How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Patrick H. Your Own Question
Patrick H.
Patrick H., Lawyer
Category: Australia Law
Satisfied Customers: 5357
Experience:  Dip Law LPAB - Sydney based lawyer
61534878
Type Your Australia Law Question Here...
Patrick H. is online now
A new question is answered every 9 seconds

I am sixteen years old in Australia and have been running an

Customer Question

Hi,
I am sixteen years old in Australia and have been running an online business. How can I open a business bank account and avoid paying tax on all of my revenue and only pay tax on profit.
As far as I know I can register a company beacause I'm not yet 18 so cannot be a director.
Submitted: 1 year ago.
Category: Australia Law
Customer: replied 1 year ago.
I have an annual turnover around to $500,000 AUD and have just applied for a TFN
Customer: replied 1 year ago.
Personal TFN
Customer: replied 1 year ago.
Ideally I would like a business TFN to run as separate entity
Expert:  Patrick H. replied 1 year ago.

Hello and thank you for your question.

If your business is making that much money I would strongly recommend you engage an accountant to help you set up your affairs and accounts to minimise the tax consequences.

Even without an accountant, income tax is only normally payable on net income, not revenue. What you have to do is keep records of both your revenue and expenses so you can declare both in your tax returns and activity statements and you should then normally only be taxed on the difference.

I trust the above assists.

Please rate my answer.

Patrick

Customer: replied 1 year ago.
Okay, could you actually answer my question though
Expert:  Patrick H. replied 1 year ago.

Sorry, perhaps I wasn't clear enough.

In relation to paying tax only on your profits, I You asked:

"How can I open a business bank account and avoid paying tax on all of my revenue and only pay tax on profit."

I answered:

"What you have to do is keep records of both your revenue and expenses so you can declare both in your tax returns and activity statements and you should then normally only be taxed on the difference."

The difference between revenue, less your expenses is your profit, and that is what you will pay tax on if you maintain records of of both your revenue and expenses and report these figures in your tax returns.

If your request for a further answer is directed at how you open an an account, the answer is that you will generally need to involve your legal gaurdian, and open the account directly with your guardian's signed approval or have an adult appointed to run the account in your stead as a trustee. This is because when you open a bank account you are essentially entering into a contract with the bank, and as a minor you generally are not considered to have the legal capacity to contract unless a legal guardian has approved the contract.

I trust that answers your question.

Please rate my answer.

Patrick