Sole Trader vs Company. When starting a business in Australia, one of the first and most important decisions you'll make is choosing your business structure. The two most common options are operating as a sole trader or setting up a company. Each has its own benefits, obligations, and risks, so understanding the differences can help you choose the right path for your goals. So let's dive into the topic.
A sole trader is the simplest and most affordable business structure. As a sole trader, you operate your business as an individual and are legally responsible for all aspects of the business.
Pros of being a sole trader:
Cons of being a sole trader:
A company is a separate legal entity registered with ASIC (Australian Securities and Investments Commission). This structure offers limited liability and is often better suited to growing businesses or those with higher risk.
Pros of setting up a company:
Cons of setting up a company:
| Feature | Sole Trader | Company |
|---|---|---|
| Legal Entity | Individual | Separate legal entity |
| Liability | Unlimited personal liability | Limited liability |
| Tax Rate | Personal income tax rates | Flat company tax rate |
| Control | Full control | Shared among directors/shareholders |
| Costs | Low setup and compliance | Higher setup and ongoing costs |
If you're starting small, have minimal risk, and want full control, operating as a sole trader may be the best option. It's cost-effective and easy to manage.
However, if you plan to grow, take on partners, or protect your personal assets, a company structure might be more suitable.
It’s also worth considering that you can start as a sole trader and switch to a company later, depending on how your business evolves.
Choosing the right structure is crucial for your business’s success and legal compliance. It's a good idea to speak with a qualified accountant or business advisor to ensure your choice aligns with your goals and circumstances.
Starting your own business is an exciting journey, but it can also feel overwhelming if you're unsure where to begin. Whether you're launching a new venture from scratch or turning a side hustle into a full-time job, this guide will walk you through the essential steps for getting your business off the ground in Australia.
Start by validating your idea. Ask yourself:
Research your market, look at trends, and think about what sets your business apart. Consider doing a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) to assess your position.
In Australia, you can choose from several business structures:
Each structure has legal and tax implications. Speak to a qualified business advisor or accountant to determine which structure suits your needs.
Once you’ve decided on a structure, you’ll need to register for an Australian Business Number (ABN). This is a unique 11-digit number that identifies your business to the government and other businesses.
You can register for an ABN online through the Australian Business Register (ABR) website.
If you're operating under a name other than your own personal name, you'll need to register your business name with ASIC (Australian Securities and Investments Commission).
Before registering, check that:
Depending on your business size and structure, you may need to register for:
Your accountant or tax advisor can help ensure you meet all your tax obligations.
Separating your personal and business finances is crucial. Open a business bank account under your registered business name for easier bookkeeping and tax reporting.
This is especially important if you're operating as a company, trust, or partnership.
Running a business in Australia means maintaining accurate records for tax and compliance. You'll need to:
Accounting software can make this much easier — and working with a trusted business advisor ensures you're ticking all the boxes.
Depending on your industry and location, you may need specific licences, permits, or zoning approvals to operate legally.
You can use the Australian Business Licence and Information Service (ABLIS) tool to find what applies to your business.
Protect your business legally and financially by:
The most successful business owners don’t do it alone. Engage an accountant, bookkeeper, or business advisor early on to:
At Wotton & Co, we support new and established businesses every step of the way, from setting up the right structure to navigating the tax system and beyond.
Ready to get started?
Let Wotton & Co help you take the first step in your business journey. Get in touch today for expert advice tailored to your goals.
What is BAS? If you're running a small business in Australia, you've likely come across the term BAS. It stands for Business Activity Statement, and it's a fundamental part of managing your business taxes and staying compliant with the Australian Taxation Office (ATO). For many business owners, especially those just starting out, BAS can seem confusing at first, but understanding what it is, when to lodge it, and what it covers can make tax time a lot less stressful.
Here’s everything you need to know about BAS in plain English.
What is a Business Activity Statement (BAS)?
