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The relevant factors in the badges of trade for self-employment.
KEY POINTS
- There can be doubt as to the nature of transactions particularly isolated ones.
- The existence of a trade can depend on case law and various indicators.
- A single transaction may still have the nature of a trade.
- Is the asset which is the subject of transaction one that might be owned for personal use?
- Does the taxpayer carry on a related business?
- Keeping clear records of intention regarding the asset is important.
A payment received by an individual may fall into one of several categories for tax purposes. If the individual is clearly carrying out a trade the correct category may be obvious but for some activities especially one-off transactions there may be several possibilities to choose from including:
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