Whether you want to be hired on as a contractor, or decided to start a business, you will be required to register for an ABN. 


Below we will discuss the benefits of becoming a small Sole Trader. For other business structures like company, and trust, stay tuned for our next article release. 


What are the benefits of having an ABN?

  • Access to small business tax offset
  • Trademark a business name
  • More deductions available
  • access to business instant asset write-offs deductions that normally you would have had to claim depreciation deduction across multiple years. 
  • wider range of tax planning methods


How will my record keeping change?

Depending on the nature of your business, you can get away with simple word docs and excels to keep track of your sales and expenditures. 

However, if you want to have a thorough sophisticated record keeping system that can help track your GST liability, then you may consider purchasing an accounting software like Myob or Xero.


Keeping receipts and tax invoices will still be essential standard procedure. Retain them for 5 years. 


Do I need to register for GST?

Most cases, if you make a turnover / gross income less than $75,000 then you do not need to register for GST. However, the choice is still yours.


Once you make over $75,000 gross income / turnover, then its compulsory.


Once you register for GST, any sales or service income you make will attract GST (apart from some exceptions). The GST portion of your income must be paid to the government.


Read more here

https://www.ato.gov.au/Business/GST/Registering-for-GST/


What are the benefits of having a GST registration?

You can claim GST credits each activity cycle (monthly, quarterly, etc depending on what the ATO decides for your case) on all your expenses.


For example, if you buy a laptop $1,000, you can get the GST credit of 1/11 of the cost ($1,000 x 1/11 = $90.91) to reduce your GST liability. 


If you are in the business of selling non-gst products and services (like farm produce, fresh foods, etc,) then it is extremely beneficial to register for GST.


Having a GST registration can also be useful in the event that the Government releases special stimulus packages for businesses. During the Covid19 pandemic, most business that registered for GST before 1 March 2020 were able to access a wider range of benefits than those that didn't. However, the likely hood of a stimulus package occuring isn't as frequent.