ATO warning about declaring your side-hustle income

Aussies earning extra cash from side gigs are being watched, and have been urged by the Australian Taxation Office to declare it.

The ATO gets Uber data about workers’ income Picture: Hollie Adams/Bloomberg

A surging gig economy has attracted extra attention from the Australian Taxation Office as some people fail to declare their income from side hustles.

The ATO has noticed confusion about what income is taxable, and is warning people that they can’t hide money they receive from platforms including ride sharing, food deliveries and online sales.

“We know lots of people have picked up a side hustle during the pandemic,” says ATO assistant commissioner Tim Loh (pictured).

“This has included a wide range of activities such as freelancing, setting up a local market stall or receiving income from subscribers through platforms like Patreon, Twitch or OnlyFans,” he says.

Anyone who receives payment for providing services or goods should report their income, Loh says.

Technology has put the ATO in a strong position to spot income that is left off tax returns.

“We receive information from a range of providers including financial institutions, online marketplaces, ride-sourcing applications and short-term rental websites,” Loh says.

“The data we receive is growing, which means the places to hide are shrinking.”

ATO assistant commissioner Tim Loh says anyone paid for services or goods should declare it.

H&R Block director of tax communications Mark Chapman says his firm has noticed an increase in gig economy workers and says many people “don’t understand the tax implications” of earning money this way.

“The basic rule is anything you earn is going to be assessable,” he says.

“Nobody is taking taxes out on your behalf so you have to have discipline. A lot of people think it’s a hobby and hobbies aren’t taxable – that’s not right. The ATO is almost certain to come after you if you are earning any kind of assessable income.”

Chapman says people starting any sort of small business should seek tax advice.

“With lockdowns, a lot of people have lost their jobs and have more time on their hands, and in an effort to make money a lot have started up side hustles,” he says.

“Think about your deductions – it depends on the business, but make sure you are claiming everything that’s relevant to your business or profession.

“Don’t assume that the income is not taxable – it will be and the ATO will want to know about it.”

The ATO’s Loh says people should not rely on others’ claims as a guide for themselves.

“Every job is different, and what is required to earn an income for one occupation may not qualify in another,” he says.

“Chefs can claim the knives and hairdressers can claim the scissors they use for their job, but a train driver or salesman would have the same claims get knocked back.”

Originally published as ATO warning about declaring your side-hustle income