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Cert IV - M. S. Martin March 2012
Apply Legal Requirements & Manage Small Business Finances
Lesson 7
Cert IV - M. S. Martin January 2012
Todays Lesson
• Chapter 5 - Business Structure / Ownership– Relevant links– Taxation requirements
• Finance Spreadsheet, with wages component• BAS Statements
Cert IV - M. S. Martin January 2012
Business Ownership / Structure & Registration
Chapter 5
Cert IV - M. S. Martin January 2012
Types of Ownership / Structure
• Common types of business structure used by small businesses are:
• Sole trader: an individual trading on their own• Partnership: an association of people or entities
carrying on a business together, but not as a company
• Company: a legal entity separate from its shareholders. These can be both private or public
Cert IV - M. S. Martin January 2012
Links
• The first two links are not functioning correctly, so cross them out
• This is the 3rd link on the first page and is a good guide
• http://www.business.gov.au/Business+Entry+Point/Business+Topics/Registration+and+licences/Register+your+business+or+company/Business+structures+in+your+state+or+territory.htm
Cert IV - M. S. Martin January 2012
Cert IV - M. S. Martin January 2012
Cert IV - M. S. Martin January 2012
NSW Office of Fair Trading
http://www.fairtrading.nsw.gov.au/default.html
Your second page in chapter 5, mentions BLIS. Remember the easiest way to access this is from the OFT site (we looked at it on 1st week)Review this and next slides
Cert IV - M. S. Martin January 2012
NSW BLIS - Business Licencing Information Service
http://blis.fairtrading.nsw.gov.au/?DCSext.ref=HomePageClick:Onlineservices
Cert IV - M. S. Martin January 2012
Business Taxation – 3rd page, Chpt. 5
• As owner of a business it is your responsibility to work out what your tax requirements are
• There are also a range of tax deductions you may be entitled to
• In relation to running a business, including taxation and paying workers
• The link here will take you to the previous page – link for tax
Cert IV - M. S. Martin January 2012
Briefly Tax and your business• Depending on how you set up your business, will depend on how you and
your employees pay tax.• If you are a sole trader, it is like personal tax, with deductions• If you are a partnership, each partner takes care of his or her tax obligation• If you are a company, your tax depends on how you employ yourself
(remember the company is a separate entity), but you will also pay company tax
• In any scenario, if you employ someone on wages:– the law requires that you must also withhold the proportion of tax an employee will
pay on their wage for the government. PAYG– You will be required to contribute superannuation payments– Employers are required to make their contributions on at least a quarterly basis
• These are better conversations to have with your accountant and can also be set up after the business is trading. Note: If you just start trading, you will default as a sole trader initially.
Cert IV - M. S. Martin January 2012
The Goods and Services Tax (GST)• In Australia, this is a value added tax• Meaning – Added on to the supply of goods and services• It was a New Tax System (Goods and Services Tax) Act 1999, taking effect from
July 1, 2000• The GST is levied at a flat rate of 10% on most goods and services, apart from
GST exempt items– Exempt items are, food and beverages for human consumption, school and
university fees, hospital treatment... To name a few.• You must register for GST if you satisfy both of the following criteria:
– You are carrying on an enterprise– You’re annual turnover will exceed $75,000
• You can claim the GST back when you lodge your Business Activity Statement (BAS)– If your turnover is less than $2,000,000, you may elect to lodge your BAS either
monthly, quarterly, or annually.
Cert IV - M. S. Martin January 2012
Business Activity Statements (BAS)
• Businesses use an activity statement to report and pay a number of tax obligations, including:– GST– pay as you go (PAYG) instalments– PAYG withholding and fringe benefits tax
• You can lodge and pay electronically, by mail or in person
• An ATO overview guide to BAS statements link is below
• http://www.ato.gov.au/content/00182753.htm
Cert IV - M. S. Martin January 2012
Completing your BAS
Sample Spread sheet 3 with wages component as reference
Cert IV - M. S. Martin January 2012
Cert IV - M. S. Martin January 2012
12000
x
500
400
Cert IV - M. S. Martin January 2012
409
29
29
Cert IV - M. S. Martin January 2012
10909
12
T2 is given to you by the ATO based on previous income, if its your first statement its an estimate (see your accountant)
1309
Only if there is a rate change, code is from the ATO
Cert IV - M. S. Martin January 2012
1090
29
1309
2428
Cert IV - M. S. Martin January 2012
81
81
Cert IV - M. S. Martin January 2012
81
811090
29
1309
2429
2348
2429 – 81 = 2348
Cert IV - M. S. Martin January 2012
References
• Competency reference text for ‘Apply Legal Requirements & Manage Small Business Finances’
• Web sites as listed below:• http://www.fairtrading.nsw.gov.au/default.html • http://www.gstaustralia.com.au/• http://www.ato.gov.au/businesses/pathway.aspx?si
d=42&pc=001/003/099&mfp=001&mnu=42557#001_003_099
• http://www.austlii.com/• www.standards.com.au• http://www.ebc.com.au/about/aboutserver.asp?in
A=1&hx=1,2,21,88&AID=542&PID=4
