by Tina Zawila
YouTubers, Uber drivers and influencers are all coming under the ATO spotlight this year. With data analytics becoming more and more powerful, the ATO can easily track your side hustle and will expect you to declare this income in your income tax return.
The ATO’s latest “advertising campaign” is aimed at undeclared income, and they acknowledge that record numbers of taxpayers are now working multiple jobs or earning extra money through side hustles or gigs.
The Sharing Economy Reporting Regime ensures that the ATO receives data from ride-share and accommodation platforms. “It doesn’t matter whether you are carrying on a business or simply earning additional income through a digital platform such as a website or even an app, you must keep accurate records of your income and include it in your tax return,” Assistant Commissioner Tim Loh said. He goes on to say “While there are always new and different ways to make money, the tax obligations remain the same. Don’t fall into the trap of forgetting to include all your income thinking the ATO won’t notice.”
“If you are bolstering your income with new activities, make sure all your records are up-to-scratch. This could be anything from animal breeding to earning income through digital platforms such as ride share or food delivery, or even online content creation, like social media influencers,” he said.
The message from the ATO is clear, “If your home has become more like a warehouse and is stocked to the hilt with goods to sell, then you may in fact be running a business. If you’re running bootcamp sessions in addition to your nine-to-five job, well this is a side hustle, and you need to declare this income to the ATO. If you’re an online content creator earning money or receiving gifts, you’re also likely to be running a business and there are tax obligations you need to comply with.”
Mr Loh said a hobby crossed over into a business when there was an intention to earn a profit and the activity was planned and organised to achieve that goal. The ATO said taxpayers earning money “through continuous and repeated activities for the purpose of making a profit” were probably running a business and needed to keep appropriate records.
The ATO also noted that “Businesses have a range of obligations depending on their structure and turnover, including registering for an ABN, keeping the right records and lodging the right type of tax return. They may also have to register for GST.”
Don’t wait for the ATO to come to you. If you need advice or assistance as to whether your side hustle is actually a business, please contact the professional team at UHY Haines Norton on 4972 1300.