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ATO takes aim at gig economy

The ATO has issued a reminder to gig workers and anyone making money from a side hustle that all income must be declared.

ATO takes aim at gig economy
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  • Juliet Helmke
  • September 17, 2021
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A rise in secondary work as the gig economy has gained steam seems to have left many confused as to what they need to include on their tax returns. The Australian Taxation Office (ATO) is trying to make it clear that all work income must be reported.

“Generally, when you provide your labour, skills or goods for a fee, you need to report this income in your tax return. This applies regardless of whether you’re using a digital platform or more traditional means, such as word of mouth,” ATO assistant commissioner Tim Loh said.

“We know lots of people have picked up a side hustle during the pandemic. This has included a wide range of activities such as freelancing, setting up a local market stall or receiving income from subscribers through platforms like Patreon, Twitch or OnlyFans.”

Regardless of the employment classification, when a person receives payment for services, they need to report the income to the ATO, even if it was for a one-off job.

Mr Loh warned that taxpayers who think they can hide their secondary earnings should be aware that the ATO receives information from many platforms that facilitate gig economy work.

“We receive income information from a range of providers including financial institutions, online marketplaces, ride-sourcing applications and short-term rental websites. The data we receive is growing, which means the places to hide are shrinking,” Mr Loh said.

An added benefit of doing the right thing and declaring income from side hustles is that taxpayers can claim deductions for expenses related to their secondary gig, so long as they’ve kept receipts.

“This includes the cost of managing your tax affairs through a registered tax agent,” the ATO noted.

Mr Loh urged anyone with multiple sources of income from gig work to seek proper advice if they’re unsure of what they can claim.

“Don’t rely on what other people claim as a guide to what you can claim. Every job is different, and what is required to earn an income for one occupation may not qualify in another,” Mr Loh said.

“Chefs can claim the knives and hairdressers can claim the scissors they use for their job, but a train driver or a salesman would have the same claims get knocked back.”

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