# Multiple business activity types



## WestSydGuy (Jun 7, 2018)

Hey @Jack Malarkey and other tax experts, I have a query around multiple businesses which I'm sure has been asked or answered before, but would like some confirmation if possible.

I've read about some Melbourne members running multiple businesses, such as an airport xfer business, renting cars to drivers, such as @Scottie B .

My question is, if I start another business type, such as garden services/lawn cutting, perhaps airtasker courier/Ikea assembly, how should I use my logbook, is it still only interested in personal vs business usage? Do I need to log use for rideshare, private, and garden-services?

I have a Hyundai sedan, and the towbar was very useful during my recent house move using a friends caged trailer. I may look into a small trailer for gardening business, part time based.

Not looking for actual tax advice, just a guide please.


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## Jack Malarkey (Jan 11, 2016)

WestSydGuy said:


> Hey @Jack Malarkey and other tax experts, I have a query around multiple businesses which I'm sure has been asked or answered before, but would like some confirmation if possible.
> 
> I've read about some Melbourne members running multiple businesses, such as an airport xfer business, renting cars to drivers, such as @Scottie B .
> 
> ...


@WestSydGuy, you keep a log book for the relevant period for each car recording business travel of all types so you can work out the total business proportion of total travel for that car.

You don't need to work out the amounts for each business separately.

Here's some Tax Office guidance: https://www.ato.gov.au/Business/Inc...book-method/#Usingthelogbookfortwoormorecars1.

(I shy away from the description of 'tax expert'!)


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## WestSydGuy (Jun 7, 2018)

Ok, thanks for that info @Jack Malarkey

I'm also wondering how profit/expenses from each business type would need to be presented to the ATO. For example, if I spent $1500 on gardening equiped, earned $500 gardening, while also spending money on rideshare, and earning from that, how would vehicle costs be split? I guess I'm looking at a non-comercial losses type of definition? Would I carry forward losses from gardening, or it's all under a sole trader type business?


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## Jack Malarkey (Jan 11, 2016)

@WestSydGuy, yes, for the purposes of the non-commercial losses rules, you do need to do the relevant calculations separately for dissimilar businesses: https://www.ato.gov.au/Business/Non-commercial-losses/.

This means you will need for this purpose to apportion car expenses (and no doubt some other expenses) between the two businesses.

The tax law doesn't specify how to do this. I think the Tax Office would accept any reasonable method that achieves a sensible result.

One way would be to use a coding system in your log book such as R for 'rideshare' and L for 'lawn-mowing'.

If I remember correctly, the income tax return form itself simply asks for your net business income to be divided between non-primary production and primary production net business income. This is so the averaging provisions that apply to primary production income can work.


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## Cubaroo (Aug 16, 2019)

Jack Malarkey said:


> @WestSydGuy, yes, for the purposes of the non-commercial losses rules, you do need to do the relevant calculations separately for dissimilar businesses: https://www.ato.gov.au/Business/Non-commercial-losses/.
> 
> This means you will need for this purpose to apportion car expenses (and no doubt some other expenses) between the two businesses.
> 
> ...


The meaning of primary and non-primary production (relating to tax matters) is not what you think it is. Primary production refers to activities like Farming for example and, Non primary production refers to activities like Rideshare driving for example. Best to look up online, either ATO site or just google it.


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## Jack Malarkey (Jan 11, 2016)

Cubaroo said:


> The meaning of primary and non-primary production (relating to tax matters) is not what you think it is. Primary production refers to activities like Farming for example and, Non primary production refers to activities like Rideshare driving for example. Best to look up online, either ATO site or just google it.


I agree with you. I didn't intend to say anything different.

I was pointing out the format of the income tax return rather than what counted as primary production.


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## Cubaroo (Aug 16, 2019)

Jack Malarkey said:


> I agree with you. I didn't intend to say anything different.
> 
> I was pointing out the format of the income tax return rather than what counted as primary production.


I understand now mate.


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## Sandhills (Feb 9, 2018)

On a tangent ...

