Am I running a hobby?

[Samson]

Hi there,

I'm a first year university student with a casual job (usually 4 hours per week) and when I can fit it in/actually get jobs I do graphic design/wesbites on the side. I just do it from home on my computer and have no outlay, overheads etc and the only advertising I do is through my own website and a general google listing. I definitely don't earn anywhere near $75,000 from it, and earn probably less than $4500 a year from my casual job.

My question is, am I running a business? Or is this a hobby? If so what are the legalities/obligations?

Samson

[Dream Group]

Originally Posted by Samson

Hi there,

I'm a first year university student with a casual job (usually 4 hours per week) and when I can fit it in/actually get jobs I do graphic design/wesbites on the side. I just do it from home on my computer and have no outlay, overheads etc and the only advertising I do is through my own website and a general google listing. I definitely don't earn anywhere near $75,000 from it, and earn probably less than $4500 a year from my casual job.

My question is, am I running a business? Or is this a hobby? If so what are the legalities/obligations?

Samson

Hi Samson,

In my opinion it depends on what kind of work the graphic design/web work is.
Whether you are working as a contractor or an employee.
Should you be running a business the only thing you would need is an ABN, which is free.


Hope that helps

Regards
Warren

[CruzAccountant]

Hi Samson

Here's a good starting point: http://www.ato.gov.au/youth/content....tent/66884.htm

I started off doing ad hoc work for clients. It got to a point where I had a couple of businesses that required me to perform tasks more frequently, then got to the point where the new businesses I was acquiring needed a tax invoice. It was this point where I registered the business and haven't looked back since.

Richard

[Emroy]

I could be wrong, but I think it depends on what your intention is.

[Business Vic]

Originally Posted by Samson

Hi there,

I'm a first year university student with a casual job (usually 4 hours per week) and when I can fit it in/actually get jobs I do graphic design/wesbites on the side. I just do it from home on my computer and have no outlay, overheads etc and the only advertising I do is through my own website and a general google listing. I definitely don't earn anywhere near $75,000 from it, and earn probably less than $4500 a year from my casual job.

My question is, am I running a business? Or is this a hobby? If so what are the legalities/obligations?

Samson

Hi Samson,

Please visit the following link to the Australian Taxation Office (ATO) website which provides information to assist you to determine if you are operating a hobby or a business.

http://www.ato.gov.au/youth/content....tent/66884.htm

Kind regards,

Business Vic
www.business.vic.gov.au

[beancounter]

The Government likes to complicate matters - it keeps public servants occupied. There's a couple of issues that spring to mind.

Are your studies anything to do with the graphic design / website work? Are you paying HECS fees?

I'd speak to an accountant or Registered Tax Agent - there's a tax free threshold that people can earn before they start paying tax - there may be benefits of having a business to offset your study expenses etc

According to the ato.gov.au website, if you are supplying goods or services, you will need to be able to quote an ABN so that others businesses do not withhold tax at the top marginal rate when they pay you.

Etc, etc etc - There's no "one answer fits all" - If you are developing this sideline to support you through uni then maybe you should make the decision and go for it.

In your industry, word-of-mouth is a major source of work. You may find your clients refering more work to you, so you may as well be ready and prepared

Good luck with your new venture