Uber Driver-Partners: Here's what Uber's changes mean for your taxes

Do you drive with Uber? Some changes are happening from 1 December that may affect your tax obligations. Here's how you can stay one step ahead.

If you're an Uber driver-partner, you'll have already heard that some changes are coming into effect at Uber from December that will have an impact on your tax obligations as a driver-partner.

In this blog post we'll be talking about the specifics on what's changing for driver-partners and how you can get ready to make the impact as hassle-free and easy to manage as possible. We'll even share some tips on where you can get some expert help.


What's changing?

On 1 December 2018, Uber is localising parts of its business following legislation introduced here in New Zealand. Put simply, driver-partners will begin contracting with a New Zealand company instead of an offshore company.

Due to this, GST will apply to the Uber service fee on all rides and will begin showing on driver-partner invoices from 1 December onwards.


How will you be affected?

All driver-partners will see this GST component of the Uber service fee on their invoices, whether you're registered for GST or not. The important thing to note here is how this new GST component will impact your individual tax obligations.

GST being applied to the Uber service fee means that some changes to the details included in driver-partners' income tax returns and also in GST returns for those who are registered for GST.

 

Exactly how you will be affected will depend on your individual circumstances:

If you ARE registered for GST

If you're GST registered, you'll be able to claim the GST component of the Uber service fees you're charged as an input credit on your GST returns when you file.

Your driver-partner invoices will include all of the information you'll need to make this claim at tax time.

If you are NOT registered for GST

If you're not GST registered, you'll be able to claim the full GST-inclusive Uber service fee as a business expense in your income tax return.

Your driver-partner invoices will include all of the information you'll need to make this claim at tax time.


What is GST?

Income tax and GST are two different taxes. Every Uber driver-partner must pay income tax, but not every driver-partner need to pay GST.

Goods and Services Tax (GST) is a tax of 15% that registered New Zealand businesses and self-employed people charge on top of the cost of the product or service they sell.

GST is collected on behalf of IRD, so registered businesses must calculate the amount of GST the owe IRD on their income less the amount of GST they've paid on their business expenses.

This calculation is in done in a GST return which tells the business and IRD how much GST the business owes to IRD or that IRD owes the business.

In New Zealand, we must register for GST with IRD when we expect to earn $60,000 or more from self-employment in a year - or if we already have.

It's critical to understand your GST obligations as soon as you become self-employed. You may be charged penalties or face further action from IRD if you don't register when you need to.


Need a hand with your tax and GST?

You're in the right place! Staying on top of your tax and GST obligations and returns gets pretty tricky pretty quickly. Luckily you can avoid the headache altogether just by joining WooHoo!

As an Uber driver-partner, you can use your Uber Momentum Partner Status to get exclusive offers on our tax packages.

When you join WooHoo, you'll be connected with your personal case manager. Your case manager will work with you to help you understand your tax obligations, as well as calculate how much income tax and GST you need to pay - and that includes claiming deductions and GST credits you can claim on your business expenses. Easy!

Join today and speak with our specialists before it's too late. Remember to have your IRD number, NZ driver licence, Uber Momentum Partner Status, and NZ bank account details handy when you apply.

 

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