Post
by peter.coombe » Wed Jan 21, 2015 11:41 am
Firstly if your activities are in additional to a job, and the total turnover is less than $20,000, then it is not worth running it as a small business. Declare it as a hobby and forget about all about the tax implications and all the paperwork associated with a small business. If the annual turnover is more than $20,000 then you can claim any losses against other income, so it might be worthwhile. Under $20,000 turnover then you can't, you can only roll foreward your losses and offset the losses against future income. If you declare it as a small business then you can get an ABN number. An ABN number can be an advantage in some circumstances such as when selling via a music shop or if you want to set up a web site under a .au domain you will definitely need an ABN number. Note that if you do not submit a tax return for the business then the ATO will eventually take the ABN number away from you. If your turnover is less then $2million you do not need to do an annual stocktake. I have not done a stocktake since this rule came in quite as few years ago. All you need to do is to do one stocktake and use that for future years. If your turnover is more then $75,000 then you will need to register for GST, and that is a pretty good incentive to keep your turnover less than $75,000!
If you want to run your operation as a small business, the first thing you should do is to get an accountant, make an appointment and chat to them about what is required, and what they will need from you at tax time. This will make it much easier and cheaper when the time comes to do your tax return. Make sure you keep your business activities separate from your personal finances and keep a record of what goes in and out of the business. So, you will need a separate bank account and credit card for the business. I declared my activites as a small business 20 years ago, my other half is an accountant, and I used to work for the ATO, so I know about this stuff.
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