When you’re at the stage of asking this question, it’s often the case that there’s no right answer. Many businesses will start out as hobbies, and there will be a point when you could say it’s either. Your accountant can help you consider the differences in the characteristics of commercial business and a hobby to make sure you’re lodging your taxes correctly.
Allowances are separately identified payments made to an employee to cover expenses they incur while performing their role. Allowances paid in conjunction with normal salary and wages are not treated separately for PAYG withholding, but can still have special treatment in the eyes of the ATO.
Asset protection is needed as early as possible to protect yourself from a disastrous first few years of trading -it’s not only for the wealthy! It can mean the difference in protecting your family home and not.
Buying an existing proven business can be easier than starting from scratch – an established business has brand awareness, a (hopefully happy!!) customer base, regular suppliers and immediate cash flow.
The sharing economy describes an emerging social concept that connects people via the internet to those who will share services for money.
Directors are legally responsible for ensuring that their company meets its pay as you go withholding, GST and superannuation obligations. If a company fails to comply with their obligations, company directors are held personally liable for the amount the company should have paid.
A franking credit is a tax credit attached to “franked” dividends that shareholders receive from companies. Is it where the company issuing the dividend has already paid taxes on the income used to pay the dividend. To an individual, it is similar to PAYG taxes than your employer pays on top of your net wages.
Negative gearing is one of the most misunderstood concepts in tax and is something commonly said in the media without any real explanation. Simply, gearing is “borrowing to invest”.
Lack of cash flow can be the difference between success and failure for small businesses – the planning of cash flow can reduce stress for both you and your creditors and the knowledge that you have money spare allows you to expand.
The chief reasons for the popularity of SMSF’s include control over assets,
tax benefits associated with superannuation, flexibility in funding retirement, potential cost savings by eliminating trustee and portfolio fees & estate planning opportunities.
While it might seem at first glace that a contractor is cheaper and easier because of PAYG Withholding, Superannuation & Annual Leave – it can be a very complicated space where there might not be a right answer.
A good accountant is an invaluable resource. Here are our tips to ensure you choose the right accountant for your business.