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Side-giggers warned to beware of ATO fines
With tens of thousands of Aussies turning to side gig and contracting work to generate an income, an expert has warned that many could fall foul with the ATO for failing to operate their activities as a proper business.
Side-giggers warned to beware of ATO fines
With tens of thousands of Aussies turning to side gig and contracting work to generate an income, an expert has warned that many could fall foul with the ATO for failing to operate their activities as a proper business.
Coco Hou, the managing director of Platinum Accounting Australia and Platinum Professional Training, has explained that people taking up side gig and contracting work must ensure they follow the rules of business.
“A lot of people have lost their jobs over the last 12 months or have been forced to cut back on the number of hours they work due to COVID.
“As a result, we are seeing a significant surge in the number of people taking up side gig and contracting work. Effectively, these people are starting up their own businesses and therefore should be managing their activities as legitimate businesses,” Ms Hou said.
Understandably, for many Aussies this is a completely new way of earning money and they have little to no understanding of their accounting and taxation obligations and the requirements associated with setting up and running a business.
“Like any other business, they need to apply for an ABN.
“In addition, they also need to register for GST when their business reaches turnover of $75,000 or more.
“If you start a new business and expect your turnover to reach $75,000 or more in the first year of operation, then you need to register for GST straightaway.”
Ms Hou believes many people are at risk of failing to set themselves up properly from the outset.
“Bookkeepers are in huge demand at the moment. While people are busily trying to build up their client base and deliver services as a side-gigger or contractor, they don’t have time to be focusing on the bookkeeping and accounting side of things.
“They are going to get themselves into trouble with the ATO.
“This is why it is important for anyone who is now working in a side gig or contractor capacity to find themselves a good bookkeeper to ensure they are meeting their obligations and importantly capturing and recording all of their expenses so they can claim them come tax time,” Ms Hou concluded.
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