Home Forums Money matters GST, Quarterly BAS and Stimulus package advice pls

  • This topic is empty.
Viewing 10 posts - 1 through 10 (of 10 total)
  • Author
    Posts
  • #1000101
    Jennie_H
    Member
    • Total posts: 4

    Hi everyone,

    I quitted my full-time job to completely fly solo on a business adventure in February 2020. I didn’t know it’s bad timing to start a business by then and now because of coronavirus, I’m stuck and don’t know what to do. I would appreciate it if you can give me any advice.

    My case is that I set up a Pty Ltd company trading in 3 different fields
    – import/ export
    – yoga training
    – personal development coaching.

    (I’m the only director/ employee of this company at this stage)

    Due to lockdown and closed borders, my plan to travel overseas to source suppliers/ clients has been canceled and I don’t know when that trip is possible. Yoga and coaching businesses face the same problem because of the coronavirus. Since there is no product/ client, there is no sales or income at the present.

    I did register GST, PAYG and I’m advised that I will need to lodge quarterly BAS. One mentor told me to deregister my GST as the business is on hold so I don’t need to be worried but I contacted 2 accountants and they both suggested me keep GST. They advised that I’m eligible for $1,500 jobkeeper payment and $10,000 grant but my mentor said I’m not qualified for that. My mentor told me to apply for Centrelink. I don’t know who I should listen to because while my mentor wants to help, she doesn’t have an accounting background. Two accountants are knowledgable but since they charge a fee up to $2000 – $2500 per year, I’m not sure if they are acting in my best interest.

    So my question is that:

    – Should I keep GST even though my company is on hold at the present? I’m of course still working on 3 websites but there is absolutely no sales and income.

    – Am I qualified for any financial support from the government? In 2017 I registered ABN as a sole trader and last year I only earned a small amount of $$$. (not much at all as I focused on my full-time job). I still keep that ABN until now and continue to work on that field as part of my new company. Not sure if it can help me somehow?

    – Am I able to access my superannuation?

    – Do you hire an accountant to do quarterly BAS or you do it by yourself via Quickbook? I’ve signed up for QuickBooks as per my mentor’s advice (she used to have a small business before) but I don’t know much about Quickbook and find it to be quite complicated

    All of my savings are now paid for staying at home and I just don’t know when life returns to normalcy again. It’s pretty frustrating at the present.

    Thank you and I look forward to your advice

    #1222958
    JamesMillar
    Participant
    • Total posts: 1,675
    Jennie_H, post: 269324, member: 117106 wrote:
    Hi everyone,

    I quitted my full-time job to completely fly solo on a business adventure in February 2020. I didn’t know it’s bad timing to start a business by then and now because of coronavirus, I’m stuck and don’t know what to do. I would appreciate it if you can give me any advice.

    My case is that I set up a Pty Ltd company trading in 3 different fields
    – import/ export
    – yoga training
    – personal development coaching.

    (I’m the only director/ employee of this company at this stage)

    Due to lockdown and closed borders, my plan to travel overseas to source suppliers/ clients has been canceled and I don’t know when that trip is possible. Yoga and coaching businesses face the same problem because of the coronavirus. Since there is no product/ client, there is no sales or income at the present.

    I did register GST, PAYG and I’m advised that I will need to lodge quarterly BAS. One mentor told me to deregister my GST as the business is on hold so I don’t need to be worried but I contacted 2 accountants and they both suggested me keep GST. They advised that I’m eligible for $1,500 jobkeeper payment and $10,000 grant but my mentor said I’m not qualified for that. My mentor told me to apply for Centrelink. I don’t know who I should listen to because while my mentor wants to help, she doesn’t have an accounting background. Two accountants are knowledgable but since they charge a fee up to $2000 – $2500 per year, I’m not sure if they are acting in my best interest.

    So my question is that:

    – Should I keep GST even though my company is on hold at the present? I’m of course still working on 3 websites but there is absolutely no sales and income.

    – Am I qualified for any financial support from the government? In 2017 I registered ABN as a sole trader and last year I only earned a small amount of $$$. (not much at all as I focused on my full-time job). I still keep that ABN until now and continue to work on that field as part of my new company. Not sure if it can help me somehow?

    – Am I able to access my superannuation?

    – Do you hire an accountant to do quarterly BAS or you do it by yourself via Quickbook? I’ve have signed up for QuickBooks as per my mentor’s advice (she used to have a small business before) but I don’t know much about Quickbook and find it to be quite complicated

    All of my savings are now paid for staying at home and I just don’t know when life comes back to normal again. It’s pretty frustrating at the present.

    Thank you and I look forward to your advice

    Can you tell us a little about this mentor? What is their background in terms of professional expertise in finance and tax? Are they a CA or CPA and registered tax agent? Are you paying them anything? (it’s an offence to provide and charge for tax advice if you are not a registered tax agent with the board).

    I’m more concerned that you may have an unqualified person influencing important (life changing) decisions with no basis for providing such advice and that it may cost to tens of thousands of dollars in forgone entitlements.

