Taxation & Goods Service Tax

Small business start up information

1. Do I need a separate tax file number?

2. Can I claim business related expenses in my tax return?

3. What is an Australian Business Number ABN?

4. Are an ABN and a tax file number (TFN) one of the same thing?

5. Do I need to apply for an Australian Business Number, ABN?

6. What would happen if I didn’t have an ABN?

7. Where do I go to apply for an ABN?

8. What does it cost for an ABN?

9. Who should apply for an ABN and be registered for GST?

10. Where can I find additional information on ABN?

11. What is Good Services Tax (GST)?

12. Can I still register for GST even though I won't make more than $50,000 in sales in the financial year?

13. Where can I find more information on GST?

14. What is a Business Activity Statement (BAS)?

15. How do I get a BAS?

16. Do I need to register for PAYG?

 

1. Do I need a separate tax file number?

It will depend on the business structure your business is based upon.  Businesses operating as a sole trader, do not require a separate tax file number.  Sole traders submit a tax return under the same tax individual file number.  However partnerships and companies will require a separate tax file number and a separate tax return should be lodged as well.

2. Can I claim business related expenses in my tax return?

Deductions for costs incurred in running your business are allowable, provided the expenses are not of a private, domestic or capital nature.  The expense must be incurred in the process of generating assessable income. All businesses, irrespective of their business structure can claim tax deductions on a range of expenses. Such expenses include:
  • Advertising
  • Bank fees and charges
  • Business-related travel
  • Salaries and wages
  • Operating expenses
  • Motor vehicle expenses
  • Telecommunications
  • Business repairs and maintenance
  • Tax-related costs
  • Office stationery

3. What is an Australian Business Number ABN?

An ABN is a unique number used to identify your business dealings with the ATO.
 

4. Are an ABN and a tax file number (TFN) one of the same thing?

An ABN and a TFN are two different numbers used for separate purposes when dealing with the ATO.   The TFN is your personal number for dealings with the ATO. An ABN is a public number used in business dealings. Irrespective of your business structure you will need a TFN to apply for an ABN.

5. Do I need to apply for an Australian Business Number, ABN?

Applying for an ABN is not compulsory, unless you are required to register for GST. If you are in business, you should consider registering for an ABN, you can still hold an ABN even though your business does not qualify to be registered for GST.
 

6. What would happen if I didn’t have an ABN?

If you don’t have an ABN, you will find you are unable to claim back the GST you have paid on expenses in the course of operating your business, you must have an ABN to register for GST. Finally if you don't have an ABN, other businesses with which you supply goods or services too must withhold tax at the top marginal rate when you supply them with goods or services.
 

7. Where do I go to apply for an ABN?

You can register for an ABN online at the Australian Business Register (ABR) website.  Alternatively your accountant can apply for an ABN on your behalf.

Please note you don’t need to register for an ABN if you are
  • A hobbyist
  • Self-funded retiree

8. What does it cost for an ABN?

Nothing, if you apply for the ABN yourself. The ATO does not impose a fee for applying for an ABN online or by paper application. However you will be charged a fee if use the services of an accountant or tax agent to apply for your ABN.
 

9. Who should apply for an ABN and be registered for GST?

Those businesses that are required to be registered for GST include any:
  • Businesses with an annual turnover of greater than $50,000 or more per year.
  • Non-profit organizations with an annual turnover of $100,000 or more per year.
  • Business who transport customers by taxi or limousine at the expense of customers.

10. Where can I find additional information on ABN?

www.ato.gov.au
 

11. What is Good Services Tax (GST)?

GST is a 10% tax on most goods and services bought or sold within Australia. Certain items are exempt from GST including most basic foods, exports and many educational and health services. The GST is designed to levy a tax on the end consumer, who ultimately pays for the goods or services for private use.  Businesses registered for GST are entitled to claim the GST proportion of expenses undertaken in the course of business operations – referred to as the Input Tax Credit.  A business with an ABN, registered for GST can claim the input tax credit through a Business Activity Statement (BAS).  

 12. Can I still register for GST even though I won't make more than $50,000 in sales in the financial year?

Yes you can still register for GST this is called Voluntary Registration. The entity can choose to register for Goods and Services Tax (GST) if:
  • They are carrying on an enterprise, or
  • They intend to carry on an enterprise in the near future.
The entity should show the date they wish their registration to begin, or the date from which they intend to carry on an enterprise. By choosing to voluntarily register for GST the entity must stay registered for 12 months.

13. Where can I find more information on GST?

www.ato.gov.au or down load the ATO Guide GST for Small Business
 

14. What is a Business Activity Statement (BAS)?

A BAS is a single form, it allows businesses to report and pay their tax obligations to the ATO.
 

15. How do I get a BAS?

Once you have registered for GST, the ATO will automatically send a BAS form to all registered businesses, depending on your situation, it may be completed either quarterly or monthly.

16. Do I need to register for PAYG?

No, not unless you are employing staff. If you have employees or pay employees of another entity, you are required to withhold an amount from payments you make to them. If you conduct your business through a company, you are also required to withhold from payments to your company directors for their services. You may have to withhold an amount from payments to other workers such as contractors. Also if a business does not quote their ABN, you need to withhold an amount from payment and forward this to the ATO. This is called ‘withholding’ and is done using the pay as you go (PAYG) withholding system.

We will show you how you can make money in the new economy!

Our aim is to Show Mummy the Money!

Copyright © 2009 Show Mummy The Money

LEGAL DISCLAIMER

Every effort has been made to ensure that this website is free from error or omissions. However the publisher, the contributors and their respective employees or agents do not accept responsibility for injury, loss or damage occasioned to any person acting or refraining from action as a result of material in this website whether or not such injury, loss or damage is in anyway due to any negligent act or omission, breach of duty or default on the part of the publisher, the author or their respective employees or agents.