Self-employment and suspicion of hobbyism as well as parental allowance application
Good day,
in addition to my main job as an employee, I have been working as a freelance voice actor since 2012. (I always take advantage of the small business regulation). Since I have mostly incurred losses, a few years ago, the tax office suspected me of having a hobby. With a corresponding advertising concept and a total profit forecast (2012-2017), I was able to avoid being classified as a hobby for the time being. However, I did not come close to achieving the predicted profit and of course also incurred losses again during the Corona pandemic (only in 2 years with profits in the 90s and 350s € range, once a loss of approx. -1400 €, otherwise losses in the -10s € to -110s € range).
Now the tax office has contacted me again regarding the suspicion of hobby. I have been asked to prove my efforts regarding profit generation/optimization again within two weeks or, alternatively, asked if I would like to stop the activity. This comes at a time when I am expecting a child at the end of October and will be going on parental leave. I say "at a time" because firstly, I will not be active during parental leave and therefore will not generate any profits, and secondly, with the parental leave application that I have to submit after the birth at the end of October, I would like to be considered as self-employed with mixed income. Because as a self-employed person, the last 12 months before birth do not apply for the application, but rather the last calendar year before birth. And as a self-employed person, negative incomes are also taken into account, not just profits. This would place me in the calendar year 2019, as the pandemic period can be excluded when there are income losses (I was only briefly employed part-time during the pandemic, then lost my job and did not receive any freelance orders). The year 2019 would be good in this respect, as I did incur losses again as a freelancer, but worked full-time as an employee for 10 consecutive months, which would increase the parental leave pay. If the assessment period falls on 2020 (if I am only classified as an employee), then I would only receive the minimum rate of 300€, as I only worked part-time as an employee for 4 months in 2020.
Now to my questions:
1. In general, I can also accept it if my secondary activity is eventually classified as a hobby. Because the subsequent tax repayments from me, which will likely come my way, will hardly exceed the 2000€ range based on the above profits/losses, right? Nevertheless, it would be worthwhile solely because of the parental leave application to be able to ward off the suspicion of hobby once again through appropriate total profit forecasts/business plans, etc. Unless it is such that if my activity is finally classified as a hobby in, for example, 2022/23, not only tax repayments are necessary retroactively, but also the parental leave application that will soon be submitted can then be changed retroactively? I would therefore no longer be considered as self-employed, but as an employee. That is, a different assessment period could be used retroactively, resulting in parental leave repayments being due as well? Would that be expected? In that case, the effort with a business plan, etc. would not be worthwhile again.
2. Does it make sense to create a total profit forecast again, etc., if I will not be active due to parental leave in the next 1-2 years? Should I officially interrupt or suspend my freelance work in any way during this time? Should I report this to the tax office? So that the suspicion regarding hobby is not raised again during this time? Because I will not be active for 0 hours/minutes and will also not have any income. Theoretically, I would have negative incomes, as I have a website that presents me as a voice actor and costs me something monthly. However, I would not claim these expenses in the tax return during parental leave, because having losses every year fuels the suspicion of hobby. Is this not advisable or legal?
3. If the tax office still retroactively classifies my secondary activity as a hobby after submitting the business documents/forecasts, then I cannot state self-employment in the parental leave application, because my self-employment had never actually existed retroactively, right?
4. Despite being classified as a hobby in the future (after parental leave), I still want to accept orders as a voice actor/speaker. My goal is to continue to make profits eventually. Would I be allowed to do so after being classified as a hobby? To what extent can I still invoice? So far, I have always taken advantage of the small business regulation. In addition, I would not be able to claim losses in the future, but from
