LF Accountants Who Allow One off (Paid) Consultations

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  kale chips suck on 21/09/2020 - 08:56

  +2

  Check with your local council to see if they have "starting a business" -type programs. These will cover the kinds of questions you're asking.

  And/or you could find yourself someone who is in business (and has been successful…) and explain you'd like a mentor to show you the ropes because you're starting out.

  Also, don't be afraid to ring the ATO and ask them. They're there, in part, to help with this kind of stuff.

  Finally - check Reddit; there might be a sub that's relevant + helpful.

• 

  salmon123 on 21/09/2020 - 08:59

  +1

  Another place to start might be an accounting system like quickbooks. This will help you get a grasp on the unsorted transactions and sales at any given time.

  You could use a book keeper to help you get set up with an accounting system.

• 

  knasty on 21/09/2020 - 09:25

  +1

  This is actually a surprisingly useful resource from the government. If you want to know whether you are obliged to register for GST the ATO guidance is pretty straightforward. If you want further details an accountant is the go.

  https://www.business.gov.au/Planning/New-businesses

  • 

    nkbswe5 on 21/09/2020 - 20:52

    Thank you - it's definitely got a lot of useful info!

• 

  mskeggs on 21/09/2020 - 09:55

  Any accountant will offer this, I’d seek local recommendations.
  Give them a call, tell them you are starting a small business and you want to make sure you are doing everything right.
  They probably won’t charge much, as they will hope to get future business from you. You should also keep in mind if your side business does grow you will likely want some regular accounting advice, so you aren’t taking advantage of them by taking this approach.

  For your initial questions, though:
  - income is another word for profit. You will only pay tax on the profit portion after all costs and other deductions.
  - since you mention $75k, you are probably concerned about GST. Collecting GST is required if you make more than $75k p.a. in sales (also frequently called turnover), even if you only make a small fraction of that as a profit.

  The downside here for you is you will need to raise prices to cover the GST, though not an issue if you sell to businesses. Consider if your partner could start a business doing exactly the same thing as you do. Then they could also sell up to $75k p.a. before needing to register for GST. This could easily work if you were selling on eBay or amazon, for example.
  By the time both you and your partner were approaching $75k in sales you might be selling enough to get better volume pricing, so the GST could be less of an issue.

  • 

    salmon123 on 21/09/2020 - 09:59

    The downside here for you is you will need to raise prices to cover the GST

    Not always, since you can claim input credits on your purchases.

    Consider if your partner could start a business doing exactly the same thing as you do.

    I doubt an accountant would recommend this. It's a short-term solution that doesn't really scale.

    • 

      mskeggs on 21/09/2020 - 11:36

      +2

      I agree with your points, but note this is a side business, so scaling to double the revenue before having to register for GST might be very desirable, and the business was described as marking up US imports, so GST inputs would presumably be small.

      • 

        nkbswe5 on 21/09/2020 - 20:43

        This is a very interesting idea… thank you! Never even considered this, but it'll be in the back of my mind while I learn more!

  • 

    qazwsx on 21/09/2020 - 12:16

    The sell through partner route to avoid GST rego is not so simple. There are income tax implications as well - your partner will need to declare as income the profits on the sales attributed to the partner, with tax payable at their marginal tax rate. This will not be helped by the high likelihood that there will be mismatches in names - e.g. why is your name appearing on invoices for goods that are being sold by your partner? You can transfer the stock to your partner by selling it to them, but then that would potentially also count towards your $75k. Then on top you need to keep 2 books - one for you, one for them. Seems like you have just got the hang of things for yourself only, adding another book is just more admin.
    There may be other income-related implications as well too, eg income thresholds relating to Centrelink/FTB, Medicare, private health insurance rebates, that your partner will need to consider before being able to contribute their name.

    Edit: Oh and there's general anti-avoidance provisions as well too. If the tax office can show you're the beneficiary of your partner, and splitting your business is to avoid GST rego and charging GST, they may well just see straight through it and hit you anyway. Key giveaways are the purchase of goods in your name instead of your partner (this could lead to asking for proof of payment, which will likely have originated from your accounts), and the sales attributed to your partner being directed to make payment to your account.

    Of course all of this dependent on tax office picking you (or your partner, in particular) for a coffee catch up in the first place.

    • 

      nkbswe5 on 21/09/2020 - 20:46

      Very useful feedback. Right now, I'm not even buying from wholesalers or anything so it would be very easy for my partner to just buy things herself and then just do the same thing as me. I'm not making any wholesaler purchases (yet) because the one Aussie supplier declined me. Definitely would have to re-consider doing a partner thing if I did go wholesale and had to order everything myself!

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  worrierwan on 21/09/2020 - 10:23

  +1

  1. You would post a $150 income on the sale and have a deduction of $140 so overall you would only pay tax on the profit of $10 and pay at a small business tax rate of 27.5% if you have set up the company that way (otherwise if set up as a sole trader, you pay at your personal tax rate which i think would be more likely in your scenario)
  2. You would need to register for GST. You could claim an input tax credit (GST refund) from items you buy ($140/1.1= $12.72 refund in GST, assuming you do pay for GST on the product) and you would need to charge GST which would eat into a little bit of your profit.
  3. You're going to need some sort of accounting software to record the transactions. I think sorting out all the previous transactions that haven't been recorded may be a nuisance but hopefully going forward it'll be easy
  • 

    nkbswe5 on 21/09/2020 - 20:58

    Yeah, it's more just the previous stuff that worries me, because some of it was online, some cash in hand kind of stuff because I thought it would be a very temporary thing, like a once-off thing, that has just kept going and I realise I need to legalise myself haha!

    Thanks for the tips, they have helped!

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  frugalmastermind on 21/09/2020 - 20:36

  +1

  Highly recommend Artur at Tax Window. Really helped me out when I was starting, I'm sure he'd be good with a one off.