Lodge and Pay Business Tax Returns in Melbourne – Quick Guide

Lodge and Pay Business Tax Returns in Melbourne – Quick Guide

Are you running a business in Melbourne? If so, did you know that you must submit a business tax return annually?

This article will give you a quick guide on business tax returns and why you should submit it yearly on time.]

What is a business tax return?

A business tax return is a document filed with the taxation authority (Australian Taxation Office or ATO) to calculate the business’s tax liability. The tax return will include income and expenditure of the business and other tax-related information.

Just like calculating the tax liability, the tax returns will help to schedule your payments and request refunds for overpaying the taxes.

Who should submit a business tax return

If you are carrying out a business, you should lodge a business tax return every year, even if the business hasn’t earned any income. There is no specified threshold for business income to submit the tax return. As a result, even if you earn a single dollar, you should submit a tax return.

Therefore every business, regardless of the structure, should submit the tax return on or before the due date.

However, how you should report the tax return and when you should submit it depends on the nature of your business entity.

What is the tax return requirement for my business

As said before, your business tax return requirements depend on the type of your business structure. Let’s look at the various tax return requirements that you should fulfill depending on your business structure.

Sole trader

If you are running a sole trader business, you have to submit the business tax return as an individual tax return. You should include all the business incomes and expenditures in a separate section of your personal or individual tax return.

You don’t have to submit a separate document for your business.

Partnership

Your partnership business should have its own Tax File Number (TFN) but shouldn’t pay income tax on its profits. However, your partnership should submit its tax return under its own TFN.

Every partner should declare their profit share received from the partnership in their own individual tax return.

Company

As you know, a company is considered a separate legal entity in the face of the law. Therefore, you should submit a company tax return and pay the income taxes on the profits earned by the company.

On the other hand, if you are a Director, you still have to declare your personal tax return separately.

Trust

A trust also has its own TFN and should submit a separate trust income tax return.

Read more: Business (Australian Government), ATO

How can you lodge your tax return?

Every business is different from each other. Their structure is different, their capacities are different, etc. Therefore you should decide whether to lodge the tax return by yourself or to hire a professional depending on the complexity of your business and its applicable taxes.

As a matter of fact you have the following options to lodge your business tax return:

  • Through a registered tax agent
  • Online with myTax if you are a sole trader.
  • Through a Standard Business Reporting (SBR) software, if you are running a partnership,a company, or a trust.
  • By paper.

When should you lodge the business tax return

Submitting the tax return before the specified deadline is mandatory to avoid penalties and legal consequences. Therefore you should know when to submit the yearly tax returns.

If you are submitting the tax returns by yourself without going through a registered tax agent, the due date is on the 31st of October. This date is applicable for sole traders, partnerships, and trusts.

If your business is a company and you are submitting the tax returns by yourself, the due date is by the 28th of February. However, if there is any previous year’s outstanding balance, then the due date will be the 31st of October.

If you submit the tax returns through a registered tax agent for any business structure, the due dates are bit more flexible.

What if you couldn’t submit the tax return on time

ATO recognizes that sometimes businesses fail to meet their obligations on time, even in the best interest. Generally, ATO will not generally impose penalties in isolated cases of late lodgments.

If you fail to lodge the tax return on time, the ATO will contact you by phone or writing to remind you of your obligations. However, if you still fail to meet the obligations, ATO will send a Failure to Lodge (FTL) document imposing a penalty.

This situation generally arises when you are lodging the tax returns by yourself. However, if you are submitting through a tax agent, then you can get special protection under ATO’s Safe Harbour Provisions.

If you are using a tax agent, the rules are a bit loose, and you will not get an FTL if you have fulfilled specific criteria.

Therefore it is always better to lodge your tax returns through a tax agent.

Read more: ATO

Why should you hire SPS Consultants?

We are a team of professional consultants, tax accountants, and agents in Melbourne. We have served hundreds of clients over many years.

Our team can help you to prepare your tax returns and ensure that you will not face legal issues for underpaying the taxes or financial losses from overpaying. We will also ensure that you will never miss a deadline.

