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SOLE TRADER

SET UP

Set up costs are nil if you use your own name.

If you register a trading name directly via the ASIC website this is usually $34 for one year or $79 for three years.

If you have issues with the ASIC website try TradingAs.com.au which is generally easier, has a good 7 day helpline and charges $85 in addition to the ASIC fee.

 

APPLY FOR ABN

You may apply for an ABN at www.abr.gov.au.

Be careful of the question "Are you a contractor?". Answer "no".

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 $850 plus interest.

A GST invoice must have tax invoice written on the top.

 

SOLE TRADER BOOKKEEPING

MYOB and QUICKBOOKS require a lot of supervision and training which is time consuming and expensive.

Here is an alternative.

Easy Record Keeping for small businesses with sales < $200,000

Expenses Spreadsheet
Use at least 10 expense categories
Enter from bank statements

Date         Description     Amount     GST     Materials     Tools     MV Fuel     Stationery     Mobile    Internet Bank charges

01/01/14 Bunnings             110.00     10.00     100.00
02/01/14 BP Fuel                  55.00       5.00                                          50.00
02/01/14 Officeworks         220.00     20.00                                                              200.00
05/01/14 Telstra                  110.00     10.00                                                                                    100.00
08/01/14 Telstra                    88.00       8.00                                                                                                         80.00
15/01/14 Bank charges        12.00       nil                                                                                                                            12.00

Total using auto sum        595.00     53.00     100.00                           50.00           200.00            100.00         80.00       12.00

Labels on BAS                     G11          1B

Use totals to lodge your own BASs. (We will show you)

Give yearly totals (excluding GST) to your accountant to do your income tax returns.

 

SOLE TRADERS TAX RETURNS


Sole Traders lodge individual tax returns with a business schedule.

http://www.daviddouglas.com.au/Smallbusiness.htm

A business tax schedule is income less expenses and often includes motor vehicle and depreciation schedules.

All figures must exclude GST if you are registered for GST and have lodged BASs.

 

PUBLIC LIABILITY INSURANCE

Sole traders and partnerships have no asset protection it is important to have public liability and other business insurances.

See your insurance broker and solicitor for asset protection issues.

 

DEPRECIATION RATES

Google - depreciationrates.manager.io

 

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.

 

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?




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.
 

We have clients from the following locations:

Brisbane, Gold Coast, Sydney, Newcastle, Sunshine Coast, Cairns, Canberra, Melbourne, Adelaide, Perth, Darwin.

Other:

Brisbane, Albion, New Farm, Teneriffe, Newstead, Windsor, Wilston, Bowen Hills, Wooloowin, Herston, Lutwyche, Hamilton, Eagle Farm, Gordon Park, Fortitude Valley, Clayfield, Ascot, Hendra.

Morayfield, Burpengary, Caboolture, Bellmere, Wamuran, Narangba, North Lakes, Mango Hill, Kallangur, Dakabin, Deception Bay, Bribie Island, Elimbah, Kippa-Ring.

We do tax returns for individuals, trusts, companies, partnerships, contractors, ABNs and sole traders.

Liability limited by a scheme approved under Professional Standards legislation