Kevin Begon -

Can you boost your income by pursuing your hobby?

Do you make furniture in your spare time, or perhaps make delicious jam with fruit from your garden? You can turn these hobbies into a source of legitimate income, provided you that you meet certain administrative requirements. 

Caution: borrowing money costs money 

60% of Belgians want to know how they can spend more of their budget on their hobbies. These figures come from a Profacts survey conducted for BNP Paribas Fortis. This is a particular concern for the younger generations, with 75% of people aged 18-39 thinking about doing this. 

If you can, why not put a little money aside every month to spend on leisure activities? For the big purchases and investments needed to pursue your hobby – buying a new road bike for example – you can take out a bank loan repayable by instalments. If you want to convert a room into a dedicated space where you can pursue your hobby, taking out a renovation loan or drawing down money from your mortgage could be a better choice. “For every project, your bank will examine the type of financing that best suits your personal situation,” explains Tim Spellemans from BNP Paribas Fortis. “Your relationship manager will always work with you to find the right balance between your income and expenditure. A hobby shouldn’t cause you financial problems.” 

Making money from your hobby 

Instead of saving or borrowing to pursue a hobby, you may be thinking about the opposite: using your hobby as a source of income. According to our Profacts survey, half of all Belgians are considering this. For those aged 18-29, the proportion even rises to three quarters. 

It’s perfectly acceptable and legal to make money from your hobby, but it will be subject to tax. If the income from your hobby remains occasional, it will be regarded as “an occasional non-business activity” for tax and social security purposes. This means that you don’t have to register as self-employed. However, you must mention the relevant income in the “other income” section of your tax return and it will be taxed at the reduced rate of 33%. 

Secondary self-employed occupation 

If this additional income becomes regular, you will be regarded as having a secondary self-employed occupation. This means that you must register with a social insurance fund and request a business registration number from it. The money you make will be added to your main income and taxed as business income. If your annual revenue is less than €25,000, you don’t have to charge VAT.  

To determine whether additional income is “regular” or not for tax and social security purposes, the authorities look at various criteria such as the frequency and regularity of the income. If you manage a website or Facebook page in relation to your additional income, this may indicate that it’s more than an occasional activity.  

It’s worth noting that if your additional income is food-related – for example if you’re selling apples from your orchard or homemade jam – you must also register with AFSCA, Belgium’s federal food safety agency. If you are a home-brewer, the rules are even stricter: you must request a permit from AFSCA and from Belgium’s Customs and Excise department. You can do this via a “secrétariat social”/”sociaal secretariaat” (personnel and payroll administration organisation). 

Buying and selling 

Are you a collector? For example, you might own a fine collection of rare whiskies and decide to sell a bottle, for a profit of course. If you do this only occasionally, it will be regarded as “normal management of your private assets” and the profit will be tax-free. But if you are selling items regularly or buying them with the intention of selling them at a profit later on, this is regarded as “speculation” and the capital gains will be taxed as miscellaneous income. 

It’s not always easy to draw a clear line between normal management of your private assets and speculation, but it’s up to the tax authorities to show that a transaction falls outside the normal management of your private assets. 

(Loan repayable by instalments. The provisions regarding consumer finance in Chapter 1, Title 4, Book VII of Belgium’s Code of Economic Law apply. Subject to your application being accepted by AlphaCredit SA, lender, boulevard Saint-Lazare 4-10/3, B-1210 Brussels, RPM Brussels, TVA BE0445.781.316. Agent: BNP Paribas Fortis SA, rue Montagne du parc 3, B-1000 Brussels – RPM Brussels – TVA BE0403.199.702.) 

About Ask Your Bank 

At BNP Paribas Fortis, we want to help you gain a greater understanding of money matters, which is why we asked more than 1,000 Belgians what their main money-related questions and concerns are. With the Ask Your Bank series, we aim to make your life easier by addressing those matters in a fully transparent way.