Business
I have started my own business and wonder if I need to register for GST.
Businesses with an annual turnover of $75,000 or more are required to register for GST. If your business has a lower turnover you are not required to register but you may do so if you wish. You will only be required to charge your customers GST if you are registered.
I run a furniture delivery business and have a 5 tonne truck which is getting very expensive to run. I have heard that the government gives rebates for the cost of fuel. How do I qualify for the rebate?
From 1 July 2008 most businesses will be able to claim fuel tax credits for running machinery, plant, equipment and heavy vehicles used in running that business. To be eligible to make a claim the business must be registered for GST and the claim should be made on the Business Activity Statement that is required to be lodged. The amount that can be claimed will depend on the type of fuel and what it is used for. Fuel tax credits are not available where alternative fuels (e.g. LPG) are used.
I run my own business and am wondering how I can minimise my annual tax bill.
If your turnover is less than two million dollars, you would be classed as a small business entity (SBE). As such you would be able to access a number of small business concessions. An SBE is able to use simplified depreciation rules which allow for a full deduction of the whole cost of depreciating assets costing less than $1,000. Most other assets are pooled and depreciated at a higher (accelerated) rate than that otherwise available. Businesses that are SBE’s or have a net asset value of less than $6 million can also benefit from certain capital gains tax concessions.
An Entrepreneurs’ Tax Offset may also be available to eligible small business entities whose gross turnover from the business is less than $75,000. However, from 1 July 2009 an additional income test had to be passed. This test applies to taxpayers who also earn income from non-business sources.
The Government also announced an instant tax write-off for the first $5,000 of any motor vehicle purchased by Australian small businesses after 1 July 2012. The remainder of the purchase price can be transferred into a general small business depreciation pool. This will affect the timing of acquisition of many new cars next year. The Government’s existing small business tax reform announced in last year’s budget includes an immediate write-off of assets valued under $5,000, a write-off of other assets in a single pool at 30% and a reduction in company tax rate to 29% for small business. These new upfront deductions will replace the Entrepreneurs’ Tax Offset in the 2012-2013 tax year.
I run a small business and have bought a new piece of equipment this year that was quite expensive. Am I entitled to claim the investment allowance that I heard about?
The investment allowance finished up in the 2010 income year. If you qualified as a small business entity and you committed to buy that piece of equipment between 13 December 2008 and 31 December 2009, you may have been eligible. It should have been used mainly in the running of a business in Australia and be first used or installed ready for use by 31 December 2010. In addition it must have cost at least $1,000. If you meet all of those conditions you will have been able to claim 50% of the cost on your tax return in the year that it was first used or installed ready for use.
In the 2012-2013 income year an instant tax write-off will be available for the first $5,000 of any motor vehicle purchased by Australian small businesses’ with the remainder of the purchase price being transferred into a general small business depreciation pool. They are also introducing an immediate write-off of assets valued under $5,000 as an aid to cash flow for small business.
I am self employed and have paid personal superannuation contributions all year. What can I claim?
Provided that you satisfy the eligibility criteria, you will be able to claim a deduction for the contributions you have made to a complying superannuation fund or retirement savings account. To do so you must be fully self employed or no more than 10% of your assessable income (including Reportable Fringe Benefits and Reportable Superannuation Contributions) is from an employer. You must also have first notified your superannuation fund of your intention to make the claim and received a confirmation.
I have heard that self-employed people can claim the superannuation co-contribution from the government. Am I eligible because I paid money into my super this year and I run my own business?
You may be eligible for the government co-contribution if more than 10% of your total assessable income is from running that business, eligible employment or a combination of the two. Investment income is not eligible income. If you claim any of your superannuation contributions as a tax deduction only the amount that you do not claim will be eligible for the co-contribution.
I run a small business and in June pre-paid 12 months’ rent on the premises that I operate from. Can I claim the whole amount on my tax return even though most of the payment is for next year?
If your turnover is less than $2 million you will qualify as a small business entity and will be able to claim certain eligible pre-paid expenses in the year they were paid. Some examples of prepaid expenses that can be claimed in the year they are paid are: rent, insurance and subscriptions to professional associations. Eligible expenses will be payments that are made for periods of 12 months or less and that the period covered ends in the next income year. Your pre-paid rent qualifies because the period it covers does not exceed 12 months and that period will end before the end of the next income year. The whole amount will be claimable on your tax return this year.
