any accountants or tax experts in here?

[JJCRU23R]

heres the thing -

i am a jack of all trades so to speak... (high school teacher/tutor/amateur webdesigner amongst other things) and i basically want to be able to give my pupils/customers a proper receipt/tax invoice/account whenever people pay me for my services.

for instance, my mate whos paying me to develop his website is going to pay me a 4 figure sum for building the site from the ground up. thats a big chunk of cash from his business to give to someone and i cant even give him a recipt?!

im guessing i need to register as a business, but then again im only doing small things here and there on a part time basis.. not planning on opening a shop front or anything like that... so what do i need? what should i do?

i know id need an ABN, but do i need a business tfn?

im very confused - the ATO website makes me go crosseyed i cant make sense of the info.

please help!

thanks in advance... jase

[Azza]

Hey Jaso...

Mate, you 'should' register for an ABN if you are planning on carrying on an enterprise with the intent of making income. Income is derived as being regular and expected.

Your mate is able to pay you on his books legitimately, all you have to do is provide him with a Statement By Supplier, which is basically a document from the ATO that you sign and declare that you are recieving ther monies for a particular purpose, ie, as private recreational pursuit or hobby, thereby he is covered and does not have to withhold 48.5% tax and you can safely justify the money recieved without having to declare it as income.

The secret to the tax rules is simple, 'Self Assesment'. THis means, you can fit a lot of things through the loopholes if you can justify it with some sort of legitimacy. If you were to do the above thing a few times, then things would be harder to justify as being a hobby, however you have to look at the definition of income, this being 'Regular" and "expected"

It sounds to me like you are planning on trying to make some coin, so my honest suggestion is to register for an ABN (you will only need to register for GST if you are expecting an annual turnover of like $75k per year or something....) and declaring it lawefully.

If you do not register for GST, you can not charge GST, and cause you can not charge GST, you can not claim GST input tax credits....

You dont need to be a Business to register for an ABN either, you canregister for an ABN as a sole trader, meaning the ABN will be registered to you personally, and you personally will be responsible for the lodging of the relevant Installment Activity Statements and making the appropriate payments to the ATO for your tax.

What registering will do for you is allow you to issue an Invoice (only a Tax Invoice if you are registered for GST) and therefore not having to supply a statement by supplier everytiome you deal with business yourself.

My final suggestion, is talk to friends you already have in business, and ask them to reccomend you for a good Tax Agent. He will prolly clarify most of what I said, and be able to lodge most of the documents for you. (Also by having a registered tax agent listed on your account with the ATO, it gives you an automatic 28 day extension on the deadline for lodging your activity statements, this also goes for personal tax rteturns)

Hope this helps...

Cheers

Aaron

PS: My credentials...I used to work at the ATO in the Small Business Call Centre andswering calls all day just like this... I currently am a FInacial Operations Officer for a major state government department dealing with audit control on GST, FBT and other financial resources of the organisation.

[JJCRU23R]

thanks for the help azza!

i frikken hate doing tax... wouldnt know where to start with it

EDIT-

so i guess for the purposes of the website i should fill in the supplier by a supplier form yea?

i dont plan on opening up a business as a webmaster or anything...

Edited February 13, 2008 by JJCRU23R

[JJCRU23R]

the statement by supplier doesnt show anything about how much the service costs... is there another sheet i fill in for this?

Edited February 13, 2008 by JJCRU23R

[wishbone]

if u do do it tht way....the amount u get will be a taxable income...if i were u i would just make up a recipt on excel and keep it at tht....

[Azza]

the statement by supplier doesnt show anything about how much the service costs... is there another sheet i fill in for this?

It doesnt need to show the amount. The person you supply to will retain the form with their paperwork as evidence as to why they didnt withold 48.5%. You only ever need to supply the Statement By Supplier to a customer once...

if u do do it tht way....the amount u get will be a taxable income...if i were u i would just make up a recipt on excel and keep it at tht....

precisely, however by doing a didgy excel spreadsheet and not declaring, when dealing with businesses, they must withold 48.5% witholding tax unles they are provided with an ABN or a Statement By Supplier.

Should the business be audited and can show that paid Jase (or anyone else) then the ATO will further audit the payee, then Jase is in more poo that a poof's doodle without a rubber

[JJCRU23R]

the statement by supplier doesnt show anything about how much the service costs... is there another sheet i fill in for this?

It doesnt need to show the amount. The person you supply to will retain the form with their paperwork as evidence as to why they didnt withold 48.5%. You only ever need to supply the Statement By Supplier to a customer once...

if u do do it tht way....the amount u get will be a taxable income...if i were u i would just make up a recipt on excel and keep it at tht....

precisely, however by doing a didgy excel spreadsheet and not declaring, when dealing with businesses, they must withold 48.5% witholding tax unles they are provided with an ABN or a Statement By Supplier.

Should the business be audited and can show that paid Jase (or anyone else) then the ATO will further audit the payee, then Jase is in more poo that a poof's doodle without a rubber

please do not put my name in the same sentance as the words "poo", "poof's doodle" and "without a rubber" in the same sentence!

MUAHAHAHHAHHAALOLROTFLMAOWTFAZZA!!!?!