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You are here: Home / Blog Posts

What the Election Means for Tax

April 4, 2019 By raadmin

The federal election is looming with a speculated May election, but all the major parties stand quite differently on tax. How are we meant to make sense of the policies amongst the politics? 

With the both major parties budget intentions now on the table, it’s time to unpack what these would mean for Australians. There are five major areas of tax that we can expect to be shaken up, particularly if there is a change of government. 

  • Personal tax cuts 
  • Franking credits 
  • Discretionary trusts
  • Negative gearing
  • Capital gains tax

Personal tax cuts 

For starters, the coalition have announced a three-stage process for tax cuts. This begun in 2018 with the increasing of the top threshold of the 32.5 per cent tax bracket from $87,000 to $90,000. Following this, the coalition plan to increase this bracket again from $90,000 to $120,000 at the start of financial year 2022/23. Finally, the coalition plans to increase this bracket yet again from $120,000 to $200,000 thus removing the 37 per cent bracket completely.  

Labor intend to roll back the latter two stages of this if elected, as well as looking to cap the amount individuals could deduct for the management of personal tax affairs. There is intended to be a carve-out for individual small businesses with positive business income and annual turnover up to $2 million.  

Franking credits 

Labor intend to do away with the current system of individuals earning below the $18,200 threshold receiving refund for all their imputation credits. Proposing a return to the system instated in the 80s during Bob Hawke’s stint as PM whereby imputation credits can be used to reduce tax, but shareholders will not receive cash refunds from the government.  Pensioners will be excluded from this system through a “pensioner guarantee.”  Scott Morrison and the coalition currently have no policy in place for removing franking credits.  

Discretionary trusts 

While the coalition has no plan to tax discretionary trusts, Labor intend to introduce a standard minimum 30 per cent tax rate for discretionary trust distributions to mature beneficiaries. Labor intend to reduce income splitting use through this plan, minimising tax. There are some carve-outs intended for non-discretionary trusts with this plan, such as deceased estates, etc. Farm or charitable trusts will also be exempt.  

Negative gearing 

While the coalition have not announced any intention to change the current policies for negative gearing, Labor intend to limit negative gearing to newly built housing from 2020. Investments previous to 2020 will not be affected, being grandfathered and still allowed to claim deductions.  

Capital gains tax

Labor hope to reduce the capital gains tax discount for assets held longer than 12 months from 50% down to 25%. The CGT discount is not intended to change for small business assets. The coalition’s focus for CSG changes are on eliminating foreign residents’ entitlements to claim the main residence exemption when they sell property in Australia. However, these have seemingly been put on hold.  

With budgets and the election just around the corner there are bound to be further changes proposed and will update you on those as they are announced. 

Filed Under: Tax Tagged With: budget, election, federal government, tax cuts

ATO Waving Penalties For Unpaid Superannuation Payments

March 15, 2019 By raadmin

The ATO will be waiving penalties for the hundreds of businesses who have admitted failures to pay superannuation to their staff after a ‘botched’ amnesty.

An amnesty was rolled out in May of 2018, which offered employers who failed to pay super entitlements stretching back to the 1990s a “clean slate.” Unpaid super is estimated as being worth up to a whopping $6 billion a year in Australia, with the government hoping this initiative would encourage employers to pay their workers super entitlements. 

While the policy has been dumped, the amnesty for employers will still run for 12 months. Anyone failing to use this amnesty as a time to declare their past wrongdoings is warned they will face penalties in the future to the sum of half the money owed, on top of the unpaid super. 

Employers who have already made claims to the ATO are being treated as though they had voluntarily reported themselves under current rules. This means they must repay unpaid super as well as interest to the employee and an administration fee per employee of $20 per quarter. 

To be eligible for the superannuation amnesty, businesses will need to:

  • Not be subject to an audit of your Superannuation Guarantee (SG) for the relevant periods 
  • Voluntarily disclosed amounts of SG shortfall or late payments that have not been previously disclosed for any period from 1 July 1992 to 31 March 2018 
  • Made the voluntary within the proposed 12-month amnesty period (24 May 2018 to 23 May 2019) 

If you are unsure whether you are meeting your superannuation requirements effectively, give us a ring on 07 3367 0852 or email us at mail@raaccountants.com.au 

Filed Under: Small Business, Tax Tagged With: Amnesty, ATO, employers, superannuation, unpaid super

Single Touch Payroll For Everyone!

