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market stall selling charity gifts hobby or business?

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Hi,

My husband and I have long supported a charity which teaches **bleep** workers wanting to make a new life sewing, jewelry making and wood-working skills in Cambodia. We now want to sell items they make at the local market. We would buy the items from the charity at the cost they set. We would mark them up before selling to cover the costs of market fees and insurance. This will be an estimate as while the fees are a set price the amount we will sell is undetermined. So it's possible that either we don't make enough to cover fees or we make more than the fee amounts. In which case I was planning to use extra to be able to order more items to sell so the charity can make more money. We were also planning to occasionally sell produce from our garden when we had extra. I have read the ATO info about what is a buisness and what is a hobby. I think this would be considered a hobby but I'm not 100% sure. 

My intentions are to just make enough to cover expenses but I'm not sure how much will sell. We haven't started yet I'm just doing research to see if this would be feasible and what would be involved before deciding if I should do this. I thought of a name for the stall, but I wasn't going to register it and I don't have to use it. We were going to set up another bank account in my husband's name just to keep it seperate from our personal finances since we would be ordering from the charity. Our actions would be regular as we'd regulary be ordering from the charity and selling at the markets once a month. The garden does cost us every year to set up and it's not a large garden plot so I don't think we'll make more than we spend on garden supplies from selling produce occasionally. I'd appreciate advice about how I can determine more definitively whether this is a hobby or buisness before proceeding.

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Best answer

Taxicorn

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This would appear to be a business due to the following:

 

A Business plan of how and what to do.

Consideration to a Business name.

The regularity of it.

Separate Bank Account.

See https://www.business.gov.au/planning/new-businesses/a-business-or-a-hobby

 

I would suggest registering an ABN (free) and not a Business name.

 

Record all the sales and then all the costs involved.

Include this in your tax returns.

 

You will probably run at a loss until things are established and then may see a small profit.

If things continue to run at a loss for several years then consider it a hobby and cancel the ABN.

 

1 REPLY 1

Best answer

Taxicorn

Replies 0

This would appear to be a business due to the following:

 

A Business plan of how and what to do.

Consideration to a Business name.

The regularity of it.

Separate Bank Account.

See https://www.business.gov.au/planning/new-businesses/a-business-or-a-hobby

 

I would suggest registering an ABN (free) and not a Business name.

 

Record all the sales and then all the costs involved.

Include this in your tax returns.

 

You will probably run at a loss until things are established and then may see a small profit.

If things continue to run at a loss for several years then consider it a hobby and cancel the ABN.

 

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