Nov 18, 2024 Joel Hernandez

ATO targets the sharing economy

The sharing economy has grown significantly in recent years, with more and more people earning income from platforms like Uber, Airbnb, Airtasker, Doordash, etc. However, with this growth comes increased concern from the Australian Taxation Office (ATO) due to a lack of accountability over these transactions. The government has taken steps to minimise the potential under-reporting of income by the participants.

Previously, only ride-sharing and short-term accommodation platforms were required to report transaction data to the ATO. However, from 1 July 2024, the scope has widened to include all platforms. The platforms will be required to provide detailed information, including the following:

• Client identification details of individuals (given name and surname, date of birth, account holder’s addresses, Australian business number, email address, contact phone number)
• Client identification details of non-individuals (business name, address, Australian business number, contact name, email address, contact phone number); and
• Account details (account name, account identification number, account registration date, account registration type, store type, seller status, IP address, number of annual sales transactions, value of annual sales transactions, number of monthly sales transactions, value of monthly sales transactions).

The ATO estimates the total number of account records that will be obtained will be between 20,000 and 30,000 each income year, and that approximately 10,000 to 20,000 matched records will relate to individuals.

If you are a provider or sharer of this arrangement, the income derived from the sharing economy must be accurately declared on your tax return. There is no room for error as the ATO is actively utilising data-matching systems to identify discrepancies. Taxpayers should be aware that the ATO may inquire about any inconsistencies flagged through this process.

Maintaining accurate records of income and expenses is crucial for understanding and fulfilling your tax obligations. We can recommend suitable record-keeping software and provide professional guidance to clarify any complex tax obligations. By understanding these changes and taking appropriate steps, you can ensure compliance with the tax laws and avoid potential ATO audit activity and penalties.

If you need to know more, just contact a member of our Tax and Business Services team.