Business Tax Return Services

Tax Returns for Small to Medium Enterprises (SMEs)

As tax accountants we don’t just prepare your business tax return and business activity statements, we work to ensure that your business complies with all relevant ATO regulations, and at the same time we explore all available avenues to legally minimise your business tax liability. Our firm can provide the specialist knowledge needed to prepare a small business tax return that delivers the best outcomes possible. SME business accountants need to do more than enter numbers into a tax return form. They need to take a holistic view of your business and to look for opportunities to make improvements.

Tax Accountants providing solutions that work for you, not the tax office

Our team of business accounting and taxation specialists provide expert advice for all types of businesses from ecommerce, medical, construction and property. Accounting for SMEs is our focus and we strive to provide the right advice to our clients. We provide tailored solutions for business growth and exit strategies, grant services, tax advice, business structuring, tax compliance, wealth creation and asset protection. If you’re ready to take the next step, we will help you:

• Minimise your tax.
• Protect your assets.
• Maximise your wealth.
• Give you peace of mind that your taxation obligations are being met.

Crest’s Small Business Tax Return Caters For All Business Structures

Whether you operate your business as a sole trader, company, trust or partnership structure, it’s important to have access to the expertise of a professional tax accountant that has detailed knowledge of the Australian tax system. It’s also important to understand the pros and cons of each of the most common structures, in order to ascertain which of them suits your business. Read on to explore each of the structures in detail.

Business Tax Return Services for Sole traders

The simplest small business structure is to operate as a sole trader. Set up and launching costs are relatively minimal, and tax obligations are clear and straightforward. The downside of running a business as a sole trader is that personal assets are exposed to creditors and litigation. Another downside is the inability to split income generated from business operations with low-income family members. Some risks can be minimised with the help of a lawyer to draft your contracts and by obtaining the appropriate business insurance. While there are risks, the sole trader structure is simple and cost-effective to establish and run. In relation to taxation, a sole trader tax return is straightforward and easy to file with the guidance of an experienced tax agent. At Crest, we do more than just prepare your tax return, we also ensure that you are meeting your tax obligations, while also minimising your tax liabilities.

Company Tax Return

A company is owned by shareholders, with directors who are responsible for overseeing the company’s affairs. The directors are obligated to act in the best interest of the shareholders and must also comply with Australia law. While the shareholders own the company, the company is a separate legal entity that owns the company’s assets. Unlike with a sole trader, the personal assets of the shareholders and directors (other than the value of their shareholding) are shielded from claims against the company if things go wrong (provided the company directors have complied with their legal obligations). As a business hires staff or expands services, risk from bad debts or litigation increases. In these circumstances the asset protection that a company offers becomes more attractive. If you are considering restructuring your business from operating as a sole trader to a company, there are many factors to consider. Getting professional advice on business transfer costs such as capital gains tax and stamp duty is imperative. Failing to seek professional advice could leave you stung with unexpected tax liabilities. As a director you must be willing to take on more administrative work and responsibilities. Set up costs are higher, and you will be required to open a company bank account, as well as obtaining the required insurance, legal and accounting advice. In relation to taxation, a company tax return is more complex in nature when compared to a sole trader tax return, however with the guidance of a good tax accountant the process can be managed smoothly.

What is the Australian company tax rate?

Full company tax rate is 30%. However, an attractive attribute of operating through a small or medium company is access to a lower tax rate in certain circumstances. For a company that has an aggregated turnover of less than $50 million, as well as earns more than 20% of its assessable income from business operations, the profits of the company are taxed at a rate of 25%. This can be a major advantage for companies that need a high level of working capital and carry a large amount of debt. The 25% tax rate on company profits may free up a significant level of cash that can be used in the business.

How are dividends affected by tax?

Dividends are paid to shareholders as their entitlement to company profits. If company tax has been paid on profits and if there are adequate franking credits available, the dividends can be franked. In the shareholder’s personal tax return, the franking credit can be received as a tax offset. This stops the double taxing of company profits.

Incentives and Tax Benefits for a Company Structure

In addition to the 25% tax rate, there are other advantages to having a company business structure, which include the following:

• Companies are often eligible for more government grants.
• The Research & Development Tax Incentive is only available to companies.
• Fulfilling requirements of state and territory licensing bodies is often easier when operating as a company.
• It is easier to bring in unrelated people (such as key staff) as equity owners.
• Succession planning for companies is simpler, compared to other structures.

