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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 $170 for one year or $360 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.
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
$1,110
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.
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