Are the ATO just being bullies?

UBER_TOP_PARTNER

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Are the ATO just bullying in requiring Uber drivers to pay GST? They the ATO continually state the driver charges the rider from point A to B. Which is completely untrue! Uber provide the service...set the price, charge the price, collect the price and pay the driver a weekly wage. As a former courier...Uber operates exactly as a courier company, not a taxi company!

Furthermore, if Uber works for the drivers. How is it Uber have all the riders details, such as surname, address, phone number and credit card details. Yet the drivers are not privy to any of that information. The ATO are just bullying!

* if the ATO win out, then Uber should Lobby very vigourously for Uber drivers to use taxi ranks, bus lanes etc remember if it "smells like, quacks like..." see how the taxi industry like that!
 

g00r

Well-Known Member
As a former courier...Uber operates exactly as a courier company, not a taxi company!
Did you work as an employee, owner/driver or a franchisee?
Uber operates exactly like taxis have done for the past 17 years and 21 days that the GST act has been in effect.
The driver invoices the passenger.
The owner receives an invoice for network access services.

As for the argument that you don't receive the cash, Uber does.. Well the taxi driver doesn't receive the cash from ETFPOS either.

* if the ATO win out, then Uber should Lobby very vigourously for Uber drivers to use taxi ranks, bus lanes etc remember if it "smells like, quacks like..." see how the taxi industry like that!
You're confusing federal laws (A New Tax System (Goods and Services Tax) Act 1999) and state based road regulations.

Remember that the ATO handed down their ruling on ride share services (found here) long before the states worked out what to do about this new industry. The ATO expressed no opinion on the legality of operating a ride-share service with respect to state based regulations, they were only concerned with taxation matters.


Which is completely untrue!
Sorry, but it is not.
 

UBER_TOP_PARTNER

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I worked as an sub-contractor owner/driver. Uber are identical to courier companies in the way they operate with drivers or as they brand them partners!

I didn't say receive cash or eftpos or any other form of payment...the uber driver at no point in time transacts with the rider. They notify uber of the trip ending nothing more! Just as a courier does! Taxi drivers take payment!!
 
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Jack Malarkey

Well-Known Member
I don't believe the Tax Office are being bullies.

The way I see it is that they are fair dinkum and are seeking to apply the law enacted by Parliament to the facts as they understand them.

They have concluded that, on the facts, the better view is that Uber drivers are independent contractors even though they don't rule out a court reaching a different view.

This view that drivers are contractors makes life challenging for the Tax Office in a practical sense as they need to deal with large numbers for relatively small amounts of revenue and have to deal with many who don't understand their obligations and quite a few determined to be martyrs in relation to all or some of the GST payable.
 
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UBER_TOP_PARTNER

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The ATO are bullying because they know full well that they get a lot more $ from GST than they ever will from Uber income tax!

It's about being fair dinkum not martyrdom! I only do Uber for the freedom and flexibility to facilitate my new startup business!!
 
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Jack Malarkey

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The ATO are bullying because they no full well that they get a lot more $ from GST than they ever will from Uber income tax!

It's about being fair dinkum not martyrdom! I only do Uber for the freedom and flexibility to facilitate my new startup business!!
UBER_TOP_PARTNER, I wasn't seeking to suggest that you're trying to be a martyr but there are drivers who are.

The amounts of GST revenue from the Tax Office's perspective are relatively small but they do need to apply the law as they understand it. They also can't give a competitive advantage to rideshare compared with taxis.

It would be much easier for them to collect the GST from Uber but the current law as they see it doesn't permit that.

All the best for your start-up business. :smiles:
 
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BabyBoomer

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The tax office is complicit in that they condone Uber stealing the 25% of GST from drivers that should be paid to drivers who then pay it to the Tax Office (partners ...yeah right :cool:smiles:.

Bullies is a reasonable description ...but its more accurate that they are condoning the real bullies.

GST should be paid by the customer and eventually get to the tax office WITHOUT Uber unilaterally stealing 25% like some feudal overlord.

