Filing your income tax as a self-employed person can be very different from filing your income tax as a full-time employee, especially if you were working for a company on the Auto-Inclusion Scheme for Employment Income.
For the many drivers who have joined private hire car operators such as Grab, Gojek, Ryde and Tada to supplement or replace their income, this may be the first time you will need to file your income tax as a self-employed person.
According to IRAS, Private Hire Car (PHC) and taxi drivers are considered self-employed persons. This means that unless you are hired directly by ComfortDelgro as a taxi driver or Grab as a fleet driver, you need to file your income tax as a self-employed person based on the revenue you derive from driving your car and taxi.
File Your Income Tax Under Form B
For private hire car and taxi drivers, you will need to file your income tax under Form B.
File Your Income Using Pre-filling of Income for Self-Employed Persons (SEPs)
Since 2018, Private Hire Car (PHC) and taxi drivers are eligible for pre-filling of income for self-employed persons, if their operators took part in the pre-filling of income for self-employed persons scheme.
Under this scheme, your gross income is filled in on your behalf by intermediaries such as the operators (e.g. Grab and Gojek. Note that ComfortDelgro did not join the scheme, so drivers with them are ineligible.
Pre-filling of income also excludes drivers engaged as employees and drivers who provide solely social carpool services (e.g. GrabHitch).
If you are eligible, your operator (e.g. Grab, Gojek) would have sent you an email to your registered email address to opt-in to the pre-filling scheme. Currently, this invitation is sent by participating operators on a yearly basis (before filing season), so you will need to opt-in every year.
If you are driving with multiple platform operators and did not opt-in to all of them, you will need to manually input your earnings from those you did not opt-in for.
The pre-filled information should show up under Income, Deductions and Reliefs Statement (IDRS) in your Form B.
Sample Of Pre-filled Income. Source: IRAS.
If you were ineligible for pre-filling or forgot to opt-in, you can refer to the annual statement that each platform operator sends.
For Grab, you can check your email for this annual statement which is sent to your registered email address. Alternatively, you can download the statement within the Grab Driver app, under History > Weekly > Partner Statement > Complete Partner Statement.
You can also request for paper copy of the annual statement from the platform operators, but some of them will charge a fee for this request.
You Can Automatically Claim 60% Deemed Expenses
To make tax filing simpler, the prescribed deemed expense ratio for all self-employed private-hire car (PHC) and taxi drivers is set at 60% of the gross driving income.
According to IRAS, this amount is deemed to be the sum of all deductible business expenses incurred (including car rental, repairs, maintenance, fuel, parking fees, service fees paid to booking service operators) in earning your driving income. The 60% prescribed deemed expense is applicable to all PHC or taxi drivers regardless of whether they drive on a full-time, part-time or casual basis.
This means that when you file your income tax, you can automatically claim 60% as expenses instead of claiming actual expense amounts. For those who choose to claim 60% deemed expenses, you will no longer need to keep receipts and invoices, although you should continue to keep simple records (e.g. the list of your expenses) as a good business practice.
If your actual expenses exceed 60%, you can also choose to claim the actual business expense amount. Expenses that you can claim for deduction should be incurred solely for producing your driving income. These may include:
- Service fees paid to booking service operators.
- Licence renewal fees, including renewal of Private-Hire Car Driver’s Vocational Licence (PDVL) and Taxi Driver’s Vocational Licence (TDVL).
- Mobile phone data plan/bills used in the course of providing the services.
- Vehicle rental fee, fuel, road tax, car insurance, car wash charges, parking charges, interest expenses incurred on car loan, car repairs and maintenance expenses.
However, you cannot claim non-deductible expenses, such as:
- Capital expenses such as business start-up expenses, PDVL / TDVL and training courses for the purpose of obtaining the first PDVL / TDVL, purchase cost (including COE) of the private cars.
- Personal Insurance costs and expenses for medical check-ups, parking fines.
As you are likely to use your car for personal use as well as for private hire use, you can only claim the portion of expense that is incurred in earning your driving income and apportion the expenses accordingly. For the apportionment, IRAS recommends that you consider using measures such as mileage tracked as a basis of apportionment.
If you are claiming actual expenses, you will need to keep proper daily records and retain all supporting documents, e.g. receipts, statements issued by the platform operators for 5 years from the YA to which the claim relate, if your driving revenue is more than $100,000 for the past 2 financial years. From YA 2021, the revenue threshold is increased to $200,000. If your driving revenue is below the threshold, you qualify for Simplified Record Keeping and you will need to keep simple records (e.g. listings) without the need to keep supporting documents (e.g. receipts and invoices).
What About Additional Support Given Due To COVID-19 Relief?
Under the Point-To-Point Support Package, active eligible taxi drivers and PHC drivers would have received a relief of $300 per vehicle per month (or $10 per day) for the period of February 2020 to September 2020. This Special Relief Fund (SRF) payout is not taxable. However, any additional support from the operator is taxable.
|Type of relief||Government SRF payout||Government SRF payout||Additional support from operator||Additional support from operator|
|Mode of disbursement||Given directly (bank transfer or e-wallet credit)||Reduction in taxi rental fees||Given directly (bank transfer or e-wallet credit)||Reduction in taxi rental fees|
|Tax treatment||Not taxable as income||Not taxable as income||Taxable as income(to report as part of Revenue if the support payments are given to supplement your driving income)||Taxable as income(to report as part of Revenue if the support payments are given to supplement your driving income)|
|Tax deduction claim on either actual expenses or 60% FEDR:|
|1) Actual expenses||–||Do not reduce rental expense claim by payout||–||Reduce rental expense claim by support received|
|2) FEDR of 60%||Do not include payout as income when claiming 60% FEDR||–||Include payout as income^ when claiming 60% FEDR||–|
What About Social Carpooling (Such As GrabHitch) Drivers?
For PHC drivers who also provide social carpooling services such as GrabHitch, you are supposed to declare the income derived from these carpooling trips. These will need to be manually declared and will not be included in the pre-filled income.
If you are not a PHC driver and provide not more than two social carpooling trips a day and the amount collected is solely for covering the costs incurred by you for making the trip, you need not declare the income from these trips.
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