Sole Trader/Company and doing uber

Paul Collins

Well-Known Member
The ATO have 'advised' me that I need to be a sole trader to do uber and that I can not use my company.

There are issues with this as...
1. The company owns the car
2. Uber pay my company bank account not me as an individual.

Many über drivers will be and are in the same boat and I have lodged a request for a special ruling on this as it does not appear that any such condition is part of any tax ACT, rather, is is just what the ATO 'want'

"Already registered for GST for a different industry

If you have an existing GST registration as an individual, for example an IT contractor, use the same GST registration for your ride-sourcing activities.

However, if you have a GST-registered company, you need two separate GST registrations – one for you and one for the company. A company is a separate legal entity that must report GST separately."

from https://www.ato.gov.au/general/ride-sourcing-and-tax/abn-and-gst/
 

Paul Collins

Well-Known Member
I was told by Uber that I couldn't use my company as well.
mmmm... not sure Uber know what to advise actually. My Uber account is in my company name and they pay my company bank account. The issue is with the ato, not Uber.

I have correctly paid my gst and income tax from day on of my Uber driving and until I am shown a specific piece of legislation, I will continue on as is.
 
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UberDriverAU

Well-Known Member
The ATO have 'advised' me that I need to be a sole trader to do uber and that I can not use my company.
That's not surprising. The contract is between you and Uber, and they require you to do the work personally.
1. The company owns the car
How is that a problem?
2. Uber pay my company bank account not me as an individual.
That's not relevant. You earned the income personally, the account it gets paid into doesn't matter.
Many über drivers will be and are in the same boat and I have lodged a request for a special ruling on this as it does not appear that any such condition is part of any tax ACT, rather, is is just what the ATO 'want'
It's a matter of who has earned the income. Your company doesn't have a contract with Uber, you do as an individual:
Contract said:
This Services Agreement (“Agreement”) constitutes a legal agreement between you, an individual (“you”) and
Rasier Pacific V.O.F.,

I have correctly paid my gst and income tax from day on of my Uber driving and until I am shown a specific piece of legislation, I will continue on as is.
You mean your company has?

GPH, this will be relevant to your setup too I believe.
 

Paul Collins

Well-Known Member
That's not surprising. The contract is between you and Uber, and they require you to do the work personally.

How is that a problem?

That's not relevant. You earned the income personally, the account it gets paid into doesn't matter.

It's a matter of who has earned the income. Your company doesn't have a contract with Uber, you do as an individual:



You mean your company has?

GPH, this will be relevant to your setup too I believe.
Actually the tax invoices for riders that are generated by Uber have my company name and company abn on them.

On your other points, quite correct.

The actual issue is that the ato ‘ruling’ that Uber drivers must be sole traders is not in any current tax act.

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UberDriverAU

Well-Known Member
Actually the tax invoices for riders that are generated by Uber have my company name and company abn on them.
Uber simply uses the information that you provided to them. You could put in a company name and ABN that doesn't even belong to you and I doubt they'd care.
The actual issue is that the ato ‘ruling’ that Uber drivers must be sole traders is not in any current tax act.
It doesn't need to be. The question is which entity does the income belong to, and it can't possibly belong to your company because your company doesn't have a contract with Uber. Your contract with Uber also doesn't permit you to assign the contract to another entity.
On your other points, quite correct.
I suspect that the ATO is going to require you to put the GST payments and income on your personal books, and take it all off the company books. The amount of GST paid should still be correct, but you will likely pay a different amount of income tax due to differences in the company rate and personal rates. You could probably structure things so that you are leasing the car from your company to cover the expenses, etc.
 
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Paul Collins

Well-Known Member
Uber simply uses the information that you provided to them. You could put in a company name and ABN that doesn't even belong to you and I doubt they'd care.

It doesn't need to be. The question is which entity does the income belong to, and it can't possibly belong to your company because your company doesn't have a contract with Uber. Your contract with Uber also doesn't permit you to assign the contract to another entity.

