Tax help for rideshare drivers, freelancers and the gig economy

Unless you’re an accountant, it’s safe to say you don’t look forward to tax time. This is even more so for small business owners or sole traders, whose tax affairs are more complicated than the average wage-earner, with a corresponding higher risk of something going wrong.

Take part-time rideshare driver Sean Conquo. Despite time-consuming back-and-forth exchanges with an accountant, one recent tax assessment left him owing a stinging $900 tax bill.

Innowell

Amid all the technological change in society, most people are still doing their taxes the way they have done them for decades: they collect their receipts and income details, book an appointment with their accountant and head along to get it sorted.

But what about those who'd rather find a simpler and cheaper way?

That's where PwC's Airtax platform comes in: providing tax help for rideshare drivers, freelancers and the gig economy.

Source: ABS Quarterly Labour Account, December 2018.

Where the idea started

If anyone needs a simpler way to handle their tax obligations, it's rideshare drivers.

Unlike other businesses or freelancers who don’t have to fill out BASs (business activity statements) until their annual turnover passes $75,000, rideshare drivers have to collect GST from the first dollar they earn.

That can be a lot of work for someone who may be unable, or unwilling, to pay for a professional accountant.

PwC Australia People & Organisation Tax Leader Norah Seddon says it was that group of people PwC had in mind when it first started developing Airtax.

"Once you've gone over $75,000, you are more likely to go to an accountant and to go into all that paperwork," Ms Seddon says.

"If you're just doing it every now and then to earn a couple hundred dollars to go on holidays or to buy some clothes, suddenly an accountant does not make sense."

The stats:
4 million small businesses in Australia
380b
78%
70%

Source: Australian Tax Office, Small Business Engagement 2017.

A simpler way of doing tax

The idea behind Airtax is to give people, especially those in the gig economy, an easier way of doing their tax returns and BASs – something that can be done from their phone.

Even better, Airtax can be integrated with many of the apps people in the gig economy use to source work, such as Square and Intuit QuickBooks, so their income can be added to the system at the press of a button.

"That means you can essentially speed up that process for doing a tax return and reduce the need for paperwork," PwC Australia Digital Director Mark O'Neill says.

While the idea for Airtax started with the gig economy, interest in the product has not been contained to that sector. Ms Seddon says it is available for anyone – sole traders, freelancers, permanent employees – and several employers are offering it to their staff as part of wellness and financial fitness initiatives.

"It is taking them on the journey in a way that's like a conversation with their accountant."

PwC Australia People & Organisation Tax Leader Norah Seddon

 

Going on a tax journey

As they developed the Airtax project, the PwC team found themselves facing another problem: how to take users through potentially complicated tax procedures in a way that was easy for them to understand.

Ultimately, they worked out a way to communicate in plain English while still complying with the law.

"So instead of saying something like ‘Do you have any deductions in relation to your car’, we'd ask 'Have you used your car for work this year? Yes, no?’" Ms Seddon explains.

"It is taking them on the journey in a way that's like a conversation with their accountant.

Mr O'Neill says the team behind Airtax quickly found that there was still strong demand for real, human-to-human advice. That's why, if users feel they need guidance from an accountant, they can request a phone call from a professional.

That’s echoed by part-time rideshare driver Mr Conquo, who jumped to the new platform after his unexpected tax bill.

"Everything is almost completed for you because everything you do with (the ridesharing platform) is automatically uploaded, it's just a matter of adding a few extra things,” he said.

"And if you do need it, there is someone there to speak to, which I really appreciate."

Mr Conquo ended up paying around $300 for his tax return through Airtax, including calls with accountants - about a third of what he had to pay with his previous accountant.

By making tax returns simpler and easier, PwC has helped more than 10,000 people like Mr Conquo to lodge their tax returns, and is supporting growth in the gig economy.


30% of small business owners don’t pay their tax on time.

Source: Australian Tax Office, Small Business Engagement 2017.

29% of small business owners aren't confident about their management of their tax.

Source: Australian Tax Office, Small Business Engagement 2017.

Only 28% of small business owners rate their tax systems as efficient and effective.

Source: Australian Tax Office, Small Business Engagement 2017.

Contact us

Norah Seddon

People & Organisation Tax Leader, PwC Australia

Tel: +61 2 8266 5864

Mark O'Neill

Director, New Ventures, PwC Australia

Tel: 03 8603 3568

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