A common career pathway that many mining professionals contemplate is setting up a consultancy. This could be for a variety of different reasons but it is important to understand some of the key tax issues that may apply in this scenario.
In this episode, Craig Barry and Scott Lindeblad discuss two important tax issues – setting up a structure to trade through and the different tax issues and opportunities that might apply.
One of the first considerations for anyone looking to start a new consultancy is whether to set up a trust or company, or whether to trade as a sole trader. Craig and Scott discuss a number of items to evaluate when making a decision about structure, including cost, purpose and commercial reasons. They discuss different structure types and the importance of working with an experienced accountant, lawyer or business advisor throughout the process.
A lot of the decision making around structuring centres around the current circumstances, but also understanding future plans and expectations. There are a variety of issues to consider, including splitting income, paying yourself a salary and superannuation, company cars, and personal expenses to name a few.
Craig and Scott go through a case study about a husband and wife in the 50’s who both work in the mining industry. They discuss details regarding their financial position and current circumstances and the advice they received on the best way to structure their consultancy.