Rethink Your Business Structure for Long-Term Success

The structure of your business is a cornerstone of its success. A well-chosen structure supports growth, efficiency, and financial health. On the other hand, an unsuitable structure could lead to unnecessary costs, limited asset protection, and tax inefficiencies over time. As your business evolves, it’s important to reassess whether your current structure still meets your needs.

Why Your Business Structure Matters

Your business structure influences more than just day-to-day operations. It can determine your tax obligations, the level of protection for your personal assets, and even how you expand or take on new opportunities. What worked for you when you started your business may no longer align with your goals, especially as your business grows or your circumstances change.

Understanding Business Structures in Australia

In Australia, there are four common types of business structures:

  • Sole Trader: Ideal for small, simple businesses, this structure is cost-effective and easy to manage. However, it provides limited asset protection and ties business liabilities to the owner.
  • Company: A separate legal entity, a company offers greater asset protection and potential for growth but comes with higher compliance costs and more complex administration.
  • Partnership: Suitable for businesses with multiple owners, partnerships share profits, losses, and decision-making responsibilities among partners. They’re relatively easy to set up but can present challenges if disputes arise.
  • Trust: A trust structure can provide tax flexibility and asset protection, with a trustee managing assets on behalf of beneficiaries. This option, however, requires more effort to establish and maintain.

Each structure has its advantages and disadvantages. Selecting the right one is about understanding your current situation and future ambitions.

When Should You Consider Restructuring?

If you’re experiencing growth, facing increased liabilities, or pursuing new opportunities, it might be time to rethink your business structure. Restructuring isn’t just for businesses in trouble; it’s a strategic move to optimise performance and reduce risks. The process may involve applying for a new ABN, updating registrations, and managing potential tax implications when transferring assets between entities.

How SKD Accountants Can Help

At SKD Accountants, we understand that no two businesses are the same. Our team of experts can guide you through the restructuring process, tailoring solutions to meet your specific needs. Whether you’re a sole trader looking to grow, a partnership needing clarity, or a company seeking to optimise operations, we’re here to help.

Let’s Build the Right Foundation Together

Don’t let an outdated structure hold back your potential. Partner with SKD Accountants to ensure your business is built on a strong, flexible foundation. Contact us today to book a consultation, and let’s work together to position your business for long-term success.

Cryptocurrency Taxation in Australia: Everything You Need to Know for 2024

As cryptocurrency continues to grow in popularity, understanding how it is taxed in Australia is essential. The Australian Taxation Office (ATO) actively monitors cryptocurrency transactions to ensure compliance, and failing to meet your obligations can result in penalties. This guide explains the key tax rules for cryptocurrency investors and traders.

How Does the ATO Treat Cryptocurrency?

The ATO treats cryptocurrency as property, not currency. This means digital assets are taxed similarly to other capital investments, like shares or real estate. Depending on how you use cryptocurrency, you may be subject to capital gains tax (CGT) or income tax.

Taxable Cryptocurrency Events

The ATO considers the following activities taxable:

  1. Selling Cryptocurrency for Australian Dollars (AUD):
    Profits from selling crypto for fiat currency are considered capital gains and must be reported.
  2. Trading Between Cryptocurrencies:
    Exchanging one cryptocurrency (e.g., Bitcoin) for another (e.g., Ethereum) is treated as a taxable disposal.
  3. Using Cryptocurrency to Pay for Goods or Services:
    Payments made with cryptocurrency are also considered disposals, and any gain or loss must be reported.
  4. Earning Cryptocurrency as Income:
    Receiving cryptocurrency through mining, staking, or as payment for goods or services is treated as income, based on its market value at the time of receipt.
  5. Earning Staking Rewards or Receiving Airdrops:
    Any additional cryptocurrency received through staking or airdrops must be declared as taxable income.

 

Non-Taxable Cryptocurrency Events

Certain transactions are not taxable, such as:

  • Holding Cryptocurrency (HODLing):
    Simply buying and holding cryptocurrency without disposing of it does not trigger a taxable event.
  • Transferring Cryptocurrency Between Your Wallets:
    Moving crypto between wallets you own is tax-free, as it does not involve a change in ownership.

 

Types of Cryptocurrency Taxation in Australia

  1. Capital Gains Tax (CGT):
    Cryptocurrency held as an investment is subject to CGT when disposed of. If you hold it for more than 12 months before disposal, you may qualify for a 50% CGT discount.
  2. Income Tax:
    Cryptocurrency received as income, such as mining or staking rewards, is taxed as ordinary income and must be declared in your tax return.

 

How to Stay Compliant

To meet ATO requirements, ensure you:

  • Keep Detailed Records:
    Record the dates, amounts, market value, and purpose of every cryptocurrency transaction.
  • Use Crypto Tax Tools:
    Consider tools to track transactions, calculate cost bases, and automate tax reporting.
  • Lodge on Time:
    Include all cryptocurrency-related income and capital gains in your annual tax return.

