Sole Traders

If you are running a business with the intention of generating a profit then you will need to have an ABN. You may also be required to register for GST if your turnover is greater than $75,000 or if your turnover is less than this you can choose to voluntarily register for it. Your business income will be treated as your Individual income and included on your tax return and you will then be taxed at your marginal tax rate.

You will be responsible for paying the tax on your business income and it is highly recommended that you make provision for this throughout the year to avoid a hefty tax bill at the end of the year.

You need to keep a copy of all invoices you issue and business expenses incurred so that they can be declared and claimed in your tax return.

You may be required to lodge a BAS (Business Activity Statement) if you are registered for GST. Your BAS will include income and expenses and needs to be lodged with the ATO on a monthly, quarterly or annual basis. Even if you have no income or expenses for a period you still need to lodge your BAS statement.

You may be issued with an IAS (Instalment Activity Statement) which requires you to make tax payments monthly, quarterly or annually to the ATO. This prevents you having a big tax bill at the end of the year and struggling to repay the debt.

Our Tax Team experts are here to guide you through the sometimes confusing world of the Sole Trader.