Sole trader/sub contractor help needed.

[martrix]

OK, help needed here for a newbie.

Basically my working life up until now I have been an employee and have always had tax/super/workcover taken care of by the employer.

I am now going to be working for myself as well as doing work for a company in a factory as a sub contractor(as a labourer), possibly a few months at a time at the one place.

So what is the best way to set my self up? Or what is the bare minimum I need to do to start working as a sub-contractor for a company?

After a brief read at Business Victoria website, I'm guessing I need to set up as a Sole Trader and get an ABN? Guess I can also find out tax & super info from the ATO website.

Ive got lots more questions , but I will see what info anyone has from here, cheers.

[ozwinner]

Bare minimum is an Abn.

Al

[rat52]

Don't foget the insurance.

Check out a few associations that represent the type of work you intend to do.

Unions can also be a source of info but you usually have to join.

State gov web sites are another place to look.

[mic-d]

G'day Matrix, when I was in your situation about 6 years ago my accountant recommended setting up a shelf company and a family trust with the business being trustee for the family trust. Good idea to speak to your accountant or someone who understands this system cos I can't remember all the details now. You have to pay a fee to ASIC each year but your private assets are safe. I'd advise having public liability insurance too.

CHeers
Michael

[Cliff Rogers]

All depends on how much you are going to be earning in a year.

Get an ABN for sure.

Also get Workcover (what we call it in Qld) & Public liability insurance.

Register for GST if you are going to earn more than $50K/annum.

Only go into companies & trusts if you are into bigger money & you can split some of it with your spouse. (bookkeeper, storeman, boxpacker, )

[munruben]

You have to get an abn no matter what, thats the law if you are carrying out any business activity.I would go sole trader. its much simpler.

[journeyman Mick]

Besides the ABN don't even consider contract work without accident insurance and public liability insurance. It's a cold hard litigious world out there and you don't want to lose everything you own.

Mick

[Poppa]

I'd agree with the others - just get an ABN for starters and set up as a sole trader - this is a minimal set up and you don't need to set up a company. Later, if you are earning fair dollars and this looks like it will work for you and you like working for yourself (not everyone does), then you can set up the company/trust thing if you want.

If you do go down the company/trust route, I would advise getting a good accountant to give you some advice. And I stress the 'good' part - some accountants don't seem to know a lot about this stuff.

[billbeee]

Martrix,
don't go too cheap with your pricing!
Coming from working on wages, anything might seem like good money, but remember what you will be getting from now on is all you will be getting. Whatever your hourly rate was on wages I'd say double it. At least.

As soon as you start working for yourself you have heaps more bills to pay.
Just off the top of my head you will have to pay for
Insurance, super, extra accountancy, vehicle expenses, tools, holiday pay, more bank fees etc.etc.

There is heaps of small business help out there. Get as much advise as you can.

Regards
Bill

[rat52]

Billbee is dead on the money.

5yrs ago I would't get out of bed for less than $40 per hr.

Although all expenses can be a tax deduction, remember, you have to make it before you can deduct it.

[Rossluck]

G'day Rat, when I was in your situation about 6 years ago my accountant recommended setting up a shelf company and a family trust with the business being trustee for the family trust. Good idea to speak to your accountant or someone who understands this system cos I can't remember all the details now. You have to pay a fee to ASIC each year but your private assets are safe. I'd advise having public liability insurance too.

CHeers
Michael

This is the advice I'd run with Martrix. You need to run your individual particulars past an accountant so that he or she can advise you and do your tax and so on. Good luck with it.

[Sturdee]

I am now going to be working for myself

The first question you must answer is are your activities likely to incur any liabilities if you did do something wrong, could you be sued for damages, will you be borrowing from creditors etc.

If the answer is a definite no then the simple advices gioven MAY be adequate, but not if circumstance change in the future and it is cheaper and easier to now plan for the futue.

If the answer is possibly, than you must consider the possibility of your assets being lost (your house, car and workshop tools etc) and seized if you go broke. If so, you should consider incorporating yourself into a company and possibly a trust. Whilst it is not the cheapest option it's the safest option.

Hence obtain good advice from a good accountant and let him set up the structure that is appropriate for your current and future needs.

Having been involved with a number of cases where the client did get into trouble and was able to walk away with all his assets in tact, and knowing one who did not do so and lose his house, I can not stress this aspect of business planning enough from the beginning.

Sure a sole trader and ABN will get you started but you would be ill advised to do so.


Peter.

[martrix]

Thanks for all of the good advice. The ABN was pretty easy to get and only took about 30min online. Now Ive gotta think of a name. Have been thinking of a name for a long time, but every time I come up with something I like it has already been registered and the domain name taken. Going to have to start thinking wildly obscure which I thought I already was.

To start with I will only being doing joinery assembly as part of a team in a Shopfitting factory so I am not sure if or how much Public Liability insurance I need, but I will look in to it before I start.

Can anyone recommend some company's for this purpose?

As for bookkeeping I know I don't really need an Accounting program, but I want to learn how to use one so I can improve my financial skills which up until now have been, umm not golden.

So I have been playing with trial versions of Quickbooks and MYOB. Quickbooks has the votes so far and the interface seems a little easier for the accounting challenged , so if anyone has some opinions as to the pros/cons of either programs (or another one) I would appreciate your thoughts, cheers.

PS. any links to sites that could help with Business terminology/running tips for a newb would also be good.

[ozwinner]

So I have been playing with trial versions of Quickbooks and MYOB. Quickbooks has the votes so far

I tried both before going for QB, I wouldnt say its easy, but its easier than MYOB.

Al

[mic-d]

I am not sure if or how much Public Liability insurance I need, but I will look in to it before I start.

Can anyone recommend some company's for this purpose?

I have public liability through Elders. They have been good to me, but haven't needed a claim yet. When I recently increased my limit from 5M to 10M, the new premium turned out to be less than I was paying before!

Cheers
Michael