Can we file skip the dishes income of $5000 on form t2125 or should we include this income in other income on line 104

Skip The Dishes is Like Uber. They have to charge GST/HSt on their services regardless of income level.

So yes T2125 is required and HST/GST return is also required irrespective of the $30K threshold! It is mandatory for such businesses.

It might not be mandatory to apply for a BN since the sales are still less than $30,000, but why not handle it as a business from the start? Certainly any expenses incurred to earn the income, including reasonable vehicle costs, would be deductible.

You should definitely NOT put your Skip the Dishes income on line 104.  This was done in the past, but CRA started cracking down on that practice quite some years ago.  If it were $500 you might get away with that, but $5000 is a fair chunk of change.

You are considered a self-employed driver, so you will fill out a T2125.  On this you will put the gross amount of $5000 and then take all relevant expenses (vehicle).  Be aware that the vehicle portion of the form is not fun and requires keeping track of your total kms for the year as well as business kms for the year so you can pro-rate all your expenses.  I have heard tax preparers say they have successfully used a mileage rate (such as $0.59/$0.53) for business kms but that's not how the rules read.  You will also have to have a log of your business kms.as CRA likes to check those.

Your total income for the business was less than $30,000 for the year so you do not have to register for GST.  However, should your income pass $30,000 (and the rules for passing are somewhat complex), then you will be required to register for GST.

I'm attaching a reference from Intuit from 2020:

https://turbotax.intuit.ca/tips/gst-hst-reporting-requirements-for-food-delivery-services-11950

Hope this helps.

Jo