When an employee uses a taxi service for travel to or from work or if the employee is sick, it is generally exempt from Fringe Benefits Tax (FBT) under the FBT taxi travel exemption. The question is, what about Uber and other ride sharing services, do they also qualify for the exemption? If Uber is considered to be a taxi for GST purposes, that is, all drivers need to be registered for GST and charge GST as they are considered to be a taxi service, does the FBT exemption extend to employees using Uber for travel?
The ATO has confirmed its view that travel in ride sharing services is not exempt from FBT under this specific exemption as they do not meet the definition of a taxi service under the FBT laws (even though they do under GST law). 
However, this does not mean that FBT will necessarily apply to travel undertaken by employees using a ride sharing service.
FBT taxi travel exemption
Taxi travel by an employee is an exempt fringe benefit if the travel is in a single trip that begins or ends at the employee’s place of work. In addition, if the taxi travel is a result of sickness or injury to an employee and some or all of the journey is directly between the employee’s place of work, their residence or any other place that is necessary or appropriate for the employee to go as a result of the sickness or injury, it would qualify as exempt.
Under FBT law, a taxi is “… a motor vehicle that is licensed to operate as a taxi.”
Ride sharing and FBT
While an Uber trip is ‘taxi travel’ for GST purposes, and therefore GST applies as there is a $0 GST threshold, the ATO’s view is that it would not generally meet the definition of a taxi for FBT purposes as ride sharing drivers re not generally “licensed” to operate as a taxi.
If an employee travels to or from work in an Uber that is not a licensed taxi and the cost is covered by their employer then the FBT taxi travel exemption does not apply and the trip would trigger an FBT liability for the employer unless:
- The “otherwise deductible rule” applies (ie, the employee would have been able to claim a deduction for the trip); or
- The minor benefits exemption applies (ie, the value of the benefit is less than $300 and is provided on an infrequent and irregular basis).
Weirdest tax deductions revealed
Would you claim the Lego you bought for your kids throughout the year as a tax deduction? One taxpayer did and it made the Australian Taxation Office’s 2018-19 list of most unusual claims.
The Lego was not the only claim for money spent on kids. Another taxpayer claimed their children’s sports equipment and sporting membership fees. Others claimed school uniforms, and before and after school care. And, others claimed, “the cost of raising twins,” the “cost of raising three children” and simply, “New born baby expensive.” Yes indeed, but the expenses, while often shocking to parents, are not deductible.
Cars were also a favourite. The ATO says that “many” taxpayers tried to claim the full purchase price of their new cars as a tax deduction. This included the taxpayer who claimed the cost of the new car he bought for his mother as a gift. Nice gesture but still not deductible.
Medical and dental expenses also featured heavily. The most striking was the couple that claimed the cost of their dental expenses, “believing a nice smile was essential to finding a job.” Medical and dental expenses in general are personal expenses and not deductible.
Also making the list was the couple who claimed the cost of their wedding reception as a tax deduction.
The unusual claims all came from the ‘Other’ deductions section of the tax return. In order to claim an ‘other’ deduction, the expenses must be directly related to earning income and you need to have a receipt or record of the expense. If your expense relates to your employment, it should be claimed at the work-related expenses section of the return.
The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.