RENTING your home on Airbnb or driving for Uber and worried about the tax implications?
You just have to get the right advice.
Bathurst-based registered tax agent Bronwyn Stone says Uber drivers must get an ABN and register for GST, the same as taxi drivers do.
“Record-keeping in any business is crucial, and these two businesses [Airbnb and drivers] are not exempt,” Ms Stone said.
“In particular, Uber drivers ideally should keep a logbook and all receipts so that the correct percentages of car expenses can be claimed.
“Airbnb hosts need to apportion their expenses according to the area of the home rented out and the number of days it is rented.
“Expenses of buying supplies similarly need to be apportioned if there is any private use.”
Ms Stone said the most important thing is to get advice from a registered tax agent first to make sure that the work is worthwhile doing.
“For example, if residents use part of their own home for Airbnb, they could have a rather complicated capital gain calculation when it is sold as they lose some of the exemption for it being your principal place of residence,” she said.
The Federal Government on Wednesday announced that the Australian Taxation Office will be targeting Airbnb hosts and drivers working for app-based services such as Uber, Ola, Uber Eats, Menulog and Deliveroo for tax purposes.
Assistant Minister Zed Seselja said there is a risk that some individuals are not reporting their full income and avoiding tax.
“We are committed to make sure people pay their fair share of tax,” Mr Seselja said.
“Treasury is seeking to standardise the reporting format for sharing economy platforms, reducing red tape for sharing economy sellers and assisting the move to pre-filling tax returns in the future.”
According to a consultation paper circulated by the Treasury, Australia’s sharing economy was worth about $15.1 billion in February 2017 and an estimated 10.8 million people were predicted to have earned extra money from sharing economy services from July to December 2017.
Western NSW Business Chamber regional manager Vicki Seccombe said it’s a good move for the region.
“Making sure everyone is paying the tax they owe ensures that businesses in our region are not asked - or forced - to make up the shortfall,” Ms Seccombe said.
“Over time, that should mean a lower tax rate for our region than would otherwise be the case.
“Having said that, it’s important that any move from the ATO doesn’t involve excessive compliance costs on business.”
Orange-based registered tax accountant James Madden said the ATO will get to know about those who have earned any extra money through Airbnb or driving Uber.
“If people don’t report their incomes, they will get picked up eventually. Uber and Airbnb provide all the information to the ATO,” Mr Madden said.
“It is better people talk to their tax accountants, who will be able to help them report their income correctly and offset any income against legitimate expenses.”
Mr Madden said people can be fined depending on the income they don’t reveal in their tax returns.
“The ATO will not hear excuses such as they didn’t know to report the income,” he said.
“Airbnb hosts and Uber drivers can approach these companies and ask for a statement earned for a particular period and get the same to their agents.”
Ms Stone said the ATO can amend a taxpayer’s return to include the income they have earned.
“It is up to the taxpayer to disprove that, which is where good record-keeping comes in,” she said.
“There can also be additional penalties for not taking reasonable care or making false claims as a percentage of tax owing.”