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With more Australians looking to start a side gig, accountants are set to become more in demand than ever, according to a managing director.
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Accountants urged to take advantage of gig economy
23 February 2022
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9 minute read
Coco Hou CPA, managing director of Platinum Accounting Australia and Platinum Professional Training, said the “monumental shift” in employment over the last two years has seen many Australians turning to the gig economy and contracting work.
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This, she flagged, is presenting ample opportunities for accountants to ensure businesses have proper procedures in place from the get-go to prevent falling foul of the ATO.
“A lot of people have lost their jobs or have been forced to cut back on the number of hours they work due to COVID. In addition, a lot of people have loved working from home so much they have decided not to go back to the office,” Ms Hou said.
“As a result, we are seeing a significant surge in the number of people taking up side gig, contracting work and pursuing their own ventures. Effectively, these people are starting up their own businesses and therefore should be managing their activities as legitimate businesses.
“The Australian Bureau of Statistics reported last year that the number of small businesses jumped by 15.2 percent over the last financial year. This means there are a lot of people at risk of falling foul of the ATO.”
Ms Hoa noted that it’s vital accountants ensure new businesses are across the basics.
“For many people who have been employed and are used to having their pay drop into their account every week or month, this is a completely new way of earning money and they have little to no understanding of their accounting and taxation obligations and the associated requirements around setting up and running a business. Like any other business, they need to apply for an ABN,” Ms Hou said.
“In addition, they also need to register for GST when their business reaches turnover of $75,000 or more. If you start a new business and expect your turnover to reach $75,000 or more in the first year of operation then you need to register for GST straight away.”
Ms Hou believes many people are at risk of failing to set themselves up properly from the outset, flagging that “sourcing a good accounts system is critical when you start up a new business”.
“Thankfully, many systems such as Xero, QuickBooks or FreshBooks are cloud-based and are really easy to use,” she said.
Finding a good bookkeeper is also something to stress with new businesses, Ms Hou noted.
“While people are busily trying to build up their client base and deliver services as a side gigger or contractor, they don’t have time to be focusing on the bookkeeping and accounting side of things. They are going to get themselves into trouble with the ATO,” Ms Hou said.
“This is why it is important for anyone who is now working in a side gig or contractor capacity to find themselves a good bookkeeper to ensure they are meeting their obligations and importantly capturing and recording all of their expenses so they can claim them come tax time.”
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