Avoiding registering for GST for sole trader business whilst Uber driving?

[decryption]

I’m looking to make some money on the side with my electric car driving for Uber, but have run into a hurdle in that to do so, I need to register for GST. This wouldn’t be a problem for most sole traders, but I make about $50k/yr via an online business that involves recurring billing for small amounts to hundreds of customers of customers.

If I was to register for GST, I’d have to increase the price of my product to these customers by 10% (or take a 10% pay cut) and add a bit of extra administrative burden.

I thought I could register a 2nd ABN for Uber purposes only and collect GST only on funds via that ABN whilst still remaining under $75k/yr total income threshold, but that doesn’t seem to be possible.

Does anyone have a creative solution for this problem that wouldn’t require me to collect GST on my main income source?

[Paul – FS Concierge]

Time for an Accountant

You should be able to achieve your aim and have 2 x entities with separate ABN’s but again, see an Accountant.

Cheers

[bb1]

decryption, post: 268400, member: 24443 wrote:

and add a bit of extra administrative burden.

GST only takes about 20 minutes longer admin at the end of a quarter for a properly run and administered business, not really a burden.

[James Millar]

decryption, post: 268400, member: 24443 wrote:

I’m looking to make some money on the side with my electric car driving for Uber, but have run into a hurdle in that to do so, I need to register for GST. This wouldn’t be a problem for most sole traders, but I make about $50k/yr via an online business that involves recurring billing for small amounts to hundreds of customers of customers.

If I was to register for GST, I’d have to increase the price of my product to these customers by 10% (or take a 10% pay cut) and add a bit of extra administrative burden.

I thought I could register a 2nd ABN for Uber purposes only and collect GST only on funds via that ABN whilst still remaining under $75k/yr total income threshold, but that doesn’t seem to be possible.

Does anyone have a creative solution for this problem that wouldn’t require me to collect GST on my main income source?

If UBER allow drivers to operate under a different structure (partnership, trust or company) then you could explore that as separate entity and not register. A company or trust will add quite a bit in cost as compared to a sole trader but a partnership might in inexpensive if you have a spouse etc.

Helping build better businesses and better lives with expert financial and taxation advice. info@360partners.com.au www.360partners.com.au 03 9005 4900

[Jason Ramage]

Not sure being creative to avoid GST responsibilities is the best solution.. However, as James mentions, you can run under a seperate entity with its own ABN – however, that may increase your ‘burden’ for processing and additional fees, which it appears you are trying to avoid..

ps.. is uber really the answer? why not try and bolster your existing revenue stream and save your car

Jason Ramage | Lucas Arthur Pty Ltd | E: hello@lucasarthur.net.au   P: 61 3 8324 0344    M: 61 412 244 888

[bb1]

LucasArthur, post: 268407, member: 34537 wrote:

and additional fees,

It is interesting really isn’t it, on the current $50K the GST component would be a nominal $4.5K, but then he could claim the input credits on and goods and services purchased for the business which would reduce this figure further. Then subtract the cost of paying and accountant to setup or advise on the other entity, plus the cost of an accountant to administer the entity, and there may be a net benefit in just doing it all under the current entity, and pay the GST

[decryption]

Thanks for all the input

[Paul – FS Concierge]

JamesMillar, post: 268406, member: 5318 wrote:

If UBER allow drivers to operate under a different structure (partnership, trust or company) then you could explore that as separate entity and not register. A company or trust will add quite a bit in cost as compared to a sole trader but a partnership might in inexpensive if you have a spouse etc.
I think all Uber drivers have to register for GST regardless of income – to bring Uber in line (re: GST) with Taxi services.

[James Millar]

Paul – FS Concierge, post: 268418, member: 78928 wrote:

I think all Uber drivers have to register for GST regardless of income – to bring Uber in line (re: GST) with Taxi services.

Yes they do irrespective of turnover – but they may be allowed to operate within an alternative structure.

Helping build better businesses and better lives with expert financial and taxation advice. info@360partners.com.au www.360partners.com.au 03 9005 4900

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