| Disclaimer This edited version has been archived due to the length of time since original publication.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. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of private advice
Authorisation number: 1051630035101
Date of advice: 28 January 2020
Ruling
Subject: Am I in business
Question
Does your activity amount to the carrying on of a business?
Answer
No. You don't meet the relevant factors contained in Taxation Ruling TR 97/11. While you perform the activities required to run the podcast, the scale, repetition and regularity of your activities and volume of operations is too small to be considered as carrying on a business. It is considered to be more of a hobby that you undertake. Further information about carrying on a business can be found by searching 'QC 31733' on ato.gov.au
This ruling applies for the following period:
Year ended 30 June 2019
Year ending 30 June 2020
Year ending 30 June 2021
Year ending 30 June 2022
The scheme commences on:
1 July 2018
Relevant facts and circumstances
You started a podcast focused on a computer game with other enthusiasts.
The podcast is free and listeners are under no obligation to pay to listen to the podcast.
Listeners can donate amounts per show through a third party platform who take a commission. Listeners are under no obligation to make donations.
You are the organiser of the podcast so the donations, less the commission is deposited into your PayPal account.
You use these funds to purchase prizes for listeners or equipment to improve the quality of the podcast.
During the 2019 financial year you received revenue of a few thousand dollars but the related expenses exceeded this. For the 2020 financial year the revenue is expected to be slightly higher and with similar expenses the activity will be making a small profit of under $1,000.
You and the other enthusiasts are not paid a salary/wage for operating the podcast.
You have a full time job and in your spare time you spend approximately 3-4 hours per week on the podcast.
Your intention for running the podcast is for enjoyment not for profit making.
Relevant legislative provisions
Income Tax Assessment Act 1997 subsection 6-5(1)
Income Tax Assessment Act 1997 section 995-1