I suspect that the ATO is going to require you to put the GST payments and income on your personal books, and take it all off the company books. The amount of GST paid should still be correct, but you will likely pay a different amount of income tax due to differences in the company rate and personal rates. You could probably structure things so that you are leasing the car from your company to cover the expenses, etc.
Perhaps, but a tax invoice to riders from my company (generated by Uber) is good enough for me to seek a private ruling on both legal and an accountant advice.
 

UberDriverAU

Well-Known Member
Perhaps, but a tax invoice to riders from my company (generated by Uber) is good enough for me to seek a private ruling on both legal and an accountant advice.
By all means seek a private ruling, but I suspect they'll refuse to allow this setup because of the contractual issues.
 

Paul Collins

Well-Known Member
By all means seek a private ruling, but I suspect they'll refuse to allow this setup because of the contractual issues.
Quite correct, but it will take until June 2018 for the ruling and the advice to me is that the ATO can not make it retrospective given the tax invoices. At the start of the next fin year I will more than likely change it all over but for now, I will not comply.
 

UberDriverAU

Well-Known Member
Quite correct, but it will take until June 2018 for the ruling and the advice to me is that the ATO can not make it retrospective given the tax invoices. At the start of the next fin year I will more than likely change it all over but for now, I will not comply.
That's a risky course of action in my view, especially as the ATO has told you it can only be done as a sole trader. Was the advice you received from a lawyer or accountant?
 

Paul Collins

Well-Known Member
That's a risky course of action in my view, especially as the ATO has told you it can only be done as a sole trader. Was the advice you received from a lawyer or accountant?
Both. Their advice is that there does not seem to be any specific legislation that requires it and given the correct GST and income tax has been paid to lodge a request for a private ruling.
Do you have any knowledge of any specific legislation?
 

UberDriverAU

Well-Known Member
Both. Their advice is that there does not seem to be any specific legislation that requires it and given the correct GST and income tax has been paid to lodge a request for a private ruling.
Do you have any knowledge of any specific legislation?
There isn't a piece of legislation that requires you to be a sole trader for Uber, it's simply a matter of Uber refusing to make contracts with companies. Because the contract is with you as an individual and you actually do the work personally, the ATO is correct in saying that in the circumstances you must be doing Uber as a sole trader and declaring this as income for your company is a mistake. You would need to produce a contract between your company and Uber before the ATO would change its tune.
 
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Paul Collins

Well-Known Member
There isn't a piece of legislation that requires you to be a sole trader for Uber, it's simply a matter of Uber refusing to make contracts with companies. Because the contract is with you as an individual and you actually do the work personally, the ATO is correct in saying that in the circumstances you must be doing Uber as a sole trader and declaring this as income for your company is a mistake. You would need to produce a contract between your company and Uber before the ATO would change its tune.
All correct, but here is the crux of the legal advice.
1. Uber have accepted all documents (rego, insurance etc in the company name)
2. über produce riders tax invoices in that company name
3. The über 'contract' is an unsigned agreement and in fact I have 'signed' on behalf on my company, which uber have accepted.
4. Uber asked for an ABN and accepted my company ABN without question or any diligence.
5. The über 'contract/agreement' while it may state is with an individual, in fact is not executed as such based on their acceptance of all the above.
 

