Private ruling: Hobby or business income
Date of advice: 17 July 2023
Published: 11 September 2023
Ruling period: Year ended 30 June 2023
Date scheme commenced: 1 July 2022

Ruling: Q1: Is the income received from producing jams/preserves considered to be assessable income? | A1: No. The income that has been generated from the production of jams/preserves is not assessable income and you cannot claim a deduction for any expenses that you incur in relation to the activity.Upon reviewing the Taxation Ruling TR 97/11 and with the information supplied it has been acknowledged that this activity is more suitably defined as a hobby. Note that your activity can change from conducting an activity as a hobby to that of being in business and vice-versa over time, as your level of activity changes. You should evaluate your level of activity on a regular basis to see whether you are conducting a hobby or carrying on a business. Also, you should keep your own records, separate to the Square, to show how much of the total income was earned by you.

Relevant facts and circumstances: You produce jams/preserves. You sell the jams/preserves at a market. You also have an agreement with some other stall holders in which you trade your product for their fruit to make the jam/preserve. With the start of the COVID-19 pandemic and the requirement to eliminate cash handling to reduce the spread of the virus spreading throughout the community, you purchased Square EFTPOS device was purchased to alleviate this risk.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 6-5