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Starting your business — Registering your business: Tax basics for small business

Starting your business — Registering your business: Tax basics for small business


You may need to register your business for
a number of tax obligations. The most common tax registrations businesses need are a tax
file number or TFN, an Australian business number or ABN, goods and services tax or GST,
pay as you go withholding and fringe benefits tax. If you’re registered for GST, you can
also register for fuel tax credits. You can complete and lodge applications for
most tax obligations online at abr.gov.au, by phoning the ABR on 13 28 66, or through
your tax agent. Let’s have a look at a couple of examples. JASON started his own business as a landscape
gardener. He does most of his work on site and in his workshop. JASON doesn’t need a separate TFN because,
as a sole trader, he uses his individual TFN. He needs an ABN as he is going to register
for GST and needs to quote an ABN when dealing with other businesses. He doesn’t have to register for GST because
his expected annual GST turnover is below the GST registration threshold, but he prefers
to charge GST and claim GST credits. He plans to work alone, with no employees. He can register later if he needs to – for
example, if he needs to withhold from a supplier that doesn’t quote an ABN, or when he has
employees. JASON sometimes uses fuel in machinery such
as a whipper snipper, ride-on lawn mower and a generator, to do his job. JASON may be able
to claim fuel tax credits and is required to be registered for both GST and fuel tax
credits. MARY started her own business, The Nuw Café.
At the same time, she created a company, Nuw Cafe Pty Ltd, through which she runs the business. The company needs a separate TFN. It also needs an Australian Company Number,
or ACN. And the company needs to apply for an ABN
as it must register for GST. As an employer, Nuw Café Pty Ltd needs to
register for PAYG withholding. MARY plans to have private use of a company
car, which is a fringe benefit. If FBT is payable on this benefit, the company needs
to register for FBT. For more information about business registrations,
go to the ATO’s website.

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