Your business, government grants and tax incentives. Are you cashing in?

Thomas Edison once said that “Genius is one percent inspiration and 99 percent perspiration”.

Unfortunately, going from that inspirational idea to the finished product takes a lot more than hard work. (Here’s a quick article we wrote on getting started quickly…)

Just like Edison, you also need to invest in a lot of research and development, blood, sweat and tears.

And R&D as many experience, doesn’t come cheap.

Fortunately the Federal Government provides assistance to businesses in two ways: Grants and Tax Incentives

What Government Grants are available to you?

Surprisingly, there are many different government grants and assistance programs on offer. The Federal Government’s GrantsLINK website helps you work out the grants your business may be eligible for. Click Business and Industry on the left of the screen and you’ll see pages of grants listed. Depending on your type of business, different grants might be applicable.

The Grants & Assistance Finder on business.gov.au has a more detailed listing of grants and assistance programs. You can filter on State or Territory and Type of Grant or Assistance.

Get in touch with us if you’d like us to shortcut the process for you, and we’ll let you know which grants are worth applying for in your situation.

Keep in mind there’s no guarantee a grant application will be successful. That’s one reason the next type of assistance is so appealing…

Are you eligible for the R&D Tax Incentive?

Innovate, and you reduce your tax. That’s the idea behind the Research and Development (R&D) Tax Incentive. It provides R&D tax offsets to encourage Australian businesses to innovate and engage in R&D.

Businesses conducting R&D may be eligible for:

• a 45% refundable tax offset (equivalent to a 150% deduction) for eligible entities with an aggregated turnover of less than $20 million per annum; or
• a 40% non-refundable tax offset (equivalent to 133% deduction) for all other eligible entities (entities may be able to carry forward unused offset amounts to future income years).

The program is jointly administered by AusIndustry and the Australian Tax Office (ATO).

To register for the tax incentive you must lodge your application within 10 months of the end of your company’s income year.

Each year you must elect to partake in the R&D Tax Incentive. AusIndustry offers a self-assessment process for companies using the R&D Tax Incentive Online Eligibility Tool. This will give your company an indication of its eligibility.

It’s important that your company keeps adequate records throughout the year to show it carried out eligible activities in incurring the claimed expenditure.

If you’re eligible for the R&D Tax Incentive but not applying for it, you’re leaving cash on the table. We can help you make sure you tick all the relevant boxes so you don’t miss out.

If the government is offering your business financial assistance through tax breaks, take them!

A little perspiration will be worth it

Remember Edison’s words. The ‘perspiration factor’ can’t be avoided. You need to apply for the grants and tax incentives, but the effort can be well worth it. And we’ll share the load with you.

Drop us a line and we’ll make a time to catch up and have a chat about your eligibility and the next steps required.

3 Reasons Reducing Your Tax Refund Makes Weird Sense

 

Every year Australian Taxpayers lodge their income tax returns and celebrate the refund cheques the Australian Taxation Office is kind enough to provide. A tax refund is viewed as the mid-year government bonus taxpayers have been waiting for. It’s almost like finding money in the street!

But is it really?

In reality those tax refund cheques represent money that belonged to the taxpayers all along. This is because taxpayers actually pay a larger provision than was actually needed. The ATO has been holding the funds all year, interest free. Ask yourself, in what other scenarios would you allow anyone to use hundreds or thousands of dollars of your hard earned money for an extended period of time, interest free – then celebrate when they give it back to you as if it were never yours to begin with?

Large tax refunds can occur for a number of reasons, including:

• significant work related deductions;
• negatively geared investments;
• incorrect PAYG withholding from income or investments;
• overestimated provisional tax instalments.

You should also note that a large refund does not relate to having a ‘good accountant’ as many conditions may effect the outcome. The service offer by an accountant is identifying the above and structuring the tax liability in an appropriate manner.

Why Reducing Your Refund Makes Sense

Taxpayers who choose to take steps to closely match their withholding tax with their actual income tax liability for a financial year reduce the need for a refund cheque and are able enjoy some unexpected benefits.

1. Increased investment income: By reducing the amount of your money the ATO is holding, you (rather than the ATO) can invest this amount and receive the investment income.
2. Debt Reduction: If you currently have interest bearing debt such as a credit card you can reduce this balance faster by removing any excess withholding tax on your next paycheque. Given that some Australian credit cards charge in excess of 20% interest annually this can result in a significant interest saving.
3. Improved Lifestyle: Currently saving for that dream family holiday? Reducing unnecessary withholding tax could mean the different between taking the trip this year and waiting until next year.

