PHONE. (07) 5447 1022

  • When do you need an ABN?

    Posted on September 10th, 2019 admin No comments

    An Australian business number (ABN) is a unique 11-digit number that the Australian Business Register issues to all businesses, identifying your business to the community and government whilst also making it easier to keep track of business transactions for tax purposes.

    While it is compulsory for businesses with a GST turnover of $75,000 or more to have an ABN and to be registered for GST, businesses with a GST turnover of less than $75,000 can still apply for an ABN and may choose to register for GST.

    You are entitled to an ABN if you are carrying on or starting an enterprise in Australia. An enterprise includes activities done in the form of a business, as well as acting as the trustee of a super fund, operating a charity and renting or leasing property. Features of a business include:

    • Significant commercial activity, involving commercial sales of products or services and is of a reasonable size and scale.
    • Intention to make a profit from the activity as demonstrated by a business plan and a set rate of pay.
    • The activity is repeated, systematic, organised and carried on in a business-like way with records being kept.
    • The activity is carried on in a similar way to that of other businesses in the same or similar industry.
    • The entity has relevant knowledge or skill.
    • The entity has the appropriate insurance, such as public liability and WorkCover.
  • Salary sacrificing super

    Posted on September 10th, 2019 admin No comments

    Contributing extra to your superannuation is a good way to boost your retirement funds. One of the ways you can add more to your super is through salary sacrificing. Salary sacrifice is an arrangement with your employer to forego part of your salary or wages in return for your employer providing benefits of a similar value, meaning your employer will redirect some of your salary or wages into your super fund instead of to you.

    The salary sacrificed amounts count towards your concessional contributions cap, in addition to your employer’s compulsory contributions such as super guarantee payments and salary-sacrificed amounts sent by you to your employee’s super fund. The annual concessional contributions cap is $25,000 for everyone and these salary sacrifice contributions are taxed at a maximum rate of 15%. If you have more than one fund, all concessional contributions made to all of your funds are added together and counted towards the concessional contributions cap. Concessional contributions in excess of these caps are subject to extra tax.

    Salary-sacrificed amounts are paid from pre-tax salary so they don’t count as non-concessional contributions and will not be considered a fringe benefit if the super contributions are made to a complying super fund. Individuals should also consider whether the amount sacrificed will attract Division 293 tax. This tax applies when you have an income and concessional super contributions of more than $250,000. Division 293 tax levies 15% tax on taxable contributions above this threshold.

  • What is a CGT event?

    Posted on September 10th, 2019 admin No comments

    Capital Gains Tax (CGT) events occur when an individual or company makes a capital gain or capital loss by selling or disposing of an asset they own. The timing of a CGT event is quite important, as it determines which income year an individual will report the capital gain or capital loss, and may affect how their tax liability is calculated.

    CGT events can happen when:

    • Selling or giving away an asset.
    • The destruction or loss (voluntary or involuntary) of a CGT asset.
    • Receiving compensation for the loss, destruction or compulsory acquisition of a CGT asset.
    • The disposal of a depreciating asset used for non-taxable (private) purposes.
    • Capital distributions to company shareholders or unitholders in a unit trust or managed fund.
    • Shares or units being cancelled, surrendered, redeemed or declared worthless.
    • You stop being an Australian tax resident.
    • You enter into an agreement not to work in a particular industry for a set period of time
    • A trustee makes a non-assessable payment to you from a managed fund or other unit trusts.
    • A company makes a payment (not a dividend) to you as a shareholder.

    When a CGT asset is disposed of, the CGT event usually takes place when a contract for disposal is entered into or when an individual is no longer the owner of the asset. Cases where a CGT asset is lost or destroyed, the CGT event will happen when the owner of the asset receives compensation for the loss/destruction or when the loss is discovered/when the destruction happened.

    tax
  • Spring clean your finances

    Posted on September 3rd, 2019 admin No comments

    When it comes to your money, whether it be loans, insurance, savings or superannuation, having a ‘set and forget’ attitude can be detrimental to your long term finances. Checking in on the different aspects that make up your finances every now and then to see if they need freshening up is a good way to ensure you are getting the most out of your money.

