Sole Trader ABN GST and Tax Laws Questions and Information (small IT Services Business)

AlienC on 22/05/2018 - 01:10
Last edited 22/05/2018 - 06:27

So just recently applied for an ABN as a Sole Trader to do a bit of IT Services in the local neighborhood and maybe branch out into more stuff as I go on maybe online web development services etc.

Just wondering since now I am not employed but my own employer what kind of stuff do I need to submit and keep track of etc.

Small talk with a new friend revealed I just have to do some monthly profit and loss statements and track GST and keep records of invoices etc.

Completely new to this so any help or information would be awesome.

Is it advisable to go also via a tax agent? Or do myself.

I am on centrelink newstart allowance and was wondering also how this might affect me.

Thanks.

Financial

Comments

  • whooah1979 on 22/05/2018 - 06:31

    GST

    You don’t need to be registered for gst. Not being registered for gst helps you to keep your cost down. This will allow you to give your clients a more competitive quote.

    • AlienC on 22/05/2018 - 06:49

      ? Is this legal?

    • Detective Pikachu on 22/05/2018 - 06:52

      Source:

      You do, if you expect your annual turnover is more than $75,000. (Doesn't matter if you're a sole trader or company)

      This might also be a good read.

    • MrHyde on 22/05/2018 - 07:16

      Not registering for GST also means you cannot claim GST credit back from the ATO.

      At the end of the day, you need to decide what works best for you - what puts you into a better position when competing with others for work.

      • D C on 22/05/2018 - 08:18

        you cannot claim GST credit back from the ATO

        If you're not buying supplies (eg carpenter buying wood etc) you might not have much GST to claim.

        • MrHyde on 22/05/2018 - 08:42
          +1

          and that is likely true for the OP if he is providing IT services to a local area - he won't have much expenses to claim GST back on.

          It really does depend on individual circumstances - there is no one answer.

        • AustriaBargain on 03/06/2018 - 22:56

          This financial year I'll do all my buying and the next financial year I'll do my sales. I'll get some credit but my tax bracket is low anyway so it won't matter too much all up, claiming things as expenses.

        • dp1 on 16/06/2018 - 10:44
          +1

          As an itinerant worker GST can be claimed back on the cost of a vehicle proportionately for work related use which will be nearly 100%

  • frondono on 22/05/2018 - 09:14

    If you're on newstart, you might want to think about doing the NEIS program. You get a Cert IV in Small business management (i think), develop a business plan, and then they give you help to run a business (newstart equivalent payment & business mentors).

    • AlienC on 13/06/2018 - 15:23

      I saw that. What kind of help or information would I get from the cert and mentors? Right now I have a mini mentor that just runs the local internet cafe.

      • Baysew on 16/06/2018 - 10:33

        Professional help and information.

  • dasher86 on 22/05/2018 - 09:24

    We all know you just did it to get ABN (trade discounts)!

    • whooah1979 on 22/05/2018 - 11:10

      ABN (trade discounts)!

      It services isn’t a trade. Op won’t get much discounts on tools.

  • onevstheworld on 22/05/2018 - 09:59

    If you're not dealing with large numbers of clients or transactions, you should be able to do most of the monthly/quarterly things yourself. An tax agent/accountant is still useful though, they'll know what you can and cannot reasonably claim as part of your business (In your case e.g. home office, internet, etc).

    My accountant is also happy for me to call him randomly to ask questions regarding misc ABN related questions; tax or otherwise. He's a small business owner himself so this may not apply if you go to a larger firm.

  • Smulder on 13/06/2018 - 14:13

    Hi OP. What do you expect your turnover to be each year for your first few years? That will help determine your best course of action.

    • AlienC on 21/06/2018 - 04:49

      Honestly no idea could be anywhere from 10 dollars a week to 10K a week depending on scale of services or production and competition.

  • Telcius on 21/06/2018 - 00:19

    GST registration is required once your turnover is likely to exceed $75k, normally once you turnover $20K in a quarter for a non-seasonal business. Registeriing only takes 5 minutes online.

    Strongly recommend Xero for recording your income & expenditure.

    • AlienC on 21/06/2018 - 04:48

      What's your opinion on fresh books or quick books.. saw it from a Linus Tech tip ad

      • Telcius on 22/06/2018 - 14:28

        I have never used Freshbooks.

        I have had clients who used Quickbooks online and found it to be a good product; I think Xero is superior but Quickbooks is still very good(and cheaper). As you have IT experience I'm sure you could teach yourself to use either relatively easily.

        If you're going to work with a tax agent I'd discuss accounting software choices with them. Unless they recommend MYOB online/accountright, then I'd recommend finding a new tax agent.

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