A comprehensive tax compliance guide for food delivery drivers (including UberEats and Deliveroo)

Whether you’re in between jobs or needing to earn some extra cash in your spare time, working as a food delivery partner is an exciting venture in the world of sole trading. The flexibility of working for yourself means you’re truly in control of how much or how little you earn. As you enter the world of sole tradership (working for yourself),  there are a few important things you need to set up and maintain.  

The goal of this article is to walk you through the things you need to do in order to commence work as a food delivery partner. We’ll also touch on what your tax reporting obligations are as a sole trader, and introduce you to some techniques that can help make tax time super simple and stress-free. 

Do I need an ABN as a food delivery partner?

Yes! As a food delivery partner, you are operating as a sole trader and the food delivery companies are paying you to deliver food for them - as though you are a contractor. As a result of this arrangement, you need your own Australian Business Number (ABN) in order to sign up to work for these companies and begin operating.

NOTE: This does not apply to you if you are employed by a specific restaurant, and deliver food as part of your employment agreement with them.

Do I need to register for GST as a food delivery partner?

If you choose to begin as food delivery partner, you will not be required to register for GST purposes unless you are earning $75,000 from this activity annually. This $75,000 threshold does not include things like salary and wages, or any other income sources that are not earned under your sole trader ABN.

**A special exception to this**

Through servicing thousands of users with ABN and GST registrations, a common situation we see is someone who starts operating as a food delivery driver and then later starts rideshare driving as well (e.g. through Uber, Ola, Didi, etc.). Rideshare drivers are required to have their ABN registered for GST no matter how much income they anticipate earning. In this situation, you are required to collect GST on all your food delivery income as well as your rideshare driving income that is earned through your ABN. It's at this point when you will need to prepare quarterly Business Activity Statements (BAS), to report your business income and expenses to the ATO and determine your overall GST position every period. You can find out more about BAS reporting here

How can I get a free ABN through Airtax?

Airtax is proud to offer a free ABN application service for all sole traders. We have a super simple form that takes 5 minutes to complete, and once it is submitted you’ll have an ABN ready to use in normally 1-3 business days. Get started here.

• This section asks for your identity information. It is critical that this information you provide matches ATO records (can be found on an ATO-issued letter, or on myGov), as this is a common cause of processing delays. Without details that exactly match ATO records, we cannot proceed with your application.

• This section requires your home address. P.O boxes are not valid.

• Your responses to these questions will determine whether or not you will need to be registered for GST purposes. The “Main Business Activity” is the activity for which you require the ABN. If you are operating as a food delivery driver, you can enter “Delivery service - road” in this field.

• If you are yet to officially start operating as a food delivery driver, you can use that date you are completing the form as the start date - future start dates are not valid. If you have already started food delivery activities, simply choose the date at which you completed your first delivery.

• In order to apply for an ABN, the Australian Business Register requires you to nominate a bank account for any ATO issued refunds to be transferred to you. Airtax does not use this information for any other purpose, and your bank account will not be charged with any amounts.

Now what?

As a sole trader, it is important that you keep track of all of your business expenses throughout the financial year. For example, if you’re using a bike to complete deliveries, keep receipts relating to your bike purchase. If you’re using a car, keep receipts relating to your fuel, car insurance, and maintenance, to name a few - and also consider keeping a Logbook to track your car usage. These expenses can be claimed as deductions on your personal tax return at the end of the financial year and can reduce the amount of income tax you are liable to pay the ATO.

If you don’t keep receipts for your expenses, you may not be entitled to claim them as deductions on your tax return. You are required to keep records of your expenses for 5 years.

How can Airtax help me with my annual Tax Return?

Airtax offers a Tax Return lodgement service for $99. We have a simple, easy-to-use form which helps users take control of their income tax affairs for themselves. We have an assortment of useful tools, including ATO prefill, a live tax position calculator and a capital gains calculator to name a few.

A particularly important section for you as a food delivery driver is the “sole trader” section, which can be found on the Income page of the Airtax Tax Return.

When you add a sole trader business, you will be taken to another page which will ask you for some general questions about your business activity, as well as your businesses income and expense information. Based on the income and expenses you list in this section, a “net business position” will be calculated (business income minus business expenses), and this amount is added to your taxable income for the financial year.

IMPORTANT NOTE: Once you complete the sole trader section, do not list expenses relating to your food delivery operation on the Deductions page of your Tax Return. This would otherwise result in double-claiming your expenses.

If you feel like you need more detailed guidance as you complete your Income Tax Return, you can book a phone appointment to speak to a qualified PwC tax accountant through our Tax Assist service.

Feedback from our customers indicates that the Tax Assist service is a great way to ensure you have maximized your deductions, and provides you with peace of mind knowing you have lodged correctly. Some common questions we get through our Tax Assist service include:

1. Are my deductions reasonable?
2. How do I calculate my car expenses?
3. What is depreciation, and how can I claim it?
4. Am I exempt from Medicare?
5. Have I completed my return correctly?

In order to book an appointment, you will need to submit and pay for the Tax Return first. Once you have done this, you will receive an email link to schedule a time for the phone call to take place. We will not lodge your Tax Return until after the Tax Assist session has taken place, and any necessary adjustments have been made.

You can find out more about Tax Assist here

What you’ve learned:

• What an ABN is, and why it is necessary for you as a food delivery driver
• Why you don’t necessarily need to be registered for GST
• How to get your free ABN through Airtax
• What to keep track of during the year to make tax time simple
• How Airtax can help you with your Tax Return
• The benefits of Tax Assist, and how you can book an appointment to speak with a PwC Tax Accountant about your Tax Return