We can help you from day one by looking at your cashflow position, which is one of the most important factors for any new business; by helping you to find the best bookkeeping system for your business and by discussing your options for the best tax savings available.
Are you going to launch your business as a sole proprietor, partnership, trust or company? Before you choose your business entity the following should be considered:
- commercial risks
- expected profitability
- tax planning preparation
- ABN registration and GST
- PAYG Withholding and fuel credits
- Business Plan
Have you set out your business objectives in writing? Can you demonstrate qualified experience in the type of business that you want to launch? How are you going to finance the company? What are your expectations for sales, profitability and investment in assets? Have you consolidated all this information in a formal business plan?
Even if you don’t want to borrow money, a good business plan will help you to understand your current position and give you a good indication of your future possibilities. At TaxAssist Accountants we know that a good business plan is imperative to your business, especially given the current economic climate.
Banks and Finance companies
Identify your 'friendly bank manager'. As this can be one of the most important contacts for your business it’s crucial that you’re well prepared for that critical first meeting. Fortunately, here at TaxAssist Accountants we already have well established relationships with all the major banks in Australia and are able to help you prepare for your first and subsequent meetings.
GST (Goods and Services Tax)
You should decide whether or not it’s in your best interest to register for GST from the time of starting up. Whether you decide to register now or in the future both the profitability and the cashflow of your business will be affected.
One of the main advantages of registering for GST when you do start-up is you’ll be able to reclaim GST on purchases made before you start operating. Don’t worry though, if you find it’s best to register at a later point in time, ATO has made it possible for operators to reclaim GST prior to their registration provided the claim is made within certain time limits. For further guidance on GST registration please see our GST section.
Tax Traps to avoid!
- Tax Penalties – As soon as you have set a start date, ensure that you notify ATO of your intention to commence operating, and apply for a TFN if operating a business under a structure other than a sole trader. Self-employed individuals, partnership businesses and limited companies face penalties for failure to notify ATO that they are liable to tax.
- GST Penalties – Do not represent yourself as registered for GST if you are not, as this is considered to be fraud. If you do register for GST submit your returns and pay your dues on time to avoid late filing penalties, interest and surcharges.
- Missing Invoices – Always obtain a proper invoice for any business purchase and a GST invoice if you are registered for GST. If you fail to do so, you may find that your claim for a tax deduction will be denied, as will your GST claim.
- Company Car – whether you are self-employed, a member of a partnership or operating as a limited company, planning for the use of a car in your business needs to be thought through carefully. Self-employed individuals and partners will need to keep a log of business mileage to backup any claim for tax relief. Company owners will need to compare whether the cost of using a car owned by the company will be more cost-effective than using a privately owned vehicle for business purposes. The tax implications vary considerably depending on many factors, which is why a careful review should always be undertaken in order to minimise any tax charges and maximise any reliefs.