Our Services for Company Income Tax Returns

At Crest, we do more than prepare your Company Income Tax Returns for SME’s. We ensure you are fulfilling all of your tax obligations and we legitimately minimise your tax liabilities. However our services also cover a wide range of business accounting needs. If you are thinking about setting up a company, ask us for help with business structuring and expansion advice, growth strategies and planning, and business and asset acquisition and sales.

Tax Returns for Trusts

A trust structure is commonly used when running a business or holding investment assets. This structure may be considered when a company grows and requires an investment in a large ticket item such as a commercial space. A common type of trust is known as a discretionary trust. The key roles in this type of trust include the trustees, primary beneficiaries, settlor, and the appointors. The trust’s assets are legally owned by the trustee, who manages them for the benefit of the beneficiaries. The trust itself is the relationship of obligation between the trustee and beneficiaries. The settlor establishes the trust by gifting an amount of money or property and sets out the rules of the trust in a document known as the trust deed. The settled sum is often minimal (say $10), and the settlor is an independent person (often an accountant or lawyer as the settlor cannot be a beneficiary of the trust). A trust’s appointer holds the ultimate power and is a position that should be given careful consideration when drafting the deed. The appointer holds the power to remove or appoint a trustee. Asset protection is a key consideration in the formation of trust, which can only be achieved if a company is put in place to act as the trustee of the trust. If an individual is put in place to act as trustee, the individual’s assets may be at risk to the trust’s creditors or litigation. Trust deeds are complex documents. Even so, trustees are obligated to be familiar with the specific terms within the deed and act in accordance with them. Often, trustees seek the advice of accountants for accounting and tax services for trusts.

Income tax and discretionary trusts

A discretionary trust is a common form of trust where the beneficiaries are named and defined in the terms of the deed. The trust’s primary beneficiaries could be a married couple or closely related family members. Additional beneficiaries are more broadly defined and could include extended family members or in some circumstances could also include companies, trusts or charities. From an income tax perspective, discretionary trusts wield great flexibility. The trustee is not obligated to distribute the trust’s profits by any fixed or predetermined way. The deed often simply states that the trust’s annual profits be distributed to beneficiaries. This gives the trustee total discretion to how those profits be shared (distributed). These distributions are then taxed in the hands of the beneficiaries who receive them. If the trustee does not effectively distribute the profits in writing before the deadline of 30 June, there is a risk that the trustee will be assessed on the undistributed profit at the highest marginal tax rate. For more information on our services for filing a trust income tax return, contact our team.

Capital gains tax and discretionary trusts

Another advantage in terms of taxation is access to the 50% capital gains tax discount. If the trust makes a capital gain, it can be distributed to the trustee’s chosen beneficiaries. If the capital asset has been held for longer than a year and the selected beneficiaries are individuals, they are entitled to claim the 50% capital gains tax discount. If the asset sold is an active asset that has been used in the course of carrying on a business, the taxable gain could be reduced even further, depending on eligibility requirements, through the application of the small business capital gains tax concessions. Contact the team at Crest Accountants for your discretionary trust accounting and tax services. We can help with more than preparing your return, we can cover all of your company and trust’s needs for tax compliance, restructuring advice, capital gains tax advice, and legitimately minimise your tax liabilities.

Business Tax Services and Partnerships

A partnership is an association of persons carrying on a business together, with a view to earn profits. The partnership isn’t a legal entity on its own, it is a relationship between the partners. While a partnership is usually required to apply for a tax file number and lodge tax returns, the partnership itself does not pay income tax. Partnership profits are split between the partners based on a percentage that is typically outlined in a written partnership agreement. The profits of the partnership are distributed to each of the partners, who declare it in their own tax returns and are responsible to pay their own tax on their share of profits. The key factor to consider before entering into a partnership is that the partners are all responsible for the debts of the partnership. If one partner enters into a transaction on behalf of the partnership, all partners are jointly and severally liable for that debt. When starting a partnership, contact a registered tax agent to apply for a partnership TFN and ABN. The tax accountant will also prepare your partnership tax return.

Crest Accountants Tax Return For Business On Gold Coast

For over 45 years we have honed a system that works. We understand the challenges faced by businesses and can work with you to ensure that your business is compliant with its legal obligations whilst helping to minimise your tax. Our expertise and acumen across a broad range of business activities will guide you seamlessly through a competitive and evolving business landscape. Our particular focus is on SMEs who are great at doing what they do but need assistance with managing the complexities of the Australian taxation system.

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