Determining if a business is a small business entity

1. An individual, partnership, company or trust is a small business if it:
   • Operates a business for all or part of the income year; and
   • Has less than $2 million aggregated turnover.
2. The aggregated turnover includes the annual business turnover, excluding passive income, of:
   • The taxpayer;
   • The taxpayer’s connected entities; and
   • The taxpayer’s affiliates.
3. An entity is connected with the taxpayer if either:
   • The taxpayer controls or is controlled by that entity; or
   • Both the taxpayer and that entity are controlled by the same third party.
4. An affiliate is an entity who acts or could reasonably be expected to act in accordance with the taxpayer’s directions or in concert with the taxpayer in relation to their business affairs.
5. The $2 million aggregated turnover test is met if:
   • The taxpayers's aggregated turnover was less than $2 million in the previous income year; or
   • The taxpayers's aggregated turnover in one of the two previous income years was less than $2 million, and their current year aggregated turnover is likely to be less than $2 million as reasonably estimated at the first day of the current income year; or
   • The taxpayers's actual aggregated turnover was less than $2 million as worked out at the end of the current income year.
6. For more information, click here.

Licence requirements for market stalls

1. Whether a taxpayer sets up a market stall to sell their second-hand goods or cupcakes at the local farmer’s market or annual fair, certain types of registrations, licences, permits or insurance may be required.
2. To assist taxpayers, the business.gov.au website has compiled information on common licences that market stall owners may need to apply for.
3. Although the applications required may be overwhelming, they are important in helping to protect the taxpayer and their investments in their market stall business.
4. Common applications and regulations taxpayers may need to consider include:
   • Footpath usage/obstruction permit from the local council;
     
   • Insurance for public and product liability;
     
   • Products meet the product safety and standards requirements and trade measurement laws; and
     
   • Temporary food licences.
     
5. Regulation and license obligations vary in each state, territory and local council, so taxpayers need to check their obligations for each government level.
6. For more information, click here.

Contractors, independent contractors and subcontractors

As an employer, it is important to determine whether the worker you hired is considered an employee or contractor.

Employees and contractors have different entitlements with regards to receiving various paid leave and superannuation guarantee.

Contractors fall into 3 main categories with subtle differences.

A contractor describes a person, business or organisation that contracts with another entity for work at an agreed price.

Independent contractors run their own business and are hired to do tasks based on their contract. They generally use their own processes, tools and methods to complete tasks.

A subcontractor is an independent contractor that has been hired by another independent contractor to help complete their contracted work.

A worker may be a contractor, however in certain circumstances, Government agencies such as the Fair Work Ombudsman and the Tax Office may classify them as an employee.

For more information, click here.

ASIC - renew or lose business name

ASIC has cancelled more than 95,000 business names in the first half of 2015 after business name holders failed to pay their renewal notice.

ASIC urges business owners to maintain business name records and ensure renewal fees are paid when due to avoid the business name being cancelled.
Business names can be renewed with ASIC online for either a period of 1 or 3 years.

If business owners are unsure of their renewal date, they can search for their business name on ASIC Connect Search or log into their ASIC Connect account.

Business name guidance is available on topics such as renewal fees, renewal period options, how business name holders will be notified about their next renewal and outlines what happens after the renewal process has been completed.

For more information, click here.

Are the costs of travelling between work and home tax deductible?

1. The cost of travelling between work and home is usually private in nature and not deductible even if:
   • Minor work-related tasks are done on the way to work;
     
   • Travelling between work and home is required more than once a day;
     
   • The taxpayer is on call;
     
   • Access to public transport is limited;
     
   • The taxpayer works outside normal business hours; or
     
   • The taxpayer does some work at home.
     
2. However, deductions may be available for the travelling costs in some situations such as:
   • Between two separate workplaces;
     
   • From the taxpayer’s normal workplace to an alternative workplace, such as a client’s premises, and back to their normal workplace or directly home;
     
   • From the taxpayer’s home to an alternative workplace for work purposes, then to their normal workplace or directly home; and
     
   • From home to work if the taxpayer needs to carry bulky tools and equipment used for work and cannot leave them at their workplace.
     
3. Travelling between work and home may be deductible if the taxpayer carries out itinerant work. The following factors may indicate that the taxpayer does itinerant work:
   • Travel is a fundamental part of work, not just because it is convenient to the taxpayer or their employer;
     
   • The taxpayer travels to a 'web' of workplaces throughout the day;
     
   • The taxpayer’s home is a base of operations; and
     
   • The work site location is often uncertain;
     
4. For more information, click here.

Streamlined GST reporting option for quarterly lodgers

1. Taxpayers who pay GST quarterly are now given three options:
   • Option 1: Calculate and report GST quarterly;
     
   • Option 2: Calculate GST quarterly and report annually; or
     
   • Option 3: Pay GST instalment quarterly and report annually.
     
2. Option 2 was introduced to streamline the GST reporting obligations for taxpayers.
3. Taxpayers electing option 2 are required to report the following amounts on their quarterly Business Activity Statements (BAS):
   • Total sales at label G1;
     
   • GST on sales at label 1A;
     
   • GST on purchases at label 1B; and
     
   • Wine Equalisation Tax and Luxury Car Tax at labels 1C, 1D, 1E or 1F if applicable.
     
4. Taxpayers are then required to lodge an ‘Annual GST information report’, which will be mailed to them, to report the annual amounts for the following items:
   • Export sales at label G2;
     
   • Other GST-free sales at label G3;
     
   • Capital purchases at label G10; and
     
   • Non-capital purchases G11.
     
5. Taxpayers need to lodge the annual report by the due date of their tax returns or 28 February of the following financial year if they are not required to lodge an income tax return.
6. For more information, click here.

$20,000 instant asset write-off for small businesses has become law

1. New and second hand assets acquired between 7.30pm on May 12, 2015 and June 30, 2017 can now be immediately written off by small business entities.
2. Assets costing $20,000 or more will continue to be deducted over time using a small business pool.
3. The low pool value threshold will also increase to $20,000 to allow for an immediate deduction if the pool balance is less than $20,000 at the end of an income year.
4. The 'lock-out' rule has been suspended until the end of June 30, 2017. This means small business entities that have previously elected out of the simplified depreciation regime can now re-enter the scheme without having to wait for the 5-year lock-out period to lapse.
5. A small number of assets may not be eligible for the accelerated depreciation, including:
• Horticultural plants;
• Capital works;
• Assets allocated to a low-value pool or software development pool;
• Primary production assets that have been elected to be depreciated under the normal depreciation rules rather than the simplified depreciation rules; and
• Assets leased to another party on a depreciating asset lease.
6. For more information on the new law, click here.