A BAS is a form that businesses use to report and pay several types of taxes to the ATO. If your business is registered for Goods and Services Tax (GST), you're required to lodge BAS regularly. The BAS helps the ATO keep track of your tax obligations, and it ensures you’re paying (or claiming back) the right amount of tax.
When you fill out your BAS, you’ll report things like:
Who needs to lodge a BAS?
If your business is registered for GST, meaning your annual turnover is $75,000 or more ($150,000 for non-profit organisations), then lodging a BAS is mandatory. Even if you’ve had a quiet quarter or haven't made any sales, you still need to submit your BAS to report that.
When do you need to lodge your BAS?
Most small businesses lodge their BAS quarterly, although some businesses lodge monthly or annually, depending on their size and ATO requirements. The ATO will notify you of your due dates, but typically:
If you lodge your BAS through a registered tax or BAS agent, you may be eligible for extended deadlines.
What do you need to include in your BAS?
A typical BAS form will include sections to report:
The exact sections on your BAS will depend on what you're registered for with the ATO.
How do you lodge your BAS?
You can lodge your BAS:
Lodging online is usually faster and gives you more time to correct any errors.
Why is BAS important?
Accurate and timely BAS lodgement is critical for a few reasons:
Tips to make BAS easier
Need help with your BAS?
At Wotton & Co, we work with small and family-owned businesses across South Australia to take the stress out of tax time. Whether you need help preparing your BAS, managing cash flow, or understanding your GST obligations, our experienced team is here to support you.
Running a small business involves juggling many responsibilities, and tax time can feel especially overwhelming. At Wotton & Co, we help small business owners across Australia not just stay compliant, but also take advantage of all small business tax deductions they’re entitled to. Many businesses miss out on thousands of dollars in potential tax savings each year simply because they don’t know what they can claim.
Here are some of the most commonly overlooked tax deductions for small businesses:
If you run your business from home, you may be able to claim a portion of your rent or mortgage interest, electricity, internet, and even cleaning costs. The ATO provides different methods for calculating your home office expenses, and choosing the right one can make a big difference to your deduction.
Do you use your personal vehicle for business purposes? You may be eligible to claim fuel, maintenance, insurance, registration, and even depreciation. Be sure to keep a logbook or use a mileage tracking app – the ATO requires records to support your claims.
Fees paid to your accountant, lawyer, business coach or other professional advisers are tax-deductible if they directly relate to the operation of your business. This includes one-off consultations and ongoing retainer services.
From Facebook ads to printed flyers, website hosting to photography – all marketing and advertising costs used to promote your business are deductible. This includes the cost of engaging marketing consultants or web designers.
If you’re investing in yourself or your staff with training programs, short courses, or professional development that relates to your current business operations, it’s usually deductible. This is a great way to level up your business and get some money back at tax time.
Smaller tools and equipment can usually be written off immediately under the instant asset write-off scheme (if eligible), while larger items can be depreciated over time. Computers, printers, and even work phones can fall into this category.
If you've made all reasonable attempts to recover a debt and have written it off in your books, you may be able to claim it as a tax deduction. This is especially relevant for service-based businesses.
Business insurance premiums – including public liability, professional indemnity, and income protection (if included in assessable income) – are typically deductible.
Any interest charged on loans used for business purposes, or bank fees related to your business account, can be deducted. Make sure these expenses are separate from your personal banking to avoid confusion.
Every business is different, and the best way to maximise your deductions is to work with a professional who understands your industry and your goals.
At Wotton & Co, we specialise in working with small and family-run businesses. We take the time to understand your operations and tailor strategies to ensure you’re not missing out on valuable deductions or tax planning opportunities.
Need help at tax time or with setting up your accounts correctly from the start?
Let’s talk. Contact Wotton & Co today for friendly, expert accounting and business advice.