Hey ...UTP also doing the same as you re: startup ...but have arrived at the conclusion that Uber will not provide sufficient income to enable flexibility or freedom.

All the best mate.

BB
 

fields

Well-Known Member
I don't believe the Tax Office are being bullies.

The way I see it is that they are fair dinkum and are seeking to apply the law enacted by Parliament to the facts as they understand them.

They have concluded that, on the facts, the better view is that Uber drivers are independent contractors even though they don't rule out a court reaching a different view.

.
They most definitely are bullies. Not to everyone though, while chasing every cent they can get out of Uber drivers, they have just given wealthy celebrities a tax break not available to anyone else.
 

Jack Malarkey

Well-Known Member
The tax office is complicit in that they condone Uber stealing the 25% of GST from drivers that should be paid to drivers who then pay it to the Tax Office (partners ...yeah right :cool:smiles:.

Bullies is a reasonable description ...but its more accurate that they are condoning the real bullies.

GST should be paid by the customer and eventually get to the tax office WITHOUT Uber unilaterally stealing 25% like some feudal overlord.

Hey ...UTP also doing the same as you re: startup ...but have arrived at the conclusion that Uber will not provide sufficient income to enable flexibility or freedom.

All the best mate.

BB
It's inappropriate for Uber to charge its service fee on the GST component of the fare. The Tax Office doesn't have the legal authority to change the contractual terms between Uber and its drivers.

They most definitely are bullies. Not to everyone though, while chasing every cent they can get out of Uber drivers, they have just given wealthy celebrities a tax break not available to anyone else.
I haven't heard about this new tax break for wealthy celebrities.
 

BabyBoomer

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It's inappropriate for Uber to charge its service fee on the GST component of the fare. The Tax Office doesn't have the legal authority to change the contractual terms between Uber and its drivers.


I haven't heard about this new tax break for wealthy celebrities.
No offence Jack, but I don't think you have got that analysis quite correct: GST is collected to be paid to the Tax office. Assuming Uber is taking a 25% service fee (as they advertise) then, they are clearly also taking an additional 25% of the GST amount (which surely must be against GST regulations).

The ATO clearly should be aware of this as a result of the extensive legal action between them (if they are not aware then they are inept). This means that the ATO is happy to insist that they get their GST while at the same time happy to throw the drivers (who are literally in poverty) to the wolves. This should have been part of the agreement or understanding as part of the court outcome and for the ATO to ignore this is gutless.

It might take a while, but I intend to get legal advice on the matter.


Cheers,

BB
 

UBER_TOP_PARTNER

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The ATO sent me their rhetoric on you are charging people from point A to B and as such are a taxi service. But, with a disclaimer at the end saying it is only the ATO's interpretation of the current tax laws.

The ATO are bullies! Which ever way they want to say it...they are incorrect. At no point in time does an Uber driver charge or transact with the rider. Just as a courier does, an Uber driver merely notifies the company (Uber) of pick up and delivery.

I also intend to get legal advice!
 

Jack Malarkey

Well-Known Member
No offence Jack, but I don't think you have got that analysis quite correct: GST is collected to be paid to the Tax office. Assuming Uber is taking a 25% service fee (as they advertise) then, they are clearly also taking an additional 25% of the GST amount (which surely must be against GST regulations).

The ATO clearly should be aware of this as a result of the extensive legal action between them (if they are not aware then they are inept). This means that the ATO is happy to insist that they get their GST while at the same time happy to throw the drivers (who are literally in poverty) to the wolves. This should have been part of the agreement or understanding as part of the court outcome and for the ATO to ignore this is gutless.

It might take a while, but I intend to get legal advice on the matter.


Cheers,

BB
Thanks, BabyBoomer. You correctly describe the position but I can identify nothing in the GST or other taxation law that would authorise the Tax Office to require Uber to stop charging its service fee on the GST component of the fare irrespective of how unfortunate that practice is.

The Australian Small Business and Family Enterprise Ombudsman might be persuaded to take an interest in this matter on the grounds that the relevant contractual terms are oppressive to small businesses. (See http://www.asbfeo.gov.au/.)

