- November 7, 2016
- Posted by: Harpreet
- Category: Tax Tips
Calling all Uber drivers!
More and more people are choosing to be part-time Uber drivers. It’s a great way to make some extra cash and is as easy as using your own vehicle.
We have heard of Uber having a series of regulatory battles, mainly with municipal and provincial governments, over taxi regulations. One item that must be considered is the GST/HST implications of being an Uber driver.
Self-employed cab drivers are required by the CRA to register, collect and remit GST/HST from their fares to the government, regardless of whether they meet the $30,000 threshold.
We all know that Uber considers itself a technology company and not a cab company. Meaning it does not seem to have an opinion as to whether its drivers are required to register for GST/HST or not. This should be of great concern to the CRA, anyone driving for Uber, and those who care about tax compliance.
The CRA has not commented on whether Uber drivers fall into the “cab drivers” category, and hence, Uber drivers fall into the regular business category, meaning that they have to register for HST if sales are greater than $30,000 in any given period.
Another item to consider is that Uber does not allow an individual driver to charge GST/HST above the fare charged by Uber and an Uber driver cannot collect cash from a passenger to pay any GST/HST amounts owing. Therefore, Uberdrivers are actually being paid much less than they think if they are to remit a portion of their fare to the CRA for HST!
Also remember that the $30,000 revenue threshold applies to all business you may have – so if you are making $25,000 from another self-employment business and $5,000 from Uber driving, then you are required to register for GST/HST and charge GST/HST on both businesses (assuming both are providing taxable supplies).
Reminder that reporting your Uber income is important because technology has made it easier for the CRA to track your sales and how much money you have made – this is something very easy for the CRA to pick up. If you are unsure about your obligations, both GST/HST and income tax, contact our office today!