I know...it SUCKS but at least you are familiar with the routine I suppose! You will run at a loss for awhile anyway.
It's one of the reasons I am hesitant to go back into biz..I want to get away from Clink forever and it just tangles me back in....feelin ya pain!
i agree with Lulu - the profit and loss statements suck, but it's best to be completely upfront with them - you're registering as a business and need to be upfront about it. it will all go through a complex assessment officer who will be able to say whether you run at a profit or loss and then it willbe recorded on your file. not fun - but definitely better to do a bit of paperwork than to have them find out months down the track that you've started it and have nasty investigations...
Thanks BG.... I've been PMing Lulu, but would like your input too!!
We got the ABN in Adams name (long story).
According to the ATO guy, they only wanna know about the business if it earns over $50,000, otherwise its a hobby and not GST applicable. And centrelink only want to know if its taxable income, which ATO says it isn't.
But it doesn't sound right.
I know a lot of tupperware and avon ladies that just do there work and dont need to report it, but it still doesn't sound right....
it may be classed as a hobby for ATO purposes - not for centrelink - you're ALWAYS better off getting the initial paperwork submitted and assessed by the assessment officer rather than assuming it will be ok to not report it. it's better to have them assess it and say "yup, it's all ok" and not include it, than to NOT report and find out you should have. i would double check with ATO though (read the next bit!)
having the ABN in Ad's name just means it has to be reported as his business not your. given it's not a "standard" party plan, it's hard to say exactly how it will be assessed. company's like tupperware, bodyshop, partylite, avon - they all have a central "figurehead" company further up the food chain that is responsible for all taxation and things. you're essentially starting out a new "shop front" business working from your garage (if memory serves) - YOU are ultimately responsible for everything - there is no figurehead company that has to take responsibility for taxation. you are essentially a small business, NOT a party plan consultant - the buck stops with you. if something goes wrong, you are responsible. please make sure to check this out. do NOT label yourself as a partyplan consultant when starting out with ATO - talk to them about your business idea - from what i gather, you're going to stock nappies and sell from your garage. you're going to offer the opportunity for people to see your wares from the comfort of their home. but you're not a consultant for another company. it would be no different to you opening an IRL shop in town and then going from your shop to peoples homes to show things. you are still, ultimately, the "business" and are responsible for all aspects (stock, insurance of stock, public liability for your home to ensure safety if people attend your garage "shop front" etc). it's no different to the local lawn mowing company - they have to be registered properly and have to declare income and losses. PLUS if it's registered in Ad's name, and is run as a business, it may actually give you some tax breaks on his primary income (that's a maybe - if business is running at a loss, it might reduce his tax liability)
all stuff to keep in mind - i don't think the ATO have given your actual situation enough consideration - you're not a consultant for another figurehead company - you're a business in your own right using multiple sales techniques...
For now, its strictly party plan... i need some profit to have stock "in store". But yep, its all different brands. I'm not a 'consultant" but a 'stockists" for each company. I take orders, pay wholesale, then sell at retail prices.
I explained this to the ato guy and he said unless Ad make over $50,000 or want to claim GST, then he doesn't have to do a BAS or tax return on the business. Its a "hobby".
Centrelink then said if he doesn't have to declare to them, then he doesn't have to declare to us.... when his tax return says the same as last years one, from his day job, my payments will be made accordingly...so stay the same...
I am trying to tell them what I'm doing so i do the right thing, but no one wants to know about it!!!
ask centrelink to send out a new business profit and loss statement, or to make an appointment at the local office. it's not a standard partyplan and you don't want to be caught out - better to do a bit of extra paperwork than it is to not do it
and they can't say they will only class income as it is listed on his tax return if you're on PPP - that's a load of crud! it's gotta go on actual income for PPP purposes (before deductions!) so you need to be above board. maybe say you want an appointment with someone in relation to starting up a business but you don't want to do it over the phone. it's a pain, but you're better getting it all out in the open with someone that knows how it works with self-employment - and those on the phones are not self employment experts!
if it's only ftb now (sorry, i thought you were still getting part ppp) then it all goes on what ATO said - it's only what is on the tax return
check with them about the ABN though - for most "hobbies" you don't need an ABN and can actually be penalised for having one and using it unless you have X amount of turn over... i know i do a partyplan and am not registered with an ABN as it's considered a hobby... not sure how that will work cos i guess we have that "figurehead" ABN though...
damn - i knew it had been mentioned in some context somewhere
at least you have reason for needing the ABN! i know a lot of hobby ABN's get taken away - but given you're buying wholesale it sounds like it's been worked out properly...
Thats why Ad got it this time... my ABN was cancelled for not being used for FDC... but I didn't have to pay tax, (under threshold) so wasn't claiming any back...
It was easier for him to get a new one, then for me to re apply... that procces is a massive pain!!!
wat the ATO guy said doesnt sound right $50,000 is a big amount for a HOBBY. i make around 15k at the most a yr and i have to do BAS and do GST. i would look into the ATO side of things more or you could be caught out big time. also when you do get advice make sure you get names and numbers so your not just saying well some guy told me i could do this and that.
What is a hobby is way much more complicated than a $$ threshold, it is on the ATO site what they take into account what is a hobby. $50,000 used to be the threshold before you had to register for GST, now it is $75,000. As for whether it is taxable income, well that is a different matter and better discussed with an accountant who knows you whole circumstances.
But I will have to call back anyway..... As soon as I said its a party plan, similar to tupperware type thing, and tried to go on and explain, he cut me off, and said party plans are "hobbies" and unless I suddenly make a lot of money doing it, they dont need to know....
BellyBelly Member
Party Plan and centrelink??
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