If you currently have a passion which you think you may be able to earn income from, it is important to know how to transfer your hobby into a successful business.
Definitely speak to your business coach. This will help you determine if there is a market for what you’re wishing to be successful at. We have partnered with a successful coach called John Millar from More Profit Less Time. You can access his website here.
Speak to us at Roy A. McDonald to help with compliance and determine the strategy you need to undertake to transfer your hobby to a fully-fledged business owner. If you would prefer to get the information face to face, please do not hesitate to contact us now.
There is no tax or reporting obligations for a hobby, however there are reporting obligations when you turn your hobby into a business. A business can run at a profit (this is never guaranteed) but a hobby may not. If your hobby expands and grows, this may occur. The ATO compares your business to others in a similar market. This is one of the performance indicators the ATO uses to determine if a hobby is really a business.
Finally your hobby stops being a hobby if activities are carried out that a normal business would do such as invoicing and taking payments. If you are carrying out these activities on a regular and ongoing basis then it would be time to see the accountant and business coach.