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Employers Using Uber Rather Than Taxis Face Tax Bill

ozziejoe

Active Member
Well I'm glad that's been cleared up :o-o: I don't understand FBT, but suspect this might cost us some corporate clients.
 

everythingsuber

Well-Known Member
  • Thread Starter Thread Starter
  • #4
Well I'm glad that's been cleared up :o-o: I don't understand FBT, but suspect this might cost us some corporate clients.
Don't think too many. Corporate accountants have known it was a likely outcome for a while.
Can't see too many caught out.

Don't have any sympathy for Uber at all here.
Uber still allow non abn compliant drivers on to their platform and I don't think they are at all keen on enforcing drivers to be compliant after 2 failed attempts to get drivers to comply.
 

Jack Malarkey

Well-Known Member
Well I'm glad that's been cleared up :o-o: I don't understand FBT, but suspect this might cost us some corporate clients.
That’s true.

FBT is a tax paid by employers equivalent to the top marginal tax rate on non-salary benefits provided to their employees. Exemptions apply for taxi travel in specific circumstances.

One of these is where an employer pays for an employee who is ill to go home by taxi. Another applies where employees are working back late at night.

The fact that employers face a large tax impost if they use rideshare but not if they use taxis for these kinds of employee travel can only result in employers reducing their use of rideshare.
 

phred

Well-Known Member
The key element is that the ATO (and Federal Court) recognize a taxi as being "licensed to provide rank and hail work ".
 

phred

Well-Known Member
You obviously don't get their corporate work.
Cut down the corporate work -> more ants chasing your work.
 

Craka

Well-Known Member
No.... What people are missing is the starting and ending destination determine if FBT will be applicable. Not a blanket all business trips.
 

Lex5162

Active Member
No.... What people are missing is the starting and ending destination determine if FBT will be applicable. Not a blanket all business trips.
as far as I know business trips are only related to business, all other trips like getting to work and going out - non related...
 

Jack Malarkey

Well-Known Member
It’s true that most employee taxi and rideshare trips paid for or reimbursed by the employer aren’t subject to fringe benefits tax in the first place. This is because what is known as the ‘otherwise deductible rule’ applies.

Under the ‘otherwise deductible rule’, the taxable value of a fringe benefit is reduced to the extent that the employee would have been entitled to an income tax deduction if they had incurred the expense themselves.

The otherwise deductible rule typically reduces the taxable value to nil where the travel arises in the course of employment.

It’s in those relatively rare cases where the trip is of a private nature that a fringe benefits tax liability can arise.

The fringe benefits tax law provides for exemptions in particular cases such as where the employee has worked overtime or has been injured or is ill. Under the Tax Office interpretation, these exemptions apply only if the trip is by licensed taxi and not by a rideshare or other for-hire vehicle.

It may well be true that all of this has a minimal impact in practice.

My concern is that the outcome is wrong in principle.

I’m also concerned that SOME employers won’t know the precise circumstances in which the fringe benefits tax liability may arise and MAY play it safe by using taxis in all cases for employee travel.

In many cases, decisions about travel are at a practical level made by junior staff such as executive assistants. This is especially the case with government agencies. (I may be wrong about the level of impact.)
 
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Jack Malarkey

Well-Known Member
I urge drivers to communicate with the federal Treasurer Josh Frydenberg to request urgent legislative amendments to extend the present fringe benefits tax exemptions for certain taxi trips to similar trips made by rideshare and other taxi-like vehicles.

Be sure to request a reply.

You can do so via https://treasury.gov.au/the-department/contact-us/ministerial-correspondence.

Alternatively, you may wish to make representations to Prime Minister Scott Morrison (ScoMo) via https://www.pm.gov.au/contact-your-pm.

Here’s the text of my own representations to Treasurer Frydenberg:

Your correspondence

Minister you wish to contact
Treasurer - The Hon Josh Frydenberg MP

Your message to the Minister

FRINGE BENEFITS TAX AND RIDESHARE DRIVERS

The Australian Taxation Office recently confirmed its interpretation that the fringe benefits tax exemptions for specific cases of employee taxi travel do not extend to similar trips in rideshare vehicles (such as Uber) or other vehicles for hire.

If the Tax Office cannot see its way clear to changing this view, it is important that the Government as a matter of urgency sponsor legislative amendments to ensure that trips in rideshare vehicles and other for hire vehicles give rise to the same fringe benefits tax exemptions in all cases as apply to taxi trips.

There can be no policy basis for the present discriminatory treatment given that rideshare is now legal and regulated in all states and territories.

Would you please reply.
 

