The gig economy is revolutionising the global workforce, offering millions of freelancers, contractors, and side hustlers unparalleled flexibility and the chance to explore diverse career opportunities. With the worldwide gig economy expected to reach $1 trillion by 2032, this growing sector presents both challenges and opportunities for workers and accounting firms alike.
However, gig economy workers often face unique financial complexities, including irregular income, tax compliance hurdles, and cash flow management issues.
This article explores the challenges and opportunities for firms exploring gig economy accounting and how accountants can help clients navigate these challenges by positioning themselves as trusted advisors in this fast-evolving marketplace. Read on to learn more.
Understanding the Gig Economy Landscape
Platforms like Uber, Etsy, Fiverr, and Airbnb have empowered millions to generate income independently. This means that aside from traditional freelancing or independent contracting roles, practically anyone can boost their existing income with a side hustle gig.
However, recent data shows that around a quarter of gig workers struggle to manage their tax obligations and maximise earnings. Fortunately, accountants are uniquely positioned to bridge this gap in understanding and empower gig workers to explore new income streams successfully.
Helping Gig Workers with Tax Compliance
As of January 2024, platforms like Uber and Airbnb are required to report user income to tax authorities under OECD guidelines. In countries like the UK, these reports were first submitted in January 2025, giving HMRC access to detailed income data from gig workers.
Gig economy accounting experts can help their clients by:
- Accurately Recording Income: Gig workers can consolidate earnings data across multiple platforms to help clients accurately record their income for tax authorities.
- Navigate Earning Thresholds: In the UK, income above £1000 per year must be declared for tax purposes. Accountants can help clients understand when they meet reporting thresholds across jurisdictions.
- Voluntary Disclosure: If clients have failed to declare past income, accountants can guide them through voluntary disclosure processes to avoid financial penalties.
Maximising Deductions for Gig Workers
Another critical area where accountants can add value is helping gig workers understand and maximise allowable deductions. Many freelancers and contractors are unaware of the full range of expenses they can claim to reduce their taxable income. Common deductions include:
- Business Expenses: Accountants can calculate deductions for space and equipment exclusively used for business purposes, such as home offices, broadband services, video recording equipment etc.
- Vehicle Costs: Accountants can help ride-share or delivery service workers calculate their mileage and other vehicle expense deductions for their tax returns.
- Professional Development: Gig economy workers can also seek advice from accountants about deducting career certifications or specific professional development courses from their tax bills.
Advising on Technologies for Gig Economy Clients
Technology has transformed both the gig economy and accounting practices, enabling accountants to provide more efficient and tailored services to gig workers while empowering freelancers to manage their finances more effectively. Cloud-based accounting software (e.g., QuickBooks Online or Xero) can streamline client bookkeeping and financial reporting. These platforms allow gig workers to:
- Track income and expenses in real-time
- Generate invoices quickly
- Access financial insights on demand
Maximising Gig Economy Clients’ Earning Potential
Gig economy clients may be hesitant to enlist a qualified accountant’s help to boost their earning potential. However, accounting firms can offer the following value-added services to help them build trust with their existing clientele and attract new clients:
- Jargon-Free Advice: Accountants can provide learning resources that simplify complex financial concepts to help the gig economy workers feel empowered in their financial decision-making.
- Specialise in Niche Services: Accounting firms can create dedicated email and ad campaigns that target specific gig workers, such as creatives or rideshare drivers, to attract clients and tailor their services. For example, an accountant specialising in rideshare drivers could focus on helping them increase their after-tax income through strategic tax planning and expense management.
- Provide Additional Support Services: Think beyond tax season and offer your gig economy clients ongoing support with budgeting, retirement planning, or business growth.
INAA: Helping Accountants Evolve with the Changing Business Landscape
As the gig economy expands, accountants will play a vital role in helping gig workers adapt to changing regulations and increased competition. Here at INAA, we offer accounting and auditing professionals the resources and collaboration opportunities they need to stay competitive on the global stage. To learn more, visit our member benefits page and join INAA today.