Other Tax Issues

Answer: There is no set answer for this question. There are too many factors that need to be taken into account.

Each case should be looked at individually it may be worthwhile to speak to a professional adviser or to your accountant so that you can get the right advice for your situation.

Q2. If I employ someone do I need to contact the ATO?

Answer: Yes, you must apply to register for PAYG withholding by the day on which you are first required to withhold an amount from a payment.

If you were registered as a group employer under the PAYE system as at 30 June 2000, and you had applied for an ABN, you don't need to register for PAYG withholding. Your existing registration has been automatically carried over.

Q3. How do I register for PAYG withholding?

Answer: If you already have an ABN:
Register by phoning the Business Tax Reform Infoline on 13 24 78 or completing an Add a new business account form.

If you don't have an ABN but need to obtain one:
You can apply for one and register for PAYG withholding at the same time. You can register electronically through the Business Entry Point at www.business.gov.au or the Electronic Lodgement Service (ELS) with your tax agent.

If you don't need an ABN:
You will still need to register for PAYG withholding. Register by phoning 13 24 78 or completing the Add a PAYG withholding account form.

Q4. What is Fringe Benefits Tax (FBT)?

Answer: Fringe Benefits Tax is a tax payable by employers for benefits (as defined by the Act) paid to an employee or the employee's associate.

Examples of benefits include a car, car parking, low interest loan and payments of private expenses. Salary, wages and superannuation are specifically excluded.

Q5. Who pays FBT?

Answer: Fringe Benefits Tax is payable by the employers and is assessed on the value of the fringe benefits payable to the employee or their associates. Further information is available from the ATO.

Q6. Can I depreciate equipment and furniture?

Answer: The income tax laws allow you to claim an annual deduction for wear and tear of items used to produce the income disclosed in your tax return. This deduction allows the capital cost of plant to be written off over the effective life of each item.

For further information on how to claim a depreciation deduction please refer to the ATO publication "Guide to Depreciation 1999 -2000."

Q7. Can I claim mileage and use of my car as a business expense?

Answer: If you use your car for business you are able to claim some of the costs of running it. Self employed people are required to substantiate their claims if the vehicle is a motor car, a station wagon, a panel van, utility vehicle or other road vehicle designed to carry less than one tonne or fewer than nine passengers.

There are a number of different methods for claiming motor vehicle expenses, these are outlined in the A.T.O. website and publications.