Everyone seems to be bringing in extra pocket money from either letting out a room – or a house – on Airbnb, or driving an Uber in their spare time. Yet two years ago, hardly anyone knew anything, or very little, about the value these brands could bring to everyday Australians. Today, we all want a piece of this pie that serves up the sweet taste of extra cash and helps many of us avoid the bitter taste of overpriced hotel bills, or the taxi metre ticking over in traffic.
Known as the sharing economy, this “collaborative” business model cuts out the middleman and connects the buyer and seller directly through a digital platform. If you have a spare bed, a decent car, or any other assets or resources that aren’t being fully utilised, you too can start your own mini business and earn a bit on the side. Who knows, if it takes off like so many of the businesses are doing, it may even become your main source of income.
As the online sourcing of products and services continues to grow, so too will the opportunity for the budding entrepreneurs looking to jump on the sharing economy bandwagon. However, before you start plugging your wares and sharing your toys, there are some key things you need to consider.
You’re not sharing your hair-dryer with your friends or letting mates crash for the night, you’re actually running a business. That means simple things such as income must be declared, and tax paid, on your new (and for most, secondary) source of income. The ATO is increasingly cracking down on undeclared income and it is very easy for them, and anybody else for that matter, to see what services your business is offering online.
Here are ways you can keep the tax boogeyman at bay and run a successful start-up:
Ultimately, joining the sharing economy is a worthwhile and potentially lucrative endeavour, but don’t let the fine print trip you up. A simple investment into the right software and advice will ensure a smooth and enjoyable experience as you enter an exciting new world of business possibilities!
Alex Alexandrou, General Manager, Reckon