The sharing economy & tax
If you let a room or a car-parking space, do odd jobs etc for payment or drive passengers in a car for a fare, you may have tax obligations.
The ‘sharing economy’ – aka collaborative consumption, peer-to-peer or the like – is a new way of connecting buyers (‘users’) and sellers (‘providers’).
Sharing economy arrangements are generally booked through a facilitator using a website or app.
Common examples of what providers do in some sharing economy services include:
- renting out or letting a room or other property for accommodation
- renting out or letting car-parking space
- providing odd jobs, errands, deliveries or more skilled services on an ad hoc basis
- using a car to transport members of the public for a fare.
The tax laws that apply to conventional business activity also apply to sharing-economy activities.
In some instances letting out a room, letting out a parking space, doing odd jobs or other activities for payment or driving passengers in a car for a fare will mean that you are earning assessable income regardless of whether you are carrying on a business.
If you are earning assessable income from providing sharing-economy services, you will need to keep records of:
- income from that activity
- any allowable deductions, which may need to be apportioned for private use
These records will help you to include these amounts in a tax return and pay any tax owing from your activities on time.
Renting out part or all of your home
