Business Structure: Sole Trader or Company

December 13, 2017 Robb Business Development, Tax & Compliance business structure, companies No Comments

Your Business Structure: Sole Trader or Company?

Business is risky. Risk is the price we pay for the rewards we hope to get from owning a business. Risk is the reason we expect a higher return from a share investment than a bank deposit.

If investing in a portfolio of businesses via the share market is risky, it is nothing compared to investing in one small business. While we may be very happy with a 10% return on our share portfolio, a venture capitalist may look for a 30% return on his investment in small, growing companies, knowing a good portion of them will fail.

It would be foolish to go into business ignoring the fact that things can go wrong: consultants get sued by client for advice gone wrong; businesses lose key customers and can’t pay their bills; professional firms are attacked by ransomware and cannot operate. Your best defence is your business structure. Read More…

Ratios: Making Sense of Your Financial Statements

December 8, 2017 Robb Business Development financial management No Comments

How to Make Sense of Your Financial Statements

When I show a client a financial report, they usually respond with a blank stare. When I point out a figure in the report, such as their net profit, they usually ask something like: “is that good?”.

They are appropriate responses because numbers are meaningless on their own. Only when they are put into some context do they become useful, which is where ratios come in. Read More…

New Company Car Rules

December 7, 2017 Robb Tax & Compliance business expenses, income tax No Comments

A new Option for Claiming Company Car Expenses

Small business owners typically have one vehicle which they use for both business and personal use. A common question is whether their company should own their vehicle.

Until recently, company ownership of your car meant the company claiming 100% of the vehicle costs but paying Fringe Benefit Tax (FBT) on the private usage. The problem is that the FBT rules assume the shareholder-employee has full use of a private vehicle (with some limited exceptions) and FBT is charged accordingly. The FBT paid sometimes exceeds the tax savings from claiming the vehicle expenses.

From 1 April 2017, we have a new option. Read More…

Tax Deductible Business Expenses

November 29, 2017 Robb Tax & Compliance business expenses, income tax No Comments

Tax Deductible Business Expenses

What we Can and Cannot claim

With income tax rates as high as 33%, tax majorly impacts nearly all our business transactions. So, while we should be making business decisions for commercial reasons, it is vital to understand what their tax impact them will be. Yet, business operators regularly make decisions on business expenses based on false assumptions and misunderstandings, resulting in a drastically different tax outcome than they expect. Read More…

Avoid the New Business Tax Trap

November 23, 2017 Robb Tax & Compliance income tax, new business No Comments

Whether we like it or not, a lot of our money goes on tax. With up to 33% of our profits going to income tax alone, tax has a major impact on our business’s cash flow. But when we start a new business, it can be up to two years before we need pay a cent, making it too easy to put our head in the sand.

It does catch up with us. Facing two years of tax, payable within a month, can be enough to knock a fledgling business over. This is one bill that a new business owner must have a plan for. Read More…