Warning for hobbies claiming GST credits

A recent media release from the ATO has shown that they will be applying judgement when using resources to review GST claim made by micro-businesses.

In part, they will be using income tax return data to analyse whether particular entities are, in fact, carrying on a hobby and not a business. Broadly, an entity undertaking a hobby is not able to claim GST credits on their purchases.

Practitioners have been advised by the ATO to review clients in this situation with an outlook to potentially amending past activity statements and repaying GST credits.

For further information please contact your RCB Advisors team member.

Source: ATO - Should you clients claim GST credits?