Donating your time and professional expertise can be incredibly rewarding, especially when it benefits a cause you're passionate about. But when it comes to tax time, many Australians are left wondering: can you claim a tax deduction for donating services?
At Wotton & Co, we work with individuals, sole traders, and small businesses across Adelaide and South Australia to ensure they fully understand their tax obligations and opportunities, including when it comes to charitable giving. Below, we break down the rules surrounding donated services, how they differ from financial donations, and what you can do to maximise your impact (and tax efficiency).
In short: no, donating your time or professional services, such as legal advice, building work, design services, accounting, or consulting, is not tax deductible under Australian tax law.
Even if your services have a clear commercial value, and even if they are provided to a registered charity or Deductible Gift Recipient (DGR), the Australian Taxation Office (ATO) does not recognise donated services as tax-deductible gifts.
That’s because tax-deductible gifts must involve the transfer of money or property. A service, unlike a physical item or monetary contribution, does not constitute “property” under tax law, and therefore doesn’t meet the criteria.
The ATO defines a gift as a voluntary transfer of money or property where the donor receives no material benefit in return. While donated goods, like office furniture, vehicles, or equipment, are considered “property” and potentially deductible (subject to certain conditions), services do not leave behind a transferable asset that can be valued and claimed.
That means a graphic designer who donates 10 hours to create branding for a charity, or a builder who volunteers their skills to renovate a local shelter, cannot claim that time as a deduction—no matter the commercial value of their contribution.
While services themselves aren't deductible, there are still ways to make a meaningful contribution and receive tax benefits. Here are a few options:
1. Out-of-pocket Expenses
If you're volunteering your time and incur personal costs in the process—such as travel, uniforms, materials, or parking—you may be able to claim these as a tax deduction, but only if:
- You are not reimbursed by the charity or organisation.
- The charity is a registered Deductible Gift Recipient (DGR).
- The expenses are directly related to the voluntary work.
Keep detailed records and receipts of these expenses, and speak with your accountant to confirm eligibility.
Gifting tangible items such as second-hand goods, new products, or other property can be tax deductible if:
- The donation is made to a registered DGR.
- The value of the donation can be substantiated (e.g., market value or purchase receipt).
- The item is considered valuable enough to meet thresholds set by the ATO (generally over $2).
Gifts of property acquired less than 12 months before the donation may be deductible at the lower of the market value or the cost of acquisition.
This is the most straightforward form of deductible giving. Cash donations of $2 or more to DGRs are tax deductible. You’ll need to keep a receipt, and the deduction must be claimed in the income year the donation was made.
You can also set up regular payroll donations through your employer if they offer a workplace giving program—this streamlines the process and can result in immediate tax savings.
In South Australia, we’re fortunate to have a strong network of not-for-profits, grassroots organisations, and community groups. While the national tax laws apply uniformly, local initiatives often present opportunities for volunteering and contributing in ways that align with your values.
If you're a business owner, particularly in fields like trades, legal services, or consulting, it's worth having a discussion about how your business can support local causes in a strategically beneficial way. For example:
- Sponsorships (which may be deductible depending on the arrangement)
- Donating business stock or assets
- Partnering with charities for fundraising or awareness campaigns
These types of contributions might also boost your visibility and community presence while delivering genuine value to the organisations you support.
At Wotton & Co, we support South Australians who give back to their community, whether it’s through time, money, or expertise. While donating services may not directly reduce your tax bill, there are still many smart ways to contribute and claim deductions where legally possible.
If you’re unsure whether your charitable contributions or business-related giving qualifies for a deduction, or you want to structure your giving more tax-effectively, we’re here to help.
Need Help With Tax and Donations?
Whether you're a business owner, freelancer, or generous individual, Wotton & Co can help you navigate the complexities of tax deductions and charitable giving. Book a consultation today to make sure your giving is aligned with ATO rules—and your values.
Proudly based in Glenelg and serving clients across South Australia.
Contact us now to speak with a friendly tax advisor.
