abn - business name

[BMan]

i know this isnt property related but id classify it as investmentish
looking at it as trying to kill 3 birds with one stone
i have a few questions

first i heard it doesnt hurt to get an abn (its free anyway) as it may help you down the track to get a low doc loan if you cant get a normal one and you need the abn for 2 years? yes/no?

the next bit is slightly confusing but ill try my best

my dad runs a small business and has got a vinyl cutter to assist his business
i was looking at using the vinyl cutter to create a small business of my own doing decals for people.
i dont expect to make big $$ or much at all but it could become reasonably profitable if it works

now i know i dont need an abn but if i was to do something for business it would be easier right?
looking at the ato site and going through this survey it says im not entitled to one... http://calculators.ato.gov.au/scripts/axos/axos.asp?CONTEXT=&KBS=ABN_Entitlement.xr4&go=ok

id also look at getting a business name and know i dont need an abn to get one of them
but if i was wanting to claim things do i need the abn?

my plan is if i stickered up my car as advertising i could then claim a percentage of the vehicles use rite?

how much would i have to make/ turnover to be able to claim anything and what could i claim?
all the vinyl cutter and items would be claimed by my dads business so i wouldnt be claiming any of that im looking more along the lines of claiming part use of the car?

and how would it go if he was to purchase the vinyl etc im guessing he would have to onsell to me for a profit to make it worth it for him?
if he sold for cost price what would the implications be?

 

[Aaron_C]

ABN registration is important for any business because it allows you to issue tax invoices and claim back GST and any payments made. You don't need an ABN for a business name but they do go hand in hand as you can imagine.

 

[BMan]

yeah i understand it would be better to get one

just unsure of the benefits of doing it as a business or hobby and what i could or couldnt claim

 

[Aaron_C]

Without question register for ABN and GST especially if you think you will do it in the future.

 

[james_w]

Register an ABN like you said it's free and there is a few nice perks that come with an ABN and will save a lot of headaches later.

 

[PrimeCommercial]

Dont register for an ABN unless you absolutley have to. Its a pain in the ****. You'll have to prepare and submit BAS statements quarterly

 

[skater]

Dont register for an ABN unless you absolutley have to. Its a pain in the ****. You'll have to prepare and submit BAS statements quarterly

Only if you register for GST!

You can operate a Business without needing to register for GST, so long as your turnover is under $75k (I think), but I'm sure the Accountants will be along shortly and let you know if I've got the figure wrong.

 

[Aaron_C]

$75,000 turnover is correct. But honestly if you're not trading at all filling out 4 forms a year is no big deal. Just put "0" in the Sales and Purchases areas.

 

[Peter_Tersteeg]

first i heard it doesnt hurt to get an abn (its free anyway) as it may help you down the track to get a low doc loan if you cant get a normal one and you need the abn for 2 years? yes/no?

Having an ABN for 2 years is one of the criteria for most lo doc loans. Other criteria include some sort of support documentation to demonstrate that you're actually making the income that you put on the income declaration form of the lo doc application.

In other words, the ABN is useful, but it's the easiest part, the rest of the criteria are required to actually verify that what you're saying is true.

 

[BMan]

Register an ABN like you said it's free and there is a few nice perks that come with an ABN and will save a lot of headaches later.

what are these?

yes its 75k turnover used to be 50k from what i have read
i dont think ill register for gst atm keep it easy for now if i actually start making money i may think about it im not expecting much but see if i can make it into a small bonus each month

yeah didnt think just having an abn would suffice but least having that will prompt me to start trying to do something else and will be there if i do require it for 2 years

 

[Mick C]

Having an GST can be helpful in getting a loan tho...as it's a requirement with some lenders even if you make under 75k

 

[Peter_Tersteeg]

Here's a tip to running a successful business.

Even if you're earning less than $75k, treat your business like it's a serious one and register for GST right from the start.

 

[Aaron_C]

I agree with Mick and Peter. Registration for at least 2 years is required by many lenders to prove that you earn more than 75k if you declare that on your lo-doc application. Like I said earlier, all it involves is just 4 Business Activity Statements which are easy to fill out. Plus it's good practice for you.

 

[damacc]

If you are running a hobby then you are not running a business and therefore don't need an ABN or be registered for GST.
Being registered with an ABN doesn't automatically give you GST registration. When you apply for an ABN you can elect to register for GST if your turnover is under $75,000 per annum. If your turnover is over $75,000 per annum then it is compulsory to register for GST.
If you elect to register for GST (and have a small turnover amount) then you can choose to lodge your BAS Report (this is the report where you state how much GST you have received and paid) either quarterly or annually.
If you want to have a business name to go with your business then this needs to be registered too. For example, if you set up a sole trader business as Barry Manilow (your own name here of course) trading as BMan Vinyl Cutters the BMan Vinyl Cutters name needs to be registered. There is a new national business register coming into effect from 28 May 2012. For more information check the Fair Trading QLD website: http://www.fairtrading.qld.gov.au/national-business-names-register.htm

 

[BMan]

ok thanks

i agree with this

treat your business like it's a serious one and register for GST right from the start.

but if im talking about maybe a grand or so max per year is there much of a point?
i guess like was said its only 4 times a year and if im only doing tiny amounts then it would be a very easy BAS statement or even annually if thats possible (as said above)

how should i purchase my materials...?
my dads business has purchased a few rolls of vinyl in the colours he needs should he sell the amount i need at cost or mark it up
hes under the opinion if hes selling it at cost it will increase his turnover but lower his profit margin and could lose part of his deductions...?
i dont see how that would work as what he will be using and selling will cover the cost of all the vinyl anyway?
also how would i manage this business? for book keeping then if i was to register for gst?

 

[skater]

ok thanks

i agree with this

but if im talking about maybe a grand or so max per year is there much of a point?

This is not a business. It's a hobby.

 

[Peter_Tersteeg]

If you're only talking a grand a year, I can't really see a business reason for setting it up as a business, or registering an ABN. I'd treat it as a hobby and do it with cash.

Having an ABN for lending purposes is a separate question, but there's no point having an ABN for lending unless you're actually going to make money to service a loan.