What is this STS all about?

      The Simplified Tax System is a new method for Business Entity Income Tax. It allows people starting off in Business (rather than in the Cash Economy) to effectively manage their Business. 

      It eliminates the odorous hassles of overbearing book keeping (accountancy) and Taxation Compliance. In the past, this had bedeviled entry level Business and made the Cash Economy look attractive. 

     Why not? Everyone else was doing it

     It allows entry level Small Business to get on with the job of supplying Goods and Services and building up their own Business. On the way, they would continue to learn the “Tactics” and “Strategy” of Small Business that is a requirement to succeed.

     It might be of value to understand that at least 80% of Small Business will go broke before they master the Science of "Tactical" Management and the Art of “Strategy”. 

    This was the reason the greatest Australian entrepreneur, Sir McPherson Robertson KBE (Chocolates and Airway) choose Croquet to teach the Science of “Tactical” Management and the Art of applying “Strategy” to his ever increasing Small Business Retailers around Australia.

    Small Business (and Big Business) going broke, in part, can be blamed upon the Government. It is therefore, an embarrassment for any Government for any Business to go broke and thus add to the numbers of the unemployed. 

    Not to mention the loss of profits to other businesses to whom they may have owed considerable debt – and the loss of the Government's Income Tax.

    Why did the STS came about?

   The Prime Minister of Australia, John Howard, introduced the GST (Goods and Services Tax) to catch some of the people who were not paying any Income Tax. 

      Also, it was found that some people with money were starting up a Business(s) just so a Tax Loss could be claimed to minimize their own Income Tax. They were either “Avoiding” tax or “Evading” tax to become wealthy. At one time there was a legal difference between ligitimate Tax Avoidance and sometimes illegal Tax Evasion.

     But it all backfired.

      He confused the issue of legal “Tax Avoidance” with, sometimes, illegal “Tax Evasion”. So confused in fact, that the Pope was also confused. He made it a Mortal Sin (or Excommunication) for Catholics to do either. Not the done thing.

       Many of the confused decided to join the dreaded “Cash Economy”. This took business away from “Big Business”. So the PM was told to get his A into G down to Melbourne to explain himself to Shylock Fagin and Co.

     He was told to repair the damage he had done with the GST. He should “Simplify Tax” for Small Business. This, Shylock Fagin and Co. predicted, would bring the confused sheep back into the fold from the Cash Economy. 

     And bring them back into their Stores and Shopping Centers.

     He started first, to upgrade the Cash Economy into the area of “Hobbies”. This took away the stigma of Tax Evasion - at least for the little fellows. 

     So “Hobbies” has now become the legitimate apprenticeship for “Small Business.

     See “Hobbies” elsewhere.

     Who can join the STS Club?

    You can volunteer to join the Club if you have a Business Entity. See “What is a Business”

NB. If you only have rental properties but without a Small Business you are not eligible.

    If you are a Small Business with a turnover of less than $1,000,000 (One Million Dollars) with normal depreciable assets of less than $3,000,000 (Three Million Dollars) you can join the Club.

     If you leave the Club there are limitations for rejoining

Which are the Benefits if you have joined the STS Club?

(1)   Total ITAA97 s8 (1) tax deduction for all assets that cost less than $1,000 ($300 if not in the Club) This means you can buy a top Vampire Croquet Set for four Players for the Staff and/or Workers as a total Tax Deduction.

(2)   This means less paperwork for Tax Compliance for the Depreciation Schedule.

(3)   Other assets are pooled and get diminishing value depreciation in different ways. (See Depreciation)

(4)   All normal Business ITAA97 s8 (1) tax deductions apply. (See Business Deductions)

(5)   Trading Stock accounting is simplified. If there is less than $5,000 change from year to year there is no need for the paperwork. More time to play ProAm Croquet?

(6)   You pay no tax on your ordinary income until it is received.

(7)   You get a full deduction for payments made for things to be done in the next 12 months.

(8)   As an owner of a Vampire Croquet set you might like to be involved in ProAm Croquet. You would thus be able to be taught the “Tactics” and “Strategy” by fellow retired Business Owners at Tax Deductible Seminars. 

Like at Wanaka New Zealand.

    Where does the STS apply?

    With Partnerships, if the Partnership is carrying on the Business, it is the Partnership that joins the Club, not the individual Partners.

    Otherwise, it applies to all business entities, Trusts, Companies and including primary industries.

  When can one join the STS Club?

    If you volunteer to join the STS Club, you can do so for the related income year. If you want to join today then the next Income Tax Return will be within the STS. 

    You will, hence forth, be called or referred to as an STS Tax Payer. No need to advise your major shareholder, the Australian Tax Office (ATO) 

    Tell them I sent you so I’ll get a bonus.

     If you choose to leave the STS Club you will have to notify the ATO using the form supplied for that purpose. Ring them to have them send the form. Better still, write to them.

      Tell them how well they are doing their job. Usually, they cop a lot of abuse. So it might make someone’s day and you are sure to get that form. It might be cheaper and the ATO can’t forget a letter to the boss.

    One disadvantage of choosing to leave the STS is that it might take you five (5) years to get back in. However, by that time, the gold posts will surely be shifted.

     However, if you are forced to leave the STS Club because your Business is no longer eligible you can rejoin the Club when your Business again becomes eligible.

    How does a Business Entity join the STS Club?

     On your next Business Tax Return there will be some boxes to tick or other means of informing the ATO Computer. How it is set out in that year’s Return is any ones guess. They have a tendency to change the playing field from time to time. 

      No doubt it will take a moment of your time to peruse the related Return to acquire the entry pass.

 {Next}  {Back}  {Index} {Comment} {E-mail}