As a taxpayer, if you or your employer are looking to take more control over withholding taxes, keep an eye out for our articles on salary packaging and Fringe Benefits Tax.

Doing the Numbers

After our Christmas Party and Inspire Cafe Launch Party in December 2013, it was time to take a hard-earned break from the first of many big years at Inspire CA.  I’d like to take a moment to reflect on some key numbers and share the most significant business and life-changing moments of 2013.

7,470: the number of emails that I sent during 2013 (That’s about 33 each business day!…);
From 15 to 67: client groups that we now serve;
894: Inspire CA YouTube views, over 19 videos;
From 18 sq. mt to 273 sq. mt.: in office space, with a cafe as the centrepiece;
From 1 to 6: team members between Inspire CA and Inspire Cafe; and most phenomenally ………

62,415: Lives were changed through micro-giving via B1G1: Business for Good.

 

The most Profound Moment of 2013

I was first introduced to B1G1: Business for Good when I met Paul Dunn via a webinar in May 2013.  Paul is a builder of phenomenal businesses, globally, and is now the Chairman of what I see as the best business giving initiative in the world.  After Paul explained to me the concept of B1G1, it was a no-brainer for Inspire CA.

The idea is simple. Paul explains:

– What if every time you dined at a restaurant, a child receives a nourishing meal

– What if you drink a coffee, someone gets access to life saving pure water

– What if you buy a book, a tree is planted

– What if a TV is purchased, someone receives the gift of sight

 

 

B1G1 provides a platform that enables businesses to give efficiently (and effortlessly) to over 600 projects in over 30 countries. What’s more, 100% of the donations go to the projects! The businesses who are part of B1G1 find ways of giving transactionally throughout their business.

For instance, here at Inspire CA for every email we send, we give a child access to life saving water. For every Strategic Planning Session we provide to a client, we educate 75 women in India on how to run their own business and provide for their family.  In the Inspire Cafe, for every coffee that is purchased and meal that is consumed, a child receives access to life saving water and a nourishing meal. The whole idea is to make a difference every day – just by doing what you normally do.

Not only that, B1G1 has recently provided a way in which you can easily see the impact you’re having on the world – via the Business for Good map. Here is our impact to date:

I can’t be more excited to be a part of B1G1 and just recently I shared with Paul our Giving BHAG for 2014: To take the Inspire CA & Inspire Cafe total micro-giving impacts to 1,000,000!

The ATO, the Christmas Grinch, and your office party

The festive season is upon us once again, which means it’s time for our business clients’ questions and concerns about the costs associated with their staff Christmas parties.

“Is the Christmas party tax deductible?”

“Can I claim the GST on the expenses?”

”Will I need to pay Fringe Benefits Tax?”

Do any of these questions sound familiar? If they do, then let us give you the lowdown on the ATO Christmas Grinch.

But first things first: There are no special tax rules for staff Christmas parties. The costs relating to the party fall under the same rules that apply to any other meal and/or entertainment a business provides to employees (past, present and future) and their associates.

Here’s a table from the ATO that outlines how each situation is treated in terms of Income Tax and Fringe Benefits Tax:

Situation	Income tax	FBT
Employee takes two clients to lunch at a restaurant – cost $150	Employee’s portion: $50 tax deductibleClient’s portion: $100 non-deductible	Employee’s portion: $50 fringe benefitClient’s portion: No FBT
Employee has meal in restaurant while travelling on business trip	Tax deductible	No FBT (‘otherwise deductible’ rule)
Employee has meal in an ‘in-house canteen’	Tax deductible	Exempt from FBT
Employer provides sandwiches and juice for working lunch in office (not entertainment)	Tax deductible	Exempt from FBT
Employer provides substantial lunch with wine for employees and clients in office	Non-deductible	Exempt from FBT
Employer provides social function for employees /clients in office	Non-deductible	Exempt from FBT
Employer provides social function for employees and associates in office	Cost per employee: Non-deductibleCost per associate: Tax deductible	Cost per employee: Exempt benefitCost per associate: Taxable fringe benefit
Employer reimburses employee for cost of private party	Amount reimbursed is tax deductible	Taxable fringe benefit
Employer provides employee and associates with theatre tickets	Tax deductible	Taxable fringe benefit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By looking at the table we can take away a very simple rule of thumb: You can’t claim a tax deduction or an input tax credit in relation to a benefit provided to employees or their associates unless the amount is subject to Fringe Benefits Tax.

