-share drivers in Australia, with $40 million owed by 10,000 drivers. The ATO is using data matching to ensure correct tax payments, with ride-share drivers considered self-employed and responsible for various costs.
However, there are differing opinions on the pursuit of unpaid taxes, with the Transport Workers Union arguing that companies like Uber should be required to retain tax obligations on behalf of drivers.
While the pursuit of unpaid taxes is necessary, it is crucial to ensure that ride-share drivers are not unfairly burdened with excessive costs. Companies like Uber should be held accountable for their role in the tax obligations of their drivers, as they are the ones setting the fares and taking a commission from each ride.
By requiring companies to retain tax obligations and pay the money to the ATO, ride-share drivers can be relieved of some of their financial responsibilities and ensure a fair distribution of tax obligations.
Overall, the ATO’s program for ride-share drivers highlights the importance of proper tax compliance in the sharing economy, and the need for fair and equitable distribution of financial responsibilities.
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