How do I get an ABN?

ABN’s are issued through the Australian Business Register, and can be applied for online.  There are various requirements to be met before you can get an ABN. Applications may be refused if you are not entitled to an ABN. 

McKern can provide expert advice for structuring your new or existing business, as well as organise any ABN applications you may need.

How do I set up a new business?

There are many things that need doing in order to set up a new business. From choosing and registering your trading name, to setting up bank accounts and registering for your ABN, TFN in some circumstances, and other ATO registrations for GST and employees etc. 

You will also need to ensure you have a suitable accounting system in place to record your financial information and business transactions, to satisfy the ATO requirements. The McKern team would love to meet with you to take you through a step by step list of the things you need to do to set up your new business or improve your existing business structures. 

Do I need a company?

A company has a separate legal existence to its owners.  There are many advantages to setting up a company within your business, one of them being the flat 30% tax rate on all income.  However, there are also many other issues that need to be considered prior to using a company, including the non-availability CGT discount on any capital gains. 

Companies can be more expensive than other entities to set up and maintain each year. Contact McKern to arrange an appointment to discuss your options regarding setting up a company.  

Can I use a family trust?

Put simply, a Trust is where a Trustee is under an obligation to hold property for the benefit of Beneficiaries.  A ‘Family Trust’ is a discretionary trust, where the beneficiaries do not have a fixed entitlement or interest in the trust funds.  The Trustee has the discretion to determine which of the beneficiaries are to receive the capital and income of the trust, and how much each beneficiary is to receive.  The terms of the Trust are set out in the Trust Deed - a very important document that governs how the Trustee is able to operate the Trust.  

One major benefit of using a Family Trust is the ability to distribute the income each year between various family members, utilising lower tax brackets if available.  However, there are many complex areas of Trust Law, so it's essential to get the terms of your Trust Deed right from the start. This will help ensure the Trustees can effectively use the Trust to minimise tax and work as a valuable entity within your organisational structure.

Still unsure? Contact McKern

How do I register a business?

Setting up a new business? There are numerous registrations you will need to organise, including Business Names, ABN, TFN (in some cases), GST & PAYG Withholding, just to name a few.  The number of registrations necessary for your business depends entirely on your exact circumstances. 

The McKern team are experienced in working with our clients to achieve the best outcome for their business and circumstance. Contact Us for an appointment today. 

What is a SMSF?

Self Managed Superannuation Funds (SMSF) are a way of saving for your retirement. Instead of placing your superannuation contributions into the hands of fund managers each year, you can be the Trustee of your own fund, and manage it yourself.

There are various annual costs associated with having a SMSF, including but not limited to annual Accounting and Audit fees that are necessary to satisfy ATO requirements. These costs are minimal when you join a large Superannuation Fund, and for this reason, unless you have substantial retirement funds to roll in to your new SMSF, they may not be appropriate. 

The Superannuation Industry Services (SIS) Act regulates the industry, and there are many complex rules and regulations governing the Trustees of SMSFs. The penalties that can be given out to a Trustee where funds breach the regulations are serious, and can even include jail terms.

SMSFs are not for everyone, contact McKern for an appointment to see if a SMSF is your best option.  

McKern Strategic is a Corporate Authorised Representative of Count Financial and is able to provide advice on the set up and operation of your SMSF.

How do I comply with ASIC?

The Australian Securities and Investments Commission (ASIC) is Australia’s Corporate (company), Markets & Financial Services regulator. If you operate your business or investments through a company, you will be required to satisfy the numerous provisions of the Corporations Act. This is a complex area with many rules and regulations, as well as penalties.

Every company needs to lodge an Annual Return with ASIC each year and to lodge forms for any changes to the company, including changes to Directors, Shareholdings, addresses etc.  McKern are experienced in preparing and lodging annual returns and other forms on our client's behalf as well as providing advice about other ASIC issues you may encounter. Contact McKern to discuss ASIC compliance. 

How to finance a new asset

There are various forms of finance available out in the market including bank loans, chattel mortgages, hire purchases, leases, and many more.  When it comes to financing a new asset, there are many considerations when deciding which form of finance is most suitable.

Some of these considerations will include the effective life of your asset, your cash flow needs, interest rates, tax deductibility, GST registration, and more. To best plan for your next asset purchase, contact McKern to discuss if the finance you are considering is most suitable for your situation.

McKern works closely with trusted finance brokers who may be able to secure you better terms.

Which name should my finance be in?

The name used to draw up a new asset is a crucial choice. By using the incorrect name on the finance documents, it is possible to lose the tax deductibility of interest, and cost yourself additional income tax for years to come. Contact McKern to review the details of your circumstances and for advice on the most suitable entity to apply for your finance.

What are the tax savings on an investment?

By negatively gearing an investment, you can obtain tax savings.  For example, if you purchase a residential investment property and the interest expense each month exceeds the amount of rental income that you receive, you will have a shortfall that you will need to pay to the bank each month to cover the interest payments.  

However, because you will be making a loss on the property, in most cases you will be able to offset that loss against any other income you have earned, and save tax at your marginal tax rate.

It's important to note there are additional costs you can claim on a rental property, including depreciation and capital allowances, which will increase the tax savings possible.

Contact McKern for personalised advice and estimations on tax savings.

Do I have to pay Payroll Tax?

Payroll Tax is assessed by the various Offices of State Revenue (OSR) in Australia. Payroll Tax is essentially a tax on Employers. In Queensland, if the total amount of your annual wages (inclusive of superannuation and various other costs of employees) exceeds $1.1m, you will be liable to pay payroll tax at 4.75%.

There are various payroll provisions and rulings handed down by each state, and in all states there are grouping provisions. So, if the same people essentially control more than one business, then they will be grouped for payroll tax, and will be assessed as one with only one threshold applied.

Want to discuss Payroll Tax? Contact McKern

Do I need Workers Comp?

Workers Compensation is managed differently in each state of Australia. Workcover is the government body that manages the Workers Compensation Fund in Queensland. Anyone that employs someone in Queensland is required to register for Workcover within 5 days of the employment starting. There are no minimum thresholds for small employers.

When it comes to Employees and Contractors there are various rules in relation to Workcover. This is a complex area. We recommend making an appointment with a McKern team member to determine your Workercover requirements.