Fringe Benefits: Minor Benefits Exemption

To be eligible for this exemption, the taxable value of the fringe benefit must be:

• under $300 per employee
• ‘infrequent’ and ‘irregular’.

The ATO has provided very little guidance on what they believe to be ‘infrequent’ and ‘irregular’, which is frustrating for tax accountants and employers alike. However, the ATO has stipulated the more often and regularly benefits are provided, the less likely an employer will satisfy this criterion.

The ATO touches on how the minor and infrequent exemption should be applied to staff Christmas parties in Taxation Ruling TR 2007/12. This ruling states an employer who provides a Christmas party for its staff isn’t exempt because the benefit is not infrequent. (Christmas parties are arranged annually for staff and, therefore, occur on a regular basis.)

Conclusion

We take the approach outlined in Taxation Ruling TR 2007/12. If a benefit is provided regularly (e.g. every week, month, quarter or year), then it doesn’t qualify for the minor and infrequent exemption and fringe benefits tax applies according to the table. If the benefit occurs ad-hoc or for one time only, then it will qualify as a minor benefit providing the taxable value is less than $300.

How does this apply to your upcoming Christmas party?

We believe employers who hold annual Christmas parties don’t satisfy the minor and infrequent exemption criterion, and will be liable for FBT on the costs associated with the party.

However, employers who don’t necessarily hold Christmas parties every year, or start-up businesses planning their first Christmas party, can satisfy the infrequent criteria, and the minor and infrequent exemption can be applied to the benefit if the cost is less than $300 per person.

Pushing the Envelope (with coffee??) – B1G1: Business for Good

 

The original article was published by B1G1: Business for Good on 14 October 2013. Written by Paul Dunn.

 

Ben Walker’s one of those guys you love to meet. Looks sharp, is sharp and clearly on the pace. And Ben’s a Chartered Accountant.

But the thing I like most about Ben is his intuitive understanding of this, ‘the power of any idea is only ever in its implementation.’

Ben implements like mad. Mention to him, for example, that timesheets have no place in any Professional Knowledge Firm, and he gets rid of them. Totally.

Or mention to Ben that we should do an event together and you don’t get ‘Oh …. What a good idea.” What you get back is “Great … let’s do it!” (http://inspireca.eventbrite.com)

Or this one, “Ben, in all these years I’ve been consulting to and mentoring Accountants, I’ve always felt that the basic office layout was in need of work. I’ve always thought we should not have reception desks and the like. What we should have is someone game enough to make the very core of their office as a café.”

Ben’s response: “I’ve been wanting to move offices to deal with our growth any way, so let’s do it.”

And the result …… the soon to be launched Inspire Café (a name completely consistent with Ben’s firm: INSPIREca.)

But even more than that. Ben’s well aware of this dictum too: ‘WORDS MATTER’. He’s seen what happens when we no longer have tabs on websites that say ‘Our Team’ but rather ‘Meet our Exceptional Team’. That one word ‘exceptional’ changes everything.

So when Ben advertised for a Barista, he got an exceptional one. How? Like this:

 One word makes all the difference doesn’t it?

And Ben Walker’s pushing the envelope by making a difference in so many other areas too because of his Partnership in B1G1: Business for Good.

Oh ….. you’ll want to keep track of the progress of the Inspire Café too. Just click on this link and Ben will keep you right up to date. SO …. Go ahead and implement .. make sure you click that link now: http://inspirecafe.com/

Are You Using The 80/20 Rule? Or Is It Using You? 2 Simple Profit Improvement Business Ideas

In 1906, Italian economist Vilfredo Pareto observed that 80% of the land in Italy was owned by 20% of the population. He also observed that 80% of the peas in his garden stemmed from 20% of the pods.

And so began what’s known as the 80/20 rule or the Pareto Principle—the idea that 80% of your results come from 20% of your efforts.

This principle tends to show up more often then we realise. And our success lies in how we interpret it and react to it.

One aspect of business where we see this all the time is 80% of a business’ profit coming from 20% of their clients. It usually happens when a business moulds its methods around a client’s demands, rather than fitting the client into their business processes while still achieving its objectives—pricing, scope of work, payment terms, etc.

