In this series of posts we’re looking at common questions that arise regarding when it’s appropriate to register for an ABN. If you have an activity or hobby that you do in your spare time and make money from selling the resulting products or services, you are probably wondering if you need to register as a business.
Do You Need an ABN for a Hobby?
Simply put, no. An ABN is not needed for a hobby. A hobby is a pastime or leisure activity conducted in your spare time for recreation or pleasure. If you develop your hobby into a business however you will need to think about an ABN for tax purposes e.g. If you’re working from home or selling handmade goods online for example, you need to decide whether you are doing so as a business or a hobby.
Simple questions to determine if your activity is a business or hobby:
- Is the activity being undertaken for commercial reasons?;
- Is your main intention, purpose or prospect to make a profit?;
- Do you regularly and repeatedly undertake your activity?; and
- Is your activity planned, organised and carried out in a business-like manner?
If you answered yes to most of these questions, you’re likely to be running a business and you will need an ABN.
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