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  1. #1
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    Default New home business questions

    I'm considering starting up a WFM business of retail goods which would be both online and local pick up. I would start out advertising on BSS sites then look at developing a FB page if it took off. I'm aware if I register a name I'm legally a business and therefore have to do ATO stuff. I'm not wanting to do that yet until I know I can make a go of it. So I have a few questions:

    Can I set up a FB page with a personal ABN number, not a registered name but name the FB a name? So I might have Delirium Flowers, but with a personal ABN?

    I've been told by lots of people it's considered a hobby by the ATO until profit a hit 5k, thus how Avon/Scentsy type businesses are so attractive. But reading govt sites it says you are a business if you even *intend* to make a profit, therefore you need to register business name etc. Is it enforceable? Can someone shed some light?

  2. #2
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    When you say personal abn, do you mean getting an abn as a sole trader? Unless you are going to set up a separate entity like a company or trust, that first abn is the same one you will always use for your business. As for the 5000 threshhold, as soon as you make 1 dollar profit it is taxable (assuming your taxable income is already over the 18k threahhold). Have a look at the ato website, there is a pile of fact sheets and other info for small business. It may be worth talking to a tax agent before you go too much further.
    Last edited by tb2; 30-08-2016 at 17:01.

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  4. #3
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    Intention to make profit is quite difficult to prove (by the ATO). It isn't the sole test, other factors have to be considered. Eg systematic transactions, records and activity. Making "profit" doesn't necessarily constitute a business. Neither does setting up a business name.

    An example of an activity which makes profit but is not a business is where you buy some item for personal use, eg a pram, and then change your mind and decide to sell it on eBay, and you sell it for more than you bought it for. If you do this on a regular basis (ie systematic) then it would constitute a business but if it's one-off, or a number of random transactions, eg selling a pram, then selling a dress, then a car seat, etc, then it isn't a business and the $ you get is not taxable income.

    Similarly, if you regularly knit baby outfits and you decide to sell some of them online but the activity is very low and you're not make much money, it could be deemed a hobby, not a business.

    It's not exactly black & white.

    Having said that, what you are describing sounds like you really want to make a go of running a home business, so why don't you just do that? You don't need a registered business name to run a business and if you quote your ABN on the sales you make or on your website then you are basically admitting that you've got a business.

    If you want to do it and make money, then that unfortunately involves declaring it in your return.

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    The other thing to think of is if you start with declaring your business from the beginning its highly likely you'll make a loss on the first year/two years. This can then be carried forward and offset future profits when you do make a profit.

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    Thanks for the replies

    I'm a SAHM and don't have any taxable income, so any profit up until the threshold wouldn't be taxed.

    It's not that I'm deliberately wanting to defraud. It's not wanting to pay for a business name and do all the business/ATO paperwork if it doesn't take off. Is it worth it to do quarterly BAS statements for a grand a quarter? That's what I'm trying to work out.

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    Quote Originally Posted by delirium View Post
    Thanks for the replies

    I'm a SAHM and don't have any taxable income, so any profit up until the threshold wouldn't be taxed.

    It's not that I'm deliberately wanting to defraud. It's not wanting to pay for a business name and do all the business/ATO paperwork if it doesn't take off. Is it worth it to do quarterly BAS statements for a grand a quarter? That's what I'm trying to work out.
    If your annual sales are under $75,000 there is no need to register for GST. BAS needs to be submitted annually in this instance.

    See more here:

    http://myob.com.au/blog/basic-tax-ex...mall-business/

    https://www.ato.gov.au/Business/GST/...ering-for-GST/

    https://www.ato.gov.au/Business/Mana...tered-for-GST/
    Last edited by SSecret Squirrel; 30-08-2016 at 18:12.

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    This is all so helpful. So no GST, and only annual BAS, that's not too bad.

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    You can register a business name to your ABN in your personal name and I think it's about $79.

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    Default New home business questions

    Quote Originally Posted by delirium View Post
    Thanks for the replies

    I'm a SAHM and don't have any taxable income, so any profit up until the threshold wouldn't be taxed.

    It's not that I'm deliberately wanting to defraud. It's not wanting to pay for a business name and do all the business/ATO paperwork if it doesn't take off. Is it worth it to do quarterly BAS statements for a grand a quarter? That's what I'm trying to work out.
    Nope definitely not worth doing BAS. I wouldn't bother registering for GST or registering a business name. You can make up a name for your Facebook page and website without actually registering a business name. All it does it make the name unofficial and doesn't protect you from someone else stealing/using your business name. But that happening is extremely unlikely in any case. It's more likely that you might start using a name that is similar to another business that IS registered, but they would have to be in the same industry and selling similar products or services for there to be any ACCC or copyright issue.

    If you just set up your business online using your ABN and earn less than $75k a year, the only paperwork required will be giving a spreadsheet of your income and expenses to your accountant at the end of the year. The business activity would be part of your individual tax return.
    Last edited by witherwings; 30-08-2016 at 20:21.

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  15. #10
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    Quote Originally Posted by delirium View Post
    This is all so helpful. So no GST, and only annual BAS, that's not too bad.
    If you aren't registered for GST there is no annual BAS either. You only do an annual BAS when you register for GST voluntarily (ie you register even though your income is under $75k)

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