Don’t stress out doing something which you can simply outsource. We are experts in the industry and can help you manage your taxes.

Don’t hesitate to contact us today to make an appointment and get to know our tailor-madepackages for your business.

Why Should You Hire a Contractor Accountant in Richmond – Brief Overview

Why Should You Hire a Contractor Accountant in Richmond – Brief Overview

It doesn’t matter whether you are an established contractor or a newbie to the industry; it is always in the business’s best interests to maintain accounts.

As a contractor, you would spend most of your time visiting the sites and on the road. However, you should never disregard the importance of maintaining books and keeping accounting records of the business.

We understand that you have a tight schedule. That is why you should consider hiring a contractor accountant for your business in Richmond.

This article will give you a brief overview of contractor accountants and why you should hire them for your business.

Who are contractor accountants

Every contractor business will be different from one another. They have different structures, levels of employees, and agreements with the clients. Therefore, even different jobs done by the same contractor can be different from one another.
A skilled and dedicated contractor accountant would identify the differences in each contractor’s business and manage its books and taxes on behalf of the business.

One can say that contractor accountants are the same as general accountants. Well, qualificationswise, they are the same. But a contractor accountant should have more experience and skills to adapt to each client’s changing requirements and nature.

What are the duties of a contractor accountant?

As said before, maintaining accounting records is crucial for any business. You have to decide whether to hire someone internally or hand over the accounting function to a third party.

If you are hiring a third-party service, they would only provide the services for which you hired them. Some of the most common duties performed by a third-party contractor accountant are:

  • Performing accounting duties such as maintaining the books and preparing financial
    statements.
  • Calculate and file for taxes by preparing the required statements.
  • Analyze the transactions and report any detected shortcomings.
  • Help to prepare the budgets and forecasted statements.
  • Provide consultations on changes in accounting and legal frameworks which could affect
    your business.
  • Simplify the financial records and briefly describe how your business is doing.

If the contractor accountant you hire is also a skilled consultant, they would also consult you about the opportunities in the market.

Therefore it is difficult to say that a contractor accountant would only do specific duties. Their job depends on the purpose you hire them for and the services they offer.

When should you hire a contractor accountant?

Before discussing the benefits of hiring a contractor accountant, you should know when to hire them. This is a crucial decision, which most businessmen, including contractors, leave until the last moment.

Don’t wait until you get stuck with work to hire an accountant. That being said, the ideal time to hire an accountant is before starting the business.

A skilled accountant and consultant can help you prepare the documents to register your business. Then once the business is up and running, they can implement control systems and maintain the book from the beginning itself.

This will help you monitor the business’s progress and make corrective decisions early on.

Don’t worry if you are hiring an accountant in the middle of the financial year or halfway down the business. Make sure to hire a skilled accountant who will pick up the work from where you left off and get you back on track again.

What are the benefits of hiring a contractor accountant

Now we come onto the benefits of hiring a third-party contractor accountant. While there are various benefits of hiring a third-party accountant, these are the most common benefits that you will get

1. Might be cost-effective

Hiring a permanent employee to do your accounts can be costly. You would have to pay a salary and other fringe benefits to a permanent employee. If you have a small business, a permanent accountant will idle most of the time, for which you must pay.
However, if you are hiring a third-party accountant, you would only have to pay for the time they spend and the services they provide.

2. Highly skilled

Most third-party contractor accountants are highly skilled. They have the required qualifications and the experience to handle even a complicated business.

Therefore you can get professional and quality service from a third-party accountant.

3. Updated about regulatory changes

The legal and accounting frameworks undergo different changes every year. You cannot stay updated about every one of these changes if you are busy managing your business.

However, it is the accountant’s job and duty to stay updated about these changes. A third-party contractor accountant is highly updated about these changes and will help you avoid legal offenses.

4. Provide professional advice

A skilled contractor accountant would provide you with professional advice to make crucial decisions and formulate strategies.