February 15, 2019 By raadmin

Small business STP

It is now official, all businesses no matter how many employees they have will be required to electronically file each pay run with the tax office using Single Touch Payroll (STP) as of July 1. With 40% of the nation’s workers employed by small businesses, this is a big opportunity for cloud-based solutions to overhaul the efficiency of your small business.  

Xero has been the royalty of cloud-based solutions for some time now, with STP being only two clicks away. For the 90,000 businesses yet to embrace any software, this is a great time to start looking.  

What does this mean for micro-businesses?

As of last week, Xero announced a standalone solution for micro-businesses with four or fewer staff. This payroll-only product will process, pay and report information for up to four employees, with an expected price of just $10 a month (what a steal!).  

Did you know RA Business Advisors are long term Partners with Xero? If you want to hear more about what Xero can do for your business, give us a ring on 07 3367 0852 or email your questions through to mail@raaccountants.com.au

Filed Under: Small Business, Xero Tagged With: cloud technology, micro business, single-touch payroll, small business, xero

How Strong Is Cloud Security?

February 8, 2019 By raadmin

Data Security

All SMEs including accounting firms have a common issue: security, with ransomware, data breaches, employee theft and scam artists becoming an increasing issue for all companies. Unfortunately, the security market is becoming more convoluted with merchants who only care about sales, as well as poorly made “silver bullets.” How do we keep our firms secure amongst all the noise? We simply have to seek out experts and keep ourselves informed.

One of the biggest debates when it comes to considering your data security is what do you use to share data? How do you share access to apps? Well, as Ping’s senior technical architect Sarah Squire explains

“the two best practices are to encrypt data when it is stored and when it is transferred. When transferring to a client, the client needs a private encryption key on their computer to decrypt the file.”

What is identity management and why do I need it?

Identity management may be a foreign concept to many of us, but this is another integral practice for securing your firm. Employing identity management means setting up identities for each member of a firm and giving them separate permissions for logging into your software.

A common solution to the use of identity management is a password manager, either locally or through the cloud. However, as Sarah Squire states “(Password managers are inferior) because a password manager is controlled by employees. You could have an employee who is a bad actor and you need to log them out of all their apps at once.”

Filed Under: Technology Tagged With: apps, cloud, identity management, security, technology

Five Tips To Get Your Business Ready For The New Year

January 24, 2019 By raadmin

New Years Resolution

1. Make sure you are maximising your use of Xero

The cloud is the place to be in 2019, has your business gone digital? If you haven’t fully integrated the cloud into your business just yet don’t worry, because we are here to help. The benefits from cloud accounting are endless but here’s just a few: scalable, cost-effective and easy to use, no need for software to clog up your computer and no need to worry about huge initial costs as Xero runs off a monthly subscription.  

Not only this, but apps have brought a whole new dimension of utility to the Xero platform. Research from Xero has shown businesses which make use of apps grow net profits 30% faster. Apps enable you to combine a specialised set of services into an app stack that works together to streamline your business. Eliminating so many of the hassles commonly associated with the archaic endless list of computer programs you would use in the past. Goodbye dumb license agreements, goodbye constant update waits, hello more time on your hands. 

You can read about some of our favourite apps here

2. Automate your business processes

Automating your business processes reduces manual tasks in processes such as forwarding data, extracting information from databases and much more. A good business integrated app stack will not only eliminate human-caused errors but will save you money.

Faster, cheaper and powerful, these apps will not only identify bottlenecks in your business but will eliminate them too. 

3. Review your expenses

Has it been a while since you took a good hard look at your supplier costs or your additional spending? It’s time to get on top of your expenses and cut unnecessary costs out of your life. The first step is to examine your quarterly invoices and see if there are any unwanted patterns arising. Shop around and make sure your current supplier is giving you the best deal you can get.  

Review the purpose of what you are spending money on and consider if it’s critical to the success of your business. Think about the renewal fees and whether there are loyalty discounts you can access. 

Consider making some payments to decrease your debt, whether it be the company credit card or back payments to suppliers. Making payments ahead of interest coming into the picture is an important policy for ensuring you don’t have unnecessary debt.

4. Forecast your cash flow

A well thought out cash flow forecast is helpful for predicting surpluses and deficits in cash flow. This mean your business can make better decisions, as well as prepare for potential business changes or decisions.  