    #1222959
    Jennie_H
    Member
    • Total posts: 4

    Hi James,

    My mentor is a business advisor working for a government-funded program that offers a few free consultations for start-ups. So I don’t pay anything at all. The government pays for mentoring hours. She used to have a business before but now works as a full-time business advisor. As far as I know, she has a bachelor’s degree of art and business coaching certificate.

    Regarding tax or business regulations, I think it’s hard to know everything so that’s why another mentor (from the same program) suggests me speak with several accountants or lawyers before signing up for any services. But it’s confusing as well because I got different advice.

    #1222960
    JamesMillar
    Participant
    • Total posts: 1,675
    Jennie_H, post: 269326, member: 117106 wrote:
    Hi James,

    My mentor is a business advisor working for a government-funded program that offers a few free consultations for start-ups. She used to have a business before but now works as a full-time business advisor. As far as I know, she has a bachelor of art and business coaching cerfiticate.

    Well that does not qualify her to provide tax advice so I would take anything she has to say about tax stimulus measures a grain of salt. I’m pretty sure she would be at risk of being removed from the program if the government were aware she was providing persuasive tax advice.

    Can you tell my why the fee proposed by the accountants makes you feel like they are not acting in your best interest?

    #1222961
    Jennie_H
    Member
    • Total posts: 4

    I don’t mind the fee but because I’m in a startup phase and the cost is pretty high, it makes me unsure if they are acting in my interest or their interest.

    #1222962
    JamesMillar
    Participant
    • Total posts: 1,675
    Jennie_H, post: 269328, member: 117106 wrote:
    I don’t mind the fee but because I’m in a startup phase and the cost is pretty high, it makes me unsure if they are acting in my interest or their interest.

    Ok I’m going to suggest an alternative way to look at it which I think you should consider.

    If a qualified professional is offering to help you with a complex commercial matter and there is little to nothing in it for them then my question is – is there a chance that they will not give your matter the attention it needs and as a consequence is there a chance that it will cost you a lot of money (say in tax or missed entitlements)?

    The problem with “free” in complex matters is that very rarely do you get everything you need to a high standard. The main reason being that people that can deliver a high standard normally get paid well for it so why would someone in that position give away a perfect solution for nothing. Generosity – maybe but unlikely. Free generally means you get less than the person that is paying market rate and getting something less in the advisory space can be very costly.

    To give you an idea – at our firm we do not discount for family and friends (no mates rates) because the last thing we want to do is give them a second rate experience because they were second in line. If you really care about someone you should make sure they buy the best product for their needs (no more no less) – simple as that.

    Now frankly – your mentor should not be providing you with tax advice and you should not be acting on it. Not because it’s my opinion but because it’s illegal under the tax agent act.

    I understand that $2000 is a lot of money for a startup but if cutting that corner costs you $20,000 then is it a wise choice?

    food for thought

    #1222963
    Paul – FS Concierge
    Moderator
    • Total posts: 3,119

    Hi and welcome to Flying Solo Jenny.

    These are tough and confusing times to be a start up.

    Getting actual paid advice will be your best bet.

    I can recommend [USER=5318]@JamesMillar[/USER] because he puts so much effort into helping very small businesses but any other Accountant you pay for advice will get you advice, specific to your business that the Accountant has to stand behind.

    Cheers

    #1222964
    Jennie_H
    Member
    • Total posts: 4

    Thanks Jame and Paul. I much appreciated your advice. It’s a really tough time for a new starter.

    #1222965
    bb1
    Participant
    • Total posts: 4,472
    Jennie_H, post: 269328, member: 117106 wrote:
    I don’t mind the fee but because I’m in a startup phase and the cost is pretty high, it makes me unsure if they are acting in my interest or their interest.

    Interesting conundrum, you are trusting someone who is free, rather then someone who is charging you money. Remember even though they are free, they are being paid for by someone else, the government in this case. So in reality they have no real care to your business, rather just clocking up the hours to get their own pay check but not from you, so they don’t actually care about you.

    On your comment though, you are 100% correct they (the accountant) is acting in their own interest, any business who pops up here and says they are not acting in their own interests, are just down right telling porkies. But to act in their own interest, it is in their best interests to look after your interests 150%, because word will quickly get out that they are not doing the right thing.

    #1222966
    Dash Freight
    Participant
    • Total posts: 89

    Hi Jennie

    I think you have some good advice re the finances in the previous replies. I would be asking how much dismantling do you do, given this pandemic is temporary? Can you hibernate?
    You mentioned 3 different businesses…Maybe you should add juggling to your resume!
    Re the Import Export business – Air freight is pretty expensive and unreliable (relative to normal times) But sea freight is operating as normal. If you still have a demand for your goods, then you can still supply. Domestic carriers are also operating as normal. If you are new to importing, are you aware of the Free Trade Agreements and how to get Duty free Entry? have you considered getting quotes for FOB from your overseas suppliers? That could save you money. If you can reduce your cost of goods sold, without dismantling the structure, surely you will be better off.

Viewing 10 posts - 1 through 10 (of 10 total)
  • You must be logged in to reply to this topic.