    Your budget:
    Since a person’s income and expenses will change over time, making sure your budget is up to date can help keep track of your spending and calculate how long it will take to reach your savings goal. This is also impacted more by day to day and surprise expenses you may incur so regular assessment will better your planning.

    Your savings:
    Spring is the perfect time to reconsider the type of savings product you currently have and whether the return you receive on your savings is at the best rate out there. For those with a term deposit that is about to mature, consider whether there is another savings account that pays higher interest or if another term deposit is a better option.

    Your superannuation:
    To get to know your superannuation better this Spring, find your latest super statement and check the following:

    • If you have multiple super accounts: consolidating all of your super accounts to just one will save you fees and make it easier to keep track of.
    • Investment options: consider the best investment option for each stage of life when choosing super investments. How close an individual is to retirement can affect how aggressive or conservative they want their investment strategy.
    • Contributions: consider how much you are currently contributing to your super; the sooner you start contributing extra, the less you have to give up each week to make a difference in the long-term.
  • Are they an employee or a contractor?

    Posted on September 3rd, 2019 admin No comments

    Employers that incorrectly treat employees as contractors can face hefty penalties and charges as well as claims for entitlements and superannuation contributions. Even if employers are only hiring someone for a few hours or a couple of days at a time, it must be established whether they are employees or contractors to get tax and super requirements right.

    When hiring an individual, it is the details within the working agreement or contract that determines whether they are a contractor or employee for tax and super purposes. The agreement or contract the business has with the worker can be written or verbal.

    Workers such as apprentices, trainees, labourers and trades assistants are always treated as employees. In most cases, apprentices and trainees are paid under an award and receive specific pay and conditions. Employers must meet the same tax and super obligations as they would for any other employees of the business.

    Companies, trusts and partnerships are always contractors as an employee must be a person. If a company, trust or partnership has been hired to work, then it is a contracting relationship for tax and super purposes. The people who actually do the work may be directors, partners or employees of the contractor.

    Sham contracting arrangements, where an employer attempts to disguise an employment relationship as an independent contracting arrangement, are illegal and breach the Fair Work Act 2009. Employers who engage in sham contracting arrangements can face serious penalties for contraventions of these provisions. The courts may impose a maximum penalty of $54,000 per contravention.

  • Diversification requirements for SMSFs

    Posted on September 3rd, 2019 admin No comments

    The ATO has identified approximately 17,700 SMSFs where investment strategies may not meet the requirements under regulation 4.09 of the Superannuation Industry Supervision Act (SISA). Records show these SMSFs may hold 90% or more of funds in one asset, or a single asset class.

    Diversification aims to maximise an individual’s return by investing in different asset classes that react differently to the same event. Although it does not guarantee avoiding a loss, diversification is an important component of reaching long-term financial goals while minimising risk. This can help to control a super fund’s risk, as the better performing asset classes will help offset the others that aren’t performing very well. Diversification also provides the super fund with the opportunity for long-term growth, as the portfolio is exposed to asset classes with strong growth potential.

    SMSF trustees that don’t have the appropriate blend of different asset classes in their fund risk their portfolio experiencing increased and unnecessary volatility. Well-diversified SMSFs include all the major asset classes including cash, fixed interest, shares and property.

    To help ensure an SMSF is properly diversified, consider the exposures the fund currently has to the major asset classes and assess how diversified the fund is. Trustees must then engage in the process of working out which asset classes the fund requires to be properly diversified.

  • Reestablishing lost or damaged records

    Posted on September 3rd, 2019 admin No comments

    Taxpayers are responsible for safely storing a written backup copy of their tax record in case the original electronic form becomes inaccessible or unreadable. In the event that your records have been damaged or destroyed, there are a number of ways you can reconstruct them.

    Where the tax records are accidentally lost or destroyed from a burglary or fire, the ATO will allow a taxpayer to claim a deduction for certain expenses, provided that:

    • The taxpayer has a complete copy of a lost or destroyed document.
    • The ATO is satisfied that the taxpayer took reasonable precautions to avoid the loss or destruction of the form. If the tax record was a written document, it is not reasonably possible to attain a substitute document.
    • Taxpayers keep a record of these circumstances and inform the ATO in writing to back up the claim.

