Last week the ATO updated its guidance on the tax obligations of the sharing economy, reminding its participants that they must declare what they earn, apportion related expenses, and pay GST among other things.
HLB Mann Judd manager Helena Yuan told Accountants Daily that while accountants seem to have a grip on the tax requirements for the sharing economy, some clients in the industry do not.
“The ATO certainly feels that there are a lot of participants in the sharing economy who do not completely understand their tax obligations,” she said.
“These participants in the sharing economy are unlikely to be tax savvy, particularly if they are sharing their family cars or a spare room in the family home, and to them it could hardly seem as if they are earning an income from these activities.”
Ms Yuan said that accountants shouldn’t just take their client's information and should dig a little deeper into their potential sharing economy activities.
“At tax time, the accountants should be asking their clients if they participate in the sharing economy and more questions on their sharing economy activities, than simply accepting the information provided on face value,” she said.
“It will be an ongoing client education process to get people to understand that the ATO views these activities in a similar way to more traditional businesses.”
Looking ahead, Ms Yuan believes that the sharing economy is here to stay and that the ATO will continue to scrutinise its participants.
“We expect to see its revenue size will continue to grow, at the same time, we expect to see the ATO will increase their effort to ensure those who participate in the sharing economy fully understand their tax obligations and are tax compliant,” she said.