Setting up your own business is an exciting prospect and getting it right from the beginning is vital for success. Operating a business is not just about working for yourself, it’s about having the necessary management skills, industry expertise, technical skills, finance and of course long term vision to grow and succeed. During our initial consultation our aim is to gain information on you as an individual and your businesses motives and goals, recommend and establish a suitable business structure based on your requirements and establish a suitable method for accounting for the business. We will advise you of all obligations with the ATO, set up all necessary registrations with the ATO including obligations related to running a business.
The most suitable business structure for you will depend on numerous factors. Here at McMahon Osborne Group, we will work with you to gain the greatest possible understanding of your business needs as well as your personal goals to ensure that we can select the most appropriate business structure for your circumstances.
Here are some important factors you need to consider;
Your risk management strategy, including your exposure to litigation risks and the need for asset protection
The expected size, growth and income of your business
Whether or not you have a need for a nationally registered business name, e.g. If you want to operate under one name in more than one state
Who will be involved in owning the business and whether or not you plan to introduce equity partners or shareholders in future
Your career and work plans for the future, e.g. When you plan to retire, how long you plan to work for and if you are expecting to have time off
The structure of your family and whether you have beneficiaries to whom you wish to distribute income
The availability of reduced tax rates and other tax concessions (e.g. Capital Gains Tax concessions for Individuals) and how you plan to spend the money you earn
We can tailor our services to ensure that not only is your structure in tune with your personal goals, but also tax effective in the modern competitive business world.
An ACN (Australian Company Number) is issued by ASIC (Australian Securities and Investments Commission) to all new companies registered in Australia to facilitate the monitoring of those companies and also to give them a unique identity code within the structure of the Corporations Law of Australia. Only a company can be issued with an ACN.
An ABN (Australian Business Number) is a unique number issued by the ATO (Australian Taxation Office) to all entities that are in business. If an entity is trading as a business, no matter how large or small, they must apply to the ATO to acquire an ABN and must show that ABN on any invoices they issue. The ATO will then automatically issue a unique eleven digit number.
It is not necessary for an entity that has an ABN to be registered for GST if their annual turnover or income does not exceed $75,000.00. Confusion often arises between the two numbers due to the fact that the ATO will use the ACN as the basis for a company's ABN. A company's ABN will always consist of their ACN with a two-digit pre-fix.
When you hire a new employee you need to know your responsibilities to ensure you get the best outcome for your business. There are workplace laws that apply to all employees, so it’s important to understand the legal requirements.
We can support you in the process of ensuring you are Super Stream compliant. Some accounting programs such as MYOB and Xero already provide Superannuation features that satisfy the ATO’s Super Stream requirements. Other clearing houses are also available that satisfy these requirements. Please contact your accountant to see which solution suits you and your business.
A wide range of record keeping software is available, each with different features and prices. In recent times, software with bank feed automation has become increasingly popular. Programs such Xero generally have this automation process available which see’s your bank transactions automatically imported into the record keeping software (no more manual entering of bank statements!). These programs also provide a Payroll and Superannuation feature. These programs generally have a monthly subscription fee that varies depending on the needs of your business. Ultimately as accountants, we will use whatever program is a best fit to you. It is best to contact your accountant to discuss which program may be appropriate for you and your business.
Using the simplified depreciation rules, assets costing less than the relevant instant asset write-off threshold are written off in the year they are first used, or installed ready-for-use. This threshold applies to each asset irrespective of whether the asset is purchased new or second-hand.
The threshold has changed over the last few years and during the current year as shown in the table below
Threshold for each asset
7.30pm (AEDT) 02/04/2019 to 30/06/2020
29/01/2019 to before 7.30pm (AEDT) 02/04/2019
7.30pm (AEST) 12/05/2015 to 28/01/2019
01/01/2014 to prior to 7.30pm (AEST) 12/05/2015
01/07/2012 to 31/12/2013
01/07/2011 to 30/06/2012
The entire cost of the asset must be less than the instant asset write-off threshold, irrespective of any trade-in amount. Whether the threshold is GST exclusive or inclusive will depend on your GST status, for further information about GST impacts see Cost.
In working out the amount you can claim, you must subtract any private use proportion. The balance (that is the proportion used in earning assessable income) is generally the taxable purpose proportion. While only the taxable purpose proportion is deductible, the entire cost of the asset must be less than the threshold.
Note that if you later sell or dispose of an asset for which you claimed an instant asset write-off, you include the taxable purpose proportion of the amount you received for the asset in your assessable income.