If you’re in business, you already know that careful financial management is important. But do you really aspire to spending your time dealing with numbers and paperwork? That’s probably not why you went into business!
There are more and more sharing economy, or collaborative consumption, websites and apps hitting the market in Australia and they are making their way from the big cities into the Tasmanian market. With the holiday season upon us, short-term vacation rentals through apps like Airbnb and Stayz will be in full swing. And now that Uber has arrived in Hobart – just in time for the silly season – Tasmanians and our tourists are embracing the ride-sourcing phenomenon.
But before you decide to rent your house out for summer with Airbnb or earn some extra money driving for Uber, you need to consider the tax implications – you may need to pay GST and income tax on your earnings and you may be liable for CGT down the track.
The final tranche of 2015 small business budget announcements have made it into law, now expanding the tax relief available for small businesses to change the legal structure of their business. This new arrangement is designed to provide greater flexibility for small businesses to change legal structures without incurring an immediate CGT liability, and allowing it to defer CGT to a later point in time.
Choosing a business structure can be tricky. How you choose to legally structure your business can have many tax, legal and financial implications.
There are four commonly used legal business structures in Australia: sole trader, partnership, company and trust. The advantage and disadvantages of each should be carefully considered before you decide which one is best for you.
Choosing the right structure for your business is a consideration that is not only important from the start, but as your business grows and develops. Here we look at the basic differences between operating under the simplest of structures compared to the most complex business structure.