The Australian Taxation Office has warned users of “sharing economy” apps like Uber, Airbnb and Airtasker that it performs data matching with third parties to detect undeclared income.
ATO assistant commissioner Matthew Bambrick said that his organisation obtains more than 650 million records from “a range of third party sources” — such as banks, eBay and Uber — to match and analyse with its own data to catch Australians not declaring income.
“The data enables us to put together a picture of what a person’s assessable income should be. If something doesn’t look quite right, it will send up a red flag and we’ll investigate further,” he said.
“The ATO is keeping up with the sharing economy, meaning that we have the ability to identify if you have left out a significant amount of your income.”
Last year, the ATO wrote to 20,000 ridesharing drivers about their tax obligations after data-matching identified them as earning an income through Uber or similar apps.
“We also write to newly registered drivers, drivers that have been driving and have not registered, and drivers that continue to drive and remain unregistered despite us having written to them previously. The last group can expect more contact from the ATO,” Bambrick said.
The tax office website shows that data-matching processes are currently in place for ridesharing, eBay sales, credit and debit cards, “specialised” payment systems and motor vehicle registrations. The tax agency says that it adheres to the Privacy Commissioner’s Guidelines on Data Matching in Australian Government Administration for all its programs.
The ATO’s data-matching revelations come amid controversy about Centrelink’s use of third party data to calculate alleged welfare overpayments. Debt notification letters generated by that system – sent out without human checks — have caused an uproar for their inaccuracy, although the government has refused to back down from the revenue raising scheme.
H&R Block tax communication director Mark Chapman said that Uber drivers must register for GST and declare their gross ridesharing income to not get caught up in the ATO’s crackdown.
To offset any tax liability, Chapman said rideshare drivers have a range of potential deductions that can be claimed, such as fees and commissions to Uber, cost for water and mints, insurance premiums and vehicle costs.
“Remember to keep a logbook and remember too that you can claim for the costs of driving to, from and between pick-ups, as well as the costs linked to the actual fare-paying journey. Claim for things like fuel, servicing, cleaning, etc,” he said.
Bambrick said that income should be declared regardless of whether the sharing economy activities are “odd jobs”, such as occasionally completing an Airtasker task or renting out a room through Airbnb, or a full business.
“Amounts paid for renting our all or part of a house or unit through the sharing economy must be declared as rental income in the tax return,” he said.
“If you are running a business through the sharing economy you also need to declare this income, as for any business. If the business turnover is more than $75,000 you have to register for GST. If you transport passengers through ride sourcing you have to register for GST no matter what your annual turnover is.”
The ATO looked into a family’s income after they posted photos of a holiday with business class flights to Whistler on Facebook