I think it's sensible for you and UBER_TOP_PARTNER to seek legal advice as planned.

I know that another and related matter that causes angst to many drivers is that GST is payable on the gross fare and not the net fare after application of the service fee.

Yet the GST law clearly requires this interpretation and it's not something that the Tax Office comes up with out of spite towards rideshare drivers. It's also consistent with GST being a tax on turnover without regard to expenses incurred other than by allowing a credit for any GST payable on those expenses.

The fact that those providing taxi services (including rideshare, as confirmed by the Federal Court) don't have access to the generally applicable $75,000 threshold is not something that the Tax Office came up with to bully Uber drivers but is an application of what the Australian Parliament unequivocally enacted.

Those who believe that the Tax Office is on some kind of malevolent and bullying frolic or conspiracy against Uber drivers have the avenue open to them of a complaint to the Inspector-General of Taxation. This is something I believe they should pursue to clear the air. (See http://igt.gov.au/.)
 
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BabyBoomer

Well-Known Member
Cheers Jack,


The only salient question re this GST fiasco AFAICT is the legality of Uber collecting GST and not passing this GST on so that it may be paid to the Commissioner of Taxation. I cannot understand how GST regulations allow an entity to unilateraly confiscate part of this tax.

Surely the regulation states that GST is to be charged to the retail customer and must be paid to the ATO. Surely it doesn't say collect the GST and only pass on 75% of it. Thus any agreement with a third party that contradicts this basic tenent of GST should be invalid.

Other questions such as the $75,000 or gross fare vs net fare are not relevant and are really obfuscation (or red herrings) IMHO (no offence).

It's not a question of the ATO being malevolent, but rather them not being concerned if an entity ignores TAX regulations ...as long as the ATO is not financially disadvantaged.

Cheers,

BB
 
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UberDriverAU

Well-Known Member
Cheers Jack,


The only salient question re this GST fiasco AFAICT is the legality of Uber collecting GST and not passing this GST on so that it may be paid to the Commissioner of Taxation. I cannot understand how GST regulations allow an entity to unilateraly confiscate part of this tax.

Surely the regulation states that GST is to be charged to the retail customer and must be paid to the ATO. Surely it doesn't say collect the GST and only pass on 75% of it. Thus any agreement with a third party that contradicts this basic tenent of GST should be invalid.

Other questions such as the $75,000 or gross fare vs net fare are not relevant and are really obfuscation (or red herrings) IMHO (no offence).

It's not a question of the ATO being malevolent, but rather them not being concerned if an entity ignores TAX regulations ...as long as the ATO is not financially disadvantaged.
If you have a read of the GST laws (act here, regs here) you'll see that there is nothing that covers how a commission is to be calculated. As Jack correctly points out, it's a contractual matter between the parties to a contract. There may well be some other law or legal principle that makes what Uber is doing illegal, but I don't believe you will find any solace in the GST laws.

The way our GST system is structured, it is suppliers (and only suppliers) that pay tax debits on outputs (ie. "taxable supplies"in GST terms) and claim tax credits on inputs (ie. "creditable acquisitions" in GST terms). That is how a Value Added Tax (VAT ) style system is designed to operate. Consumers are never liable to pay such a tax and the way our GST laws operate suppliers are not legally holding money on behalf of consumers, they are directly liable whenever a taxable supply is made. One and only one entity will be 100% liable for any taxable supply that has been made. When you have an appreciation for how the GST system operates, you come to understand that it's not possible for Uber to be taking 20-25% of "the GST".

Rightly or wrongly, the ATO has decided that drivers are the "supplier" for GST purposes. That means that drivers are liable for 100% of the GST payable on the amount paid by riders. There is no basis in law to say that a supplier can be liable for anything other than 100% of the GST payable. The only thing you could argue is that you are not the "supplier", and you could only argue that if you are an agent or employee of Uber. If you are an agent or employee of Uber, then you are acting on their behalf and they are the "supplier" and subsequently become liable for 100% of the GST payable on the amount paid by riders. There is no scope to argue that we are liable for some portion of the GST payable, and Uber is liable for the rest. The GST law does not allow for such an interpretation.

