Understanding tax in the sharing economy is easy with the team from STS Accounting.
The sharing economy connects buyers (users) and sellers (providers) through a facilitator who usually operates an app or a website. There are hundreds of sharing economy websites and apps.
If you provide goods or services through any of them you need to consider how income tax, the goods and services tax (GST) or any other tax applies to your earnings.
Popular sharing economy services include:
• Renting out a room or a whole house or unit for a short-time basis, such as Airbnb and Stayz
• Providing ‘ride-sourcing’ services for a fare (considered to be taxi travel for GST purposes) such as Uber, SheSafe, Shebah and GoCatch
• Providing personal services, including creative or professional services or odd jobs such as Airtasker, Mad Paws and Deliveroo
• Renting out a car parking space, for example Parkhound and Spacer.
“When you use sharing economy platforms to provide services for a fee or use your home, car or other assets to earn income, you need to keep records of all income earned and declare it in your tax return and expenses you can claim as deductions,” STS Accounting director Margaret Leigh said.
She said people also need to consider:
• If you are carrying on an enterprise
• If you need an Australian Business Number
• If you need to register for GST and lodge activity statements
• If the price of the goods or services you provide includes GST
• If and when you need to provide tax invoices for sales declaring your income in your income tax return
• What income tax deductions and GST credits you can claim for your expenses related to earning your income, and
• How all your sharing economy activities added together affect your income tax and GST obligations.
Senior manager Kim Thomas said there were different tax obligations depending on what goods or services you are
providing, for example all ride-sourcing enterprises must have an ABN and be registered for GST.
As with all work expenses, you can claim income tax deductions relating to income you earn, as long as you follow
these three rules: you must have spent the money and not been reimbursed; the costs must relate to doing your job and
can’t be a private expense (such as travel from home to the job); and you must keep appropriate records to prove your claim.
STS Accounting Group have expert accountants on hand to help new start-up businesses and those already working in the sharing economy.
Phone Margaret and the team at the Winchelsea office on 5267 2673 or Kim and the team in the Torquay office on 5261 2262, or head to surftax.com.au.