5. Avoid hassle at the year-end.

It is a hassle at the year-end for many businesses. They would have to finalize the accounts and file for taxes. But it won’t be a hassle if you hire a third-party accountant for your contractor business. They would finalize the accounts and file for taxes on your behalf.

Why should you hire SPS Consultants?

If you have a reliable contractor accountant who can get your job done, then by all means you should seek their help. However, if you are looking for one, don’t hesitate to contact us.

We have served many clients who own contractor businesses over the years. Don’t worry about pricing. We have tailor-made packages to suit the needs of your business and its scale.

Our team is a combination of skilled accountants and consultants who can help you stay on top of our business and achieve outstanding results. So if you are looking for a skilled contractor accountant in Richmond, then look no more.

A Quick Guide on Why a Sole Trader Should Hire a Tax Agent

A Quick Guide on Why a Sole Trader Should Hire a Tax Agent

A sole trader business is the easiest to set up out of all the business structures available in Australia. You can be your own boss and take control of your business. It does come with a lot of freedom and perks.

However, like any other business structure, a sole trader should also pay the relevant taxes to the government. As a single businessman, you would have to focus on the business’s daily operations and maintain the books to file for taxes at the yearend by yourself.

This article will help you understand the taxes a sole trader is liable to pay and why hiring a third-party tax agent is better.

What taxes should you pay as a sole trader?

A sole trader business has fewer legal formalities, yet it still has to pay the due taxes. These businesses are mainly liable to pay income tax and goods and services tax (GST).

Income tax will be paid on the business’s taxable income in a given financial year, whereas the GST is imposed on goods and services.

Apart from these main taxes, a sole trader might have to pay the payroll and capital gains taxes under certain circumstances. 

Is there a threshold to get registered for taxes

Income tax

Another benefit of a sole trader business is its income threshold to pay the taxes. Unlike companies, sole traders don’t have to pay taxes on every dollar earned by the business. 

According to the Australian Taxation Office (ATO), a sole trader business doesn’t have to pay income tax if the taxable income is less than $18,200 for the financial year 2022-2023.

GST

The threshold to register for GST is that the net turnover (gross income from sales minus GST) should be $75,000 or more per year. There are various benefits of getting registered for GST even before this threshold. If you want to learn more about it, then check out our article on GST for small businesses.

On the other hand, you should also register for GST; 

  • If you want to claim the fuel tax credit
  • If you provide a taxi or limousine service for passengers

What are the tax rates for a sole trader?

A sole trader business has progressive tax rates depending on different levels of taxable incomes. The sole traders would have to pay taxes based on the individual tax rate. 

Accordingly, such businesses have to pay the following rates as income tax for the financial year 2022-2023.

Taxable incomeTax on this income
0 – $18,200Nil
$18,201 – $45,00019 cents for each $1 over $18,200
$45,001 – $120,000$5,092 plus 32.5 cents for each $1 over $45,000
$120,001 – $180,000$29,467 plus 37 cents for each $1 over $120,000
$180,001 and above$51,667 plus 45 cents for each $1 over $180,000

Source: ATO

When should sole traders file for taxes?

You must lodge your tax returns annually if you continue as a sole trader. However, when you pay the taxes at the end of each year, always be prepared to pay a lump sum as taxes.

This is not always the case, but there can be situations where the tax liability could accumulate over twelve months.

To overcome such hard situations, you can follow the pay-as-you-go (PAYG) scheme to pay the taxes quarterly. This will reduce the tax burden at the end of the financial year.

How to pay taxes as a sole trader

A sole trader can follow the individual tax return system. You can use your individual tax file number when lodging the income tax returns of your business.

You might have to submit a business activity statement (BAS) every quarter if you are registered for GST or follow the PAYG scheme.

If you plan to manage your taxes by yourself, then mygov can help you manage your tax obligations and PAYG payments easily. Further, use a recognized accounting software like Xero to maintain your books, prepare the BAS, and comprehensive financial statements, etc. This would help to calculate the tax liability accurately.

Why should you hire a tax agent?

As a sole trader, you must focus on managing the business’s daily operations. Therefore it might be tough for you to find time to maintain the books and handle the accounting function of the business.

