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#1 | |||
FF.Com.Au Hardcore
Join Date: Aug 2006
Location: Melbourne
Posts: 1,674
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What kind of tax breaks do businesses get, for example I know farmers get a rebate on diesel and I know that leasing a forklift can be beneficial for tax purposes rather than actually buying one.
Does depreciation apply to the actual businesses premises? Any business owners out there, I've always been interested in business and always wondered if the risk of starting one is worth it.
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#2 | ||
FF.Com.Au Hardcore
Join Date: Feb 2005
Location: Pit Lane
Posts: 11,867
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it really depends on the business, you should really speak to an accountant as many people pass on stories that are not true or not legal
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Pit Lane Performance 20 Rosella St Frankston 03 9783 8122 Authorised Streetfighter, Pcmtec , SCT & HP Tuners Tuning Agent,
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#3 | ||
FF.Com.Au Hardcore
Join Date: Nov 2005
Location: perth
Posts: 4,355
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also there are other places to check out as well like the business enterprise centre and or the small business development centre in your state
I came across these groups whilst I've been looking info about setting up a small farm enterprise (primary producer)
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yes still (as money n time permit) doing the rebuilding the zh fairlane with a clevo 400m 4v heads injected whipple blown with aode 4 speed trans to a 9" ....... we'll get there eventually just remember don't be afraid to try something new. Remember, amateurs built the Ark...Professionals built the Titanic! I have taken up meditation... at least it's better than sitting around doing nothing !! |
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#4 | ||
Regular Member
Join Date: Mar 2012
Location: Australia
Posts: 332
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As already mentioned, it's worth having a chat with an Accountant.
The tax situation also depends on how the business is structured (eg: sole trader, company etc) Again, an Accountant can advise the most suitable option. |
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#5 | ||
Lyminge, Shepway, Kent
![]() ![]() Join Date: Oct 2008
Location: Geelong - Go Cats
Posts: 3,197
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Simply, you can claim any expense involved in generating income. The rebate you get is simply based on your marginal tax rate. If you have choice between using cash or debt for a purchase, use cash, as long as it doesn't leave you short.
There is a complete misunderstanding around 'writing things off', some seem to think it means you get it for free.
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#6 | ||
FF.Com.Au Hardcore
Join Date: Mar 2007
Posts: 2,699
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All of them.
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#7 | ||
FF.Com.Au Hardcore
Join Date: Sep 2012
Location: Sydney
Posts: 718
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Yep, writing off is a tax deduction at the marginal rate, it isn't recovery costs. Seek professional guidance.
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#8 | |||
FF.Com.Au Hardcore
Join Date: Aug 2006
Location: Melbourne
Posts: 1,674
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Thanks for all the replies.
I'm not actually starting or a business or looking for professional advice, I was just more after a discussion on the topic as I find it interesting. We often here from business owners about the associated costs of running a business such as workcover premiums, wages, loading, superannuation etc. but then there are benefits of owning a business such as tax cuts, but do these tax cuts make a big enough difference, employees often fail to realise the true cost of there employment, I often have discussions with people who complain they only got a $40 a week payrise, but that's what they take home after tax, once you add it all up it's an expensive payrise, but people are happy to whinge that they don't get enough, owning a business is tough from what I have been told.
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#9 | ||
FF.Com.Au Hardcore
Join Date: Feb 2005
Location: Pit Lane
Posts: 11,867
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this is the biggest misconception
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Pit Lane Performance 20 Rosella St Frankston 03 9783 8122 Authorised Streetfighter, Pcmtec , SCT & HP Tuners Tuning Agent,
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#10 | |||
Regular Member
Join Date: Jun 2010
Location: Sunshine Coast
Posts: 235
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People (and Accounts) say when you lease you get everything back but you only get the tax back, not the complete payment, so at the Company tax rate of 30%, if you spend $10,000 in a year leasing a forklift for example, you get only $3000 back. Same applies to personal tax rates(if you don't run the business under a company structure) when you consider that the personal rate across the board is 30% up to $175000 income. I have always looked at leasing as a means to have what you need for the business when you don't have the cash or the capacity to borrow and pay back the principle amount as well as interest. As has already been mentioned, if you can afford to buy outright then do so. Also consider if you buy something, either by way of cash or borrowings, you can depreciate the item each year, but by leasing you do not get the depreciation benefit which can be 20-30% on the purchase price in the first year then the same % on the written down price from then on. |
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#11 | |||
Performance Inc.
