No hiding the side hustle: ATO launches new ad campaign to boost business income tax compliance

As Australian workers hurtle towards the end of financial year, the Australian Taxation Office (ATO) is reminding new side hustlers not to overlook business income on their tax return.

In a fresh advertising campaign, the ATO says workers who launch a secondary gig outside of their main job may technically qualify as being ‘in business’, meaning any income earned through those activities should be reported.

That includes everyone from rideshare drivers and occasional delivery workers, to fitness fanatics who charge for ‘bootcamp’ services, and social media influencers who regularly receive fees or gifts in exchange for glowing product endorsements.

Conducting continuous and repeated activities which earn money likely counts as a business operation, said ATO assistant commissioner Tim Loh.

Leniency exists for individual payments, like the sale of old furniture online, Loh said in a statement.

“The ATO won’t consider activities as ‘in business’ when they are a one-off transaction (unless it is the first step in carrying on a business or intended to be repeated) or an activity from which you don’t seek to make a profit,” he said.

And with the tax office only tightening its focus on small business tax performance, anyone with a paying side hustle — for example, if a furniture-flipping hobby turns into a genuine enterprise — should expect scrutiny.

That goes doubly for rideshare workers in the new financial year, as the new Sharing Economy Reporting Regime kicks into action from July 1, 2023.

While Australian workers may turn to alternative income-generating measures as the cost of living surges, Loh maintained accurate taxation is necessary to provide “vital services like health and education.”

“The ATO needs to ensure there is a level playing field for everyone, with no unfair advantages,” Loh said.

The tax office has urged anyone with questions about their side hustle to run through the official ATO resources for new business operators, which detail how and when tax should be reported.