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BRISBANE ACCOUNTANTS / MORAYFIELD ACCOUNTANTS
ATO CHOOSING THE RIGHT BUSINESS STRUCTURE
SOLE TRADERS/PARTNERSHIPS
30 June 2011
Am I in
business?
Is my business large?
Do I have employees?
Do I have frequent transactions?
Do I make a profit?
Do I have a commercial location?
Do I have specialized knowledge?
Have I made a large capital investment?
Do I keep business records?
Do I run the business full time?
Do I advertise?
Do I have a business name?
Do I conduct market research?
Am I associated with other commercial activities?
Am I a contractor or employee?
Are you employed by a labor hire firm?
Are you an apprentice?
Do you have an ABN?
Do you rectify your own faulty work?
Can you employ staff?
Google ATO Employee/contractor
decision tool
Personal Services Income
Do you receive income for personal effort or skills?
Do you satisfy the results test?
Do you rectify your own faulty work?
Does 80% of income come from one client?
Do you have other clients?
Do you have other employment?
Do you have business premises?
SOLE TRADER/PARTNERSHIP
SET UP COSTS NIL If you use your own
name
Register your business name with the
State Government
Dept of Fair Trading. $78
Apply for an ABN at www.abr.gov.au Cost Nil
Be careful of contractor question.
You are not required to register for GST if your sales are less than
$75,000.
The penalties for not lodging each BAS may be $550 plus interest.
A GST invoice must have tax invoice written on the top.
PUBLIC LIABILITY INSURANCE
Sole Traders/Partnerships have no
asset protection so most have public liability and other business
insurances.
See your insurance broker.
SOLE TRADER V PARTNERSHIP
Many families have two sole trader
ABNs rather than setting up a partnership because sole traders usually do
not have to prepare a set of Financial Statements and lodge a
partnership tax return.
Therefore
accounting fees are usually much cheaper.
SOLE TRADER/PARTNERSHIP BOOKKEEPING
MYOB and QUICKBOOKS requires a lot of
supervision and training which is time consuming and expensive.
Here is an alternative.
Easy Record Keeping for Small Sole Traders with sales < $200,000
Set Up Expenses Spreadsheets
Use at least 10 expense categories
Enter from bank statements
Date Description
Amount GST Materials
Tools MV Fuel
Stationery Mobile
01/01/11 Bunnings
110.00 10.00 100.00
02/01/11 BP Fuel
55.00 5.00
50.00
02/01/11 Officeworks
220.00 20.00 200.00
05/01/11 Telstra
110.00 10.00
100.00
End of Quarter and Yearly Totals
Give Totals to accountant.
SOLE TRADERS TAX RETURNS
Sole Traders lodge individual tax
returns with a business schedule.
A business tax schedule is Income less Expenses and often includes
motor vehicle and depreciation
schedules.
All figures must exclude GST if you have lodged BASs.
Disclaimer
The information provided in the above documents is not intended to
be, nor should it be construed as tax advice. Any specific
recommendation for a client can only be done after their individual
circumstances have been determined by David Douglas Accountants.