ATO is coming after gig economy, digital content incomes: CPA

If you work a side-hustle in the gig economy and don’t pay tax, expect to get a tax bill this reporting season.

That’s the word from Australia’s largest professional accounting body, CPA Australia, who say the gig economy has become a major target for the Australian Tax Office.

The CPA says digital service platforms are now legally required to report the income of their users under the Sharing Economy Reporting Regime (SERR).

CPA Australia tax lead Jenny Wong says that anyone who earns money off digital platforms like UberEats, Airtasker, YouTube and OnlyFans but doesn’t pay tax risks a higher bill and possibly penalties.

“The regime is expanding this financial year, meaning the ATO will be aware of any income you have received through these types of gig economy platforms,” she says.

“Until this year, individuals were required to self-declare income from their side-hustles. Now nothing will go under the radar.

“If you deliver food with DoorDash, work some casual jobs through Airtasker, or make content for Patreon, YouTube or OnlyFans, these sites are now reporting your earnings to the tax office.”

Wong explains that the new rules will apply to a broad range of services.

“If you use a website to rent out a car parking space or your designer handbag, this income will be recorded — you’ll need to pay tax.”

Ms Wong says individuals who have had a strong year making money off sites like YouTube and OnlyFans could be in for the biggest shock.

She also reminds influencers that they need to declare gifts and gratuities that they received as a form of payment.

“You must pay tax on income you earn above the tax-free threshold of $18,200,” she said.

“So, if you’ve had a successful year earning money through advertising revenue and streaming subscriptions, as well as through gifts and gratuities, the ATO will be expecting you to cough up.”

Wong says this includes free cars, holidays, clothes and anything else they received.

“Depending on how much you’ve earned during the year, this could be a significant amount, maybe even tens of thousands of dollars,” she says.

The SERR expanded from July 2023 by targeting platforms like Airbnb but has expanded to take in a much broader range of activities like content creators.

“The current level of tax compliance from digital economy users has largely been a mystery,” she says.

“Though people might not consider earnings from digital platforms as income in the same way as their regular job, it is all viewed the same way by the ATO.

“Chances are that many people have simply not been declaring this income at tax time. That all changes now,” Wong says.

CPA TIPS FOR GIG ECONOMY WORKERS

Declare all income: Ensure all earnings are reported in your tax return, regardless of the amount or frequency. This includes gifts and gratuities.

Maintain accurate records: Keep detailed records of income and expenses to support your deduction claims.

Understand your obligations: Familiarise yourself with your tax requirements, including ABN registration and GST obligations if applicable.

Seek professional advice: Consider consulting a professional tax agent like a CPA to navigate your tax affairs and ensure compliance.

EXPENSES GIG WORKERS CAN CLAIM

The CPA says gig economy workers may be able to claim some work-related expenses but only if they are directly linked to the income they earned, they have not been reimbursed, and they have proof of purchase. Examples include:

• Work from home expenses: Such as phone, internet and energy costs.
• Travel costs: The cost of travel between work locations could be deductible.
• Motor vehicle expenses: Delivery drivers could claim for fuel, repairs and other expenses, but must identify the percentage used for business purposes.
• Tools of the trade: For example, a video camera, editing software and professional lighting. This must only be for business use, not private.

To find out more about them, visit their website at cpaaustralia.com.au