Business or private rego?

[paddyj]

I have recently started up a small business (on the side to my full time job) and I am at the point now where I use my car more for the business than for personal use.

Does anyone know what are the benefits of getting business rego for my car?

Paddy

[Macca177]

Are u a sole trader or busniness??

if ur sole u can have it private but can only claim a % of the total costs etc. were if it was busniness the whole lot can claim.

if its a busniness, it carnt be a "Personal" and u recover the full $$$ not just a %

that was my understanding when i was a sole trader

oh and business rego is more expensive with insurance etc as well!

[paddyj]

I'm a sole trader at the moment. So if I use the car for %50 business use I can claim %50 of the operating costs?

[jNINE]

We have two vehicles for the business (sole trader) - one is a commercial vehicle and therefore under commercial rego and we claim 100% use because it is only used for business purposes.

The other is a run-around commodore wagon which is used for 75% business and 25% personal, determined by keeping a logbook, and is under normal rego and claim 75% it's total running costs.

If you are a sole trader and do more than 5000 business kilometres then there are several methods and you need to decide what suits you best (often it is method 4 - logbook)

check out the ATO site here

[jNINE]

I'm a sole trader at the moment. So if I use the car for %50 business use I can claim %50 of the operating costs?

Yes, but you must keep a logbook for 12 weeks as evidence of how you calculated the percentage of business use.

Here is the relevant info on the ATO site

The way we do it is my other half pays the fuel bill from his own pocket and at the end at the end of every month or so adds up all the receipts and puts in an expense claim for the percentage of business use and reimburses himself. For rego, insurance & repairs I apportion the cost accordingly and only claim the business use.

[paddyj]

Thanks for the info, I better start keeping a logbook! I think the easiest way is to leave it with private rego and claim the %.

I need to get a good book, maybe a dummies guide to starting a business!

[Macca177]

Thanks for the info, I better start keeping a logbook! I think the easiest way is to leave it with private rego and claim the %.

I need to get a good book, maybe a dummies guide to starting a business!

Thats how i did it, as said for the 12 weeks then the ratio is set for MR tax man. also have a chat to ur accountant the best method for your situation

[jNINE]

Thanks for the info, I better start keeping a logbook! I think the easiest way is to leave it with private rego and claim the %.

I need to get a good book, maybe a dummies guide to starting a business!

Yes, there are alot of little things to get to grips with. Have you registered for GST?

[paddyj]

yes have registered for GST.

Don't have an accountant at the moment but I think I need one!

I need to figure out what happens when I take money from my personal income to fund the new business. For example if I spend 10k of my wages this year setting up the new business, I suppose the business would be running at a loss for the first year until I made that 10k back.

[jNINE]

It's a little hard to explain...but..

That 10K you put into the business sits on the Balance sheet under Owners Equity or Capital. It does not affect whether the business makes a profit or a loss. The balance sheet is a statement of your businesses assets (equipment, money owed to you etc), Liabilities (loans, how much you owe suppliers etc), and Equity (your money).

The profit & loss is separate to this and shows all your income & expenses, and all things going well - more income than expenses!

The simplified tax system is something to look into also if you aren't already on it.

Maybe do a small business course or see if you can get some advice from any government department - like NSW Small Business

(my partner doesn't realise how lucky he is having an accountant for a girlfriend!!! all he has to do is replace my suspension and service my car occasonally!)

[Macca177]

i was doing small busniss managment cert 3, at tafe in sydney this year, it does go into all the things jNINE said. i left as i changed jobs and no longer needed it but yes very helpfull, cost was around the $800(tax deduction for u) 2 nights a week from 6-9.

My g/f runs her own business as well and did small bussiness managment and pulled out as it was too basic. . so just wouldnt suggest that one

[paddyj]

Thanks for the link jNINE, there is lots of info on that site. I have a lot to get my head around! I think it will be a good learning experience for me.

Don't think I have time in the evenings for a course at the moment but I'll try and get a few books and do some reading

[Spaced]

whats the type of business if I could ask?

[paddyj]

It's an IT business. I'm only doing about half a days work a week at the moment, it's all I really have time for with my other job taking up mon-fri.

It's mostly software at the moment, reworking old MS access database applications, bit of server side programming and hosting/email.