When starting or growing a business, choosing the right structure is one of the most important decisions you will make. Two of the most common structures used in Australia are discretionary trusts and companies. Each comes with its own set of advantages and disadvantages, and the right choice will depend on your goals, risk profile, funding needs, and long-term plans.

When starting a business in Australia, many individuals choose to operate as a sole trader due to its simplicity and low cost. While this structure can offer several benefits, it also comes with certain risks and limitations.

When starting or restructuring a business, choosing the right structure is essential. In Australia, the most common business structures are sole trader, partnership, company, and trust. Each has its own legal, financial, and tax implications.

Inconsistent or incomplete records are a red flag. The ATO has increased its use of data-matching technology and AI to identify anomalies in tax returns and BAS. If your DIY bookkeeping doesn’t align with industry benchmarks or bank data, an ATO audit could trigger and you will require clean, reconciled records to defend your position.

When using the logbook method, you must record every trip in your vehicle (both private and business) for a 12-week period. Your logbook is then used to calculate the “business use percentage” of your car across the year. Your business use percentage is the percentage of kilometres you travel in your car for work-related purposes. It’s also the percentage of all of your car expenses you paid during the year that you can claim on your return.

For many business owners, selling a business can be both an exciting and complex milestone. One important concept to understand when selling a business is whether it qualifies as a “going concern” for Goods and Services Tax (GST) purposes. Selling a business as a going concern can have GST exemption on the sale.

Division 7A is a section of the Income Tax Assessment Act 1936 designed to prevent private companies from making tax-free payments to shareholders (or their associates). The ATO has recently published a document 'debunking' various Division 7A 'myths'. Division 7A of the tax legislation is intended to prevent profits or assets being provided to shareholders or their associates tax free.

The Pay As You Go (PAYG) instalment system requires certain taxpayers deriving business or investment income to pay instalments progressively towards their income tax liability. These instalments are prepayments of your expected income tax for the year.