Do I have to pay GST to buy or sell a business?

Posted by James Price | JPAbusiness on 04-Nov-2020 02:00:00

When working with clients who are either buying or selling businesses, we’re often asked: ‘Will I have to pay GST?’

The short answer, according to the Australian Tax Office (ATO), is:

No GST is payable on the sale of a going concern if certain conditions are met. (A ‘going concern’ is a business that is operating and making a profit.) However, as the seller, you may be able to claim input tax credits for GST you paid on expenses relating to the sale.

Of course, it’s never as simple as one paragraph when it comes to tax, so we’ve asked our business analyst Shirley Jin, who is also a CPA, to clarify those ‘certain conditions’ mentioned, and when you can and can’t claim input tax credits for GST paid on sale expenses.

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Topics: Buying a business, business advice, selling a business, Business advisor, James Price, JPAbusiness, Parramatta, taxation, GST, Central West NSW, business sale, business sale transaction advisor, tax advice

When should I tell my team I'm selling? [Video]

Posted by James Price | JPAbusiness on 09-Sep-2020 02:00:00

Our guiding principle is that open and transparent communication with your staff is always a positive thing.

However, this is complicated by the fact selling a business is a sensitive issue and disclosing the fact it’s for sale can be detrimental to a business’ operations.

A pending sale can unsettle your team and, if it gets out in the market, it can cause difficulty with clients or suppliers.

In this video I share some strategies for sharing business sale plans with key staff:

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Topics: Selling your business, Video, staff management, business advice, selling a business, Business advisor, James Price, JPAbusiness, business basics, Parramatta, Central West NSW

How do earnouts and contingency payments work? [video]

Posted by James Price | JPAbusiness on 02-Sep-2020 02:00:00

If you are considering selling a business at the larger end of the SME market, with a longevity of orders and forward earnings, it’s important to consider the concept of earnouts and contingency payments, because it will come up from interested parties.

It’s also important to recognise that earnouts as part of the purchase price have capital gains tax implications, so expert advice is essential.

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Topics: Buying a business, Capital gains tax, business advice, selling a business, Business advisor, James Price, seller earnouts, JPAbusiness, Parramatta, contingency payment, Central West NSW, transaction advice, business sale transaction advisor

Do I need a valuation before selling a business? [video]

Posted by James Price | JPAbusiness on 26-Aug-2020 02:00:00

The simple answer is ‘no’, you don’t need a valuation to sell a business.

However, in terms of engaging JPAbusiness to sell your business, the answer is ‘yes’: we always recommend clients have their businesses independently and professionally valued before they invest time and money in a sale process.

In this video I explain how our first experience of helping a client sell their business – combined with our many years of subsequent experience – has shaped this philosophy regarding valuation and its role in a successful sale process.

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Topics: Business Value, Video, business advice, selling a business, Business valuation, Business advisor, Business selling, JPAbusiness, Parramatta, client case studies, Central West NSW

How to prepare your business for sale [eBook]

Posted by James Price | JPAbusiness on 19-Aug-2020 02:00:00

In a perfect world, business owners would be preparing their businesses for sale from the moment they established or purchased them. For example:

  • important business structures, systems and processes would be carefully devised and executed from day one;
  • succession plans would be in place and understood by senior members of the team;
  • clearly worded partnership agreements would reduce the chance of misunderstandings on exit, and so on…
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Topics: Selling your business, Free download, business advice, eBook, selling a business, Business advisor, Business selling, vendor due diligence, JPAbusiness, Central West NSW, business sale

What’s happening in the business transaction market

Posted by James Price | JPAbusiness on 24-Jun-2020 02:00:00

Taking a look at JPAbusiness’ website analytics this week, I noted that our Business Transfer Checklist has been a popular download over the past few months.

It got me thinking about the state of the business transaction market and the fact some may be surprised to hear that business sales are still going on during such an uncertain time.

I know from our contact with solicitors that sales and acquisitions, and legal services relating to these, have certainly declined since COVID-19 restrictions came about.

However, from what I’m seeing on the ground, transactions that are still happening – or being planned or contemplated – are being driven by a range of factors, including the following:

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Topics: Buying a business, Business transfer, business advice, selling a business, Parramatta, COVID-19, coronavirus, Central West NSW, business news

Parramatta new home base for JPAbusiness

Posted by James Price | JPAbusiness on 18-Mar-2020 02:00:00

Last year we told you about our move to Parramatta in Western Sydney. Well, it’s been just over 12 months and we’re loving it!

It’s now time for us to consolidate our physical footprint within one office, which will be the Parramatta office. As a result, we have closed our Orange office, but our corporate address and roots remain firmly in the central west, at Blayney, NSW.

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Topics: business advice, selling a business, Business valuation, Business advisor, business valuer, running a business, James Price, JPAbusiness, Parramatta

How your inventory management impacts business sale price [case study]

Posted by James Price | JPAbusiness on 11-Mar-2020 02:00:00

A few years back the JPAbusiness team facilitated the sale of a business involved in import and distribution.

It was a well-known, independent brand that had been established for well over 50 years and had solid bottom-line performance.

Unfortunately, when it came time to exit the business, it soon became apparent there was too much inventory (stock on hand).

We negotiated a price for the goodwill, plant and equipment etc, based on a multiple of Business Maintainable Earnings (BME), which is essentially the cash flow of the business.

Then it was time to address the stock value.

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Topics: Business Value, Selling your business, Advice, Cash flow, Inventory, selling a business, Business advisor, JPAbusiness, Parramatta, Orange NSW, cash flow management

4 marketing tips when selling a business [video]

Posted by James Price | JPAbusiness on 22-Jan-2020 02:00:00

No one knows your business like you do and, whether you choose to sell it yourself or work with a broker or advisor, you will play a key role in the marketing process.

Your extensive knowledge of the business needs to be translated into marketing material that will inform potential purchasers of the opportunity your business presents.

The following video contains 4 key tips for marketing a business for sale: what they are and how they can contribute to the ultimate success of a sale.

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Topics: Selling your business, Advice, Brand and marketing, Video, selling a business, Business advisor, Parramatta, Orange NSW, marketing

Capital gains tax (CGT) issues to consider when selling a business

Posted by James Price | JPAbusiness on 08-Jan-2020 02:00:00

In 2014 we published an eBook titled Capital Gains Tax – Issues to consider when selling a small to mid-sized business. This eBook drew on extensive experience, including that of our guest contributor Michael Pisani, partner at Chapman Eastway, and remains one of our most popular publications to date.

Given the far-reaching scope of Capital Gains Tax (CGT) and the ever-evolving nature of taxation laws, in 2017 we released Capital Gains Tax 2.0 – Issues to consider when selling your business. The new eBook did not replace the original, but instead complemented it.

Over the past few months, the JPAbusiness team has been reviewing and updating the information in both eBooks, to reflect the most recent changes in Australian tax policy.

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Topics: Selling your business, Advice, Capital gains tax, selling a business, Business advisor, tax minimisation, Parramatta, Orange NSW, CGT

 
Disclaimer: The information contained in this blog is general in nature and should not be taken as personal, professional advice. Readers should make their own inquiries and obtain independent, professional advice before making any decisions, taking any action or relying on any information in this blog. 
 
 

 

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