The paper ''Rule-Making Processes of the ATO'' is a wonderful example of an essay on business. In Australia, a small business refers to a business that employs less than two individuals. Small business groups include micro-businesses, non-employing businesses, and other small businesses (Australian Bureau of Statistics 2009). Microbusinesses employ less than five individuals, including non-employing businesses. Non-employing businesses are partnerships or sole proprietorships without employees. Other small businesses include those that employ five or more individuals, however not more than twenty. Small businesses usually have various distinctive organizational or management characteristics such as principal decision-making by the managers or owners; independent operations and ownership; close control by managers/owners who are the main contributors of business capital.
Barkoczy (2012) defined a small business as an individual’ s, partnership, trust, or company that undertakes business activities. The business is a courier service whereby the brothers deliver or pick up goods for their clients. The brothers have one particular client who has a large distribution business, though this distributor does use other couriers, as there is too much work for Buzz and Fuzz. The two brothers work from Fuzz’ s garage, which has been converted into an office.
The brothers own three vehicles, which they use for the business. The office equipment, the vehicles, and other utilities used in the business are worth about $800,000. The brothers reckon they had a turnover of about $1m last year, though their expenses were considerable, particularly petrol and vehicle maintenance costs. Broadly, this is a small business as it has a cumulative return of less than $ 2million for the previous income year. Buzz and Fuzz's small business is thus required to be compliant with the Australian Tax Office (ATO). As a small business entity, Buzz and Fuzz can claim a depreciation deduction in case they hold depreciating assets that have a relevant connection with running the business that is used to derive assessable income.
When running a small business, the simpler depreciation rule applies.
Australian Bureau of Statistics 2009, Small Business in Australia, Viewed May 20, 2013, http://www.abs.gov.au/AUSSTATS/abs@.nsf/mf/1321.0
Australian Taxation Office 2011, Tax basics for small business: Information about your tax obligations and entitlements, NAT 1908-07.2011.
Australian Taxation Office 2009, Personal services income for companies, partnerships and trusts, NAT 72510-05.
Sarkozy, S 2012, Core Tax legislation and study guide, CCH Australia Limited.
FC of T v Raymor (NSW) Pty Ltd 90 ATC 4461