Backyard Aquaponics
A place to discuss aquaponics

has anybody used there aquaponic system as a buisness to clam power water ect
back at tax time to lower there taxable income any info would be good thanks
Dave

I have read somewhere on the ATO website of people trying similar things to this.

For example, someone claiming they are a vegetable grower to be able to claim things as tax deductable. When the ATO investigated they found that the people in question had a couple of tomato plants and were still getting most of their income from another source.

If you search long and hard enough on the ATO you will find stories like above and discover that when they find you they will throw the book at you.

There is a questionaire the ATO use to work out if you are running a business.
The questions are:
Does your activity have a significant commercial purpose or character?
Do you have more than just an intention to engage in business?
Do you have a purpose of profit as well as a prospect of profit?
Is there repetition and regularity to your activity?
Is your activity carried on in a similar manner to other businesses in your industry?
Is your activity planned, organised and carried on in a business-like manner?
Does your activity have characteristics of size, scale and permanency?
Would it be true to say your activity is really better described as a business, rather than a hobby, recreation or sporting activity?

And with regards to the hobby aspect...
Common areas where people carry out activities which may be a hobby rather than a business include hobby farming, motor car/bike racing, and hobby ceramics.

If your activity constitutes a hobby or recreation:

any money you earn from this activity is generally not assessable income
you are not entitled to claim tax deductions for any expenses you incur in carrying out this activity, and
if your activity results in a loss, you are not entitled to offset this loss against other income or carry the loss forward.

You are generally considered a hobby if income generated is less than $5k.
And there may be further tax implications, such as having to pay a percentage of capital gains tax when you go to sell your house, as it was used in producing assessable income.

Some free advice... Dont bother

thanks guys for your reply might give it a miss

dont listen to the above GO TALK TO A TAX ACCOUNTANT you can run a business at a loss for years and all the gear and running costs can be deducted from a full time other job if you honestly think that you can sell either products for aquaponics or the produce it grows.... I have been running my aquaponics for almost 3 years and even the seeds I buy are a tax right off.... small business usually run at a loss for the first 2-3 years as setting up and it is called R&D-research and development...... getting an ABN and a proper business Name opens a lot of doors for you...

As in any business as long as you have a idea it can be run as a business, all expenses for that particular business is a right off even against a normal full time job, many people have full time job and start running a business off another jobs earnings GO TALK TO AN ACCOUNTANT (A GOODONE)

If you do it may take you about 15minutes to get through your BAS every 3 months

You certainly do need to speak to an accountant but a good one is going to cost you more money than you may save (in this case). It is also you, not the accountant who is taking the risk with these things.

You may well be able to run your business for a loss for a while (as it takes money to get started and you won't have a cash flow immediately) but your intention needs to be that you are in business to make money.

Unless that is your intention then it's not worth doing.

I may be labelling the point here, I think you've already realised the reality of the situation, but here's my two cents worths:

Have another read of the questions from the ATO that Werdna posted… and answer them honestly to yourself.

I know a multi-millionaire business man, who was also the CEO of one of the largest companies in the country (you would assume he knows good accountants), that ran 20 head of Murray Grey cattle on his 130 acre “weekender” so he could claim primary producer status and therefore make the property and it’s running costs tax deductible… and even he ran into trouble with the ATO over his “intent”

For what you are intending, just to claim a few $ back on your tax, you would need Shire approval from a zoning and health aspect, probably an aquaculture license from Fisheries, business name registration, an ABN, quarterly BAS statements and GST payments forwarded to the ATO if you make any income etc, etc.

Cheers.

Or write a letter to the ATO asking if you have to pay tax on regular income you have made from your AP system. If they send a letter back saying that you have to pay tax then you should also be able to claim for its running costs.

quote "so he could claim primary producer "

well all i can say is he was an idiot as an accountant would have told him to get primary producers it doesnt have to be you only income but it has to be your biggest income stream

Being a primary producer has nothing to do with whether or not the production constitutes your primary income.

Primary producers are the sector of an economy making direct use of natural resources, ie: Agriculture, Mining, Oil & Gas, Fishing, Tree farming etc.

I guess I am not a very good one

DD, you live on a 160 acre farm with 20 acres of crops.
You dont think that is a little different to someone claiming seeds for a 600sqm property in the suburbs?

Well it is hard to know who is a good accountant and who is a bad accountant... Some accountants are pretty good at putting on the "used car salemans" hat and promise you that they can do what you need, but there is a lot of aspects to the accounting system in Australia.

If you want to go down the business path, look for an accountant or accounting firm that servicing small business and start-ups... gets references from small business owners and new start-ups... the average tax return accountant would not be much use...

But most importantly, the ATO has a system that allows you to get a private ruling... Not sure exactly how it is done, but basically it is putting your case on paper and the ATO will respond to your case. And once you have a ruling, you will know for sure if you can or cannot, no doubts and you are not dependant on a good accountant to say yes or no...

There's no way it will pass the business test the ATO makes you go through. For DD on a large block producing other crops, sure, it's just a subset of that.

http://www.youtube.com/watch?v=jtnqNEmvb1o

cheers

Primary Producer and tax deductions aren't mutually exclusive
20 head isn't going to be a +50% of his total income therefore disqualifing him from "primary producer" status. Why would a big shot CEO bother with that, from the top of my head the few "extras" that would be available to him, income averaging, farm management deposits, off road feul exise,.. actually thats one's allowed for others , would not alter his tax situation.
Legit tax deductions for legit business expenses in running his small farm would be allowed.
Rorting is frowned upon.
Shire approval and licence ...yes
business reg would be an application & fee , ABN 15 min online, 1/4 BAS and GST dont need to register for GST until earning $50,000 could be raised to $100,000 and you can do it annually turnover less than $1,000,000 . These fees and cost incurred are deductable expenses


Proper records and book-keeping would just about do it

If you're serious, does not matter how big or small an operation, get some proper advise from some-one you trust be it an accountant or a ruling from the ATO, but I think you've answered your own question

Cheers