Accountants for electricians, plumbers and trade businesses
A trade business can be flat out and still short of cash. Materials are paid for before the job is invoiced, the ute and the tools are the biggest assets on the books, BAS and PAYG instalments land whether the customer has paid or not, and the line between a subbie and an employee carries super and payroll tax consequences. A general accountant can lodge the returns. Running a trade business on the numbers takes a team that works with tradies every week.
New Wave works with electricians, plumbers, carpenters and other trades across the Gold Coast and Australia, from a sole trader with one van through to companies running several crews. Builders have their own page: building and construction accountants.
The questions tradies bring us
The ute, the van and the tools
A vehicle built to carry a tonne or more sits outside the car limit on depreciation. In a company, a work ute is only exempt from fringe benefits tax where private use is limited to home to work travel and minor, infrequent private trips. As a sole trader, the claim is the business share of running costs, best evidenced by a logbook. Tools and equipment can often be written off immediately, but the instant asset write-off threshold changes almost every year, so we confirm it before you buy.
Which jobs make money
Job costing in Xero, fed by the job management app you already use, shows every job’s quoted price against materials, labour hours and subbie costs as it runs. That tells you which customers, job types and quotes are worth chasing, and whether the hourly rate covers the van, the tools and the admin time. See bookkeeping.
Subbies and the taxable payments report
A business that provides building and construction services and pays contractors to do that work generally has to lodge the taxable payments annual report by 28 August each year, which catches most electrical, plumbing and carpentry businesses using subbies. It lists each contractor’s ABN and total paid, which the ATO matches against what the contractors declare. We code contractor payments in Xero as they happen, so the report is checked, not rebuilt.
Contractor or employee
Calling someone a subbie and taking their ABN does not settle it. For tax, the written contract now carries most of the weight, but super has a wider test: someone contracting in their own name and paid mainly for their labour can still be owed super, and Queensland payroll tax has its own contractor provisions once wages pass the threshold. We review the contracts and how the work is done, advise on the super and payroll tax exposure, and reconcile the wages accounts in Xero.
Moving from sole trader to company
Personal tax reaches 47% including the Medicare levy, while a small company pays 25% on profit it keeps, so the move usually pays once profit runs well past what the owner lives on. Loans out of the company fall into Division 7A, and a one person company must pass the personal services business tests, which a tradie paid for a result, using their own tools and fixing their own defects usually does. A small business rollover generally moves the business across without an immediate capital gains tax bill, and a QBCC licence then sits with the company and its nominee, with the company’s balance sheet meeting the minimum financial requirements. See business structuring and start-up services.
What the work looks like
- A designated team covering the trade business, the owner’s personal tax and any family trust or holding entity, on one monthly package agreed up front.
- Bookkeeping in Xero with job costing and contractor payments coded for the taxable payments report.
- Tax planning in May with real numbers, not a tax return in October.
- Annual review of the structure, the vehicle arrangements and, for QBCC licensees, the minimum financial requirements.
- Advisory for the next move: a first employee, a second crew, a company or a sale.
Who we work with
Electricians, plumbers and gasfitters, carpenters, air conditioning businesses, tilers, painters, roofers, landscapers and solar installers, across the Gold Coast, Brisbane and interstate.
Getting started
Book a FREE discovery call, 30 minutes with a New Wave team member. Bring your last tax return, a recent BAS and what you pay contractors. If it is a fit, a proposal follows within the week with the monthly package set out.