Media coverage of sharing-economy services understandably focuses on the benefits they offer and how innovative and exciting they are.
But as the likes of P2P lending, lift-sharing and accommodation services cross over into the mainstream, so it is inevitable that a certain amount of red tape will intrude on this brave new world.
Returns from lending through platforms such as Zopa have always been taxable – this comes as no surprise given how carefully regulated financial services are in the UK.
But what about the extra cash you might make renting out a room on Airbnb or giving someone a lift through BlaBlaCar: should that be declared? And will you need extra insurance or to meet certain standards of care if you’re offering these kinds of services?
The bureaucratic side of the sharing economy is something that was explored in a recent review carried out by the government.
While ministers see a lot of economic potential for sharing, they also rightly recognise that regulation is something that needs to be addressed: the people making money from sharing should pay a fair amount of tax and consumers should be protected with the right kind of insurance and, where necessary, safety precautions.
So if you’re making some extra cash from providing accommodation every now and again, should you pay tax? In fact the government already has a rent-a-room scheme which means that householders don’t face any income tax charges on the first £4,250 they receive in rent in any financial year.
But the rules on lift-sharing, on the other hand, are not yet so clear cut: should you declare the money you make if it just adds up to a few pounds a month?
According to the review, this is something for HM Revenue & Customs to clarify – it suggests drawing up an official guide and tax calculator so people know when tax is due and how much they should be paying.
The treatment of eBay sales could be a guide: HMRC says that no tax is liable if people are selling off old possessions on an ad-hoc basis, but that traders who buy goods and re-sell them on the site should be declaring their income.
But while tax bills for some participants in the sharing economy could be set to rise, the opposite may be true in P2P lending. The government has confirmed it will include P2P within the Isa (individual savings account) framework in the near future, which will significantly cut income tax bills for many lenders.
And from April, any losses made on P2P loans will be allowed to be offset against gains when calculating tax bills.
Where cars and property are concerned, insurance is a big issue: if you’re offering lifts, are your passengers covered by a standard motor policy?
And should you be arranging extra cover if you’re having regular paying guests in your home?
The insurance industry is only now waking up to the implications of the sharing economy: at the moment, many providers simply don’t have the right policies for situations such as these.
The British Insurance Brokers’ Association (Biba) has recently published a guide to insurance and the sharing economy which explains, for example, under what circumstances drivers may need to tell their insurers or buy extra cover before offering lifts.
Biba says that insurance brokers may be a better way of getting the customised or flexible cover that people and firms engaged in sharing often need.
Tax and insurance may not be the most exciting of topics, but they are a necessary part of the evolution of the sharing economy.