Whether your running a business or not is a question of fact meaning on the evidences and in accordance with a long line of case law principles

The ATO is NOT the be all and end all in determining what is or isn't a business but they do publish guidelines which are extracted from these principles

This is why they have a very poor win rate in taxpayer challenges...relying on scripting rather than the source of the rule

Practically;
If you download the ato guidelines on indicators of a business and follow those you will set up your business in an ato friendly manner ...eg obtain an abn, seperate business account for each sub business ( it is certainly possible to be running a business without these but not advisable as the ato would tend to initially dispute)

At its core a business is a venture intending to make a profit , always keep that in mind

A rough ato rule is losses are not unexpected in a new business for up to three years, that is not a hard rule,

So if you have rideshare that is one business that should generally make a profit

If you then begin gardening, provided you set it up to make a profit ( to distinguish from a hobby which the ato calls non commercial) and being wise look at the ato guidelines on what defines a business and set it up In a standard way and did make losses for up to three years then they will reduce the business income on the rideshare business income

And so forth for each new business provided again it is a business set up to make a profit

For example you could have 10 (or 100) non performing businesses with losses ( but may then attract some attention the ATO is not silly) provided all were genuine attempts at earning profits then any losses they will reduce the rideshare business income

I can't remember if these are all aggregated into the one line in ato return or you put each net income or loss in a separate line and it aggregates in the calculation

I use the hr block online portal which just asks for the net income or loss overall

The ato substantiation rules are strict, that means u read up on record keeping and have a separate expanding file for each business and bank account etc etc

If your a sole trader they are all under the one abn but u keep seperate records then post the net of all the businesses in the return

Otherwise see Jack above

Tax is best to be collabaritive and discuss and confer with others to get the best view


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## Jack Malarkey (Jan 11, 2016)

Sandhills said:


> On a tangent ...
> 
> Whether your running a business or not is a question of fact meaning on the evidences and in accordance with a long line of case law principles
> 
> ...


It's important to keep in mind is that the non-commercial losses rules can still apply to oblige you to quarantine the losses of a business even though you are carrying on business in a legal and factual sense.

These rules need to be considered and applied separately for each dissimilar business.

Rideshare and lawn-mowing would be dissimilar businesses.

See generally https://www.ato.gov.au/Business/Non-commercial-losses/.


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## Icecool (Feb 8, 2016)

Jack Malarkey said:


> It's important to keep in mind is that the non-commercial losses rules can still apply to oblige you to quarantine the losses of a business even though you are carrying on business in a legal and factual sense.
> 
> These rules need to be considered and applied separately for each dissimilar business.
> 
> ...


Even thought you have dissimilar business under one Abn. you still can claim the loss on the dissimilar business provided you pass a few test. One of them is the turn over is more be more than $20k. And if you run all these businesses together in one company. These non commercial loss rule don't apply.


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## Jack Malarkey (Jan 11, 2016)

Icecool said:


> Even thought you have dissimilar business under one Abn. you still can claim the loss on the dissimilar business provided you pass a few test. One of them is the turn over is more be more than $20k. And if you run all these businesses together in one company. These non commercial loss rule don't apply.


Thanks.

Yes, I agree with all of that.


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## Sandhills (Feb 9, 2018)

Jack Malarkey said:


> It's important to keep in mind is that the non-commercial losses rules can still apply to oblige you to quarantine the losses of a business even though you are carrying on business in a legal and factual sense.
> 
> These rules need to be considered and applied separately for each dissimilar business.
> 
> ...


Yes sorry if not clear was speaking on a tangent as not across those rules


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## President (Jan 16, 2018)

WestSydGuy said:


> Hey @Jack Malarkey and other tax experts, I have a query around multiple businesses which I'm sure has been asked or answered before, but would like some confirmation if possible.
> 
> I've read about some Melbourne members running multiple businesses, such as an airport xfer business, renting cars to drivers, such as @Scottie B .
> 
> ...


Go and see an accountant tight arse


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