One of the more confusing elements of our tax system is the PAYG instalment system. In this blog we set out to answer our most commonly asked questions in relation to the system.

Starting a business? Many people slip from being employed into being an independent contractor, keeping it unofficial until the concept gains traction and there’s scope for a legitimate business to take shape. At this point, you can start looking at the direction you’d like to take. Would you like to see your one-man band become a team of capable professionals? Are you keen to share the risks and responsibilities with another trusted ally? Or do you want to be an independent professional? Here is a summary of the common business structures and how they can work for your business goals.

Both companies and trusts have attractive features when it comes to asset protection, wealth creation and managing taxes. Which type of entity you choose to trade your business through will depend on your vision for your business, your appetite for risk and your long term wealth creation goals. For some people a simple company or discretionary trust will suffice, however where your business plans and wealth creation plans are more ambitious it would be great to be able to combine the benefits of both companies and trust. I am going to use Liam and Adele as a case study to demonstrate how we helped a client achieve just this. But first, let’s revisit what makes companies and trusts individually so appealing.

In short, yes, you can set up your own company…BUT doing a Google search and asking around in a few Facebook groups is not going to equip you with everything you need to know to set your company up right. Having started a business from scratch myself I appreciate that every dollar spent is precious and that you do what you can yourself to save money. DIY’ing your company set up is not something that I would recommend. Not knowing what you don’t know can be very costly and here is why.

Adrienne owns a small architecture firm and spent the 2018-19 Christmas break reading Mike Michalowicz’s book, Profit First. She was so excited by the read and wanted to implement it in her business straight away. I was a little sceptical as being an accountant I know that being in business is about cashflow first. Curious, I decided to have a read. I wasn’t long into the book before I realised it’s about a methodology to manage cashflow. I settled in and enjoyed the read.