FAQ’s
We are aware that tax is a vast field containing many complex legal issues which is why we have identified and answered many individual, income, deductions and business related tax questions that come up frequently. Note that these questions are a general overview and may not be applicable in your specific scenario. Please consult us before reaching any conclusions.
GST of 10% is chargeable if on supplies when they are taxable supplies. No GST is charged to customers when it is a GST free supply such as fresh foods or on items that are considered input taxed supplies.
Your business must register for the GST if it has annual turnover of $75,000 or more if your business is a for profit organisation and an annual turnover of $150,000 or more if it is a not-for-profit organisation.Registering for GST is optional if your business or enterprise doesn’t fit into one of these categories. If you choose to register, generally you must stay registered for at least 12 months.
To find out more if your business is required to register for the GST visit: https://www.ato.gov.au/Business/GST/Registering-for-GST/#Whentoregister1
If you provide taxi or limousine travel or passengers (which includes ride-sourcing), you must register for the GST regardless of your income turnover. Drivers of an uber or any other ride hailing company must register for the GST no matter their income levels.
To find out more if your business is required to register for the GST visit: https://www.ato.gov.au/Business/GST/Registering-for-GST/#Whentoregister1
Generally, a business needs to keep most records for five years and in some instances even more. A business is legally required to keep records of all transactions relating to its tax and superannuation affairs from its start, operations or when its sold or closed. Records that are expected to be kept are:
- Documents relating to the business’s income and expenses
- Documentation of the businesses’ tax and super affairs including the basis of the estimate, determination or how it was calculated
There are also minimum requirements for the information a business must keep on its record and they include:
- The date, amount, and character (i.e. sale, purchase, wages, rental) and the relevant GST information for the transaction
- The purpose of the transaction
- Relationships between parties to the transactions if relevant
To find out more about what records you must keep when running a business visit: https://www.ato.gov.au/business/record-keeping-for-business/overview-of-record-keeping-rules-for-business/?anchor=Whatisarecord1#Whatisarecord1
There are many business related concessions available to business owners with structures such as sole traders, partnerships, trusts and companies. Each structure may has different eligibility criteria’s in the types of concessions they may be able to get and is generally based on their turnover levels. ATO’s Table found in https://www.ato.gov.au/Business/Small-business-entity-concessions/Concessions/Concessions-at-a-glance/ shows a summary of each concession that you may be able to get. If you want to find more in detail about your eligibility criteria for certain concessions, give us a call or visit one of our offices and we will be happy to help!
When an employer provides fringe benefits to their employees, the tax is levied on the employer and not the employee. The Fringe benefits tax (FBT) is a separate calculation from income tax and the employer must self-assess their FBT liability. The FBT year is calculated between 1st April to 31st March, and certain items which are considered as fringe benefits may be:
- Allowing an employee to use a work car for private purposes
- Giving an employee a discounted loan
- Paying an employee’s gym membership
- Providing entertainment by way of free tickets to concerts
- Reimbursing an expense incurred by an employee, such as school fees
- Giving benefits under a salary sacrifice arrangement with an employee.
Employers can generally claim an income tax deduction for the cost of providing fringe benefits and for the FBT they pay. Employers can also generally claim GST credits for items provided as fringe benefits. To find out more about the FBT visit: https://www.ato.gov.au/General/Fringe-benefits-tax-(FBT)/
In order to be qualified for fuel tax credits, you must be registered for GST and for fuel tax credits when you lodge the claim. Fuel credits are given to businesses that’s included in the price of fuel used in machinery, plant, equipment, and heavy vehicles. Your business vehicle is defined as a heavy vehicle as it is above 4.5 tonnes and may be eligible for a fuel credit. The amount of the fuel credit depends on when you acquire the fuel, what fuel you use (i.e. some fuels such as LPG are not included) and the activity you use the fuel in. Your fuel credit claim must be made on the most recent business activity statement (BAS) that you are going to lodge.
To find out your eligibility criteria and your claim amounts visit: https://www.ato.gov.au/Business/Fuel-schemes/Fuel-tax-credits—business/
An employer generally has to pay an employee super on top of their wages when they pay more than $450 or more before tax in a calendar month to that particular employee.
To find out more about Employer super requirements visit: https://www.ato.gov.au/Business/Super-for-employers/