Sole traders 043-03110000

Many small businesses are owned and operated by one person as a sole trader. Larger businesses often initially commence operations in this manner.

Examples of sole trader businesses are cleaners, gardeners, home handymen and other self-employed subcontractors.

The business may be run in the owner's name or under a registered business name for example, J Bloggs trading as 'Brite-up Cleaning Services'.

For payments made under the Social Security Act 1991, the income from a sole trader business is the net income amount derived from the business operations.

The assets of a sole trader business are assessable assets of the owner. The amount to be taken into account for assets test purposes is the current market value of the assets, less the business liabilities (debts) listed on the business' balance sheet.

If a sole trader business has ceased to operate it is necessary to establish the circumstances why the business activity has ceased.

For example, is the closedown due to a change in the circumstances of the business, such as the loss of a major contract or major downturn in the industry, or is it a part of the normal seasonal cycle of activity applicable to the business?

Such factors will have a significant influence on the income and assets test assessment of the business.

See Business has ceased or has been sold.

Although a customer may run a business there can be situations in which the customer is working as an employee and is not self-employed.

For example, a contractor can be determined to be self-employed or an employee depending on their circumstances.

Consider all factors when determining self-employment. If a customer receives group certificates they will generally be considered an employee.