Your first year in business is not tax-free. Any income tax from your first year in business is usually due by 7 February the following year. If you have an agent it will be due by 7 April. This tax is due as a single payment, so you might need to budget for it.
You can choose to make voluntary payments of tax during your first your of business, to help spread the cost. If you make voluntary payments you may be entitled to an early payment discount.
Early payment discount
If you are self-employed or in a partnership and make voluntary make tax payments during your first year of business, you may get a 6.7% early payment discount.
To qualify for an early payment discount you must:
- be self-employed or a partner in a partnership
- get most of your income from the business
- make a voluntary income tax payment before the end of the income year
- elect to receive the discount before the income year’s tax return is due
- not have to pay provisional tax in the income year, or in the past 4 years
- not have received an early payment discount, any self-employed income, or any partnership income in the past 4 years, and
- have started a new business.
Contact us to find out more.