Tax compliance and the sharing economy

The ATO is reminding those who work in the sharing economy to be aware of their tax obligations. 

The sharing economy connects buyers (users) and sellers (providers) through a facilitator who usually operates an app or a website. Some popular examples include Airbnb, Stayz, Uber, Deliveroo, Airtasker and so on. It is often overlooked by providers of these services that money earned as a result of using them is taxable income. Different rules apply, depending on what type of sharing economy activities are undertaken by an individual. 

Tax responsibilities will vary depending on the services taxpayers engage with. Those who rent out part or all of their home are reminded to: 

  • declare what they earn in their tax return; 
  • apportion related expenses as appropriate before claiming deductions and 
  • understand it may affect their capital gains tax if they sell their home in the future. 

Individuals who participate in ride-sourcing activities need an ABN, to register for GST from the day they start, to pay GST on the full amount of every fare and to keep records of income and expenses for both GST and income tax purposes. GST credits associated with your ride-sourcing enterprise are deductible. 

Those providing other goods and services through the sharing economy need to remember to declare what they earn and apportion related expenses. 

While there are a number of compliance issues to consider, there are also a number of deductions users and providers of the sharing economy can claim, but rarely do. According to the ATO, to be eligible to claim a deduction: 

  • Appropriate records must be kept 
  • You must not have been reimbursed for the money spent 
  • Cost must relate to the job/service and not a private expense 
  • Accurately calculate how much of the total expense is business related and only claim from this portion.

Cristy Houghton

Embarketing, 48 Johnston Street, Wagga Wagga, NSW, 2650

Cristy's unique career has taken her from country NSW to the city lights of Clarendon Street South Melbourne and back again. With an early career in radio as a copywriter and creative strategist, she is now a Jill of all trades as a graphic designer, website builder, blog writer, video editor, social media manager, marketing strategist and more. 

In fact, give her any task and this chick will figure out how to do it! Go on, we dare you!

No, really, we DARE you!!

Cristy has won two Australian Commercial Radio Awards (ACRAs) for Best Ad and Best Sales Promotion, and even has an 'Employee of the Year' certificate with her name on it.

Cristy and her husband James have traveled extensively through Russia, China and South East Asia, and have two fur-babies, Sooty (cat) and Panda (puppy). Cristy loves drinking coffee, meeting people to drink coffee, coffee tasting and coffee flavoured cocktails. She also enjoys road trips, TED Talks and watching cat videos on youtube.