As an employee in a business, often there are perks that can come with the job. A company car, fuel money, perhaps some technology to help make things easier. Small business owners however have to be a lot more mindful of how they use the money from their business.
Any money or assets that a business has earned or possesses, is solely the property of that business. That means that there are numerous issues that can arise from dipping into these company funds.
As a business owner, it’s important to keep records and correctly report transactions if using company money or assets (e.g, company car). These can include instances such as
For small businesses, this can be easily done through:
If a business does not report correctly or keep appropriate records for transactions, an unfranked deemed dividend could be included in their assessable income (this is a bad thing) during tax time.
Here are some easy ways to avoid being put into this situation: