SMEs can adopt similar practices for tracking expenses and invoices, ensuring no deductions or tax credits are missed.
2024 has been a significant year of change for the sharing economy in Australia.
In August, The Fair Work Act amendments affecting gig economy workers came into effect, setting tailored minimum standards for ’employee-like’ workers in the gig economy. This included gig economy workers getting greater protection from unfair deactivation and unfair contract terms, and the ability to ask the Fair Work Commission to resolve disputes.
From July 1st, The Sharing Economy Reporting Regime (SERR) came into effect for transactions made through electronic distribution platforms (EDPs) for the supply of services such as asset hire, performing tasks, and food delivery – adding to taxi travel, ride-sourcing and short-term accommodation (90 consecutive days or less) that were already listed. The new SERR terms increased the types of gig economy workers having to log their transactions accurately. This meant having to track invoices, payments, and expenses, and submit BAS and annual statements in a timely and accurate manner.
Gig economy workers have always operated in somewhat of a grey area. They have the unenviable task of carrying out their duties, while effectively needing to be their own accountant and understand their tax obligations as a sole trader. The new reforms have only heightened those responsibilities. This is where technology and a solid understanding of tax and financial reporting obligations come in. Here’s how sharing economy workers can be more tax compliant, and relax knowing that things are being taken care of.
Utilising the right technology
Hiring accountants can be too costly for sharing economy workers and not particularly scalable across a workforce. However, there are now all-in-one, cost-competitive platforms like TaxLeopard designed to help gig workers with everything including invoicing, payments, expense tracking, business activity statements, filing tax returns, and bookkeeping with minimal input from the user. They are typically easy to use, accessible on the go, and digitally native – meaning they are desktop or mobile-compatible and have simple interfaces that visualise and simplify the tracking of accounts. In short, this means less worry about taxes and more time gigging.
Key dates and deadlines
While they may not be the most riveting of placeholders to put in your diary, there are some unavoidable dates and deadlines to note if you want to meet your tax obligations as a gig worker. Not doing so can result in hefty repercussions. The tax year begins on the 1st of July and ends on the 30th of June each year. The 30th of June is also the final day to claim deductions for business expenses incurred throughout the year. The other key date is the 31st of October––this is the deadline for individuals not using a registered tax agent to lodge their tax returns.
Income and expenses tracking
To complete an accurate end-of-year statement, it’s essential to keep track of all invoices, income, and expenses throughout the year. Doing this manually, either on paper or via a digital spreadsheet, however, can prove tricky and be prone to error. Expenses tracking can be critical for your income. As a gig worker, it can be easy to overlook the various expenses incurred––such as your phone bill or fuel. Claiming deductions for those expenses can take time, but make all the difference when it comes to funds owed to the ATO. Doing so accurately may even lead to a healthy tax rebate at the end of the financial year.
Ideally, gig economy workers should use a digital system designed precisely for invoices, payments, and expenses. This will help ensure there are no missed payments or expenses, and no costly mistakes made when filing the final return.
Real-time reporting
In relatively recent history, tracking your accounts was a manual process consisting of calls to your accountant, digging out files containing your paper business receipts, and doing your best to navigate the keys of a calculator that you may not have picked up since school. That has now changed. All you now need to do to get a real-time gauge on your accounts is log in to your accounting platform and your own personalised dashboard will appear, showing your estimated reduction in income tax based on the expenses you have logged, recent payments, outstanding invoices and more.
Being a relatively new sector, the gig economy is ever-evolving and the new legislation has heightened the reporting responsibilities of gig economy workers and the organisations that hire them. While mandatory logging of accounts and taxes can seem labour-intensive and time-consuming, there are tools and techniques now available that mean gig workers can confidently stay across their accounts.
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