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Hi KBee,

The answers to those questions depend on which registration you must choose. For example, if you register an ABN but do not need to register for GST yet, your obligation is to keep very good records, calculate your Profit and Loss at year end and remit it on your personal tax return – there is a special section for it. You can have a Tax Agent prepare both the accounts and your tax return or have a BAS Agent enter the data from the year and provide the End of Year accounts to your Accountant for checking and preparation of your tax return. In that first year, until you lodge the first tax retun, you will not see any paperwork from the ATO. After that first year is lodged, they will then start sending you Quarterly IAS requiring you to pay an installment on your PAYG income tax. This means that they will look at your earnings for that first year and your total tax payable, they estimate your next year’s tax payable and divide it into four parts. They then send you a form to remit and pay a portion each quarter. That continues each year until you register for GST.

Once you register for GST – or if you register immediately, the process is slightly different. You can nominate to fill out monthly or quarterly statements on your Business Activity. I would usually recommend quarterly to a small business like yourself, as it is often difficult to stay as up to date as is required with monthly BAS. Each quarter the ATO send your BAS form with its due date and the period the information has to cover. After correctly reconciling all your income and expenses, you can fill out the BAS form and you will have the total amount of GST that is payable to the ATO. Just as in the first scenario, after the first year trading there will also be your personal PAYG installment to pay.

Usually software is good for organising all your business income and outflow. It is also usually beneficial to have a Tax Agent or BAS Agent assist with the software or process set up. Have some advice from someone qualified to give GST advice so that you begin correctly and know what to do with all the usual expenses of your business. You may choose then to do the majority of the work yourself, or you may find that it is easier to have it organised by outside professionals.

The choice is yours and both are acceptable. The ATO also offer advisory services for free if you decide to handle your finances yourself. They have seminars and people who can work with you one on one.

The best advice that I can give you when you start out, regardless of which method you choose is to keep every single piece of paper to do with income or expenses. Keep it in a box, scan it to a folder, shove it in a bag in the cupboard – it is far easier to correlate your accounts with too much paperwork than it is to figure them out with none! Once you are certain about what is and isn’t needed, then disregard as required.

Best of Luck and happy selling!