Home Forums Money matters This is why your tax questions have no simple answers…..

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  • #999768
    JamesMillar
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    • Total posts: 1,685

    Many flying solo members would recall back in 2017 that the ATO appealed to the Federal Court in a dispute against UBER regarding the application of GST to their services. In short the ATO fought tooth and nail to have UBER services caught within the definition of “Taxi Travel” as defined in the GST Act – the result being the ATO could tax all ride sharing services and drivers would not have access to the $75k GST threshold exemption. So with very limited exceptions, if you drive for UBER you basically must register for GST and remit to the ATO. The ATO was successful on appeal and UBER services were considered to be “Taxi Travel”. Fair enough so far.

    The problem….

    There are various other sections of tax law that refer to Taxi services and many have big implications for those taxes. One of the big ones being the FBT Act and the FBT exemption on certain taxi travel provided by employers for their employees. Its a big important free kick and has been around for a while. The problem is that the FBT Act defines Taxi as a “motor vehicle that is licensed to operate as a taxi”.

    The ATO were aware of this potential inconsistency when they won the UBER case in 2017 and acknowledged they would prefer to interpret the FBT law consistently in line with the UBER decision for GST.

    Fast forward to 2019 and the ATO have recently come out and confirmed that indeed FBT travel for UBER rides is not a taxi service for the purpose of the FBT law and will not be exempt.

    In other words they are prepared to dispute the meaning of the word taxi and taxi service and take two completely different positions to their favour. In one case they call it a taxi and in another they do not.

    Make no mistake – there are currently no concessions on this and the ATO have made that clear.

    This is your tax system at work. This is why when you ask your accountant….”hey can I claim this because logic says yes”….we often reply with…”it depends and we need to review and try and find a way around the issue”.

    Clear as mud. Thanks ATO. .

    #1221311
    Lucy Kippist
    Member
    • Total posts: 230

    Hi [USER=37567]@James[/USER], great argument here. I’d love to push this to the homepage, please?

    #1221312
    JamesMillar
    Participant
    • Total posts: 1,685
    Lucy Kippist, post: 267271, member: 98720 wrote:
    Hi [USER=37567]@James[/USER], great argument here. I’d love to push this to the homepage, please?

    Sure just made a few edits for generic use. Go for it

    #1221313
    Lucy Kippist
    Member
    • Total posts: 230
    JamesMillar, post: 267272, member: 5318 wrote:
    Sure just made a few edits for generic use. Go for it
    Thank you!
    #1221314
    bb1
    Participant
    • Total posts: 4,485

    And thats the exact reason people should stop asking for tax advise on forum’s, and the worst part is that people with no accounting experience answer, because they think they know the answer.

    #1221315
    Johny
    Member
    • Total posts: 840

    I guess someone usually wins, the more complex things are.

    #1221316
    JamesMillar
    Participant
    • Total posts: 1,685
    Johny, post: 267277, member: 34822 wrote:
    I guess someone usually wins, the more complex things are.

    I think the problem in this case is that the ATO have taken a completely contradictory approach (probably the most blatant I have seen in 25 years of tax advisory). There is a reasonable expectation of equitable treatment (which they acknowledged in writing two years ago) but they appear to have changed their tune to produce self serving outcomes.

    Maybe the ATO should revisit their Taxpayers’ Charter. Pretty much at the top of the list is ……”Treating you Fairly and Reasonably”…”…

    “Acting consistently
    When we interpret and apply the law, we have one view of how it applies and apply that view consistently.We use our judgment to achieve a sensible, consistent and equitable outcome within the law.”


    Not so sure they have all read and understood

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