Private ruling: Income from rendering personal services
Date of advice: 12 February 2020
Published: March 2020
Ruling period: Year ended 30 June 2019
Date scheme commenced: 1 July 2018

Ruling: Q1: Is the money you received from providing animal related services assessable income? | A1: Yes

Relevant facts and circumstances: Following many years working for your employer, your employment ended under very stressful circumstances on mid to late 2018. At that time you decided to have a break from full-time employment and explore other activities whilst you considered your future employment options. One activity you decided to undertake was to provide a particular type of service relating to looking after particular animals for their owners (animal services), which you only intended to do on a temporary basis. In mid-to late 2018 you registered with a particular website, which allowed you to get in touch with people who required the animal services. You did not intend on providing the animal services on a full-time basis, and as such you limited the type of clients you accepted, and only provided this service when it was convenient to you. You only looked after one animal at a time (unless the owner had two animals) and you often looked after older animals. You set the cost of your services to match the specific type of clients you were after. During the 2018-19 financial year you received money from the animal services, after website deducted their fees. This represented a couple of months in total of looking after the animals for several different clients over the financial year.

Relevant legislative provisions: Income Tax Assessment Act 1997 subsection 6-5(1)

Reasons for decision: Summary: Subsection 6-5(1) of the Income Tax Assessment Act 1997 (ITAA 1997) provides that your assessable income includes income according to ordinary concepts, which is called ordinary income. Further subsection 6-5(2) of the ITAA 1997 states the assessable income of a resident taxpayer includes ordinary income derived directly or indirectly from all sources during the income year. Ordinary income has generally been held to include three categories, namely income from rendering personal services, income from property and income from carrying on a business. Other characteristics of income that have evolved from case law include receipts that: · are earned · are expected · are relied upon, and · have an element of periodicity, recurrence or regularity. In your case, you have been providing personal services to clients via the provision of animal services for their particular animals, having registered with a particular website in mid-to late 2018, which enabled you to get in contact with people who required this type of service. As such, any money you have received from providing animal services is income received from rendering personal services, and is therefore ordinary income which is assessable under subsection 6-5(1) of the ITAA 1997. This is still the case even if you are not carrying on a business of animal services.