The sharing economy and taxation

What is the sharing economy?
The sharing economy connects buyers (users) and sellers (providers) through a facilitator who usually operates an app or a website. There are many sharing economy websites and apps.

Common platforms/situations include:
• Uber and other ride sourcing services
• Uber Eats
• Airtasker
• Deliveroo
• Air BnB
• Stayz
• Privately renting out a room or your whole home
• Renting out parking spaces
• Creative and professional services – eg graphic design or creating websites

What are your income tax obligations?
If you use any of the above platforms or have similar situations you are obliged to declare the income in your tax return. The flipside to this is when you declare the income you can also claim expenses incurred to produce this income.

Do I need to register for GST?
If your annual turnover is below $75,000 you do not need to register for GST. If your turnover is, or is projected to be, $75,000 or more per year, you will need to get an ABN and register for GST. However an exception to this rule is if you are carrying on a ride sourcing service. These are considered a taxi service and subsequently you must register for GST as soon as you start operating, i.e. from the first $1 you earn.

What deductions can I claim?
You can claim income tax deductions relating to income you earn.
To claim a deduction:
• 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)
• work out how much of the total expense is for your business and how much is for personal use
• you must keep appropriate records to prove your claim.

Any fees or commissions charged by a sharing economy facilitator can be claimed as a deduction.

Other deductions will depend on the goods or services you are providing.

What records do I need to keep?
• statements showing income from your facilitators
• receipts of any expenses you want to claim deductions for
• logbooks of odometer readings

Consider using the FAJ app to maintain digital copies of deductions. This can be downloaded from the Play Store and the App Store.

Author: Tessa Jachmann
Email: tessa@faj.com.au