The more we Share, the more we Have. By Tina Zawila

In my last article I discussed the “Sharing Economy” with a focus on becoming an Uber driver and I cautioned new entrants into this market to be aware of their taxation obligations.   

This “peer-to-peer economy” or “collaborative consumption economy” as it’s also known, is not limited to ridesharing, and is growing at a rapid rate with the improvements and access to technology, and the growth in the number of participants. 

And whilst most of us are familiar with the likes of Uber, Airbnb and eBay, there is almost no limit on the products or services you can access via this shared economy, including peer-to-peer loans, shared office space for businesses, knowledge and talent sharing (freelancing), crowd-funding, and even pet-sitting!

It is suggested that the advantages of the sharing economy include:

• New and Better Opportunities – providing access to things that might not be practical to own or obtain, for example obtaining a peer loan when you cannot access finance via traditional means.
• Cheaper goods and services – on the basis that it can ‘cut out the middle man’ and that you only use (and pay for) something, or someone, as necessary, rather than deal with the cost of ownership or employment.
• Extra income for providers – by allowing them to unlock the potential of unused assets by sharing it when it is not in use, or to exploit a talent that isn’t used in their day job.

Of course there are disadvantages too:

• Privacy and Safety Concerns – people on both sides of the transaction have to forfeit some privacy.  If you rent out your house on Airbnb, you are inviting strangers into your home!
• No, or few, Guarantees – when you share with others you assume the risk that you won’t get paid or that your assets are damaged.

As I have mentioned previously, it is also very important that you understand the tax implications of your activities in the sharing economy.  In Australia, you need to consider whether you need an ABN, if you need to register for GST and what you need to declare in your income tax return and what you may be able to claim.

If you are interested in the sharing economy, make sure you seek professional advice.  Call the team at Sothertons on 07 4972 1300 today.