One of the main keys to running a successful start-up is knowing when to ask for help. Getting the right help, at the right time, means getting things done the right way, and when it comes to your tax, it pays to be accurate and on time!
If you’ve been in business or had someone do your tax before, then you know what an accountant or a Tax Agent is – before your business existed you may have even used one to process your tax returns and sort out certain types of financial issues. Accountants have a reliable and reputable standing within the business sector and can act as general business advisers, but sometimes you need different types of number crunchers. Some with a little more….. special skills.
When the time comes to sort out your paperwork, how do you know what kind of Tax Professional you need? What’s the difference between a Tax Agent, and a BAS Agent? What would each of them do for your business? Are there businesses where you can get these professionals all under one roof?
BAS Agents: keeping you balanced
BAS Agents are a type of Tax Agents. A subset, if you will. They manage and report on your GST responsibilities. You should be aware that the GST you collect is not yours, it’s the Tax Office’s, so don’t go spending it! And did you also know you can get a refund on the GST you pay if you are running a business.
GST can be confusing though – it’s not as simple as 10% in and out – and you’ll need to lodge another form to the Tax Office called a Business Activity Statement (BAS). Lots of business owners don’t even know what a BAS is when they first start up, and that’s okay too. That’s specifically what a BAS Agent is for. Bookworx Group are registered and can help with your BAS if you need us.
BAS Agents are authorised to prepare and lodge BAS returns (including all your GST and Pay As You Go withholding dues). Considering you have to lodge BAS returns every three months (and if you’re not on time you can cop a nice little fine), it pays to have someone keeping track of nitty gritty details and being wary of mistakes. Many BAS Agents also do the bookkeeping for businesses. This just makes things easier when it comes to looking at accounts payable and receivable so that your GST incoming and outgoing are all in once place. BAS Agents are legally accountable to the Tax Practitioners Board for their work as well, so you know you’re protected.
Tax Agents: Licensed to make claims
Tax Agents are income tax heavyweights. They have to be registered with the Tax Practitioners Board and must be licensed to do your taxes. While your garden-variety accountant is handy for day-to-day bookkeeping, a Tax Agent is perfectly suited to tax time return compliance, and when it comes to businesses, companies, and working with unit trusts and things like that. They are invaluable.
Most people visit them once a year, even if you are in business. They’ll ask all sorts of questions to make sure all your income and outgoings are included and hunt for all the different types of expense claims and deductions available to you and your business. Bottom line is: they’ll get you paying the right amount of tax (legally). When you own your own business, keeping your income tax liability at realistic levels is a matter of knowing how the system works. This can also be the make or break for some smaller businesses and the outlay to get a Tax Agent on board with you could be worth its weight in gold.
Accountants: the game planners
Accountants help you make better financial decisions and are typically registered as Tax Agents as well. An accountant will help you decide what kind of business you want to be (do you want to stay as a sole trader, or maybe incorporate?) and how you should plan for fiscal growth. They’ll tell you how and why you should register for things like an ABN, GST etc.
They’ll also tell you how to plan for the right tax outcomes. Whereas BAS Agents and Tax Agents deal with lodgment and compliance, the accountant will be your business adviser and meet with you to discuss how you can plan for all your business needs. Think of them like a business coach, who looks at all the financial aspects of your business, keeping you in line and making sure that you will be growing year on year, financially. An accountant should be at your side explaining the implications of any business decision you make. You need them to be a partner, not just an advisor. Because if you’re business grows and gets better, you’ll be hanging around with them for a lot longer. Its a win win situation.
Here’s the take away point: make sure you are using the right professional for the right job. Don’t assume your business can perform at its best with one or none – do yourself a favour and concentrate on your business. Give Bookworx Group a call and let us concentrate on the rest. We’re here to help you get better, and take away as much of the stress of numbers as we can.