I haven't heard about this new tax break for wealthy celebrities.
It's probably a reference to the abolition of the Temporary Budget Repair Levy.
 

fields

Well-Known Member
It's probably a reference to the abolition of the Temporary Budget Repair Levy.
No it isn't.

http://www.heraldsun.com.au/sport/a...s/news-story/9f4cfa7a73b5d8904ea61f09485916f4

AFL players and other sports stars have won lucrative tax breaks for their “fame”, which will be worth tens of thousands of dollars a year to the biggest names.

Every professional sportsperson will be eligible to cash in on the image rights perk, delivered by the Australian Taxation Office.

Sports stars — including the highest-paid AFL players such as Lance Franklin and Nathan Fyfe, who earn about $1 million a year — will be allowed to direct 10 per cent of their playing income to a private trust or company, where it will attract a tax rate of just 27.5 per cent
.
 

Jack Malarkey

Well-Known Member
No it isn't.

http://www.heraldsun.com.au/sport/a...s/news-story/9f4cfa7a73b5d8904ea61f09485916f4

AFL players and other sports stars have won lucrative tax breaks for their “fame”, which will be worth tens of thousands of dollars a year to the biggest names.

Every professional sportsperson will be eligible to cash in on the image rights perk, delivered by the Australian Taxation Office.

Sports stars — including the highest-paid AFL players such as Lance Franklin and Nathan Fyfe, who earn about $1 million a year — will be allowed to direct 10 per cent of their playing income to a private trust or company, where it will attract a tax rate of just 27.5 per cent
.
Thanks, fields. This is based on a draft Tax Office ruling that may not be finalised in this form.

This isn't a case of the Tax Office giving a tax break but the Tax Office issuing a draft ruling on what it thinks Parliament enacted.

In any event, Revenue Minister Kelly O'Dwyer has indicated that the Government is likely to seek amendments of the law if the Tax Office were to finalise the ruling in a way consistent with the draft.

See https://www.google.com.au/amp/s/amp...tax-cut-and-passive-investors-20170704-gx449s.
 

UBER_TOP_PARTNER

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And that is where the ATO are bullying. Their interpretation of the Uber driver is flawed and needs challenging!

An Uber driver at no point in time transacts with the rider. Just as a courier does they merely notify the company (Uber) of pickup and delivery.

What person or business allows a third party (Supposedly Uber) to have names, account details etc of clients and they the primary business are not privy to that information?
 

Jack Malarkey

Well-Known Member
And that is where the ATO are bullying. Their interpretation of the Uber driver is flawed and needs challenging!

An Uber driver at no point in time transacts with the rider. Just as a courier does they merely notify the company (Uber) of pickup and delivery.

What person or business allows a third party (Supposedly Uber) to have names, account details etc of clients and they the primary business are not privy to that information?
Just because the Tax Office has reached a conclusion that differs from yours is not tantamount to bullying but a difference in interpretation grounded in good faith.

There are other factors that support the independent contractor conclusion. These include the express terms of the contract entered into (relevant even though not determinative); the fact that drivers are free to work for competitors; the fact that drivers are completely free to set their own hours; the fact that drivers can negotiate a lower fare with the rider; the fact that the driver is largely free not to accept ride requests; the fact that the driver can do whatever they like while the app is on and they are waiting for ride requests; and the fact that the driver provides all relevant major tools of trade (car and smartphone).

It is indeed feasible that a court would support your conclusion. The Tax Office itself recognises this. Until an Australian court gives a definitive judgment on this specific issue, we can't be sure.

The Tax Office has reached a conclusion reasonably open to it based on its understanding of the current law even though that differs from yours. That is hardly bullying: it's a difference of opinion.

If you are convinced the Tax Office is being a bully, you should take the matter up with the independent Inspector-General of Taxation: http://igt.gov.au/.
 
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