Tax on income earned from hobby

[daymoh]

Hi Guys,

I have a personal taxation related qn.

In addition to my fulltime job I have a hobby that earns me a little extra cash each month. How much am I entitled to earn before I have to declare it to the revenue?

Also, are the expenses I incur involved in persuing my hobby deductible against how much I make?

 

[GeneralZod]

If it's income you have to declare it. There's no hobby allowance You should be able to write off expenses though.

 

[daymoh]

If it's income you have to declare it.

Thanks. Does that mean that 100% of my extra income (less the expense incurred in generating the income) is liable for tax?

There's no hobby allowance

Pity

 

[Graham_07]

Thanks. Does that mean that 100% of my extra income (less the expense incurred in generating the income) is liable for tax?

Yes, at your marginal rate and there may also be PRSI/Levy due depending on your total income.

 

[daymoh]

hi Guys.

Just a followup on this.

I'm currently renting, but I'm thinking about moving to a new bigger rental property. One of the rooms would be used as an office for this hobby. Is it possible to write off some of the rent in the new place as an expense against tax?

 

[dmv]

what is this hobby i don't think EVERY hobby is liable for tax for instance if your buying and selling a few used items on ebay i don't think the taxman will be interested.

 

[mathepac]

... One of the rooms would be used as an office for this hobby. Is it possible to write off some of the rent in the new place as an expense against tax?

Check your lease. You can't run a business (or an "income generating hobby") from privately rented accommodation.

Questions like this have been asked and answered here many times.

 

[ubiquitous]

You can't run a business (or an "income generating hobby") from privately rented accommodation.

The Revenue won't have any objection if you do.

 

[WaterSprite]

The Revenue won't have any objection if you do.

Revenue won't but the planning authorities/landlord might. I wonder at what stage "working from home" becomes "running a business" from a planning perspective...

OP, if we take the "private rented accommodation" element out of the equation and assume that you own your own house, broadly speaking you could offset a portion of your mortgage payments against tax earned through your hobby if you used a portion of your house to work on the hobby. But, if you do that, then you would lose all or a portion of your CGT relief on a principal private residence when you come to sell that property.

Sprite

 

[ubiquitous]

Revenue won't but the planning authorities/landlord might.

"might" is the key word here, a lot less definite than "you can't"

 

[dmv]

the terms of your lease are not relevant from a tax point of view. i cant see the revenue having a problem with allowing a deduction for any legitimate business expense against profits even if that deduction is for the cost of part of your private rented or owned accomadation

 

[mathepac]

Check your lease. ....

If posters are going to quote an extract from a post of mine, please put the extract in the same context as my original; the first three words were inadvertantly missed where I was quoted above.

If OP rents accommodation registered by the landlord with the PRTB and OP tries to offset some portion of the rent against a money-earning hobby, some questions arise, which will certainly get attention from Revenue and maybe other authorities too, as mentioned above.

1) Does the landlord now have to register a portion of the property as a commercial premises, as a money earning venture now operates in part of it?

2) What happens to the insurance on the building / apartment?

3) If its in an apartment block, how will other apartment owners / tenants react?

4) If its in an apartment block, how will the management company or managing agents react?

5) If OP wants to offset his private rent against his income tax (as he is entitled to), how can he reconcile this with offsetting some rent aginst the money-earning hobby?

 

[ubiquitous]

If posters are going to quote an extract from a post of mine, please put the extract in the same context as my original; the first three words were inadvertantly missed where I was quoted above.

Honestly I think that is beside the point. I took issue with your statement that "You can't run a business (or an "income generating hobby") from privately rented accommodation." It is certainly incorrect, even when prefaced with the comment "check your lease".

It is possible in some situations to run a business from privately rented accommodation. For example, there is generally no problem, from the State's viewpoint, with someone using a privately rented address when registering a business name or a directorship.

I don't really understand the context of your five questions. Obviously there are planning, insurance and apartment/estate management rules that must be considered where people work from home but that does not mean that it is illegal to work or conduct a business from one's home. Nor does it mean that if someone works from home, that their home is no longer treated as a residence.