Relevant Tax Laws for the Trades & Construction Industry
Goods and Services Tax (GST)
If your business has a turnover of over $75,000, you’re required to register for GST with the Australian Taxation Office (ATO). Once registered, GST applies to most services and materials you provide, such as the cost of timber, concrete, and equipment. However, some labour-based services may also fall under this category. For businesses in the trades and construction sector, it’s crucial to understand the specifics of GST registration and how to properly report it. We can help ensure your business is compliant with these requirements and guide you through the reporting process. For more detailed guidance, you can visit the ATO’s GST page.
Income Tax and PAYG Withholding
As a contractor or employer in the trades and construction industry, you must properly declare income and manage PAYG withholding. Contractors need to declare all income earned, and employers are responsible for withholding tax from employee wages. At JC Accountant, we can help ensure you’re meeting your PAYG obligations and provide strategic advice to reduce your tax liability. For more details on how PAYG withholding works, the ATO offers comprehensive guidance on their PAYG withholding page.
Superannuation Guarantee (SG)
The Superannuation Guarantee (SG) mandates that employers contribute 11% of employees’ ordinary time earnings into their superannuation fund. This applies to most employees in the trades and construction industry, and it’s important to ensure these contributions are made on time to avoid penalties. At JC Accountant, we can help you understand your SG obligations and make sure you are fully compliant.
Capital Gains Tax (CGT)
When you sell business assets such as vehicles or equipment, you may be subject to Capital Gains Tax (CGT) on any profit made. Fortunately, small businesses may qualify for CGT concessions, reducing the amount of tax you owe when selling these assets. Our team at JC Accountant can guide you through the application of CGT and help you minimise tax liability when selling business assets.
Fringe Benefits Tax (FBT)
FBT applies if you provide personal benefits to your employees, such as the use of business-provided tools or vehicles. If employees use these items for personal purposes, they may attract FBT, which must be reported to the ATO. At JC Accountant, we can help you understand how FBT affects your business and guide you in minimising unnecessary tax obligations. For detailed information, refer to the ATO’s FBT page.
Contractor vs. Employee Classification
Correctly classifying workers as either contractors or employees is essential to avoid tax compliance issues. Misclassification can result in penalties and additional taxes. Whether you’re hiring subcontractors or full-time employees, we can assist in ensuring your workforce is classified according to the ATO’s guidelines. This ensures your business stays compliant and avoids costly mistakes. For further guidance on the difference between contractors and employees, you can refer to the ATO’s guide.
Common Deductions
Tools and Equipment
Expenses for tools and equipment used in your trade or construction business are generally tax-deductible. This includes both the cost of new tools and the maintenance of existing ones. Additionally, under certain conditions, you may be eligible to instantly write off the cost of these tools. We can help you claim deductions for the tools and equipment you rely on to keep your business running.
Vehicle Expenses
If you use a vehicle for work, you can claim deductions for fuel, maintenance, registration, and other related expenses. The amount you can claim will depend on how much the vehicle is used for business purposes. Whether you’re using a ute, van, or another vehicle, JC Accountant can help you track and claim the correct deductions based on your business use.
Uniforms and Protective Clothing
If you wear uniforms or protective clothing as part of your work, you may be able to claim a deduction for the cost of these items, including their maintenance. This could include safety gear such as hard hats, boots, or high-visibility vests, as well as industry-specific uniforms. At JC Accountant, we’ll ensure you’re claiming the appropriate deductions for these necessary business expenses.
Training and Licenses
As a trades or construction professional, it’s likely that you incur costs for obtaining or renewing licenses, certifications, or ongoing training. These expenses are generally deductible. We can assist you in ensuring that you’re claiming the maximum deductions for training and licenses, helping you stay compliant with industry requirements while managing your tax liabilities effectively.
Home Office Expenses
If you work from home, such as for administrative tasks or planning, you can claim a portion of your home office expenses, such as electricity, internet, and furniture. At JC Accountant, we can help you determine the correct percentage of these costs that can be claimed based on the amount of business use your home office receives.
Travel and Accommodation
For work-related travel, such as visiting job sites or attending training, you can claim deductions for transport, accommodation, and meals. The key is that the travel must be directly related to your business. JC Accountant will guide you through what can be claimed and help you maintain accurate records to maximise your deductions.
Why Should You Choose Us For Your Accounting Needs?
When you choose JC. Accountant, you receive all the benefits of working with a boutique accounting practice in Brisbane. We’re able to give you the dedicated focus you need to feel secure and confident in your tax, rental property income, capital gains tax reporting and tax planning needs and requirements.Your accountant will be a seasoned professional, giving you their expertise and professionalism in all things accounting. Plus, as a boutique accounting firm, we offer same-day replies and prompt service, so you can get your tax needs handled as swiftly and efficiently as possible to meet your taxation goals.
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We believe in a tailored approach to every client. By understanding your unique financial situation, we provide customised strategies that align with your goals, ensuring you receive the attention and care you deserve.
Timely Service
In accounting, timing is everything. We prioritise prompt, efficient service so you never miss a critical deadline. From tax submissions to financial advice, we’re here when you need us most.
Experienced Staff
With years of experience across various financial disciplines, our team brings a wealth of knowledge to your accounting needs. Trust in our expertise to handle even the most complex financial scenarios with confidence.
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While your individual accounting feels like it should be easy, it’s often not. Contacting our team at JC. Accountant Brisbane will help you think and act strategically when it comes to your individual tax returns, capital gains tax, rental property income and tax planning.
Our job is to help you not only prepare and lodge returns, but also help you optimise your tax strategies, manage your finances more efficiently and to avoid common mistakes. With our help, managing your accounts and tax can be more beneficial and simpler than ever before.
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