It’s important not let other people govern your business. Here are a couple of ways you can limit your efforts for the 80% of clients who bring you little benefit.

1. Apply Client Selection Criteria

In most cases, 20% of your clients will keep the business afloat, while the other 80% ‘pay the rent’ or smooth things over in the quiet times. Unfortunately, we often get hung up on those 80% despite the fact they’re unprofitable, high-maintenance, and difficult to deal with.

You can avoid this by having clear selection criteria for your clients.

Here’s a strategy you can try:

1. Work out your ideal client (look at your current “best clients” list), and list their attributes. These are your “green” clients. You like working with them, you give them great value, they pay their bills on time, and you wouldn’t hesitate to take on more work from them.
2. Now do the same for the clients you should never have agreed to work with in the first place. You’ll find they have common attributes—they may never see your value proposition, or they may finance their business on yours by holding off payment. These are your “red” clients.  We recommend you stop taking on work from these clients, regardless of how much your revenue drops temporarily. Yes, turning down work can be hard, but once you replace them with more “green” clients you’ll be thanking yourself.
3. Any clients left over are “amber” clients, and you should consider them on a case-by-case basis. While they’re willing to listen to your advice, pay for the value you provide, and are good to work with, feel free to take them on as clients. Just make sure they don’t become “reds”.

Ultimately you want clients who are great to do business with. So save your sanity and let go of those clients who do nothing but test patience.

We understand that saying goodbye to most of your clients is a scary thought. But we have an idea that will make it seem far less dangerous.

Your “green” clients won’t necessarily be aware of every service you can provide for them. And many studies have found that, on average, it is 6 times more cost effective to sell to an existing client, than to invest in attracting a new client.

2. Stick to what you know, with who you know

One of the simplest and least stressful ways to increase revenue is to provide existing services to the clients you already have. Look at the table below. Which quadrant do you think would be the easiest to sell to?

Of course, the answer is the bottom left—selling services you already have to clients you already know. But businesses often focus on selling to the bottom right quadrant instead. Take our advice, and stick with what you know and who you know.

Create a culture in your business of providing existing services to your current clients (identifying, suggesting, delivering, etc.)  It can develop through regular nurturing meetings, identifying opportunities while working on existing projects, running events and webinars, and so on.

And don’t forget tell your clients about your complete ‘menu of services’. It helps them identify help they may need, and who they can call on to get in.

A great way to identify who is missing out on what services is to create a client matrix. Create an Excel spreadsheet with your services across the top (columns) and your clients down the side (rows). Then simply place a ‘tick’ in the services you provide for each client. A blank space means either the service isn’t appropriate for that client or you need to start offering it pronto.

The key is to take action and implement. We’ve had great results using this process, and so have many of our clients.

Cashflow By Design: 3 Ways WorkflowMAX Creates ‘Cashflow MAX’ For Design And Creative Agencies

Many design agencies and creatives use a business model where getting paid is one of the last steps in the job cycle.

While we’re fans of both the ‘price upfront’ and ‘get paid upfront’ pricing models, without efficient workflows and turnaround times you’ll either have poor cash flow or unhappy clients. Or both.

1. Implement a job monitoring system

A job monitoring system gives you a number of benefits, the key one being able to track the work coming through the door. And once that’s happening, you can start reporting on job turnaround (“Work In Progress Days”). By having access to the jobs on hand, your team will be on the same page. And you’ll be able to manage your agency’s capacity more effectively.   Your system can be:

Electronic

Part of our “Optimise” strategy is to make sure you use your time efficiently. It’s the reason we implemented an electronic job monitoring system.   While you can find plenty of workflow management tools online, we’re a big fan of WorkflowMAX. (It’s what we use for our business.)

It’s tailor-made for design agencies, and integrates with Xero so we can optimise our administration process even more. The easy and efficient flow-through from quoting, to invoicing, to data in the accounting system saves a lot of administration time and ensures your business and accounting data is up-to-date and accurate.

Visual

While using only one method to track your workflow saves time, having a whiteboard system as well gives you team buy-in and a subconscious motivation to turn around jobs quickly.   Let’s say you have a service standard of ten days from job in to job out. On your whiteboard, draw up 11 columns and a row for each team member.

