Edited version of private advice

Authorisation Number: 1051895908905

Date of advice: 6 September 2021

Ruling

Subject: Am I in business?

Question

Does your activity operating a forum website amount to carrying on a business activity?

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 periods:

Financial year ending 30 June 20XX

Financial year ending 30 June 20XX

Financial year ending 30 June 20XX

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

You operate the website forum.

You acquired the Website in 20XX for $XXX, from the person that had developed the site.

You have participated in similar forums for an extended period. You stated that you had acquired the Website, as you were concerned that it would close down as many similar sites had previously.

You have also stated that you did not purchase the site with the intention of financial gain, nor ever thought of it as a business.

You incur expenses to maintain the Website, such as the monthly host service fee as well as freelance fees for any site maintenance that you are unable to perform yourself.

You have provided that the expenses for the Website have so far been less than $XXX, although larger expenditure may be required at some time in the future.

You made the decision to monetize the Website using Google AdSense. You have stated that the purpose of doing so was cover the costs of maintaining the Website.

You do not utilise a separate bank account for the Website activity.

You do not utilise a separate premise, nor set aside a separate space at home for the Website activity.

You do not promote the Website in order to attract a bigger audience, such as by paying for Google Adwords

Most of your time spent on the site is as a member, participating in the forum.

You do not have a registered business name for the Website activity. However, it carries its own registered URL name.

You have provided that the annual receipts you receive from Google Adsense in relation to the activity have been less than $XXX for each financial year, amounts slightly higher than expenditure incurred.

You do not collect GST, nor charge subscription fees for the Website.

You have an ABN that is used for a separate business activity

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