The Gig Economy: Are Your Tax Obligations up to Date?
As technology becomes more sophisticated and more tech start-ups get off the ground, the gig economy is carving out a niche in the Australian financial sphere that is difficult to ignore.
But is the tax legislation adapting fast enough to keep up with this new type of income?
More and More Australians Now Have Another Business or ‘Side Hustle’
A key feature of many of these operations is that they are nimble, small in scale, have irregular and variable earnings, and frequently cannot be tied to a geographical location – things that can make it difficult for the Australian Tax Office (ATO) and the bloated and extremely complex tax legislation to keep up with.
Many of the crowd-sourcing or gig-economy operators also do not have the same mandatory obligations to report their operator’s earnings to the ATO, unlike banks, which report income, or corporate entities which report dividends.
By and large, most gig-economy workers are compliant with their tax obligations but the constantly-increasing scope and presence of the gig economy mean that the ATO is becoming increasingly concerned about tax ‘leakage’ from workers who might be underreporting income earned through a side business, either deliberately, or accidentally due to unfamiliarity with their tax reporting obligations.
Some steps are already being taken to make it easier for workers to meet their tax obligations, such as a recent change by the ATO to provide a summary statement for the deductions that car-sharers can claim, making it easier for users to pre-fill information on their tax returns.
But the growth of the gig economy shows no signs of slowing, and it is unlikely that the relevant legislation will be able to keep up with the pace.
For more information about the gig economy and keeping your tax obligations up to date, contact us at Bambrick Legal today:
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