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Edited version of private advice
Authorisation Number: 1051589337501
Date of advice: 02 October 2019
Ruling
Subject: Tutoring, am I in business?
Question
Are you in the business of tutoring?
Answer
No. On balance, you don't meet the relevant factors contained in Taxation Ruling TR 97/11. Further information about carrying on a business can be found by searching 'QC 31733' on ato.gov.au
You should note that conducting an activity that has been described as a hobby is a 'status'. You can change from conducting an activity as a hobby to that of being in business and vice-versa over time as your level of activity changes. Therefore you should evaluate your level of activity on a regular basis to see whether you are conducting a hobby or carrying on a business.
This ruling applies for the following period:
Year ending 30 June 2020
Year ending 30 June 2021
The scheme commences on:
1 July 2017
Relevant facts and circumstances
You are a student and are engaged in a number of other activities including tutoring. You commenced tutoring a few years ago.
You started by informally advertising via friends and on websites.
You used stationary you already had and you produce your own training material.
You have no business plan and no separate bank account for your activities.
You do not follow up on unpaid lessons. You accept cancellations without notice and don't charge for them in those instances. You occasionally cancel a lesson yourself if you have other plans.
The number of tutoring jobs varies each week but you provided an average of students you have and hours done.
You are not actively looking for new students.
You have provided details of your income and expenses for each relevant year.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 6-5
Income Tax Assessment Act 1997 section 8-1
Income Tax Assessment Act 1997 section 995-1