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 at tax time.