You should keep in mind that bookkeeping and accounting are crucial for any business to make critical decisions that could decide the fate of the business. Therefore, it is crucial to maintain a proper system and implement controls to handle your business’s accounting function from the beginning itself.

As a small business, you might have a tight budget to hire a separate employee to handle the accounts. It might even be unnecessary to have a full-time employee and pay them a salary just to handle the books every once in a while.

This is where an external agent would come in handy. They should only be paid for the services provided. Further, they know the taxation laws well which would help you to get certain concessions and tax deductions.

Likewise, SPS business consultants are experts in bookkeeping and tax accounting. We have tailor-made packages to suit your business regardless of its size. We can help you to plan your taxes and pay only what you are liable to. Don’t hesitate to contact us today to schedule a consultation session.

Why Do You Need a Startup Consultant for Your New Business in Melbourne

Why Do You Need a Startup Consultant for Your New Business in Melbourne

Starting a new business can be a complicated and crucial process. You must put in a lot of hard work to plan your startup and follow the recommended legal procedures. You might even find yourself in a tough situation if you don’t have enough experience in business startups.

What if you can get some help? This is where the startup consultants would come into play. If you are planning to start a new business and don’t have much experience, you should probably hire a startup consultant.

Who are startup consultant? This article will give you a brief understanding of startup consultants and why you should hire them.

Why a business startup is crucial

Before finding out why you need startup consultants, you should understand why a new startup is critical. The estimates say that one out of three small businesses fails in the first year of operations, and half of the new businesses fail by the second year. Therefore you have to make a series of critical decisions at the startup itself to function successfully.

There are several legal formalities involved when starting a new business. These formalities mainly depend on the structure of your business and its nature. Accordingly, you have to get the relevant documents and the approvals ready according to the structure you select. If you don’t follow these formalities, you could face various legal issues affecting your business negatively.

Further, it is important to maintain the accounting function and bookkeeping from the startup itself. This would help keep track of the business’s operations and decide whether the business is making profits.

When you get everything done appropriately from the beginning, you can stay on top of your business and lead it well. That is why the startup is crucial.

Who are startup consultants

Startup consultants are experts in the industry who can guide you through your business startup. They are external contractors who will provide expert advice on the market and industry conditions and help to prepare the documentation needed for the startup.

The startup consultants generally charge a high price for their services and the experiences they share. You would have a higher chance of surviving in this dynamic business world with the help of these consultants.

What do startup consultants do?

The startup consultants would mainly evaluate your business plan and offer guidance to manage your business successfully. Apart from this, these consultants can also help you in several other ways.

  • Assess the capabilities of your business as a whole, so that you can get a better idea about your opportunities and the barriers to the growth of the business.
  • Provide an independent evaluation and expert opinion about your business idea.
  • Defining the right scope and strategies for your business
  • Help to implement a suitable management framework and control procedures.
  • Formulate a realistic budget to match the needs of your business.
  • Conduct in-depth market and industrial research.
  • Mentoring your team.

When should you hire a startup consultant

As said before a startup consultant can be expensive. However, if you can afford one, there are few signs indicating that your new startup needs expert consultation.

  • If you don’t have any idea or experience in starting a new business, you could be heading towards trouble. In such situations, you might need expert guidance to get things together.
  • Startup consultants would also guide you once you start operations. If you feel something wrong with the strategies you use to manage and operate the business, you should probably seek help.
  • Are you having a slow or no growth rate in your business? Then a startup consultant can help boost it.
  • Feels like you need help to decide whether certain acquisitions and disposals of assets are suitable for the business.
  • Don’t have standard bookkeeping, accounting, tax accounting, and payroll functions in your business? Certain consultants would also provide these services to support your business.

When shouldn’t you hire a startup consultant?

  • Well, the first things first. Startup consultants would be quite expensive. You should have a sufficient budget to hire a consultant. If you don’t have enough money, try to manage it yourself.
  • On the other hand, if you have experience in business startups and managing them, you shouldn’t probably spend money on hiring a consultant.
  • Sometimes there can be situations where their advice and service are not beneficial or up to the standard you expected. Therefore inquire them about the services they provide and read the reviews given by the previous customers before hiring them.