 

Strategies to Minimise Your Cryptocurrency Tax Liability

  1. Hold for the Long Term:
    Holding cryptocurrency for more than 12 months may make you eligible for a CGT discount.
  2. Utilise Tax-Loss Harvesting:
    Offset gains by selling underperforming cryptocurrencies to realise losses.
  3. Consult a Tax Professional:
    Cryptocurrency tax rules are complex, and professional advice can help you optimise your tax position.

 

Risks of Non-Compliance

The ATO has sophisticated data-matching capabilities and collaborates with cryptocurrency exchanges to track transactions. Failing to declare gains or income from cryptocurrency can result in audits, fines, and penalties.

Take Control of Your Cryptocurrency Taxes

Cryptocurrency offers exciting opportunities for investors, but the tax implications can be complex. Understanding your obligations and seeking professional advice can save you from unexpected tax issues.

For expert guidance on cryptocurrency taxation, reach out to SKD Accountants. Our team specialises in helping Australians navigate the complexities of digital asset taxation to ensure compliance and maximise your savings.

Your Essential Financial Roadmap to Small Business Success

Running a successful small business is no small feat. Between managing daily operations and planning for the future, it’s easy to feel overwhelmed. One of the best ways to keep your business on the path to success is by creating a solid financial roadmap. With clear goals and proactive financial planning, you can navigate challenges, optimise growth, and build a resilient business. At SKD Accountants, we specialise in helping Melbourne small businesses develop the financial roadmaps they need to thrive. Let’s dive into the key steps to building yours.

1. Set Clear Financial Goals

Every successful journey starts with a destination in mind, and for businesses, that means setting clear financial goals. Whether it’s increasing your cash flow, expanding your market, or reducing operational costs, defining short-term and long-term goals gives your business a focus and direction.

Actionable Tips:

  • Short-Term Goals: Consider goals like improving monthly cash flow or reducing expenses by a set percentage.
  • Long-Term Goals: Look at growth objectives, such as saving for expansion, entering new markets, or achieving debt-free status.

 

Need help setting realistic financial goals? Contact SKD Accountants to schedule a complimentary consultation and let us guide you in identifying achievable goals tailored to your business.

2. Build a Budget and Forecast for the Future

A budget is the foundation of your financial plan, helping you manage your spending, stay organised, and anticipate cash needs. Alongside your budget, a financial forecast helps you predict future income, allowing you to plan strategically.

Actionable Tips:

  • Regular Reviews: Update your budget monthly or quarterly to reflect changes in revenue and expenses.

SKD Accountants offers customised budget and forecast for small businesses. Get in touch with us for a free consult and expert advice on how to maximise your budget!

3. Prioritise Cash Flow Management

Cash flow is the lifeblood of any business. Many small businesses struggle with cash flow, which can lead to missed opportunities or difficulties covering expenses. By closely monitoring cash inflows and outflows, you can make informed decisions that keep your business healthy and agile.

Actionable Tips:

  • Invoicing Strategy: Send invoices promptly and offer incentives for early payments.
  • Manage Expenses: Review regular expenses and find ways to reduce costs without compromising quality.

 

Struggling with cash flow? Our experts at SKD Accountants can work with you to develop tailored cash flow strategies that keep your business on solid financial ground.

4. Manage Debt and Explore Financing Options

For many small businesses, taking on debt is necessary for growth. However, managing debt wisely is key to ensuring it doesn’t weigh down your finances. Exploring financing options for growth initiatives, such as expanding inventory or hiring new talent, can also be a smart strategy when approached with the right planning.

Actionable Tips:

  • Debt Assessment: Regularly assess your debt levels and aim to reduce high-interest debts.
  • Financing Research: Look into financing options that align with your growth goals, such as low-interest loans or business lines of credit.

Let SKD Accountants help you evaluate financing options and create a debt management plan that strengthens your financial position.

5. Plan Ahead for Taxes and Stay Compliant

Tax planning is often overlooked but can make a substantial difference in your bottom line. Staying proactive with your tax strategy means fewer surprises at tax time and more cash in your business. Plus, ensuring you’re compliant with all tax laws reduces the risk of penalties or issues down the line.

Actionable Tips:

  • Record-Keeping: Maintain accurate financial records to streamline tax lodgment.
  • Tax Strategy: Explore strategies like maximising deductions, using tax credits, and planning for capital gains if you’re considering selling assets.

 

Not sure where to start? SKD Accountants can help you develop a tax strategy that minimises liability and maximises cash flow. Book a tax planning session with us today!

Partner with SKD Accountants to Achieve Your Financial Goals

A strong financial roadmap is one of the most valuable assets your business can have. It provides a clear path to follow, helping you navigate challenges, seize opportunities, and build a business that’s not only profitable but sustainable. At SKD Accountants, we’re dedicated to helping small businesses in Melbourne like yours create customised financial plans that drive success.

Ready to take control of your business’s financial future? Contact SKD Accountants today to schedule a consultation, and let’s get started on building your financial roadmap to success.