The platforms that play host to large proportions of Australia’s gig economy (such as ride-sharing and short-stay rental apps) will be given a reprieve from mandatory reporting requirements due to the upcoming election delaying parliament’s passing of a bill.
The 21 May federal vote means a law, which would have required digital platforms to relay all transactions to the ATO, lapses and must start again under the next Parliament.
If the bill had passed, the new regime would have begun on 1 July, but it now looks almost certain to miss that deadline.
The measure, a recommendation of the Black Economy Taskforce, would have drawn electronic platforms for taxis and accommodation into the tax net in its first year and extend the reporting mandate to all other aspects of the sharing economy in July 2023.
This does not mean that the workers of the gig/sharing economy cannot be lax during tax time regardless.
Gig workers must report their taxable earnings, but may be eligible to claim deductions of expenses and costs incurred while earning their income(such as travel, vehicle, financing and marketing). These deductions, however, can only be claimed for the work-related proportion of the claim.
You won’t be able to claim the whole amount for the deduction if the claim is made because you picked up an Uber fare on the way back from your Grandma’s for example, it will only be deductible from when you picked up your passenger.
Those who prepare their deductions based on a representative period are also warned to prepare an additional record for this period, as the pandemic has induced numerous tax challenges for many gig economy workers involved in declining and rising fields of the economy.
Workers who fail to declare cash income from the gig economy may incur penalties in the form of interest on their tax bills or potential criminal charges. It is vital that you ensure that your tax return is correctly lodged and all income is declared if you are a gig economy worker of any kind. If you need assistance regarding your tax return lodgment process, you can always contact us for advice.