Hi all

(My apologies if I’ve posted this in the wrong section of the café, but it seemed the most appropriate).

I am planning on running magic as a part-time small business, while still doing my full-time job as a public servant, and am interested to hear from any Australian magicians who are already doing this.

My reason for asking is that the ATO has been less than helpful in their advice as to how to set-up a sole-trader business (I’ve called them three times and gotten three different interpretations…) and some of the warnings attached to registering for an ABN and tax obligations are quite alarming (fines, prosecution, etc.).

Things that I’m not sure about:
• Can I get by with only having an ABN or do I need to register as a business a well?
• When registering for an ABN there is a category called “Professional artist e.g. actor, writer, musician, model” which later says that it covers Entertainer. Is this the correct one to use even though I will only be running the show part-time? (The ATO website then goes on to say that if I’m not a professional artist then I might be prosecuted, hence the reason why I’m asking for your advice here).
• Do you know of a any penalty or disadvantage if I set-up as sole-trader but earn less than $2500 per year? (The figure came from ATO but they weren’t clear as to how my earnings would affect my tax)
• As I live in Canberra my market is going to be small and erratic, so I don’t know if this also will affect my business and tax obligations

Any advice regarding how you set-up and run your business is gratefully accepted as I currently am unable (and, quite frankly, scared) to start running shows until I know the proper way of doing this.

Please feel free to PM me regarding this.

Geoffrey,

The ABN is Commonwealth issued while a business name is registered with the State the business operates in. As you are in the ACT I'm not sure if you would go to a Commonwealth or Territory department, but whichever it is, they will have the information you need. The ATO is not the best source of such information - whichever agency is responsible for small business will have everything you need.

I do know you do not need to register as a business if you operate as a sole trader under your own name - not stage name, but regular name. If you wished to operate under a stage name (not on stage but for business purposes - payments etc) you would need to register that name as a business name. I don't think the penalties you mention are anything to be concerned about - they are not there to penalise people for a lack of business success but to ensure people don't register business names they have no intention of using (legitimately?).

Probably the main reason you would need an ABN is for GST purposes but unless you are expecting to make tens of thousands of dollars in your first financial year it would be silly to register for GST and have to do all that paperwork every 3 months. You do need an ABN to write a Tax Invoice to anyone who is employing you OR there is a pro forma used by people working in a business part-time or as a hobby and not earning enough to be subject to GST. When I managed a club a few years ago some entertainers would use that in place of a Tax Invoice to bill us.

I wouldn't be too concerned about any disadvantage from earning too little money - the ATO's main concern is if you earn too much I would think that if you earnt $2500 in a year you would easily have Tax Invoices that would show you spent an equal or greater amount on your business venture - and thus no profit - remember it is the profit that matters in business, not the incomings.

Anyway the main thing to do is discover which government agency in the ACT administers small business registration and head to their website and then office - and they will have the information you need, clearly articulated.

Many thanks Destiny!
That answers most of my concerns and gives me somewhere to confirm the relevant information.

May your punters never see you palming the card!