ARE YOU A SOLE TRADER?

The world of taxation can be a complex maze for many sole traders. Navigating the intricacies of tax law, understanding the changing landscape of deductions, and ensuring compliance with the Australian Taxation Office (ATO) can be daunting for the uninitiated. However, with the expertise of a professional accountant, sole traders can effectively manage their tax obligations, optimise their financial position, and ensure that they are meeting all their compliance responsibilities. Let's look at this in more detail.

Tax Planning

One of the primary ways Hills Accounting can assist a sole trader is through effective tax planning. This involves assessing the business's financial position, predicting future income, and planning in advance to minimise tax liability. Proper tax planning can help you to save money in both the short and long term.

Understanding Deductions

The Australian tax system offers a plethora of deductions that sole traders can avail themselves of. From motor vehicle expenses to the costs of home office utilities, there are numerous potential deductions. However, understanding which ones apply to a particular business and how to claim them appropriately can be confusing. At Hills Accounting we will help you to identify all relevant deductions, ensuring that your business does not pay more tax than necessary.

GST and BAS Reporting

As a sole trader, if your turnover is above a certain threshold, you will need to register for the Goods and Services Tax (GST) and periodically submit a Business Activity Statement (BAS). At Hills, we can help with understanding which sales attract GST, how to account for GST credits, and ensure timely and accurate BAS submissions to the ATO.

Capital Gains Tax (CGT)

When a sole trader sells a business asset, such as property or equipment, it may attract Capital Gains Tax . Understanding the intricacies of CGT, including exemptions and concessions available to small businesses, can be complex. Hills Accounting will guide you through this process, ensuring that any capital gains are correctly accounted for and that any available concessions are utilised.

Managing PAYG Instalments

The Pay As You Go (PAYG) system requires businesses to make regular payments towards their expected annual income tax liability. An accountant can assist in calculating the correct amount to pay, ensuring that your business neither underpays nor overpays its tax obligations.

Navigating Tax Obligations during Business Changes

If a sole trader decides to evolve their business structure, say to a partnership or a company, there are some important tax implications. Hills Accounting can provide advice on the best way to navigate these changes, ensuring that your business remains compliant while optimising its tax position.

Staying Updated with Tax Law Changes

The taxation landscape is an ever-moving feast. Changes in government, policy shifts, and updates to legislation can all affect a sole trader's tax obligations. We make that we stay totally up-to-date with these changes, ensuring that your business remains compliant and is aware of any new opportunities or obligations.

Liaising with the ATO

Should you have any discrepancies, disputes, or issues with the ATO, having your own accountant will be invaluable. They can liaise with the ATO on your behalf, providing clarity, resolving issues, and ensuring that your business interests are effectively represented.

Tax Education

Apart from the regular tax-related tasks, your accountant can also provide education on the subjects of best practices, upcoming changes, and strategies for future growth and optimisation.

For more information, email us today at admin@hillsaccounting.com.au or call us on 03 62737800