For each team member write their assigned job name in column one, and the date it starts in column two.   The idea is to write a date in the next column each day (say, during your workflow meetings) until the job is finished and out the door. It acts as a visual progress bar and motivates everyone to get the job done before day ten. (But no more than two or three jobs per team member, okay?)

2. Get the information you need before you start

Every time you put down a job and pick it up again, you lose efficiency. And that’s not good for you or your client. So don’t start the job until you’ve got everything you need.

Make sure you have a process in place (such as a questionnaire for the client to fill out) so you have all the information and files you need before you begin the work.

And make sure they’re available in case you need more information or feedback down the track. They’ll appreciate it when your turnaround time is half that of your competitors.

3. Set some efficiency standards

How about setting some standards for turnaround times? You could even set a “Ten day turnaround” brand promise so clients know when their job will be finished.

It’s a great way to keep the cash flowing. Just make sure you’ve got the processes in place, because chances are your prospects and clients will put it to the test.

Think of it as self-imposed accountability. When you accept a job, let the client know when it will be ready. It not only adds to their expectation, but also gives you and your team an extra incentive to meet the deadline. It also readies the client for any further information you’d need.

We do this ourselves, and it works. We even set a delivery meeting when we receive the project.

 

We use these tips in our own firm, and they work a treat. So why not try them yourself and see how you go? And feel free to let us know how it goes.   If you need any help, or have further questions, give us a call. Oh, and if you have any questions about WorkflowMAX we’d be happy to help you out.   Your cashflow stems in large part from your workflow, so it pays to get it right. Literally.

Zero Excuses: 4 Reasons Xero Rocks Your Business World

You and Henry Ford have some common characteristics. Both entrepreneurs. Both growth oriented. Both focused on systems and processes that enable your  business to scale and grow.

Ford achieved it with his production line approach to building Model-T Fords.

Your business can achieve it with Xero.

You see, Xero is actually about more than accounting. It is a platform for building efficient business processes. Processes that make it easier to manage, control and grow your business.

Processes that make it easier for you to make business decisions, look after your clients or customers and, frankly, to sleep at night.

We are massive fans of Xero. We use it in our own business and we help our business clients implement Xero and the various Xero Addon software integrations that streamline business processes.

We are such big believers in Xero, we feel that once a business truly understands the power of moving their accounting, CRM and other processes to the cloud, there are no excuses for not implementing Xero.

Feedback from our clients has been further fuelling our enthusiasm for Xero as a fundamental tool that businesses should implement. Clients who we’ve implemented Xero with typically report back that they save 2 to 3 hours a week on administration tasks.

2 to 3 hours every week. Your time. Your staff time. Freed up.

What can you do with an extra 2 to 3 hours a week? (100 to 150 hours a year!)

Have more time to work ON your business. Have more time to BE with your family. Have more TIME OFF, away from your business.

The choice is yours, and will depend on the stage of your business’ development.

Here are just 4 ways (there are more) that Xero helps grow and scale your business

1. Xero helps eliminate low-value time-wasting tasks

XERO saves you a lot of time by automating tasks such as:

• importing bank statements
• guessing which account your common expenses go
• reconciling your money coming in with your outstanding invoices.

They’ve also put a lot of thought into making the system easy to use. The time you save using XERO compared to MYOB and Quickbooks means the software will pay for itself in no time at all.

2. Xero integrates with mind-blowing software apps

XERO has formed strategic partnerships with other software providers (or “add-on partners” as they call them). This means XERO will integrate with your CRM, workflow manager, payment gateway and other solutions.

This means you can have a simpler business to manage, with apps and data updating themselves, across systems. Apart from the time-saving aspects, it also improves quality, reduces errors and speeds up your processes.

We’ve kept up-to-speed with the Xero’s major add-on partners such as WorkflowMax, Vend, Unleashed, GeoOP, ReceiptBank and others. We’re confident we can identify a vertical solution for pretty much any industry.

So we should talk.

3. Xero makes collaboration easy

With Xero’s collaboration feature you can have multiple advisers and employees working from your one, master always-up-to-date Xero file. This means that in our role as accountants and business advisors, we can help our clients in real-time to work through any issues they may have. No need to wait for data to be updated, files to be sent, imported, and so on. Those days are over.

Real-time accounting via Xero also lets us do things like monitor our clients for accountability if they haven’t reached a certain revenue target. This helps us do what lights our fire: Help our clients focus on the future and achieving goals, not just reporting on last quarter, last year.

