Many businesses have adopted a work from home strategy to manage their workforce remotely during the past year. However, there is a difference between working remotely from home and making your home your workplace.
Home-based businesses are businesses where the residence is also the primary place for you to conduct your work or run your business. Maintaining a home-based business, especially if one is in the start-up phase, can take a lot of discipline and dedication to run, establish and manage. It requires strong management skills, industry knowledge and a long-term vision to grow and succeed with your business.
With nearly 1 million people running a business from home, they are a large part of the Australian business community. Common kinds of home-based business can include trade contractors, freelancing, virtual assistance, bookkeeping, web design and many more.
When starting a home-based business, always comply with the tax obligations of the ATO. You may be required to register for:
- A tax file number (TFN)
- Australian business number (ABN)
- Goods and services tax (GST)
- Pay as you go (PAYG) withholding
- Fringe benefits tax (FBT)
As with all businesses, home-based businesses have specific tax obligations that you may need to know. Always take financial advice from an accountant, as this advice can help when trying to figure out what expenses you can claim or whether you have to pay capital gains tax when selling the home.
