When a hobby becomes a business

Taxpayers may not think they are running a business from their hobby or 'side hustle' activities.  However, if they start to earn money from doing these activities regularly, they may be carrying on a business without realising it.

Generally, carrying on a business involves ongoing and repeated activities with the intention of making a profit.  These activities can include:

• regularly providing goods or services;

• obtaining and maintaining any necessary licences or permits; and/or

• keeping records of their work.

However, a taxpayer's activities may indicate that they are not operating a business where:

• their transactions are one-off;

• they do not intend to make a profit; and/or

• they work solely as an employee rather than independently.

Please keep us informed of all your income-earning and side hustle activities so we can help with this distinction.

If you have any questions in relation to the matters discussed in this blog, please get in touch with us.