On the employee side, your team members can use Xero and addon apps to prepare their timesheets online, which then pushes information through to the fully-integrated payroll system.  This makes payroll a dream—especially if you’ve ever experienced payroll done by Excel spreadsheets. This is reason enough to use Xero, if you do pay runs.

4. Xero helps you make faster, better business decisions

As an entrepreneur, you need relevant, real-time and accurate data to make decisions. Businesses often shoot from the hip, making decisions without the appropriate data to base them on.

Using Xero you will feel more control of your business than you ever have before. You’ll even be able to see how it’s tracking, in real-time from your phone or tablet device. This gives you transparency on the real performance of your business, which equals peace of mind. To us, this is another feature of Xero that on its own is reason enough to make the switch from MYOB or QuickBooks or any other system.

These are just a handful of the many reasons it makes sense to switch to Xero.

But just as Ford’s Model-T Ford evolved over time, so is Xero evolving and getting better with each new release (which you never need to install, by the way, being cloud-based software).

If you’re serious about scaling up your business and getting better insights and control on its performance, get in touch and let’s make a time to step you through those aspects of Xero that apply most to your business and industry.

We look forward to rocking your world with Xero.

FAST CASH FLOW: Three Easy Ways To Get Paid Faster

Cash can kill a business. Well, a lack of it can.

In recent weeks a number of clients and friends shared with us concerns about their cash flow. While some are putting it down to election concern slowing down business, we prefer to “control the controllables” as the top athletes say.

Focus on what you can control, not what’s happening “out there” in the economy, outside of your control.

When it comes to your cash flow, the more you focus on “the controllables”, the less you will stress when it comes time to pay the bills.

Let’s look at three ways you can help your debtors—the people who owe you money—to pay you faster and more easily. In accounting lingo, this is termed “reducing your debtor days”.

Keep a track of your debtors

A nice and easy one first up. You are not a bank.

You don’t exist to fund your clients’ businesses and lifestyles through interest-free loans.

To avoid becoming an unpaid bank, make sure your accounting system is kept up to date, to the day. Many businesses get a bookkeeper to come in once a fortnight or once a month.  That is too much grace to give to clients if they haven’t paid.

Late payers need to be followed up promptly. They’ll respect that, and they’ll pay you sooner.

We recommend Xero accounting software for easy and almost automated accounting for debtors.

Create systems to efficiently follow up your debtors

We can help you implement systems which will automatically send a follow up email to any debtors who fall overdue. Nice. Chasing up debtors while you sleep. Once set up, this requires very little maintenance.

Give multiple payment options

Nice and simple.

Giving your clients or customers multiple payment options means that your debtors have less of an excuse for late payment.

Options such as Visa and MasterCard should be given, and venturing into realms of American Express or even Fee Funding services add other attractive ways for your clients to pay you. Again once set up, this requires no maintenance at all.

Treat this article as a checklist for implementation. If you have not set up each of these systems, let us know and we’ll help you make it happen.

Hobby or Business – Eight simple questions to ask yourself

With more and more entrepreneurial businesses popping up, we’ve come across a few clients who are wondering when a weekend hobby turns into a tax generating “business”.

Generally, if the activity constitutes a ‘hobby’ or recreation, profit generated is not usually assessable for tax purposes.  On the other hand, if you’ve got more a what appears to be a business activity, this will be assessable for tax purposes.

The ATO’s Guidance

We like the ATO’s humour in their answer to ‘Am I in business?’ – “There is no simple answer”…

Like a lawyer putting a bet on each way.

But there are some good guidelines that are provided, as each case needs to be looked at independently. The more “commercial” the activity is, the more likely it will be classed as a business.  This is important as the profit that it generates may be treated as assessable income with tax consequences.  Not only this, but you may be required to register for GST and an ABN.

8 Questions to Ask Yourself

To work these out, we’ve narrowed down the ATO’s list into what we think sums it up:

1. Do you have a purpose of profit as well as a prospect of profit?
2. Is your activity carried on in a similar manner to other businesses in your industry?
3. Do you have a business plan?
4. Do you use specialised knowledge or skills?
5. How much capital have you invested in the activity?
6. Is the activity a part-time side-line or your main income earning activity?
7. Do you give quotes and supply invoices?
8. Do you advertise?

The conclusion? Exercising professional judgement. If it walks like a duck, swims like a duck and quacks like a duck… Then it probably is a duck!