ATO crackdown on the sharing economy
Talk to your clients before the ATO goes after them
The Australian Taxation Office (ATO) is “concerned” by people making income from sites such as Uber, Airbnb and Airtasker. And are unaware they have to declare these amounts on their tax return.
The warning comes after the ATO recently collated information from banks to find out who was making money from working as a ride-sharing driver (i.e. Uber driver). This prompted them to write to 20,000 drivers in May alerting them of their tax obligations that they must follow.
The ATO’s assistant commissioner Graham Whyte said it would be using sophisticated technology including data matching, data mining and analytics to scrutinise every tax return filed. “If you earn a fee from task sharing for odd jobs or providing a service, it counts as assessable income and you just need to include the income in your individual tax return,’’ he said.
“The law hasn’t changed or has the definition of income. While the economy is changing with this certainly the rules are the same.”
He said this included earning income from doing things like task sharing, transporting passengers through ride-sourcing or renting out a room or house. They are all forms of assessable income.
But Mr Whyte said this was different to if a person provides goods or an activity through a sharing economy website or platform. But if it’s done as a hobby or recreational activity, this amount may not be assessable income.
H & R Block’s Director of Tax Communications Mark Chapman said while it was important Australians declared any income made through the sharing economy, these people could also declare appropriate tax deductions to coincide with this.
“Not declaring the income is a disaster when the ATO is data matching and they will typically come after you.”
The ATO will also this tax time be focusing on travel expenses for employees and making sure people return any rental income.
Source: news.com.au