What is the highest rate of tax you can pay as an individual or a sole trader in Australia?
The top marginal tax rate is 47%, and it goes higher than that if you've got HECS. You can pay north of 50% tax, where literally half of your profit is going to the tax man. If we work our way down to tax planning, we've got a list of about 56 tax-saving strategies that we apply every year to see whether our clients are eligible for them and out of those 56, there is only about half of them that we can use as a sole trader. So it's actually not too flexible from a tax planning perspective, including one of the biggest bang for buck is actually incorporating trusts in your structure.
In asset protection, if you are trading as a sole trader in business and for whatever reason, you get sued as a business owner, then all of the assets held in your personal name are also exposed to that lawsuit so we absolutely do not advocate for business owners trading as sole traders at all.