Join Date: Aug 2008
Location: In a cave
Posts: 2,554
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Mate talk to a good accountant that is rule 1. I lease my vehicles to allow cash to be used for other things. Similarly there are leases and then there are leases, in my situation I use a chattel morgage set up. For what its worth I consider it to be the best way to own a new vehicle and reduce yout tax obligations and you claim back all the interest paid over the lease term, depreciate the asset same as if you paid cash, so the cost is same as paying cash but spread out over 5 years leaves your cash money for other things.
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#12 | ||
If it ain't broke........
![]() Join Date: Dec 2007
Location: Sunshine Coast Qld
Posts: 18,515
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What tax breaks do businesses get ? Not enough..............
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#13 | ||
FF.Com.Au Hardcore
Join Date: Feb 2008
Location: Perth, Northern Suburbs
Posts: 4,881
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Not clear on exactly what you mean by “breaks,” but the basic answer is “none.” There is certainly no tax based reason to go into business.
In fact (having been there and done that) I reckon you ‘d be mad to become a small businessman in Australia, because all the other laws are stacked against you. Why risk your capital and your livelihood, and work your **** off trying to sell your services to an unappreciative public, when you can work for wage, demand job-security, and spend your time whinging and moaning that you work too long and don’t get paid enough. |
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#14 | ||
FF.Com.Au Hardcore
Join Date: Feb 2005
Location: Pit Lane
Posts: 11,867
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I don't think Crazy Dazz is too crazy,
I love how most people think because your self employed, your loaded
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Pit Lane Performance 20 Rosella St Frankston 03 9783 8122 Authorised Streetfighter, Pcmtec , SCT & HP Tuners Tuning Agent,
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#15 | ||
BANNED
Join Date: Jul 2012
Posts: 2,886
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I run a family business that has turned over more than $50m since incorporation.
Basically for starters you get a 10 percent discount on everything you buy...the GST. It really is on everything invoiced in your business name, regardless of whether it generates income or not. If you want to buy expensive $300 coffee in your reception area then you aren't doing anything illegal, you're just a bad business operator who doesn't know how to make a profit....plenty of Alan Bond's who have gone bankrupt and bought million dollar paintings for the conference room.... You buy everything with money before paying tax, big difference. Joe Bloh pays tax on his wages then tries to claim it back from the tax office. Businesses don't pay tax on the money before spending it. Means you have 30% more money to buy things with. Also...forget talking to accountants about making a profit, they only record history, not predict it. |
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#16 | |||
FF.Com.Au Hardcore
Join Date: Feb 2008
Location: Perth, Northern Suburbs
Posts: 4,881
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Yes, with a business there are more opportunities to commit tax fraud. As Zilo says, you can run your business in a very expensive fashion (Nice office, big desk, top computer) but keep in mind that all that gets you is a tax DEDUCTION for the money you have wasted. There CAN be cashflow advantages, but it is only a timing difference. If you have the ideas, the innovation, the capital and work ethic to develop a $50M turnover, then your own business is the only way to go. You won’t make that much coin working for the man. but (in regards to your original question) there are no real tax advantages to having a business. Furthermore, if your choice is between a working as a leading hand for wages, or running your own 1~2 person business, the former is a much safe and easier option. |
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#17 | |||||
BANNED
Join Date: Jul 2012
Posts: 2,886
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Quote:
It is a 10% discount. I can claim 10% GST refund on all my purchases and not make a single sale all year....so zero GST remittance. Anyone can get an ABN and be registered for GST. With zero sales it is a pure discount. Quote:
Any tax invoice in the name of the business is a reduction in income assessed, regardless of how stupid the purchase is. Not so for individuals who must prove it as a legit expense. Unbelievably bad advice...suggest you lookup the company tax rate versus individual tax rates....and family trusts. Quote:
Ask a leading hand at Ford how safe ann option it is to work for wages? |
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#18 | |||
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Location: Morayfield
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I love Holdens.... |
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#19 | ||
Regular Member
Join Date: Jun 2010
Location: Sunshine Coast
Posts: 235
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[QUOTE=zilo;4897974]I can claim 10% GST refund on all my purchases and not make a single sale all year....so zero GST remittance.
