If you’re setting up a new business you may have additional tax obligations which require additional registrations.
Tax File Number
Every business requires a Tax File Number. If you operate as a sole trader you can keep your individual Tax File Number, otherwise your new business entity (partnership, company or trust) will require its own Tax File Number.
Australian Business Number
An Australian Business Number (ABN) is a public number for each business. Customers can confirm your ABN details by checking https://abr.business.gov.au/. An ABN is required for other tax registrations (see below) and your business customers are required to withhold 47% from payments made to your business if you fail to supply an ABN.
Goods and Services Tax
GST registration is required where your business has GST turnover greater than $75,000 ($150,000 for non-profit entities) or provides taxi/ride sharing services. If your business turnover is less than the thresholds, you may elect to register in order to claim Input Tax Credits (GST credits). Once registered for GST you must remit 1/11th of your GST turnover less any GST you have paid in operating your business to the ATO either monthly, quarterly or annually.
Pay As You Go (PAYG) Withholding
If you employ staff you must register for PAYG in order to withhold tax from employee wages. The PAYG system is also used to withhold tax from contractors with voluntary agreements, payments to businesses who don’t supply an ABN and some payments made to overseas parties. You will also have reporting requirements under the Single Touch Payroll system for payroll payments.
Fringe Benefits Tax
If you provide non-cash benefits to employees and associates, you should register for Fringe Benefits Tax (FBT). An annual FBT return detailing benefits provided for the year ended 31 March is required to be lodged.
Payroll Tax
Payroll Tax is state/territory based and whilst the rules have been harmonised in recent years, the rules and thresholds are different from state to state. If you operate in more that one state/territory you are required to register in each state/territory that you operate. Whilst not a tax, you should also consider Workers Compensation insurance in each state/territory as well.
Other Taxes
There are also a number of other taxes which are transaction/industry specific such as Fuel Tax Credits, Wine Equalisation Tax and Luxury Car Tax. Each of these taxes have separate registration details but are generally lodged together with your GST and PAYG obligations.
Most of the above taxes can be registered at the Australian Government Australian Business Register (https://www.abr.gov.au/). Your Lee Green Accountant is also able to provide assistance with your registration requirements.
If you are considering starting or acquiring a business and need advice or support, please contact our office.
The information provided in this article is general in nature and does not take into account any person or entity's particular financial situation or needs. Please contact us for advice specific to your circumstances.
This information is current at the time of publication and further updates may have occurred since that date.
