ATO Strengthens Focus on Social Media Influencers and Side Hustles in Tax Crackdown

In the upcoming tax season, the Australian Taxation Office (ATO) will intensify its scrutiny of social media influencers and individuals with side hustles as part of its crackdown on businesses during the cost-of-living crisis.

Beginning on July 1, the ATO will employ advanced data-matching and analytical tools to detect taxpayers who under-report their income. As people explore new avenues to generate income in response to rising inflation, ATO Assistant Commissioner Tim Loh stressed the importance of accurately reporting and paying the appropriate amount of tax for those supplementing their income with side gigs.

Side hustles encompass various activities, including earning money through digital platforms like YouTube and Instagram, as well as ride-sharing or food delivery services. Determining whether a side hustle qualifies as a business can sometimes be challenging, as not all money-making endeavors fall under that category. The ATO plans to launch an advertising campaign to help taxpayers understand their obligations when their side hustle generates income.

Mr. Loh emphasized the necessity of keeping accurate income records and including them in tax returns, regardless of whether it constitutes a business or additional income through a digital platform. He also highlighted that evading taxes deprives vital services, such as healthcare and education, of funding.
In July, the Sharing Economy Reporting Regime will commence, granting the ATO access to data from additional electronic distribution platforms. This information will be cross-referenced with the details provided by taxpayers in their tax returns or activity statements to identify any unreported income.