Calculating financial capacity for business owners 277-04060000

This page contains resources to assist in calculating the financial capacity of a customer who is a business owner.

Macros

Tax returns

This table provides information on the different sections of a business tax return.

Section in tax return	Business structure section relates to	Details/Indicates	General Information
Description of main business or professional activity	Sole Trader Partnership Company Trust	What the business does to generate income	May assist in determining the type of reasonable expenses for a similar business. The ATO benchmarks for industry standards, provides a guide of what is reasonable. See ATO benchmarks.
Business address of main business	Sole Trader Partnership Company Trust	The address where the business operates	The address can be matched with the customer’s address to identify if the business is operated from their place of residence. A business operated from a place of residence may provide personal benefits from either the rent or home office expenses
Company, Partnership or Trust information	Company Partnership Trust	The name of the Company, Partnership or Trust. May include: the address of the business if the business is a trust, the type, such as Discretionary	The name of the partnership will usually indicate the details of the persons or entities involved in the partnership. The address details may assist in determining if any rent or home office expenses should be claimed
Income excluding foreign income	Sole Trader Partnership Company Trust	The gross income of the business	The gross income of a business can be compare to the total sales declared in a BAS (same period and future period of trends) and or the gross income on financial statements. Note: the BAS information will usually be available for a more current period.
Expenses	Sole Trader Partnership Company Trust	Includes: details of cost of sales superannuation expenses contractor, sub-contractor and commission expenses bad debts lease expenses rent expenses, interest expense depreciation expense motor vehicle expenses repairs and maintenance all other expenses	Some expenses may be reported under ‘all other expenses’ which may prevent identifying any personal benefits paid or if the expense accounts are what would reasonably be expected from the business activity.
Reconciliation items	Sole Trader Partnership Company Trust	Reconciles the operating profit or loss with the net income or loss for income tax purpose. May include: balancing adjustments on depreciating assets small business and general business tax breaks	The reconciliation items will often be the reason for the variance between the business’ taxable income and the net income declared on the business’ financial statements
Financial and other information	Sole Trader Partnership Company Trust	Includes: Opening stock Purchases and other costs Closing stock Trade debtors All current assets Total assets Trade Creditors All current liabilities Total liabilities Dividends paid Loans to Shareholders and their associates Total salary and wages expense and payments to associated persons	Does not include: original cost of non-current assets or the accumulated depreciation non-current liabilities such as loans details of retained profits or loans to shareholders. See Attributing profit to a customer Note: not all items may apply to sole traders or partnerships. Indicates if the business: provides either goods or services employs individuals
Small business entity simplified depreciation	Company	The total depreciation deductions being claimed under the simplified depreciation rules	Does not include details of the assets the depreciation relates to. Note: Small business entity simplified depreciation is available to all business structures, and is reported in different sections on the income tax return. Trusts and partnerships report in the Business and Professional item section and sole traders in Depreciation and Other deductions sections. See Business and Professional item.
Deferred non-commercial business losses from a prior year	Sole Trader	Any prior year losses from business activities	See Step 5 in Attributing profit to a customer.
Net income or loss from business	Sole Trader Partnership Company Trust	The income from the main operating activities less expenses and any reconciliation adjustments.	For a sole trader this amount is transferred to the supplementary section of the tax return
Key Financial Information	Sole trader Partnership Company Trust	Includes: current assets total assets current liabilities total liabilities	Does not include: original cost of non-current assets the accumulated depreciation non-current liabilities
Business and professional items	Partnership Trust	Incudes: opening and closing stock amounts trade debtors and creditors total salary and wage expense payments to associated persons fringe benefit employee contributions small business entity simplified depreciation	Does not include: the amount of partnership funds which may indicate if money is held in the partnership the partnership drawings
Statement of Distribution	Partnership Trust	Provides details of the name of the person(s) or entity(s) that received a distribution, and may include their TFN, date of birth, address and their share of the income	Determine if the customer has a relationship with any persons or entities that received the distributions. See Step 5 in Attributing profit to a customer.

Note: other parts of the business tax return may also provide information to assist in determining the financial resources of a customer.

Other

ATO website

ATO benchmarks

Business income tax returns

Business Activity Statements

PAYG tax withheld

Operational Information

Calculating financial capacity for business owners 277-04060000

Macros

Tax returns

Other