The sharing economy allows business owners to earn extra money. It works by connecting buyers and sellers, most commonly through an app or a website.
Existing income can be topped up by:
- Completing jobs or errands for payment
- Renting out your vehicle
- Providing ride-sourcing services
- Renting out all or part of your house, apartment or unit.
The Australian Taxation Office (ATO) encourages small business owners to consider the tax obligations that need to be met when income is earned through the sharing economy.
The ATO states that all earnings will need to be declared in the tax return, and expenses can only be claimed on the business portion. There may also be a requirement to register for an Australian Business Number (ABN) and registering for and paying GST, as well as lodging business activity statements.
The ATO urges small business owners to keep records of what they earn, which will help when claiming deductions.