Anyone can get an ABN and be registered for GST. With zero sales it is a pure discount. Don't see how you cannot make a sale all year and still turnover $50 mill after all, turnover is sales. |
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#20 | ||
FG XR6 Ute & Sedan
![]() Join Date: Oct 2006
Location: Bibra Lake WA
Posts: 22,890
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All I can say as an accountant, is tax reduction is the wrong objective in running a business; your main focus should be on making a profit. Too many businesses get into trouble by focussing on trying to avoid tax rather than making money. Your accountant will make sure you pay no more tax than you have to and if you end up paying lots of tax it is because you a doing well and making good returns and making real money.
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regards Blue |
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#21 | |||
FF.Com.Au Hardcore
Join Date: Aug 2006
Location: Melbourne
Posts: 1,674
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I was told this was the case at work because leasing provided a better tax return, this what the old manager was saying, but then again I dont think he had much of a clue hence why he is not the manager anymore.
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#22 | ||||
FF.Com.Au Hardcore
Join Date: Aug 2006
Location: Melbourne
Posts: 1,674
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#23 | ||||
FF.Com.Au Hardcore
Join Date: Aug 2006
Location: Melbourne
Posts: 1,674
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#24 | |||
BANNED
Join Date: Jul 2012
Posts: 2,886
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Only mugs lease cars mate. Smart operators just buy them outright. When you lease, the leasing company gets the depreciation. Because they are the owners of the car, not you. That is the lion's share of the tax advantage. |
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#25 | |||
BANNED
Join Date: Jul 2012
Posts: 2,886
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Spare parts for example drop in price because in some industries they become last years model. Tools and test equipment, laptops and IT gear...coffee machines...fax machines...you name it...it depreciates. I am currently depreciating a pallet (38) of 200 watt solar panels that haven't even been installed. In 5 years they will have paid for themselves without generating any power whatsoever. |
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#26 | |||||
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I love Holdens.... |
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#27 | |||
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Join Date: Jul 2012
Posts: 2,886
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It was a comment based on one possible scenario, not my actual circunstances. However, I'll run with it.... You buy a $100k FPV, in that $100k you paid $10k of GST... You submit a BAS that month claiming back the $10k GST... Cheque arrives amonth later for $10k..... You still have the FPV in your warehouse... You just got your 10% discount and its in the bank. You are holding an FPV potentially for ever at a discount. You drive it and it depreciates at 22% per annum... 5 years later its a pile of junk and you sell it for a thousand bucks. You send them 10% of a thousand bucks ($100) as the GST on the sale. So you saved 10% less a dribble, and you didn't make a sale all those years..... Worth getting an ABN instead of a novated lease? You betcha.. Welcome to the new tax system...the GST... |
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#28 | |||||
BANNED
Join Date: Jul 2012
Posts: 2,886
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I had a team of ATO suits explain these advantages to my business in exactly the way i am presenting it here. Quote:
I just call it like it is... Last edited by zilo; 05-10-2013 at 02:25 AM. |
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#29 | |||
FF.Com.Au Hardcore
Join Date: Sep 2008
Posts: 1,112
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As we were leaving the accountant said to us something along the lines of "I'll help get you up and running and hopefully you'll all be paying a lot of tax real soon" We all looked at each other like it was a real strange thing to say, but of course if you're paying a lot of tax as a business owner, that means you're making a lot of money ![]() I still dont pay very much tax... ![]() |
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#30 | ||
FF.Com.Au Hardcore
Join Date: Sep 2008
Posts: 1,112
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On depreciation;
A business owner can claim depreciation on whatever really. Capital purchases in particular are depreciated. The amount of value they lose each year is estimated, and that dollar figure becomes a claim. With property, the fittings and fixtures, or the building is depreciated. While the value of the property overall will usually appreciate, the buildings on the land from which the business generates its income will age, wear out, eventually require renovation or re-building, hence why they can be depreciated. Claiming on deprecation can take a large chunk out of a business owners tax bill, it sure does with mine. |
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