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511 posts

Ultimate Geek
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Topic # 191374 2-Feb-2016 15:06

Hi Guys,

 

I am sure I know the answer to this but just thought I will ask anyways.

 

I am planning on doing some work from home (business) would I need to register as a business?

 

Lets say I want to start a law mower repair business from home (I doubt lawn mowers break a lot but would I need to register as a business if I was doing maybe 3-4 repairs if that a year?)

 

I assume the answer is yes since the tax man want there cut?

 

P.S: I do have a full time job this would be something on the side as extra income.

 

Thanks 


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Uber Geek
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  Reply # 1483633 2-Feb-2016 15:13
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GST:

 

Required to register for GST

 

You must register for GST if you carry out a taxable activity and if your turnover:

 

  • was over $60,000 for the last 12 months, or
  • is expected to go over $60,000 for the next 12 months
    (This equates to $5,000 per month. If your turnover is $5,000 per month and you expect to maintain that level all year, you'll need to register for GST.), or
  • was less than $60,000, but you include GST in your prices, for example taxi drivers who have included 15% in their taxi fares.

You can choose to register for GST even if your annual turnover is less than $60,000, as long as there is a taxable activity. This is referred to as voluntary registration.

 

 

 

Otherwise I believe you can just operate as a sole trader and record any income on your personal tax return, which depending on your level of income will be taxed at the appropriate rate.

 

 

 

IANAL and IANAC - so if you are intending to do this properly engage an accountant.


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  Reply # 1483634 2-Feb-2016 15:21
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I would check with the council too. If running a lawn mowing business, i may not be suitable for a residential environment, such as doing repairs could potentially cause a noise problems.

 

I would also check with the IRD as to your tax requirements. But you will liekly need an accountant too, which starts at about 1k a year, and they will sort out all the company stuff for you.


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  Reply # 1483658 2-Feb-2016 15:42
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 This depends on a number of factors, including the type of business and the area. Some businesses have different limitations, most if not all councils require food prep premises to be inspected for health reasons, for example, but if you're just selling cardboard boxes in most cases you won't need anything. You will need to register for GST, either as an individual or a business, if annual revenue is over $60k in a 12 month period, or likely to be, or you want to provide GST invoices.





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  Reply # 1483686 2-Feb-2016 16:03
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You might want to notify Your Insurance company too.


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  Reply # 1483687 2-Feb-2016 16:03
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Oriphix: Lets say I want to start a law mower repair business from home (I doubt lawn mowers break a lot but would I need to register as a business if I was doing maybe 3-4 repairs if that a year?)

 

I assume the answer is yes since the tax man want there cut? 

 

If you're repairing three or four lawnmowers a year, I doubt you'll need to register as a business. You certainly won't need to register for GST unless you're charging $15,000-20,000 per mower repair, in which case I don't think you'll be doing many.

 

The standard IR3 individual tax return form allows you to enter your full-time salary income (Question 11A) as well as any income from self-employment (Question 23).

 

Check with your local council that you are allowed to run the type of business from your home, and check with ACC regarding any levies required for self-employment.


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  Reply # 1483706 2-Feb-2016 16:26
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Register as a business then claim the mortgage pro rata on your business premises in your accounts....and the phone...and the electricity bill...and the rates....etc






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  Reply # 1483710 2-Feb-2016 16:30
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Geektastic:

 

Register as a business then claim the mortgage pro rata on your business premises in your accounts....and the phone...and the electricity bill...and the rates....etc

 

 

Has to be a real business, not a hobby type thing that you are doing just to claim stuff back. That's why I have not registered for GST yet.





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Ultimate Geek
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  Reply # 1483722 2-Feb-2016 16:31
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Geektastic:

 

Register as a business then claim the mortgage pro rata on your business premises in your accounts....and the phone...and the electricity bill...and the rates....etc

 

 

 

 

You don't actually have to register as a business to do that.  A sole trader can claim a proportion of costs.


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  Reply # 1483780 2-Feb-2016 17:55
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No you do not have to register as a business.  Their isnt such a thing really anyway.  You can chose to register as a LLC if you would like, and that would be a good idea for limiting your liabilities.  Plus its easy and cheap to do yourself.  

 

Alternatively run the business as a sole trader, that means limitless personal liability (they could take your house as an example) but you need to do literally nothing in terms of paperwork.  Get a separate bank account and an excel spreadsheet then just file an IR3 every year and send in a copy of your "books".


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  Reply # 1483912 2-Feb-2016 20:58
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Sole traders don't have to register as a business. So long as you pay taxes (GST has a threshold, income tax does not) you're all good to do whatever you want. Background: self employed for 10+ years (sadly, not right at the moment).





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