The advice contained on this website is general in nature and it should be recognised that each person / business has individual needs and situations. As such, specific advice should be sought for your particular situation.
What steps are involved in starting a business with regard to ATO matters?
After talking with us and deciding what type of structure best suits your requirements, you would need tax file number, ABN, GST and possibly pay as you go withholding and fringe benefits tax registrations with the ATO. You may also need to register a business name.
Whose name should my business be in?
This is a common question and depends greatly on the type of business you are wanting to establish and your current assets. Each business is unique and there is no hard and fast rule on this. The objective is to minimise business risk and protect business and personal assets from potential loss.
What software should I use?
There are a variety of software packages available for you to choose from either installed on your computer or online. Online versions include MYOB, Reckon, Quickbooks Online Accountants and Xero. We are happy to talk with you about which program would best suit your needs.
What’s the difference between an ABN and an ACN?
An ABN is used for dealings with the Australian Taxation Office. An ABN is issued to all business entities, irrespective of how large or small they are and should be quoted on all invoices.
An ACN is issued by the Australian Securities and Investments Commission (ASIC). It is a unique identifier purely for companies whether they are carrying on a business or not.
What is a business activity statement?
A business activity statement (BAS) is a form submitted to the Australian Taxation Office by all businesses to report their taxation obligations. These include GST, pay as you go withholding (PAYGW), pay as you go instalments (PAYGI), fringe benefits tax (FBT) and fuel tax credits.
What is the difference between Cash & Non-Cash reporting options for GST?
The main difference between accrual and cash basis accounting is the timing of when income and expenses are recognised. The cash method accounts for income only when the money is received and for expenses only when the money is paid out. The accrual method accounts for income when the invoice is created for services / goods provided and is an expense when the services / goods are purchased.
Do I have to register for GST?
Only if your turnover is expected to be over $75,000 per annum. Registration for GST when your turnover is under that amount is voluntary. Occasionally there are exceptions to this rule whereby you need to be registered for GST regardless of turnover.
Do I have to include GST on my invoices raised?
If you are registered for GST, yes, it must be included on all tax invoices. There are certain industries which are exempt from charging GST but can still claim the GST on expenses. We would investigate your personal situation in this regard.
Can I change my PAYG Tax Instalment?
This is the situation where the ATO charges you income tax in advance for the current financial year in which you are operating.
The instalment amount or instalment rate calculated by the ATO is based on your business and / or investment income from your last lodged income tax return.
Usually, you would vary your instalments only if your situation has changed and you think the amount or rate calculated by the ATO will result in you paying significantly more (or less) than your expected tax payable on your business and/or investment income.
What tax records do I need to keep for my business?
Simply, under tax law, if you operate a business you must keep records that record and explain all transactions.
How long do I need to keep my records for?
You must keep all the records, receipts and other documentation you have used to prepare your tax return. If you are claiming deductions, you must keep written evidence to verify your claims for those deductions.
If you are an individual, you must keep proper records relating to your tax affairs for at least five years from the date you lodged your tax return.
If you are a small business, you must keep proper records relating to your tax affairs for at least five years from when the business record is prepared or the transaction is completed, whichever occurs later.
If at the end of the five year period, you are involved in a dispute with the Commissioner (an audit, for example), the five year period is extended.
If you use information from your records in a later tax return, you may have to keep records for longer. So, if you carry forward a tax loss, you must keep the records until the end of any period of review for the income tax return in which the loss is fully deducted.
If you own an asset which will be subject to capital gains tax on disposal, you will need to keep records covering the entire period of ownership until five years after lodgement of the tax return recording the disposal of the asset.
What do I need to do when I employ my first employee?
You will need to register for pay as you go withholding with the Australian Taxation Office, forward a completed Employee Declaration form to the ATO, set up a default superannuation fund and an account with a small business clearing house, arrange WorkCover and review relevant employee awards either with your industry business group or Fair Work Australia.