Know the drill on sharing
AUSTRALIANS raking in incomes from the booming sharing economy are being urged to take extra attention at tax time.
Uber, Airbnb, Stayz and Airtasker are among the popular apps and websites connecting thousands of buyers and sellers with each other but with this comes strict tax obligations, similar to those of small-business owners.
Jack-of-all-trades Sam Farhat, who specialises in furniture assembly, said 90 per cent of his work came through online and mobile marketplace Airtasker, which outsources everyday jobs.
After joining 16 months ago and eventually turning casual jobs into a full-time income, he now has decent assessable income that he must declare.
“I’ve been full-time on Airtasker since September so I spoke to my accountant and signed up to an ABN and I’m a sole trader. He recommended I put aside 25 per cent of everything I make each week,’’ Mr Farhat said. “Prior to this I wasn’t doing anything at all or setting aside money so I’m sure there will be a shortfall.”
Mr Farhat said he now kept a detailed list of his business expenses and a specific bank account to pay for all his costs so it was easy to keep a track of incoming and outgoing costs.
Online software company Xero’s products partner, Matthew Prouse, said there were thousands of Australians who earned money from share economies and needed to be aware of this when they lodged their upcoming tax returns.
He said through these platforms no tax was withheld, which meant those earning income have to pay tax down the track.
“A person might be doing a couple of shifts through Uber and as a result they are going to have to declare a whole lot of income on their tax returns,’’ he said. “The ATO is going to work really quickly to data match it all so if you leave it off, technically the Australian Taxation Office gets a copy of everyone’s bank statements so it’s going to be very easy to see deposits of money in your bank account that says in the description Uber or Airtasker.”
ATO assistant commissioner Graham Whyte said they datamatched more than 600 million pieces of data each year and this included incomes earned from task sharing, odd jobs or providing a service – all of which must be included.