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ATO cracks down on tax-dodging Uber drivers

Uber drivers will be soon scrutinised by the ATO for dodging tax on their earnings.

Thousands of Uber drivers have been caught out ­dodging tax on their ride-sharing earnings in a targeted crackdown by the Federal Government.

The Australian Taxation Office sent out 15,000 letters to ride-sharing drivers earlier this month after data matching bank payments made by the service and comparing that to drivers' tax returns.

The targeted data matching scheme, which began in October, was a warning for drivers that the penny-pinching government planned to chase every dollar earned through ride-sharing services – quoting the exact amount of personal income on each letter.

If drivers fail to properly lodge their quarterly business activity statement (BAS) by February they face "possible compliance action" in the new year.

"We prefer to take a prevention before correction approach," an ATO spokesman said in response to the letter distribution.

We need to step in to protect the honest drivers

"However if some drivers are not working with us and are engaged in unfair competition, we do need to step in to protect the honest drivers."

Anyone who received two payments since 2014 was analysed in the scheme with added scrutiny over those failing to meet GST obligations since it was introduced on August 1.

A group of Uber drivers in southeast Queensland wrote to the independent review into taxi and ride-sharing this month claiming they earn as little as $10 per hour – below minimum wage – after deducting GST, personal income tax, and car-related expenses on top of Uber's 20 per cent share.

With 4500 drivers now operating in southeast Queensland, directors of the review last week asked the group to prepare a detailed submission into the structure and behaviour of Uber, which they plan to discuss at a February meeting.

"We need a fare increase of 25 per cent to earn equivalent to an Australian minimum wage while running our cars," a Gold Coast Uber driver said.

"We are paying Uber's share of the GST on their 20 per cent commission. This is unfair and makes it unviable for us financially to drive our cars for Uber without a 25 per cent increase in fares."

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