Decoda

New Member
There can be no policy basis for the present discriminatory treatment
agree, strange policy.....

...... I guess taxis in SA would say that about CTP, age limits and approved vehicles types.

regulators and Govt have no idea in making the 2 products level!
 

Lex5162

Active Member
agree, strange policy.....

...... I guess taxis in SA would say that about CTP, age limits and approved vehicles types.

regulators and Govt have no idea in making the 2 products level!
they do have an idea...
looking at you like you are looking at your pax
 

mcsenna

New Member
I urge drivers to communicate with the federal Treasurer Josh Frydenberg to request urgent legislative amendments to extend the present fringe benefits tax exemptions for certain taxi trips to similar trips made by rideshare and other taxi-like vehicles.

Be sure to request a reply.

You can do so via https://treasury.gov.au/the-department/contact-us/ministerial-correspondence.

Alternatively, you may wish to make representations to Prime Minister Scott Morrison (ScoMo) via https://www.pm.gov.au/contact-your-pm.

Here’s the text of my own representations to Treasurer Frydenberg:

Your correspondence

Minister you wish to contact
Treasurer - The Hon Josh Frydenberg MP

Your message to the Minister

FRINGE BENEFITS TAX AND RIDESHARE DRIVERS

The Australian Taxation Office recently confirmed its interpretation that the fringe benefits tax exemptions for specific cases of employee taxi travel do not extend to similar trips in rideshare vehicles (such as Uber) or other vehicles for hire.

If the Tax Office cannot see its way clear to changing this view, it is important that the Government as a matter of urgency sponsor legislative amendments to ensure that trips in rideshare vehicles and other for hire vehicles give rise to the same fringe benefits tax exemptions in all cases as apply to taxi trips.

There can be no policy basis for the present discriminatory treatment given that rideshare is now legal and regulated in all states and territories.

Would you please reply.
Good thinking, done.
 

Jack Malarkey

Well-Known Member
SBS News Australia

www.sbs.com.au

Australia's struggling migrant taxi drivers have been given a lifeline
Taxi drivers fighting to survive the rise of ridesharing have welcomed an Australian Tax Office announcement expected to lift their income.
www.sbs.com.au
www.sbs.com.au

Extracts:

Taxi drivers fighting to survive the rise of ridesharing have welcomed an Australian Tax Office announcement expected to lift their income.

BY SANDRA FULLOON

...

Tax relief

The Australian Tax Office (ATO) has confirmed that this financial year Australian businesses won’t have to pay Fringe Benefits Tax (FBT) - a charge on perks for employees - for work-related travel using licensed taxis.

The ATO says the exemption doesn’t cover ridesharing, which means businesses are more likely to book a licensed taxi to send staff to a meeting or conference.

It’s a small but positive step and we support it,” said Bankstown chartered accountant Hamid Saroha.

His business represents more than 1,000 Sydney taxi drivers, and more than 80 per cent of those are migrants.

“It will have an impact on drivers' income, and something is better than nothing,” Mr Saroha said.

...

Uber did not respond to a request for comment from Small Business Secrets.

Earlier this month, a spokeswoman for Uber told the ABC the company was disappointed Uber and other ride-sourcing cars would not be classed as taxis for the purposes of FBT exemptions.

"While it is disappointing that the ATO has decided not to proceed with a practical guidance note in this case, we are working closely with the ATO to address this inconsistency," she said.

"Delivering this would ease the burden for Australian taxpayers and level the playing field between a taxi and all rideshare."

[end of extracts]

This story was on the 6.30 pm SBS Television World News broadcast on Saturday 27 July 2019 at about 7.00 pm.

You can watch the video of the news item by using the link at the top of this thread.

The story tends to confirm the concern that the circumstances in which fringe benefits tax is payable in the absence of the specific exemptions will be overstated, thereby confusing some employers or their staff into thinking that they had better use taxis rather than rideshare in all cases.

The article quoted above includes the reassuring news that Uber is liaising with the Tax Office about the inconsistency.
Post automatically merged:

I wrote the letter below published in the ‘Financial Review’ of 15 July 2019:

30FECE90-537C-4FDE-9CA9-CBD1D29F3649.jpeg
 

RoboRider

Well-Known Member
Concerning that the media have already got it wrong and are starting to imply the FBT exemption issue affects trips to meetings or conferences. It only applies where the trip is from work to the employees home because that is not seen as strictly business related travel
 

Jack Malarkey

Well-Known Member
Concerning that the media have already got it wrong and are starting to imply the FBT exemption issue affects trips to meetings or conferences. It only applies where the trip is from work to the employees home because that is not seen as strictly business related travel
That’s the nub of it.
 
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