A newly established medical specialist that had started trading as a sole trader requested our advice to ensure he was structured in the most efficient manner possible.
Following an introductory meeting we noticed his Administration team were being employed via his sole trader ABN. We explained to him that while his own income is considered ‘personal services income’ to the ATO he could achieve a more optimal tax outcome for the business, through establishing a service entity and employing the staff through this entity. Not only would this offer potential tax savings, it also ensures a greater level of asset protection for him personally.
Our role included working with the practice manager, the principal doctor and their lawyer to organise a service entity agreement, restructure the internal business aspects (e.g. employer alterations, new processes etc) and manage communication to other stakeholders.
Engaging face-to-face with the client helped generate in-depth discussions on the future plans for the business and objectives of other stakeholders. These discussions revealed an opportunity for the group to acquire the premises they operated in by using Self Managed Superannuation as an investment vehicle. Liaising with a trusted financial advisor and their bankers we were able to assist with establishing an SMSF and related entities within a two week turnaround.
Utilising superannuation encouraged further conversation with the stakeholders, the result being that they are now contributing the maximum superannuation contributions available each year. This has significantly reduced the tax liability for the group and helped to build a nest egg for future opportunities.