money HQ saver

Earning extra income in your spare time is great, but pay attention to tax implications, writes Tim McIntyre

THE October 31 tax lodgement deadline has arrived and Australians making money from the share economy are being urged to make sure they are on top of their tax obligations.

Money earned on Airbnb, Uber, Airtasker and similar platforms requires tax to be paid, according to Jason Robinson, director at accounting firm RBK Advisory.

“More clients are casually mentioning extra revenue streams,” Mr Robinson said.

“I asked one client how their weekend was and found out they were earning $400 every weekend helping strangers move house.”

The government is beginning to regulate side income sources.

“Uber drivers are now required to be GST registered and hold an ABN before they can begin making money,” Mr Robinson said.

Airbnb and Stayz have become popular with landlords taking advantage of holiday locations by organising fixed leases for colder off-season months and then going short term for a bigger yield over summer, said Sandrina Postorino, managing director of Landlords Choice.

“During these months they can command much higher variable rents,” she said. “This all needs to be accounted for in their tax return.

“Another trap is when investors decide to Airbnb their main residence instead of their investment property, which means it is no longer completely exempt from Capital Gains Tax.”

Side hustles, or hobbies turned into income streams by entrepreneurial types also have tax requirements, according to Clayton Howes, CEO of fintech lender MoneyMe.

“If you make even one dollar on your side hustle that comes with tax obligations,” Mr Howes said.

Another confusing one is network marketing – think Avon and modern incarnations – often undertaken by stay-athome parents, said Katrina Haskew, managing director of Leading Advice.

“Where it can get messy is when turnover is more than $20,000, but they have consumed so much of their own products in testing, trials, or giveaways, that it is an effective loss,” Ms Haskew said. “This is extremely challenging to account for, so it’s paramount that stringent records are kept and presented to accountants.”

ATO assistant commissioner Kath Anderson said many Australians lodge their returns at the last minute and can make mistakes or overlook income when they are in a hurry.