1. Julie’s plan to buy an existing business

An accredited Myotherapist, Julie* met me for a business consultation, she wanted to buy an existing business which seemed to her to show exciting potential.

Julie was passionate about this business for sale; and had clear short term and long term goals. She had the initial capital, her own accreditations and even a manager ready to run the business.

Julie and I then got down to work and together we looked at a simple cashflow analysis and budget. I went through the operational and control strategy required to run the business and the paperwork she needed to see.

I also provided information on the Small Business Entity Concession.

After all this, I referred her (with no referral fee) to a lawyer whom I know to be enthusiastic about helping small business owners.

When Julie met me again in a fortnight, she thanked me for helping her analyse her business-purchase. We had looked at it in enough detail for her to see that the once exciting-sounding opportunity was in fact not feasible! This careful evaluation of Julie’s business-purchase plan saved Julie from making a terrible mistake.

2. PAYG Installment System

One of my newest clients, Marie*, explained that she wanted to meet me because she felt she was paying way too much GST; and couldn’t understand why.

She didn’t understand why she was being asked to pay this tax every quarter by instalment.

What’s more, Marie was worried as to whether she had properly remitted her payment to the ATO. As a very busy business proprietor, Marie mentioned that she “barely has time to blink, let alone deal with this kind of stuff.”

When I met Marie, I showed her how to join “mygov” the government portal which allows her to see her instalment activity statement from her account; and the ATO biller code.

I have also introduced a system for Marie, whereby I claimed the GST that she was paying each quarter and this has helped enormously by improving her cashflow. I think most importantly, Marie feels she is in control of her ATO obligations and this has been removed as a source of stress.

3. Tax Residency

Not too long ago, Domenico* approached me with a problem. Although a dual citizen, he hadn’t realized that he needed to do a tax return while working in Australia.

This meant Domenico was overdue in lodging tax returns for 10 years, which really made him nervous.

He had been under the false assumption that his employer, (whose parent company is based in Domenico’s native country) would have taken care of the tax payment.

I investigated Domenico’s situation and found two things – firstly that he was certainly overdue on tax returns; and secondly that he had been needlessly over-contributing to super funds. I took the time to explain about Tax Residency, Super Contributions and Salary Sacrifice Super and how this may be impacted by over-contribution.

Domenico’s situation is much better now and he has paid his outstanding tax liability, which was not as bad as he had feared.

4. Choosing the best business structure

Garry* and Phoebe* had been trading together in a partnership structure well before they met me for the first time, in July last year. During this financial year, Phoebe also began working as an employee, elsewhere. I explained to the couple that they need to review their partnership structure.

That’s because Phoebe’s employed status changed their reasons for having a partnership structure and also had some tax implications. They took my advice and this has improved their cashflow position and reduced their combined tax liabilities, which they were both quite happy about.

* not the client’s real name to protect confidentiality

5. Avoiding conflict of interest

One sad situation I have sometimes faced, is when clients who are a couple, have a marriage breakdown.

Especially when both of them have been very happy with your service for a number of years.

It’s often an ethical dilemma, to know which partner of the couple should disengage from utilizing my services.

In one particular case, a couple had planned to sell both of their real estate properties to reach a settlement; and it was agreed that the former wife of the relationship would continue to engage my services in the matter.

I presented all of the scenarios she needed to consider, including the Main Residence Exemption, as well as The Six Year Rule; along with Market Values-Contractual Dates-Settlement Dates for each type of property.

Learning about these important considerations has helped her to make sensible decisions about how to proceed and has helped both parties to move forward with less friction.

6. Negative Gearing / PAYG Variations

Two of my clients, Anna* and Paul*, wanted to know how negative gearing works, as they were looking to invest in a new property.

I explained about PAYG Variations, as well as the short term and long term implications these things would have on their tax returns. When I showed them a model based on the potential capital gains when they sell the property, I demonstrated the effects of depreciation expenses they would claim. This was a real eye-opener for them and Anna even remarked that the meeting was “therapeutic”.

7. Fuel Tax Credit

Running a cleaning business can have just as many considerations as some of the biggest businesses in town.

Michael*, who runs a pretty popular cleaning business asked me if he needed to register for Fuel Tax Credit. I asked him, if he had diversified his business.

I went through the Fuel Tax Credit checklist with him and found it was irrelevant in his situation.

Michael is quite frankly relieved that he doesn’t have to add any more record keeping.

8. Property Development As a Going Concern

Angas* and Anita* are a late-40’s couple who wanted me to guide them on the most efficient tax structure for their property development investment; and what to do.

I explained to them how to go about record keeping; as well as the importance of getting an Accredited Valuer for their property.

We also discussed the margin scheme and how GST would affect their investment.

Well armed, they are now in the best position to maximize their returns on the property development; and I look forward to helping them continue to build on this wealth-generating strategy.

9. Working from home

I have an Architect client (Rose*) who works at home, in her rental apartment.

It was fairly easy for me to help her apportion home office running and occupancy expenses. As a result, my client now has a more accurate (and greater) claim against her taxable income and it all helps, of course.

Read more testimonials from iACT’s clients on Oneflare and Word of Mouth.