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Hobbyiest/Wholesaler/Business

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Fuel for thought.

Just read a closed discussion in relation to wholesalers and hobbyiest and making the call as too which catagory you may fall into.

The extract below is an extract from the ATO site.

The main thing that determines whether you are running a business is whether you are going about your activities in a business like manner. Some of the things that contribute to this are registering a business name, whether you have the intention of making a profit rather than just earning some income, have set up a separate bank account for the business, do you keep accounting records for the activities of the business, and whether you operate from business premises.

This means if you are only selling the fish/dry goods you make on a regular basis, to friends and acquaintances, you would more than likely not be regarded as running a business and therefore do not have to include you activities on your tax return.

If however you are selling your fish/dry goods in an organised manner on websites such as eBay, are selling at markets on a regular basis, and you are generally setting about maximising your income from the sales, you would more than likely be regarded as running a business and by the ATO.

Also dont forget if you earn over the $5000 for the financial year you have to declare that to your tax agent and will be taxed on that money. Play by the rules of the government and there is no grey area, push the boundries and expect to pay the price.

Sent from my SM-N910G using Tapatalk

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I don't know where you get the "$5000"mark from, we have property and lease it out (adjistment) and we make more then that in a yr, out accountant reackons we don't have to declare it , as its not over the $18000 mark , from where you need to get to start paying tax ( otherwise known as the tax bracket) and our solicitor says $75,000 for when we start running cattle on the land ourselves.

With breeding fish, I wouldn't imagine many people would make the $5000 profit after expenses, anyway.

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I would be getting new accountants. Just because the first $18000 earnt in a tax year is taxed at 0% does not mean you dont declare it. It means you wont pay tax on the first $18000 of income.

The $5000 or more part comes from the ATO website as guideliness on when to declare income.

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Fish sales are mostly cash and sometimes if you are selling to a lfs then you have to sign paperwork so the owner can keep his books correct. IE gst. etc.

As the majority of us are hobbiests selling fish to other hobbiests and shops/wholesalers doesn't matter.

But if it is your only income then of course records of income and expenses have to be kept. Once again some transactions could be cash so MIGHT not be declared. wink wink.

Edited by mbunamad
wink
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If it's your primary source of income the statement above would be true but if it's not your primary income then it comes under hobby rules which are different. I've had this discussion with an accountant and was told that you can make up to $50000 from a hobby without declaring it. If i quit work that would change what I have to declare.

My question is, how does anyone make that much money selling fish? I would be stoked if i could cover the cost of having them.

Cheers mick

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i would suggest get copies of rulings or court cases on the threshold that your accountants' using. would save you on the defense down the tract that you get audited. not all accountants are the same - some are risk averse and some conservative. you as the client need some legal basis to establish your position. you can easily change accountants but the business decision you make last - until the end of the prescription period of audit.

just cover your ass in case something goes pear shape.

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As far as I'm aware the $50,000 mark isn't in relation to declaring, but to registering for GST. Although I think that may have risen to 75k? not 100% sure. But you still need to declare if you are earning that amount, no matter where it comes from. It's more than many earn in a year working full-time, I can't imagine the tax man wouldn't have his hand out for that.

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