Long hours and physical demands characteristically common of tradespeople, often sees financial and business obligations not given the right amount of attention.
As a result, in correct structures, missing legislative requirements and licences and paying penalties can play havoc with cash flow and hamper the path to success. Below we’ve outlined some common pitfalls many tradies face in business.
Employee or contractor?
Contractors have different tax and super obligations to employees. You can be an individual (sole trader), or working in your own company, partnership, or trust. You might even call yourself an independent contractor, sub-contractor or a ‘subbie’. What’s the difference?
Hold The Right Licences
They vary state by state, by type and size of job and even by business structure. Don’t get caught out by not having the right licences in place. Search the Australian Business Licence and Information Service (ABLIS) website to find out what licences and permits you need for your industry. Search the Australian Business Licence and Information Service (ABLIS) website to find out what licences and permits you need for your industry.
Protect Yourself With Insurance
Tradies are exposed to more risks than almost any other occupation. As well as compulsory insurance such as workers compensation, there are a number of specific insurance options required of businesses in the construction industry.
In most states, builders must be licenced and must obtain specific insurance cover before they can obtain a licence. Insurance requirements often vary depending on your business type and state licensing requirements Find out more about general insurance options for business.
A good accountant will assist you with everything from your regular tax obligations like BAS, GST and Superannuation as well as helping you establish the right business and tax structure for your operations. There are a number of finance and tax measures specific to construction businesses, including Personal services income (PSI) and Taxable payments reporting.
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