72 replies to this topic

[wot179]

Im happy to hear everyones arguments, Skap.

[Rockoz]

Skap. Not as easy as that if you actually want to work.

Dont sign dont work.

No exclusions. Standard industry contract.

 

There are for and against arguments.

Depends on the industry.

 

Doing stainless you may find yourself working for the major contractor on a building site.

They will require it.

Small builders wont.

If you sub to another welding company for piece work you probably wont unless the workload gets high.

[yel327]

Skap. These days if you apply for a trade account you sign that the directors will be held responsible.
If you sign up to do work on contract you sign that the directors will be responsible.
Not in every case but havent had one yet where it hasnt been a clause.
People want to protect themselves these days.

Trade account is debt liability.

I'm with Skap, cross out Director's liability with work contracts, walk away. It isn't about obligation but protecting your assets.

Example the guy who cut the sink hole in my new kitchen 10 years ago, cut it in the wrong spot. Luckily it was reasonably affordable granite but cost him $7000 to replace it. Imagine if it was $25k of marble, as a sole trader there is no hiding, pay up or your house will be sold. Be a pty limited and you have options but are only liable for what is within the Company including a bankrupcy option which then also kicks in home owner's warranty insurance.

There is nothing wrong with being a sole trader, just think about the risks. A Pty Ltd is essentially an insurance, just does it in a different way. Sort of like a fireproof house vs an Insurance policy against fire.

[rodomo]

Im only talking about getting a ute
 
What other things should I be worrying about regards "losing everything"?

Don't buy a F@4D ute would be my tip?

[wot179]

I already decided against that, Rob...lol

[S pack]

I had no drama's back then.....   and I would imagine now day's most Plumbers would be soul traders

Yep, traded my soul years ago

[Rockoz]

GTR There probably would be a good benefit for you registering for GST.

Particularly when its a set up year.

All the GST you have paid gets offset with the GST you collect. ( simplistic terms )

So when the expenses outweigh the income the ATO will give you a few bucks back.

[Dr Terry]

GTR There probably would be a good benefit for you registering for GST.

Particularly when its a set up year.

All the GST you have paid gets offset with the GST you collect. ( simplistic terms )

So when the expenses outweigh the income the ATO will give you a few bucks back.

Spot on. In your first year, you could operate at a real loss, so you would get a GST credit.

 

Dr Terry

[yel327]

Ian, very different things though. If a business cannot claim back the GST on purchase against the GST on sale the end user (the taxpayer) pays a lot more than 10% as they would be compounding the GST. The whole idea is the end user pays 10% GST, not 10% x 10% x 10% etc (depending upon how many hands the product or service goes through).

[Dr Terry]

That's funny... a few months back when we were talking about tax dodges for people in business, I mentioned that same thing, and was told I was wrong...   .........      don't get me wrong it makes perfect sense, but as I said business can claim back it's GST expenses, but Tax payers can't..     And before you  dump on me....... all I would like to see is a Tax system that is fair across the board... nothing less...  earn your money pay your tax.... 

I don't 'dump' on people & I'm not talking about any tax 'dodge'. It was purely a hypothetical answer to a hypothetical question.

 

The OP was only talking about his first year & not taking any wages. In that situation he could get a small GST credit, you couldn't see this as an ongoing situation or any sort of tax 'dodge'.

 

Dr Terry

[yel327]

Yeah I agree Yel, that's why I said it makes perfect sense.....    but to me, it just seems a little wrong that if say Boilermaker (A) works as a contractor, and he has worked as a contractor for 14 years at the same place, he can claim his phone, his office at home, maybe his wife who does his bookwork, he can right off his car and tools he needs to do his job every 5 years..... yet Boilermaker © who works for the same company for the same 14 years, can claim washing and tool replacement maybe......  sure Boilermaker (A) has to have his own insurance, workers comp ect.,  no public holidays, no penalties ect.. but all that is reflected in their pay rate.....  so just woundering, why I can't claim my car,  for getting me and all I need to work,  just as many days as a contractor does...  Both Boilermaker (A) and © could make the same gross wage, but there after tax will be a lot different...

 

Boilermaker A can only claim the travel to and from home to the place he works if it is a vehicle principally for carrying goods (the rule many people incorrectly state as a 1-tonne ute). If it was a "car" (a vehicle that is deemed to be a car) there would be no ability to claim it as the car is deemed to be 100% private use as it is garaged at his home as that is where his "office" is. If the ute is a 1-tonner or greater it is subject to FBT at 48.5%, far higher than the normal car fringe benefit level of 30%.

Plus if he works at the same place for 14 years he'd be subject to personal services tax if he was a Pty Ltd, meaning all money has to be paid out of the Company to him as income so he'd pay a far higher tax rate.

His wife cannot be paid for doing books, not in normal circumstances.

Boilermaker A also is allowed to depreciate an asset that he uses to generate his income, but only the portion of the value of the asset applicable to the work (ie not including the private use). If any kM are done on the vehicle for personal use that is supposed to have PBT applied and that percentage not depreciated.

 

I'd be surprised if Boilermaker A and Boilermaker B (or eleco A and B or whatever) earned the same gross wage, if they are either A is not charging enough or B is paid too much as the Employer has to be at least keeping $ aside for LSL and sick leave plus in most cases they'd be making a greater profit margin out of B than A. I always paid the blokes back unused sick leave but most employers keep it. same employers normally whinge if you take it too.
 

[N/A-PWR]

as a Sole Trader, I was GST registered, added the 10% to the invoices, payed the quarterly's,

 

and never claimed the GST back.

 

 

Now I'm not GST registered. 

[Rockoz]

A good accountant or tax agent will find some pretty good deductions for a FIFO guy.

The guys I know doing it get good refunds each year.

 

There have to be some perks for putting your balls and sometimes everything else you own to start up a business.

Your returns often dont cover your expenses for a while until you get established.

Wage earners dont have to fork out thousands of dollars for specialised equipment.

Wage earners get paid every week generally. If they dont then they should leave.

Invoices to businesses often take 90 days or more to be paid.

Im only small fry. But how would you like to live on next to nothing while you wait 2 months or more for 10 grand to be paid?

In the mean time find the funds to do other work that needs to be done

How would you like to work your butt off on a job and spend thousands then have the customer not pay at all?

 

I did contract work in the mines. On the rate I was being paid, the guys on wages were earning close to what I was with their penalty rates.

They got paid weekly. I worked the first month with no income.

 

Not all small business owners make mega dollars either.

[yel327]

Not always the case Yel........  there are plenty of tradies who now days are called fly in fly out tradies, and are on as much money if not more than some business owners,,,,  they have no tax loopholes, and pay 42 cents in the dollar....    and mate I'm am by no means rich, but I have plenty of rich friends,,  some through sporting,most through business, and they freely tell me what tax reducing benefits are available to them.... as I have said before, my good friend run a security business, and he is not huge by any means, but his accountant regularly tells him to spend money to avoid paying more tax than he has too, even if he didn't need a $120,000 ute.......... 

 

In-out workers are a different case, but of you compare the In-Out Employees with the Contractors the Contractors should be getting more if only slightly.

 

You have to be careful of what people are claiming versus what they are supposed to claim as it can be a very different thing which they may well discover if/when audited!

[rodomo]

In-out workers are a different case,

Gigolo? Lady of the night?

[yel327]

Fly In-Fly, Drive in-Drive out, Train in-Train out.