The definition of an enterprise for GST and ABN purposes includes:
An activity or series of activities done:
- in the form of a business, or
- in the form of an adventure or concern in the nature of trade.
But does not include an activity or series of activities done:
- as a private recreational pursuit or hobby, or
- by an individual or partnership (mainly of individuals) without a reasonable expectation of profit or gain.
The main indicators of carrying on a business for income tax purposes are:
- significant commercial activity
- purpose and intention of the taxpayer in engaging in the activity
- an intention to make a profit from the activity
- the activity is or will be profitable
- repetition and regularity of activity
- the activity is carried on in a similar manner to that of the ordinary trade
- the activity is organised and carried on in a business like manner and systematically - records are kept
- size and scale of the activity
- not a hobby or recreational activity
- a business plan exists
- commercial sales of product
- taxpayer has knowledge or skill.