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Edited version of your written advice
Authorisation Number: 1051435017141
Date of advice: 2 October 2018
Ruling
Subject: Am I in business?
Question
Are you operating a business?
Answer
No
This ruling applies for the following period:
Year ended 30 June 20xx
The scheme commences on:
1 July 20xx
Relevant facts and circumstances
You operate an event.
The event is run on location.
Venue, facilities and coffee facilities are supplied by the venue.
You provide limited equipment and refreshments.
The event is run once a week except when you take time off.
Relevant legislative provisions
Income Tax Assessment Act 1997 subsection 6-5(1)
Income Tax Assessment Act 1997 section 995-1
Reasons for decision
Section 995-1 of the Income Tax Assessment Act 1997 (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 and is a question that has been tested in many court cases. These cases have resulted in the development of a series of indicators that are now applied to determine the matter on the particular facts.
The Commissioner’s view is contained in Taxation Ruling TR 97/11 Income tax: am I carrying on a business of primary production? which lists the factors that are considered important in determining the question of business activity:
● whether the activity has a significant commercial purpose or character
● whether the taxpayer has more than just an intention to engage in business
● whether the taxpayer has a purpose of profit as well as a prospect of profit from the activity
● whether there is regularity and repetition of the activity
● whether the activity is of the same kind and carried on in a similar manner to that of ordinary trade in that line of business
● whether the activity is planned, organised and carried on in a businesslike manner such that it is described as making a profit
● the size, scale and permanency of the activity, and
● whether the activity is better described as a hobby, a form of recreation or sporting activity.
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.
Having regards to your full circumstances and the above principles, we do not consider the activities you are undertaking to represent that of a business.