Trade or Hobby?

FewFew

I'd appreciate your input as to whether certain activities are a hobby or a trade with a view to claiming losses against PAYE.

I publish a number of books, mostly my own. I have a registered business name to publish under and operate as a sole trader. I'm registered as a publisher with Nielsen etc. However I do all of this in my spare time.

I keep separate accounts for this publishing end of things and all of my expenses are directly related to marketing and printing. However, my turnover is less than €100. This is not my full-time job.

Most of my expenses are directly linked to trying to drive sales - adverts (70%) and printing review copies for publicity (20%)

I'm confused as to what makes it a trade versus a hobby. If I saw the turnover I'd say hobby, but then the money on adverts and intention to drive sales would make me say trade.

Would really appreciate some words of wisdom on this

gerrybbadd

FewFew wrote: »

I'd appreciate your input as to whether certain activities are a hobby or a trade.

I publish a number of books, mostly my own. I have a registered business name to publish under and operate as a sole trader. I'm registered as a publisher with Nielsen etc. However I do all of this in my spare time.

I keep separate accounts for this publishing end of things and all of my expenses are directly related to marketing and printing. However, my turnover is less than €100. This is not my full-time job.

Most of my expenses are directly linked to trying to drive sales - adverts (70%) and printing review copies for publicity (20%)

I'm confused as to what makes it a trade versus a hobby. If I saw the turnover I'd say hobby, but then the money on adverts and intention to drive sales would make me say trade.

Would really appreciate some words of wisdom on this

You are treating this like a business, and i assume you intend to make a profit. This could be construed as it being a trade, more than a hobby.

FewFew

gerrybbadd wrote: »

You are treating this like a business, and i assume you intend to make a profit. This could be construed as it being a trade, more than a hobby.

Excellent, thanks for your advice

scheister

FewFew wrote: »

I'd appreciate your input as to whether certain activities are a hobby or a trade with a view to claiming losses against PAYE.

I publish a number of books, mostly my own. I have a registered business name to publish under and operate as a sole trader. I'm registered as a publisher with Nielsen etc. However I do all of this in my spare time.

I keep separate accounts for this publishing end of things and all of my expenses are directly related to marketing and printing. However, my turnover is less than €100. This is not my full-time job.

Most of my expenses are directly linked to trying to drive sales - adverts (70%) and printing review copies for publicity (20%)

I'm confused as to what makes it a trade versus a hobby. If I saw the turnover I'd say hobby, but then the money on adverts and intention to drive sales would make me say trade.

Would really appreciate some words of wisdom on this

I would be thinking trade as well. Google the "badges of trade" it looks at if a trade is being carried on. looks at items like number and frequencies of transaction, motive and other thing

CIARAN_BOYLE

There is at least one Revenue Auditor that applies the rule that if the trade doesn't make a profit for 3 years you have to explain how it will make a profit in the future. If you can't realistically do that its a hobby.

gerrybbadd

CIARAN_BOYLE wrote: »

There is at least one Revenue Auditor that applies the rule that if the trade doesn't make a profit for 3 years you have to explain how it will make a profit in the future. If you can't realistically do that its a hobby.

A lot of offices take this stance, especially with farming for example.

If losses are made for 3 years, and it has been elected to offset these losses against other income, the 4th year (and any other year there is a loss) won't be allowed, as they consider it a hobby, rather than for profit.