What is a business?

A business is an activity that you intend to carry on for profit and there is evidence to support that intention. A business includes:

• a profession
• a calling
• a trade
• a manufacture
• an undertaking of any kind
• an adventure or concern in the nature of trade. For more details, see IT459, Adventure or Concern in the Nature of Trade.

Business income includes income from any activity you do for profit. For example, income from a service business is business income. However, you do not include employment income as business income. You need to know if you are an Employee or Self-Employed?

The date when the business can be said to have commenced must be known. Generally, we consider that a business starts whenever you start some significant activity that is a regular part of the business or that is necessary to get the business going. We look at each case on its own merits.

For example, suppose you decide to start a merchandising business and you buy enough goods for resale to start the business. At this point, we would consider that the business has started. You can usually deduct expenses you have incurred from that date to earn the business income. You could still deduct the expenses even if, despite all your efforts, the business ended.

On the other hand, assume you review several different business prospects in the hope of going into a business of some kind. In this case, we would not consider that the business has started, and you could not deduct any of the costs you incur.

For more details about starting a business, see IT364, Commencement of Business Operations.

Forms and publications

• Business and Professional Income guide (T4002)
• Keeping records guide (RC4409)
• IT459, Adventure or Concern in the Nature of Trade
• IT364, Commencement of Business Operations