Activity statements are used to make payments and report obligations under the tax system. The statement is used to report and pay your FBT Instalments, PAYG (instalments and withholding), GST and related tax obligations, and to pay deferred company and superannuation fund instalments. 

​Capital Gains Tax (CGT) is not really a separate tax but is what you need to include on your income tax return for any net capital gain incurred in a financial year for a Capital Gains Tax event which can include compulsory acquisitions, forfeited deposits, etc. Also you may have a Capital Gain from managed funds or other units where the Capital Gain is distributed to you. You are taxed on net capital gains at your marginal tax rate. The date of acquisition and disposal is the date the contract is signed and not when it is settled, so you may have a situation where it is signed pre 30th June and goes into the current tax return even when settlement is post 30th June.

What is FBT? 

Fringe Benefits Tax is generally the tax payable by an employer on a taxable benefit provided to an employee (or their associate­usually family) and can relate to current, past or future employment. The benefit could be in place or in addition to salary or wages. The tax is separate to Income Tax and the FBT year runs from the 1st April to 31st March.​

​Goods and Services Tax (GST) is a tax of 10% in Australia on most goods, services, and other consumables. If you are a registered business, you need to charge GST on most goods and services you sell or supply. You must be a registered if your business turnover exceeds $75,000 per annum or $150,000 for a not­for­profit organization but you may elect for voluntary registration if you are below the threshold. 

​The imputation system provides a way in which Australian corporate tax entities can pass on credit for income tax they have paid to their members. The system prevents income tax being levied twice ­ once when the income is earned by the entity, and once upon distribution of the income to the members. 

​Income tax is levied on taxable income. Taxable income is calculated as [assessable income] less [any allowable deductions]. Deductions include wages, cost of stock, rent, bad debts, and previous year losses. 

​The real benefits of negative gearing are only realized when you combine the correct tax and financial advice with a property in the right location funded by the most suitable loan product. You should always seek expert professional advice to make sure the purchase is within your budget and will provide long term taxation and financial benefits. 

​Pay As You Go (PAYG) instalments is a system for paying instalments during the income year towards your expected tax liability on your business and investment income. Your actualtax liability is worked out at the end of the income year when your annual income tax return is assessed. Your PAYG instalments for the year are credited against your assessment to determine whether you owe more tax or are owed a refund.

​Employers are required to withhold amounts paid to employees and regularly send these payments to the Tax Office. This system is called PAYG Withholding. 

Just as evolution in animals dictates that only the fittest survive, in a recession it is generally survival of the smartest.

​In this country we seem to have a recession ­like economy happening every seven to nine years and almost 75,000 Australian businesses were wiped out in the last downturn. To survive business owners must find a way to plan their way past potential threats including higher interest rates and fuel prices plus declining consumer confidence.

What records to keep and for how long?

As the burden of proof falls upon the taxpayer in event of any dispute it is imperative that adequate, well­organized records are kept for the statutory periods as set out in the Income Tax Assessment Act. 

The Simplified Tax System (STS) is an alternative method to determine taxable income for eligible small businesses with straightforward financial affairs. Participating in STS is optional. 

To qualify for Small Business Entity concessions in an income year you must:

• Run a business in that year
• Have an annual turnover of less than $2 million for that year and the previous year 

Starting or buying abusiness necessitates risk, research, passion and planning. Just like a game of chess, to succeed you need to make the right opening moves.
​
The harsh reality is that enthusiasm, money, talent or a great idea is not enough to guarantee success in business. 

​As a small business owner you will have superannuation obligations for your employees. There is a minimum earning cutoff (currently $450 per month) where most employees, full, part­time, casual or even contractors will need to have a superannuation contribution made of a percentage of their ‘ordinary time earnings' (currently 9%). The exceptions include employees under 18 years who worked less than 30 hours in a week and employees over 70 years of age. 

​Taxpayers who do not meet their tax obligations may face penalty or interest charges. To avoid these charges, ensure you pay the full amount of tax you owe by the due date.