So you have started selling your handmade items, or giving your expertise on the weekend. Your biggest question right now is ‘Do I need an ABN?’. It’s one of the most frequently asked question, is it a business or is it a hobby? The ATO has some videos and information you can use to decide this but I see a big problem with this. The considerations the ATO discuss when deciding whether you are in business include;
- Are you operating in a business like manner?
- Do you intend to make a profit?
- Is your activity planned and organised?
- Do you repeat certain activities like a business?
In today’s age of Facebook, online business, and entrepreneurship I don’t believe there is any valid hobby that is not considered a business. Especially if it’s something you are passionate about. The area of hobby is too vague, and hard to argue with these considerations. So my advice is, Yes you do need an ABN. If there is any doubt whether you are a business or not, then you need an ABN. Even if it a short term thing you may still need an ABN. To apply for an ABN is quite a simple process, which takes about 10 minutes. A Tax Agent can do this for you easily as they have all the details needed to process the application. If in doubt, ask a professional. I’m here to help. Make a time today to chat.