    The ATO holds and can re-issue or supply copies of tax documents, such as:

    • Income tax returns.
    • Activity statements.
    • Notices of assessment.

    If you have lost your TFN, you can still access your tax information by phoning the ATO. They will allow for other information to verify identity, such as an individual’s date of birth, address or bank account details.

    If you are unable to substantiate claims made in your tax returns or activity statements because records have been lost or destroyed, the ATO can accept the claim without substantiation, where it is not reasonably possible to obtain the original documents.

    tax
  • Quick fixes to boost email marketing

    Posted on August 28th, 2019 admin No comments

    While email marketing remains one of the most effective platforms for businesses to reach clients on a personal level, it does not always deliver the results you may be after. If you’re finding that email marketing isn’t going as well as you had hoped, here are five simple ways to improve your campaign:

    Experiment with your “from” name:
    Seeing “from” information that isn’t clearly related to a person or place that clients know, is often a red flag for individuals who are becoming increasingly wary of email spammers. Make sure your recipients know they’re getting emails from someone they actually asked to hear from by making your “from” information as obvious as possible.

    Target behaviour:
    While segmenting an email list by demographics can produce results, it is much more effective to segment subscribers by their behaviour. Send clients targeted messages based on their service or purchase history, send loyalty offers to those who consistently open your emails or re-engagement campaigns to those who never do.

    Remember mobile optimisation:
    With approximately 53% of emails being opened on mobile devices, using mobile-friendly layouts and graphics will help with continued engagement. If the content doesn’t appear properly on a mobile device, chances are the subscriber will be less likely to open another email. Make sure images do not look stretched or take too long to load and use appropriate ratios on all platforms.

  • Succession planning for your SMSF

    Posted on August 28th, 2019 admin No comments

    A mandatory component of managing a self-managed super fund (SMSF) is planning out what will happen to the fund if its trustee were to pass away. While succession planning may not be one of the first responsibilities that comes to mind when managing an SMSF, it is a necessity that can provide certainty and peace of mind for a deceased trustee’s family.

    Succession planning can become complex if little or no attention is paid to it on an ongoing basis, but there are ways trustees can ensure the best outcome for both the fund and their family.

    One option for a sole member fund is to appoint another trustee. Note that the non-member trustee cannot be the employer of the member unless they are related. This would not be an option for a fund with two members as the available exemptions only apply to single member funds. Those who appoint a family member or close friend must consider first whether they are suitable for a role; running an SMSF requires expertise and knowledge, and appointing someone with limited experience may not be in the best interest of the fund’s future.

    Some SMSF trustees may also choose to appoint an enduring power of attorney. An enduring power of attorney is someone who makes decisions on the trustee’s behalf if they become incapacitated or pass away. Common power of attorneys include accountants, financial advisors and lawyers; people who understand SMSF management and the associated challenges. For an enduring power of attorney nominee to be appointed, legal documents, i.e. the succession documents appointing the replacement director, must be in place before the member loses their capacity to be a member.

  • Non-compliant payments to workers no longer tax deductible

    Posted on August 28th, 2019 admin No comments

    Businesses can no longer claim deductions for payments to workers if they have not met their pay as you go (PAYG) withholding obligations. This applies to income tax returns lodged for the 2020 income year onwards. Any payments made to a worker where PAYG amounts haven’t been withheld or reported are called non-compliant payments.

    If PAYG withholding rules require an amount to be withheld, businesses will need to:

    • Withhold the amount from the payment before they pay their worker.
    • Report that amount to the ATO.

    Businesses will not lose their deduction if they:

    • Withhold an incorrect amount by mistake. To minimise penalties businesses can correct the mistake by lodging a voluntary disclosure form.
    • Withhold the correct amount but make a mistake when reporting, though mistakes should be corrected as soon as possible.
    • Fail to report payments on a Taxable payments annual report (TPAR) or a payment summary annual report (PSAR).

    Businesses will only lose their deduction if no amount is withheld or reported to the ATO unless voluntarily disclosed before the ATO examine their affairs. Businesses that don’t comply with PAYG withholding and reporting obligations may lose the deduction for that payment and face penalties that apply for failure to withhold and report amounts under the PAYG withholding system.

    tax