Problems for public businesses dealing with business of a unregistered trust

[John]

Hi Thomas,

Since April 2022 I’ve been running my enterprise through a private foundation (set up by Peter Duff). When invoicing clients for the first time, I send them my invoice (no GST is included – it is labelled an ‘Invoice’ not a ‘Tax Invoice’) and also a completed ATO form – NAT 3346 and tell my clients that they are required to keep that document filed for 5 years. They don’t need to submit that form to the ATO.

Peter Duff gave the instruction to send the ATO form and also gave me a template for invoices.

Have never had any issues. Some clients ask me about the private foundation and that gives me a good opportunity to tell them more about Solutions Empowerment.

I’m not sure if this applies to sending out invoices from a private trust.

John

[Thomas]

Hi John, hope all is well. I have gave samples to the owner of the business with a dummy invoice and the form 3346 but his questions are can he claim against my invoices on his BAS and would he have any other outgoings to ATO as in the way of any hidden payments that would cost him more than employing someone on the books over contracting me?

Peace and Blessings

Thomas-Edward

[morag-janet-of-the-hill-family]

Q…Can I run my business as a private trust?

A …You would operate your business as it is now. Set up your foundation

and then invoice from the business (company) to foundation. If the

company has profit of $50k, then the foundation can issue an invoice to

the company for $50k for administration services. This legitimately transfers the money from one entity to the other and the tax as donations. You as the teacher, would no longer be paid as an

employee of the company, you can now be hired by the foundation, so

that would be additional to the admin fees, be creative, professional

consulting would be good. Best to work this out to be split over each

BAS period and do the final BAS for the year with the catchup. I did

this with a company to a partnership, so it is more beneficial to do the

same to a foundation instead. Personally you would not be paying tax

because you would be a volunteer for the foundation, donating all your

professional earnings to the foundation. The foundation does not have

any obligation to report to ato, and neither does a man or a woman.

The ato can audit the company, that is the rules, but they cannot audit

you or the foundation, that is PRIVATE. The foundation needs to

produce with first invoice to company, the form Statement by Supplier

to the company to show the company the foundation does not have an

abn and is tax exempt. This lets the company off the hook for

withholding 48.5% if paying to an entity without an ABN.

[Thomas]

Hi Morag, my situation is slightly as a contractor role through my trust to a public company hence the question that the owner of the company is asking whether he would have to pay more to the ATO at a later time.

[morag-janet-of-the-hill-family]

Maybe ask your question at the next Q and A… https://solutionsempowerment.org/event/general-qa-october-9/

solutionsempowerment.org

General Q&A: October 9 – SolutionsEmpowerment.org

General Q&A: October 9 – SolutionsEmpowerment.org

[Thomas]

Thank you Morag 😃

[morag-janet-of-the-hill-family]

👍