If you earn income through cold, hard cash, be warned: the Australian Taxation Office is keeping a close eye on you, a major accounting association has warned.
Gig economy workers and taxpayers who make money through the ‘cash economy’ must be careful to declare all their income this tax time, said CPA Australia senior manager of tax policy Elinor Kasapidis.
“It’s legal to receive payments in cash rather than electronically but you must report these amounts in your tax return,” she said.
“If you drive people around, do odd jobs or free-lance work, rent out your car or storage space, run social media accounts or sell products, you need to declare this income in your tax return.”
This will also include anyone who makes money from bartering or sharing, Kasapidis added.
“The ATO is aware of these ‘side hustles’ and matches data from platforms like Uber, Airbnb and AirTasker against individuals’ tax returns. This means the jig is up on the gig economy this tax time.”
CPA Australia’s warning comes after a similar warning from tax expert Adrian Raftery last month, who said nine types of taxpayers were on the ATO’s ‘hit list’ this year, including gig economy workers.
“If you advertise on the internet and customers [or] guests are paying electronically then expect the ATO to find out about it,” Raftery said.
Efforts to evade the ATO’s radar will “end in tears”, he added.
“You may think that the income is so little that the ATO won’t bother, but the cash economy is huge and is a perennial favourite on the taxman’s hit list.”
If you receive any income from these platforms, ignorance won’t be a good excuse with the taxman, said Raftery.
However, Kasapidis did note that small items, like selling some pre-loved items on eBay, won’t land you in hot water with the ATO – you just can’t claim a deduction from them.
“Don’t worry, the hundred bucks you earned from selling your designer handbag or off-loading your ‘barely used’ bike on eBay doesn’t need to be reported.”