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  1. #11
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    Quote Originally Posted by Pina Colada View Post
    You can have a legitimate family trust set up that spreads the payments between beneficiaries of the trust.
    I understand that.

    I'm still baffled as to what the OP is getting at though.

  2. #12
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    Quote Originally Posted by NoteToSelf View Post
    I obviously do not have the whole story but some friends of mine who have a building business seem to be in this boat. They pay themselves a wage from the business, calculated so they still get max family tax benefits, hers is under the tax free threshold. They then seem to use a lot of the business profits, outside their wage, to pay for things and buy things that are ostensibly for the business but not really which they then claim on tax i.e. things for renovating their house which they write off as for jobs they are doing, a camping fridge for camping and a solar panel to run it which was claimed on tax as a business need (to keep lunch cold at job sites), lots of house expenses for running the business from home (legitimate I know) two cars (one work truck, the other one for running work errands). They seem to do very well. But, they have the risk of the business, they might not get work in the future or have a big insurance claim or something so I guess it balances out. (nb I know all this because my friend tells me, she seems quite proud of it all)
    I imagine doing these things is quite common. Whether it is right is a different thing. I claim 30% of my car expenses each year on our business books and that is actually legal so some of what they are doing could be ok but creative accounting exists for businesses as much as individual returns.

  3. #13
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    Quote Originally Posted by amyd View Post
    I imagine doing these things is quite common. Whether it is right is a different thing. I claim 30% of my car expenses each year on our business books and that is actually legal so some of what they are doing could be ok but creative accounting exists for businesses as much as individual returns.
    I'm not placing any judgement on them, but I guess from the outside you might wonder how they can afford so many expensive `toys' when also receiving full family tax benefits while doing what would normally be an expensive renovation on their house, creative accounting pays for it! I have tried a couple of accountants but never come across one of these creative ones for myself

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    Oh sorry! I thought you meant that an "awesome company trust set up" was fraud...my bad.

  5. #15
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    No. But they would probably have a lot of tax write offs that reduce their taxable income.

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    I own a small business and trust me we don't get many " perks" I suppose it depends what kind if business you have but it seems quite silly to pay yourself a low wage just to claim a government benefit? It would all come out at tax time anyway if their company made a profit and as my accountant says you can try and "claim" anything but if you get audited you will get found out and heavily fined if you can't prove these large expenses were legit - I always "steal" the office toilet paper and paper towels for home but that's about it!!

    I do have friends who own restaurants and they pretty much buy all their food and drinks for their personal home on the business which would be great but at the end of the day they are still the ones paying out the money anyway and working 7 days for it

  7. #17
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    What " note to self " described is what I am talking about. Where the business owner only pays themselves a small wage so they can claim all the benefits from the govt. Depending on how the business is set up it is legal as far as I know and I am talking about large profit businesses not small ones.
    Last edited by lulu 2; 07-09-2013 at 19:09.

  8. #18
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    Quote Originally Posted by lulu 2 View Post
    What " note to self " described is what I am talking about. Where the business owner only pays themselves a small wage so they can claim all the benefits from the govt. Depending on how the business is set up it is legal as far as I know and I am talking about large profit businesses not small ones.
    The big thing to note here is that many people have businesses in a sole trader or partnership format - and profit in these businesses gets counted as taxable income. It is only if it is a company/trust structure that the principals get paid a wage and would be able to set it low and then retain profits in the company.

    For the sole traders/partnerships it does come down to the creative bookkeeping. This in turn depends on how invoices from suppliers are worded as to how they could be claimed to claim deductions that aren't real.

    In my experience it is actually quite difficult for small business owners to cheat - especially with the threat of audits hanging over us.

  9. #19
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    Quote Originally Posted by amyd View Post
    If you have a business that makes huge profits and you can still get benefits either you have a dodgy accountant or an awesome company/trust system.
    Not if you are reinvesting in your business, (capital) innovating and actually doing a service to the country! That is what is wrong with the socialist/communist view that seems to be the norm on bubhub, people seem to want the same as eveyone else without having to work for it. If you work hard you should be rewarded end of story. Businesses who "make huge profits" and reinvest those into their business take a RISK of losing it all, so some small perks along the way should be expected. The current Government are a bunch of wealth destroying, innovation smugs who seem hell bent on destroying Australia. We are already so far behind in education (worldwide) and slipping in science and other disciplines because the emerging view is participation alone is good enough! Well, unfortunately it is NOT and will never be in a capitalist and competitive global environment. Im not saying that its "right" I'm saying that's the reality.

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  11. #20
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    Quote Originally Posted by mrsoptomistic View Post
    Not if you are reinvesting in your business, (capital) innovating and actually doing a service to the country! That is what is wrong with the socialist/communist view that seems to be the norm on bubhub, people seem to want the same as eveyone else without having to work for it. If you work hard you should be rewarded end of story. Businesses who "make huge profits" and reinvest those into their business take a RISK of losing it all, so some small perks along the way should be expected. The current Government are a bunch of wealth destroying, innovation smugs who seem hell bent on destroying Australia. We are already so far behind in education (worldwide) and slipping in science and other disciplines because the emerging view is participation alone is good enough! Well, unfortunately it is NOT and will never be in a capitalist and competitive global environment. Im not saying that its "right" I'm saying that's the reality.
    Sorry I'm not good at quoting but when I say making huge profits I mean genuinely making huge profits - not large amounts of income that is balanced out by business costs, either day to day or investment/improvement.


 

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