Creative businesses come in every shape: studios, agencies, production outfits, design practices, independent labels and everything in between. Whatever the form, tax time goes far more smoothly when you hand your accountant the right records, organised, at the right time. This guide is a general preparation checklist for creative businesses that do not fit neatly into a single niche, so you arrive ready rather than scrambling.
It’s general information rather than advice for your specific business. The ATO guidance on what income to include in your business return is a useful companion, particularly where your income comes from several directions.
Start with income, all of it
Creative income tends to arrive from more places than a standard business, so the first job is making sure none of it is missed.
- Client and project income. Fees, retainers, project payments and licensing income across every client and platform, including anything paid through agencies or intermediaries.
- Overseas and platform income. Income from overseas clients or platforms, with the dates and amounts received, since exchange rates and any foreign tax paid affect the treatment.
- Grants and other income. Grants, rebates and incentive income, which can be treated differently depending on the program, so flag these rather than folding them into general revenue.
Deductions to gather
The everyday costs of running a creative business are broadly deductible where they relate to earning income.
- Equipment and software. Equipment claimed in full under the write-off threshold or depreciated over its effective life, plus software subscriptions and licences.
- People. Salaries, contractor payments and superannuation, with the employee and contractor distinction clearly drawn, since it affects PAYG and super obligations.
- Premises and running costs. Studio or office rent, utilities, insurance, and where you work from home, the running costs of that space.
- The rest. Professional fees, marketing and advertising, travel with a genuine business purpose, and bank and merchant fees.
GST and structure
- Two things worth confirming every year. First, GST: once turnover reaches $75,000 in a 12-month period, registration is required, and it is worth watching a rolling figure rather than checking once at year-end. Second, structure: a setup that suited you as a sole trader may no longer fit once income grows and staff or risk enter the picture, and a company or trust can offer planning options and asset protection, though the right answer depends on your numbers.
If your structure has not been looked at in a while, it is worth reviewing with someone who can weigh the trade-offs against where the business is heading.
Production companies have their own version of this checklist — see what your accountant needs for a production company tax return.
The year-end records
Alongside the above, the standard records still apply: a reconciled accounting file, bank statements, asset purchases and disposals for depreciation, loan and finance agreements, GST and BAS records for the year, and any prior year matters still open.
Frequently Asked Questions
What do I give my accountant for a creative business tax return?
A complete picture of income across every client, platform and grant, your deductions organised by category, records of people you have paid with the employee and contractor split drawn, and the usual reconciled year-end file with bank statements, asset movements and BAS records. The checklist below sets it out in full.
What can a creative business claim on tax?
Broadly, the costs of earning your income: equipment and software, salaries and contractor payments, premises and running costs, professional fees, marketing, work travel, and bank fees. Equipment is either claimed in full under the write-off threshold or depreciated over its effective life. Private expenses are not deductible.
When does a creative business register for GST?
Once your turnover reaches $75,000 in any rolling 12-month period, GST registration is required. Below that it is optional. Because creative income can climb quickly across projects and clients, it is worth watching your rolling turnover through the year rather than waiting until you lodge.
What records does a small creative business need?
A reconciled accounting file supported by bank statements, income records across all sources, receipts and records for deductions, asset purchase and disposal details, payroll and contractor records, and GST and BAS records. Keeping these current through the year, rather than assembling them at tax time, is what makes the return straightforward.
Your Creative Business Checklist
Income
- Fees, retainers, project and licensing income across every client and platform
- Overseas and platform income, with dates and amounts received
- Grants, rebates and incentive income, flagged separately
Deductions
- Equipment purchases, split into over and under the write-off threshold
- Software subscriptions and licences
- Salaries, contractor payments and superannuation
- Premises rent, utilities, insurance, and home office running costs
- Professional fees, marketing, work travel, and bank fees
Compliance and structure
- Rolling turnover against the $75,000 GST threshold
- Whether the current structure still fits the business
Year-end records
- Reconciled accounting file and bank statements
- Asset purchases and disposals for depreciation
- Loan and finance agreements, GST and BAS records
Work with people who know creative businesses
Creative businesses have quirks a generalist practice can miss, from mixed income streams to the incentives that apply to particular kinds of work. Count Out Loud works with creative businesses of all kinds across Australia, so the questions above are everyday work, and where your business does fit a specialism, we can point you to the parts of the system built for it.
If you’d like your tax handled by people who understand creative work, start with a conversation. Call us on (02) 9043 1525 or get in touch through countoutloud.com.au.