There’s three steps to a cash flow forecast: 

  • Estimate your likely sales for each week or month 
  • Estimate when you expect to receive payments 
  • Estimate your likely costs 

After you’ve taken these steps, add an opening bank account balance and the revenue, less expenses for each period to calculate your likely cash position. 

Once you’ve taken the necessary steps to create your cash flow forecast, make sure you are updating it throughout the year.  

5. Come in for a free consult!

If you want to take your business to the next level this year or have been thinking about taking the next step to become a pro at Xero

GIVE US A CALL!

Contact us on 3367 0852 or mail@raaccountants.com.au

Filed Under: Small Business Tagged With: cash flow forecasting, expenses, New year, xero

Managing Your Cash Flow Over The Holiday Period

December 14, 2018 By raadmin

December is usually the busiest time of the year for retail and hospitality businesses. But businesses in other sectors often find that their sales slowdown and their customers stop paying them for a few months. So cash flow dries up.

Whether your business is large or small, well-established or in start-up mode, you need to take a planned approach to managing cash flow during the holiday season. Here are few tips for keeping on top of cash flow management during the Christmas/New Year holiday period.

1. Keep Invoicing In The Lead Up To Christmas

Don’t let your business admin slip in the rushed lead-up to Christmas. This is the most important time of the year to stay on top of your invoicing. You may find that many customers will be slow to pay because their businesses are closed over the Christmas period.

2. Set Clear Expectations With Your Customers

Be clear with your customers that you expect them to pay within the pre-arranged credit terms over the Christmas period. Phone regular slow payers a few days before payment is due to confirm that they’ll be paying on time. The phone is always a more effective method than email. If you’re not comfortable having this conversation with your customers, your accountant or bookkeeper may be able to assist.

3. Service Business – Offer A Discount For The “Quiet Time

If your business is usually quiet in January, why not offer your clients a 10% discount if they book you in for January? Why not offer them a 15% discount if they also refer a neighbour or a friend? Set whatever discount amounts work for you. This is the thing: A strategy like this will keep your business busy and some cash coming through during the usually quiet period.

4. Use The Quiet Time To Work On Your Business

If sales are a little slow in the lead-up to Christmas, use the time wisely to hit the ground running int he new year.

The pre-Christmas slow down is a great time to work through the to-do list you’ve been compiling all year.This might include taking a thorough inventory, searching for more suitable lending alternatives, completing a comprehensive competitor analysis or researching the market for new products and suppliers.W

Filed Under: Small Business Tagged With: cash flow, Christmas, invoicing, tax

App Stacks – The Next Step For Business Optimisation

December 13, 2018 By raadmin

The future of business is digital.  This might sound like something you would hear from someone in the 90’s, but digital is taking on a whole new meaning. The world of apps long relegated to games and memes on iTunes has moved into the world of business. The positive effects on your business from having an ideal app stack are boundless. Research from Xero shows small businesses using apps grow net profit 30% faster.  

Hang on, what is an app stack? 

App stack is the name given to the family of apps you have working for your business. In the digital ecosystem it’s important to eliminate clutter. You need to make sure your app stack is set up to work efficiently for your business. When you have the ideal stack you are going to see administrative work eliminated, time saved and a foundation for success built.  

What are the ideal apps for small businesses? 

Xero – Xero is our bread and butter here at RA Business Advisors, but it’s for good reason. Xero is where everything starts when it comes to running your small business. All the apps that follow in your stack will most likely already work perfectly with Xero considering the Xero app marketplace already has over 700 apps integrated.  

Google Docs – Well-known by everyone but still an integral part of any small business, Google Docs is the go-to word processing software for those looking to save money.  

ReceiptBank – ReceiptBank allows you to scan receipts directly into Xero, simply take a photo with your phone and ReceiptBank will scan for important information and produce a handy version in Xero instantly. 

Hubdoc – ReceiptBank is the go-to app for your receipts but what about banks and online vendor receipts you have to fetch? That is where Hubdoc comes in, automatically fetching statements, bills and receipts from more than 700 banks and online vendors. 

WorkflowMAX – WorkflowMAX is exactly what the name suggests, a solution for maximising your workflow. Through WorkflowMAX you can push sales invoices to Xero, get payment confirmation, send invoices and view profitability all through one place.  

