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This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law.

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Edited version of your private ruling

Authorisation Number: 1012474921407

Ruling

Subject: Am I in business?

Question

Were you carrying on a business?

Answer:

No

This ruling applies for the following periods:

Year ended 30 June 2013

The scheme commenced on

1 July 2012

Relevant facts

The arrangement that is the subject of the Ruling is described below. This description is based on the following documents. These documents form part of and are to be read with this description. The relevant documents are the application for private ruling received and all attached documentation.

You are a mature aged jobseeker.

You make items and do art intermittently in between your job seeking.

You spend roughly 12 hours per week on your art activities.

Your expenses roughly equal your income.

You advertise on a free website for which you have received no commissions or sales.

A friend added you to their website from which you have received no sales.

You have no business plan.

You carry out your activities in your spare room at home.

You have placed some items at local stores on a consignment basis.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 995-1.

Reasons for decision

Section 995-1 of the ITAA 1997 defines 'business' as 'including any profession, trade, employment, vocation or calling, but not occupation as an employee'.

The question of whether a business is being carried on is a question of fact and degree. The courts have developed a series of indicators that are applied to determine the matter on the particular facts.

Taxation Ruling TR 97/11 provides the Commissioners view of the factors used to determine if you are in business for tax purposes.

In the Commissioner's view, the factors that are considered important in determining the question of business activity are:

No one indicator is decisive. The indicators must be considered in combination and as a whole. Whether a 'business' is carried on depends on the large or general impression.

Your activity does not have a commercial feel. You do not conduct your activity in a businesslike manner. You do not generally maintain records indicative of a business operation.

All these factors taken together support the view that you are not carrying on a business.


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