What is a hobby?
Hobby is a pass time and a leisure activity to recreate yourself and get pleasure in a spare time.
Benefits of being a hobby?
Hobby gives you the personal enjoyment and satisfaction.
- You can gift or sell your hobby for the cost of materials.
- You can do it in your spare time or when people contact you to get these surprises.
- You don’t have the reporting obligations of a business.
How do I know if it’s a business or hobby?
It is very important to differentiate and understand if it’s a hobby or business for tax, profit and all other legal purposes.
Key questions to ask yourself to identify,
- 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?
- Is your activity planned, organized and carried out in a businesslike manner?
What is a business?
Business is an activity with perfect marketing. Directly or Indirectly the main purpose of business is profit.
Benefits of being a business?
- You’ll have access to government information, services and concessions for business.
- You can establish a business identity when selling to customers and other businesses.
- You can claim tax deductions for business expenses against your taxable income.
- It may give you the flexibility to manage your time and work your own hours.
- You’ll have to incorporate your business with several government institutes.