Hi, I'm starting my own business and have registered a business name, ABN and for GST and hoping to start in early May. My question is will l have to pay tax in June this year or could it be held over until June 2020 to help with cashflow stating up... thank you
Your 2019 tax return (if a sole trader) will need to include the business activity. May not be much of an issue - could even be a loss if you have invested funds to buy equipment etc..
You will need to liaise with your accountant (happy to help if you don't have one) to determine the tax implications. If a sizeable debt comes in, you may be able to push out lodgement and therefore payment until about May next year (again speak to your accountant).
If you have a business structure (company, trust) then financials and tax return will be needed for the 2019 tax year - depending on the business this could be fairly easy, or fairly standard fees even though only a couple of months.
Best of luck,
Todd Corderoy - CPA, B.Bus (Acc)
Corderoy Accounting Services - Wangara
If I can add a bit to Todds comments: when you lodge a tax return through a tax agent, it is generally not due to be lodged until March the year AFTER the end of the financial year:
SO....for the year ending 30 June 2019, you dont have to LODGE your 2019 tax return until March 2020.
And then you pay the tax in June 2020
which is great.
except, if you have tax to pay on business profits, you will fall into the PAYG Instlament System.
This means that the ATO will want you to pay tax in advance on the next years tax return.
Which means that after you lodge your tax in March 2020, you will receive a PAYG Instalment that will need to be paid in July. this is in ADDITION to the tax bill due in June.
here are some numbers to give you a n idea on what you are up against:
for the year ending 30 June 2019, my income if $80,000. this gives me a tax liability of something like $19,000.
so I dont have to lodge or pay the return until March 2020. Which I do because I dont like parting with my money until I absolutely have to. And the ATO sends me a notice of assessment for $19k, payable in June.
Then after I lodge my 2019 tax return, the ATO sends me a PAYG Instalment for around $20,000, payable in July.
which means that in the FIRST year of lodging returns, I am gonne get slugged TWICE for tax.
soooooo, this is where you need to get up close and personal with your accountant!!!! if you dont have one, GET ONE!!!!! and make sure he(she) is a good one!!!!!