The economy of sharing, better known as the “cash in hand” economy, seems harmless, right? Wrong.
For some individuals, the sharing economy can be a good way to earn a little something extra. Whether you’re running errands, babysitting or renting out part of your house, you need to be aware of the tax obligations in the sharing economy. It’s been estimated that the sharing economy costs the government a total of 3.3 billion a year in missed revenue.
What is the sharing economy?
The sharing economy connects people. Buyers and sellers can communicate through an app or website to come to the terms of the agreement. You can find these transactions on social media, through an add in the paper or Gumtree.
Jobs include but are not limited to;
- Completing jobs and errands for payment.
- Renting out your vehicle.
- Providing ride sourcing services.
- Renting part or all of your house out.
What are your tax obligations?
- You need to declare your earnings.
- You can only claim for the business portion of expenses.
- You may need to register for an ABN.
- You may need to register for and pay GST
Not only is it highly illegal to ignore your tax obligations, but unfair considering all the people that do pay tax. As if you needed another reason to steer away from the cash in hand job, some disadvantages can also include;
- Being paid below the award.
- No paper trail/No payslips.
- No superannuation.
- Your unlikely to be covered under insurance.
If this sounds like something you might need more information on, feel free to contact us anytime on (08) 9474 6333 or send your questions to email@example.com.