Why should you hire SPS Business Consultants?

We are a professional body of business and startup consultants in Narre Warren and Melbourne. Together we have helped hundreds of clients to manage their businesses successfully. Our combined experience and expertise in many fields give us the upper hand in helping clients in various industries.

A key feature of our business is that we have tailor-made packages that would support your budget regardless of the size of your business. We can help to get your business started and manage it by implementing better management controls to handle the operations, finance, and payroll.

Don’t hesitate to contact us today. Let’s together take your business to the next level.

One of the Best Business Consultation and Accounting Services in Melbourne

One of the Best Business Consultation and Accounting Services in Melbourne

Are you looking for business consultants and accounting professionals in Melbourne? It doesn’t  matter whether your business is anywhere from a small-scale enterprise to a large-scale company.  We can help you. 

If you are looking for a reliable consultant who can assist you in staying on top of your business, you have come to the right place. Let us show you why we are one of the best business consultation and accounting services in Melbourne. 

Brief Overview of SPS Business Consultants 

We are an expert team of professionals who provide total accounting and taxation solutions to  businesses ranging from small to large scale. No business is too small for us, and no business is  too big for us. Every business is valuable to our team. 

The team at SPS comprises CPA-registered tax agents and accountants. Therefore we have the  experience and expertise to handle your accounting and taxation requirements and help you to lead  your business. Our team also specializes in providing accounting services for construction  contractors and tradies in Melbourne.  

We will also provide consultation to your business so that you can make better decisions and stay on top of your business.  

We have earned respect and trust from clients all over Melbourne for providing quality accounting,  taxation, and consultation services. Place your trust in us, and we will ensure that you will receive  a quality service beyond your expectation. 

Why SPS is one of the best accounting service in Melbourne 

We have served over 300 customers who are highly satisfied with our services. Our clients well  trust our business, and they know we are one of the best accounting and consultation firms in  Melbourne. Let us tell you why: 

1. Years of experience 

Our business has been in the industry for many years, and we have evolved with improved  experience and expertise. We have helped many small and large-scale businesses in Narre Warren  and Melbourne to achieve outstanding results during this period.

2. Tailor-made packages 

You don’t have to worry about the scale of your business. We have tailor-made packages to suit  your budget and service requirements. We will ensure that you will get value for the money you  pay. 

3. Catchup with work 

Have you lost track of bookkeeping for a long time? Don’t worry. We can help you even if you  have not maintained books in your business. We will go through your business records and help  to bring you up to speed by preparing the books. 

4. Never miss a deadline 

You could face legal issues for underpaying the taxes and financial losses for overpaying the taxes.  On the other hand, you could also face both legal charges and financial losses if you don’t pay the  taxes on time. 

We will help you to calculate the taxes accurately and pay them to the Australian Taxation Office  (ATO) on time so that you will not face any losses. 

5. Expert team 

The SPS team is led by professionals with over 10 years of combined experience. Our team  members possess the necessary qualifications and expertise and are registered with the CPA to  handle your accounting and taxation needs. 

We are well updated about the changes in taxation laws and accounting standards, and we will  keep you in line to avoid legal issues. 

6. Friendly consultations 

We have provided professional consultations to various firms in Melbourne. Our team would  advise the customers on how to handle and stay on top of their business. We will give you friendly  consultations and guide you in managing your business and its finances.

Summary 

Our team is professionally qualified and has the expertise to handle your business’s accounting and  taxation needs while providing professional consultations. We will help you to manage and stay in control of your business regardless of its size. 

Don’t hesitate to contact our team for comprehensive accounting and consultation solutions for  your business in Melbourne. We guarantee you the best service for the money you pay.

Top 7 Things to Consider When Starting a New Business in Australia

Top 7 Things to Consider When Starting a New Business in Australia

Are you planning to start a new business in Australia but have no idea how to? There are a couple  of things that you must consider when starting a new business. 

