The ATO is cracking down on undeclared taxable income earned in the “sharing economy”.
Sharing economy services that you may earning income through, such as Uber, Lyft, Airbnb, or just through your own methods, is likely not to be tax-free hobby income but rather income that would be required to be declared on your tax return.
If you provide such services then you would need to consider registering for an ABN, preparing invoices, and registering for (and charging) GST. If you charge GST then you will need to complete regular Business Activity Statements (BAS’s) to declare and pay the GST.
If you are earning income via vehicle ride sharing — e.g. Uber and Lyft — then you will need to register for an ABN and for (and charge) GST regardless of your total income earned through these types of services. Residential rental services — e.g. Airbnb — are “input-taxed” supplies and so you would not charge GST on the rental income but also not claim GST on its related expenses.
You will need to keep financial records of your income earned, and you will want to keep records of related expenses so you may claim deductions. The records kept must be held for at least 5 years from date of lodgement of the respective tax year.
More information available here.
