Edited version of private advice

Authorisation Number: 1052140755024

Date of advice: 24 July 2023

Ruling

Subject: Am I in business - hobby professional artist

Question

Are you required to include the income received from the street performing as assessable income under section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997)?

Answer

No, your street performing activity during the relevant financial year is considered to be a hobby.

We have weighed up the indicators of carrying on a business outlined in Taxation Rulings TR 97/11 and TR 2005/1 and have determined that you were not carrying on a business during those years because your activity did not have a significant commercial purpose or intent to profit, you did not intend to engage in business, and your activities were not carried on in a businesslike manner.

Therefore, any income received from your activity during the relevant financial year is not assessable income and you are not entitled to deduct any expenses incurred in earning these amounts.

Note that your activity 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. 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:

Financial year ending 30 June 2023

The scheme commenced on:

1 July 2022

Relevant facts and circumstances

You first undertook performance sessions in the relevant year and subsequently attended further sessions leading to other such arrangements.

Your participation in these sessions was organised through initial verbal discussions then text messages confirming your attendance for each session.

You have been paid on invoice. You keep your own records.

Your only expense for participation in these sessions was your performer insurance.

You have your own ABN and no tax was withheld from payment for your participation. Superannuation payments were made on your behalf by the individual organising these sessions.

The performance sessions you participated in took place in the context of larger events organised by entities such as local councils.

Your participation in these events was organised through someone you know who is in the industry.

After initial discussions to establish your interest the individual organising these performances would send you SMS messages with dates for upcoming events and you would advise on your availability for these events.

The Individual contracting you for these appearances fenced off areas and provided the equipment to be used for these interactive sessions. You appeared alongside several other people contracted by the same company for this purpose and were encouraged to wear t-shirts with the organiser's logo.

You had absolute discretion as to what was taught and demonstrated in these interactive sessions and how that was to be done.

You have other sources of income that cover your living costs and entered these arrangements for your own enjoyment in the practice of your skills.

You can see yourself having to scale back commitment to this activity as the demands from your other paid work and your study increase.

You may someday seek to diversify work activity by including performance but have no immediate plans to systematically do this.

You are open to further occasional bookings but intend to focus on other paid work and study for the foreseeable future.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 6-5