The process can be quite complex and could take time to figure it out. Nevertheless, you must  fulfill certain criteria to start the business successfully. In this article we will list the top seven  things you should consider when starting a new business in Australia. 

1. Choose a suitable business structure 

A business structure is the legal framework of a given business organization in a given country.  Choosing a suitable structure is crucial for your business. The structure that you adopt can  determine various key features of your business. Such features are. 

  • Your degree of control over the business 
  • Your degree of personal liabilities owed towards the business. 
  • Regulatory obligations of the business. 
  • Tax obligations and payments by the business 
  • Health and safety regulations in the business place 

Accordingly, there are four types of business structures in Australia. They are, 

  1. Sole proprietorships – These are single-owner businesses that are managed and financed by the  owner him/herself. 
  2. Partnerships – This is an entity financed and controlled by a group of individuals known as  partners based on a mutual contract or an agreement. 
  3. Companies – This is an entity owned by the shareholders but managed by a board of directors.  The companies are separate legal entities from their shareholders. 
  4. Trusts – This is where a business is handed over to a third-party entity with the legal right to run  the business.

2. Create a business plan 

A business plan is crucial for your new startup. The business plan will give a quick snapshot of  the feasibility of the business. It documents the goals and objectives of the business, strategies to  achieve them, forecasted financial statements, etc. 

Preparing a business plan may not be easy as it looks. There are various factors you must consider.  The target audience, marketing plan, operational plan, and human resource recruitment plan must  also be included when preparing the comprehensive business plan.  

Therefore it could take time and effort to prepare a realistic business plan. The business plan will  also help apply for bank loans and convince the potential shareholders and partners to invest in the  business. 

3. Identify your capital sources 

You should have a clear idea of how to finance your business initially. Your sources of capital  should cover the startup cost and early operational costs. 

You could raise capital through internal sources and external sources. If you start a sole trader  business, the only internal capital you could raise will be your investments in the business.  However, if you start a partnership or a company, you could raise capital internally through the  partners or shareholders. 

You could also raise capital externally through bank loans and other financial institutions. However, this can be costly and increases the liabilities of your business. 

4. Register the business  

Business registration is crucial to start a new business in Australia. To register your business, you  should submit the required documents and supporting evidence depending on your business  structure. 

You must obtain an Australian Business Number (ABN) when starting a new business. The process  of registering a new business could be lengthy and complex based on the type of business structure. 

You might even have to obtain licenses and permits to start, depending on the nature of your  business.

5. Create a separate bank account for the business 

It’s a legal requirement to have a separate bank account for every business structure except for sole  proprietorships. However, it is recommended to open a separate bank account for the business  regardless of its structure. 

When you have a separate bank account, it is easy to track payments and cash receipts of your  business. You would not mix up your personal expenses with your business. This improves control  over the cash flow of the business. 

6. Get an insurance policy 

Accidents don’t happen with a pre-warning. Therefore you must be prepared to face accidents and  uncertainties for the business and its employees. 

Get a decent insurance policy covering fire accidents, floods and storms (depending on the area),  theft and workplace hazards, etc. 

This will help you to face the losses due to unexpected incidents which could affect the operations  of the business. 

7. Get registered for taxes 

There are various kinds of taxes imposed on businesses. Your business’s tax obligations towards  the government could change depending on the structure of your business. Some of these taxes are  income tax, capital gains tax, goods and services tax, etc. 

It doesn’t matter the scale or the structure of your business, you must register your business for  taxes in Australia. This is since you should submit the relevant statements to the Australian Taxation Office (ATO) within the given deadlines, even if you don’t owe taxes to the government. 

Why Should you contact SPS 

No, you can do all of this by yourself. But it could be more stressful and takes time to start a new  business depending on your chosen business structure. 

If you feel like you need professional help to get started, then by all means, don’t hesitate to contact  us. We are specialist consultants who can help you to get the necessary documents ready and advise  you on the best possible means to start your business.

Our team has helped hundreds of clients to manage their businesses and achieve outstanding  results. We know that we can help your startup be more successful.