The growth in the sharing economy has been accompanied by increased attention from the ATO, and tax agents are advising their clients that the tax man will be paying much closer attention to Uber drivers, Airbnb landlords and Airtasker workers.
Mark Chapman, director of tax communications at H&R Block, says the ATO will be increasing its efforts to ensure that income and expenses are reported correctly.
The ATO says that anyone who provides goods or services through a sharing economy website needs to be aware of the income tax and GST that applies.
Popular sharing economy services include renting out a house or room on sites such as Airbnb or Stayz, providing a “ride-sourcing” service, providing personal services through platform such as Airtasker and Deliveroo, and renting out a car parking space through Parkhound or Spacer.
Anyone using any of these platforms needs to keep records of all income earned and declare it in a tax return, along with expenses claimed as deductions.
People may need to get some advice on whether they are carrying on a business and need an Australian Business Number, as well as registering for GST.
Other considerations are whether the price of the goods or services supplied include GST, the need to provide tax invoices for sales, and what deductions and GST credits can be claimed.
Things can get complicated because different services involve different tax obligations.
If turnover is less than $75,000, which is the GST threshold, taxpayers are not required to register for GST.
However, special rules apply to ride-sourcing work and anyone providing a ride-sourcing service must have an ABN and register for GST.
Use of the home for rental will have a capital gains tax impact. Profit from the sale of a main residence is usually exempt from CGT but use of the home to earn income, such as by renting out a room on a sharing economy platform, means the home owner is no longer eligible for a full CGT exemption.
CGT is applied, based on the floor area rented out and the amount of time it was rented.
The same applies to a private car space that has been rented through Spacer, Carparkit or some other platform. The home owner will need to pay GST based on the area rented out and the amount of time it was rented.
Taxpayers earning their income through a sharing economy platform are entitled to claim deduction for expenses relating to their income. To claim a deduction they must have spent the money and not been reimbursed and the costs must relate to doing the job.
Private expenses, such as travelling to work cannot be claimed. Fees charged by platform providers are deductible.