Home – New Forums Money matters Paying Sole Director, Company Expenses

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  • #978824
    Ben__Young
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    Hi Guys,

    I’ve just started a Pty Ltd company as operating the way I was (sole trader) was getting messy for a number of reasons.

    I’ve got a couple of quick questions about what I can/cannot do.

    The first is this. If i go to buy a suit, shirts, etc can I buy these from the company’s bank account for the company or do I need to buy them out of my personal account and claim it back on tax at the end of the financial year?

    Second question: What’s the easiest way to pay myself? Initially I won’t be paying myself a set weekly/fortnightly/monthly wage, I will pay myself when I need to (if that makes sense)

    Hope I haven’t confused anyone :)

    Thanks in advance.

    #1109806
    Divert To Mobile
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    you can purchase uniforms and protective clothing directly from company funds
    uniforms = clothing which has company logos or company markings on it

    the next part about income has a few options depending on your situation.
    A tax specialist is better for that.
    My suggestion is get to know your accountant personally, get him / her regular bottles of scotch, ring them or text or email and ask them questions whenever you need to.

    Steve

    #1109807
    Ben__Young
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    Divert To Mobile, post: 122254 wrote:
    you can purchase uniforms and protective clothing directly from company funds
    uniforms = clothing which has company logos or company markings on it

    the next part about income has a few options depending on your situation.
    A tax specialist is better for that.
    My suggestion is get to know your accountant personally, get him / her regular bottles of scotch, ring them or text or email and ask them questions whenever you need to.

    Steve

    Hi Steve,

    RE:Clothing I’m guessing that business shirts, trousers, etc (without company logos on them) can’t be purchased from the company’s account?

    Scotch sounds like a great idea lol but if he has too much well it might get messy lol

    Thanks for your help.

    #1109808
    Cjay
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    Ben__Young, post: 122331 wrote:
    Hi Steve,

    RE:Clothing I’m guessing that business shirts, trousers, etc (without company logos on them) can’t be purchased from the company’s account?

    Bingo. Otherwise I’d be able to tell my Mrs. that I’m creating a tax write-off on my suits. :)

    #1109809
    Ben__Young
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    Cjay, post: 122334 wrote:
    Bingo. Otherwise I’d be able to tell my Mrs. that I’m creating a tax write-off on my suits. :)

    haha, alright well i guess it’s going to come out of my pocket :)

    #1109810
    yourvirtualboard
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    Safety clothing is another item that’s also legit from a company perspective.

    As for payment – wages / salary would be the normal way; these don’t have to be at any fixed intervals. Just remember even as the Director you are still an employee and the Company would have to pay super and withold tax on your wages / salary as well which would usually be paid over to the super fund and ATO quarterly.

    Also with a company make sure you have workers comp insurance in place as well.

    #1109811
    Ben__Young
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    yourvirtualboard, post: 122339 wrote:
    Safety clothing is another item that’s also legit from a company perspective.

    As for payment – wages / salary would be the normal way; these don’t have to be at any fixed intervals. Just remember even as the Director you are still an employee and the Company would have to pay super and withold tax on your wages / salary as well which would usually be paid over to the super fund and ATO quarterly.

    Also with a company make sure you have workers comp insurance in place as well.

    Ok great,

    RE: Workers comp:

    Under the South Australian Workers Rehabilitation and Compensation Act 1986 (the Act), all employers must register with WorkCover within 14 days of employing workers, unless you are exempted. From 1 July 2012 if you pay your workers less than $11,597* in the 2012-2013 financial year, you are exempted and are therefore not required to register and pay a premium unless a claim is lodged by one of your workers. However, if you cross this $11,597* threshold, you must register with WorkCover within 14 days.

    I’ll wait until i hit that threshold i think, the less money coming out of the account in the next few months the better :)

    #1109812
    yourvirtualboard
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    Ben__Young, post: 122344 wrote:
    Ok great,

    RE: Workers comp:

    Under the South Australian Workers Rehabilitation and Compensation Act 1986 (the Act), all employers must register with WorkCover within 14 days of employing workers, unless you are exempted. From 1 July 2012 if you pay your workers less than $11,597* in the 2012-2013 financial year, you are exempted and are therefore not required to register and pay a premium unless a claim is lodged by one of your workers. However, if you cross this $11,597* threshold, you must register with WorkCover within 14 days.

    I’ll wait until i hit that threshold i think, the less money coming out of the account in the next few months the better :)

    Depending on what you intend to do (high or low risk according to workcover) and also with those figures cover will be very affordable, which may be worth considering as you would then have cover.

    #1109813
    ABC
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    From a risk management perspective, it is worth considering how much workcover is if you are just above threshold (say $15,000) and take it out anyway. My guess is unless you are in a risky business, it wouldn’t be that expensive? In Vic, the companies ask you to estimate the payroll and then levy the premium with a year end reconciliation between what your payroll was and what it is – in my case, I got a small cheque back.

    Other important risk management considerations for you are
    a)key person insurance – if you sell the work/services etc and you can’t deliver it, who does? You’d need to pay someone so would be worth considering how your cashflow will cope
    b) income protection – this could be tricky if you don’t have regular income eg if you haven’t set yourself a wage

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