UberDriverAU

Well-Known Member
1. Uber have accepted all documents (rego, insurance etc in the company name)
That's not relevant because you can drive any car. If the vehicle had to be in your name, then it wouldn't be possible to drive a leased vehicle owned by someone else. The income earned by the driver doesn't go on the books of the lessor.
2. über produce riders tax invoices in that company name
4. Uber asked for an ABN and accepted my company ABN without question or any diligence.
On the "Invoice Settings" page, Uber puts the onus on you to enter the correct details. If you don't, they accept no responsibility for the consequences. They are simply using the details you've given them rather than carefully vetting them to ensure they're correct.
3. The über 'contract' is an unsigned agreement and in fact I have 'signed' on behalf on my company, which uber have accepted.
5. The über 'contract/agreement' while it may state is with an individual, in fact is not executed as such based on their acceptance of all the above.
A contract doesn't have to be signed or in writing to be valid. For your company to be a party to the contract, Uber would need to intend to create legal relations with your company. Clearly from the wording in the contract, they do not intend to create such relations because the wording explicitly rules out companies. An "intention to create legal relations" is a necessary element for a valid contract to be formed. You can't just sneakily come along and say "well I'm going to press this button as a representative of my company" and therefore any income I earn driving for Uber belongs to my company.
 

Paul Collins

Well-Known Member
That's not relevant because you can drive any car. If the vehicle had to be in your name, then it wouldn't be possible to drive a leased vehicle owned by someone else. The income earned by the driver doesn't go on the books of the lessor.


On the "Invoice Settings" page, Uber puts the onus on you to enter the correct details. If you don't, they accept no responsibility for the consequences. They are simply using the details you've given them rather than carefully vetting them to ensure they're correct.


A contract doesn't have to be signed or in writing to be valid. For your company to be a party to the contract, Uber would need to intend to create legal relations with your company. Clearly from the wording in the contract, they do not intend to create such relations because the wording explicitly rules out companies. An "intention to create legal relations" is a necessary element for a valid contract to be formed. You can't just sneakily come along and say "well I'm going to press this button as a representative of my company" and therefore any income I earn driving for Uber belongs to my company.
Yep, all correct however I do not wish to amend all past BAS and tax returns and I am being told that a special ruling may allow me to ‘change over’ at x date.
 

Paul Collins

Well-Known Member
That's not relevant because you can drive any car. If the vehicle had to be in your name, then it wouldn't be possible to drive a leased vehicle owned by someone else. The income earned by the driver doesn't go on the books of the lessor.


On the "Invoice Settings" page, Uber puts the onus on you to enter the correct details. If you don't, they accept no responsibility for the consequences. They are simply using the details you've given them rather than carefully vetting them to ensure they're correct.


A contract doesn't have to be signed or in writing to be valid. For your company to be a party to the contract, Uber would need to intend to create legal relations with your company. Clearly from the wording in the contract, they do not intend to create such relations because the wording explicitly rules out companies. An "intention to create legal relations" is a necessary element for a valid contract to be formed. You can't just sneakily come along and say "well I'm going to press this button as a representative of my company" and therefore any income I earn driving for Uber belongs to my company.
I am not trying to be sneaky, just pointing out the points raised to me.
From my Facebook group there are many many drivers using a company or trust structure.
 

UberDriverAU

Well-Known Member
I am not trying to be sneaky, just pointing out the points raised to me.
From my Facebook group there are many many drivers using a company or trust structure.
Perhaps "sneakily" was the wrong word. A better way of putting it is that you can't change the contracting entity without the Uber's consent and knowledge:

Driver Contract said:
14.4 Assignment. You may not assign or transfer this Agreement or any of your rights or obligations
hereunder, in whole or in part, without the prior written consent of Rasier Pacific.

I do think yourself or others have legitimately believed that your Uber driving is being operated through a company. I think it would be extraordinary if the ATO didn't make you amend prior BASes and income tax returns.
 

Paul Collins

Well-Known Member
Perhaps "sneakily" was the wrong word. A better way of putting it is that you can't change the contracting entity without the Uber's consent and knowledge:



I do think yourself or others have legitimately believed that your Uber driving is being operated through a company. I think it would be extraordinary if the ATO didn't make you amend prior BASes and income tax returns.
Actually, I did feel that I could run it through my company, especially when uber was illegal in QLD. I still have real concerns and will be seeking the private ruling. It is very clear that uber allow the account to 'appear' as if it is with a company, and in fact by allowing the driver to enter in the company name, this implies that they endorse as such.
 
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