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JacquiPryor, post: 102399 wrote:
Hi Julian

Just read this thread and would be interested if you could post an update from the meeting with your accountant?

Hi Jacqui,
Sure, I’m happy to report my meeting with the accountant. However as of last night, I said the words I thought I would never say in my entire life – I give up.

Anyway, I think the best way to report the information is by bullet point for ease!

Before I go on, the accountant first of all came in late (appointment for 9am), he arrived 9.12am. I was there early. Then 15 mins into the meeting, his receptionist came into work, and he excused himself to talk with the receptionist. I could hear him asking her to get a coffee and two muffins and a paper. He comes back to the meeting with me and says “Sorry about that, three days back into work and it’s hard to get out of bed!” Throughout the meeting he was swearing in his speech which from that point onwards he lost all credibility with me. Words such as F***, S***, and B***h.

Okay..

He asks “So what is your business?” I replied, “I import kayaks from China and sell them and also sell water sports accessories. Things have gone better than expected!” He replies, “Hmm, not being negative, but kayaks… everyone imports from China, and it’s competitive. The big guys all import from China and eventually swallow the small guys, or the small guys cannot compete with the big guys. F***, the two shops next to us all import their stock from China. Not being negative mate. But I guess westpac and CBA all started somewhere, and you might be the next biggest richest person in this country, who knows.”

That put me right off, and I’m not that easily discouraged. I think I have been living in a dream, and perhaps not thinking realistically. Money has been a big factor in injecting funds into the business as well since I’m working part time and doing uni. I guess the accountant was the straw that broke the camels back.

* Sole trader to Pty Ltd: I must admit I didn’t know the benefits/disadvantages of doing this. The accountant said, stick with being an ST if you’re earning an amount say $50000/year (part time wages plus ST income), the tax rate will be 17% as opposed to 30% for company tax rate. Pty Ltd costs money every year in fees he said.

* CSA/Child Support: I asked if there was a way I could put my child support into a separate account that the ex-wife could not use for her own personal use, and only used on school expenses or medical for the children. He said “Join the club like me mate and the other 600,000 who have to pay our profits to the ex. You can’t hide your money or lock it up. Put it this way, if you’re paying child support, means you’re making money. Just pay the b***h!”

*FTB A & B: Yes, this will affect the payments as ST is calculated on your EOY income, that is wages plus ST taxable income.

* Motor vehicle expenses: He said because I am not using my car much (apart from deliveries) I should just use the ‘cents/km’ method based on the engine size. He said, just because you start a business doesn’t mean you can claim a brand new car on a business because you feel like it.

I asked him what I can claim as far as deductions goes, as that was one of my main questions I needed answered. He mentioned internet, phone, computer, power etc. But didn’t go into how much I could claim – that was disappointing even though I asked specifically. He said I wouldn’t be able to claim much because he assumed by working two days a week (part time work) plus uni meant I spent no time on the business or didn’t have many expenses. I actually spend roughly 20 a week on it as it is. But whatever.

He then went back to the ST to Pty Ltd issue. “Back to the ST and Pty Ltd thing, get public liability or I won’t deal with you. That’s what I tell ALL my clients who are ST. It is important and you are stupid not to have it. You wont need Pty Ltd, just Public liability. You won’t be earning much anyway, so there is no point with a Pty Ltd.”

After that, I was done. I concluded the meeting and paid my fee and left.

Even though at that point of giving up, I went back home to call the ATO regarding depreciation and deductions. After spending 1.25 hours on the phone with them, I got all my answers I needed and cost me nothing. I guess I didn’t want to give up on finding that answer which I sought out to find. But after I sell the rest of my kayaks, I am done. The rest of the kayaks from now on is pure profit as I’ve received sales to clear my intitial outlay. So I’ll keep my profit and save it for a rainy day.

All I can say is, nothing ventured, nothing gained. At least I tried!

Cheers.