Deputy – Deputy is the ultimate employee management tool, simplifying rosters, timesheets and every aspect of payroll and time billing – all integrated with Xero. All in 1 click! 

If you want to take the next step and get a tailored app stack for your business which will work towards your goals, get in contact with us today on 07 3367 0852.

Filed Under: Technology Tagged With: apps, Deputy, Hubdoc, Receiptbank, WorkflowMAX, xero

Would You Like Fringe Benefits Tax With Your Eggnog?

November 29, 2018 By raadmin

The end of the year is fast approaching and its finally time we put our phones down, hung up our stockings and sat back with a glass of eggnog. Here at RA this will be accompanied by a wholesome team dinner for our Christmas party, but if you are considering having a Christmas shindig for your team you may be forgetting one thing – fringe benefits tax.  

Fringe benefits tax? 

Fringe benefits tax is a tax employers pay on certain benefits they provide to their employees – including employees’ family or other associates. FBT is separate to income tax and is calculated on the taxable value of the fringe benefits provided.  

When would fringe benefits tax apply? 

  • A Christmas party provided to current employees held on the premises on a working day may be an exempt benefit. 
  • The costs associated with a Christmas party (food and drink) are exempt from FBT if they are provided on a working day on your business premises and consumed by current employees. 
  • Gifts provided to employees at a Christmas party are exempt from FBT if they meet the minor benefits exemption rule and are worth less than $300. 

What do I keep in mind when I’m planning to make sure I don’t accrue any FBT? 

  • How much is the event/gift going to cost? 
  • When and where is the event going to be held? 
  • Who is going to be invited? Are exclusively current employees going to attend or a wider base of people? 
  • What type of gifts are going to be given if I’m giving gifts?  
  • Who is going to be receiving the gifts? 

What about Christmas parties off-site? 

Costs associated with Christmas parties held off your business premises will give rise to a taxable fringe benefit for employees and their associates unless the benefits are exempt minor benefits. For example, if exclusively current employees and their associates attend for $180 per head, there are no FBT implications as the minor benefits exemption applies. However, if current employees, their associates and clients attend at a cost of $365 each – a taxable fringe benefit will arise for employees and associates. For clients, there is no FBT payable and the cost of providing the entertainment is not income tax deductible.  

If you need further advice on your tax needs, give us a call or book a consultation on 07 3367 0852

Filed Under: Tax Tagged With: Christmas, Christmas party, fringe benefits tax, tax

How Are You Making Sure Your Mobile Phone Data Is Safe?

November 23, 2018 By raadmin

Recently, the new shiny iPhone XS and XR entered the market.Is Your Phone Data Safe

For all the Apple lovers out there, this might mean being the first to wrap your hands around the irresistibly smooth all-glass design, or finally upgrading your old glitchy iPhone to the new model.

If this is you, I’m guessing you’re focused on the opportunity to start afresh, buy a new case, clear all those apps cluttering your current device, and start playing with its new features. Right?

But have you considered the security aspects?

According to online security software vendor, Norton, the scary reality is that 978 million people in 20 countries were affected by cybercrime in 2017. In New Zealand and Australia, one in four small businesses experienced a cyber-attack or hacking attempt.

“It’s an unfortunate fact that the impact of cybercrime is a reality for all businesses,” Xero Head of Security, Paul Macpherson, said at the recent Xerocon conference in Brisbane. “We continually remind all of our customers – small businesses, accountants and bookkeepers – to take precautions to keep their data safe from hackers.”

Sure, you’ll be eager to try the cool Face ID feature and of course you wouldn’t dream of breaking your shiny new phone. But are you mindful of how you’ll keep its contents safe too?

Obtaining a new phone is the perfect opportunity to get everything set up correctly right from the start. And if you don’t plan to upgrade your mobile phone, there’s no time like the present to make changes.

Are you too relaxed with your data security?

While many of us are looking for convenience of easy-to-find or easy-to-remember passwords, in reality you’re making yourself vulnerable to digital identity theft.

Xero Head of Industry, Matthew Prouse, says “the biggest mistake people make is keep highly confidential information in their phone, such as in ‘Notes’ or disguised as a contact. You’re walking around with a pocket of very sensitive data.”

Prouse recommends that you do not –

·         Add passwords and pin codes to the ‘Notes’ app

·         Try to disguise passwords, bank account numbers or your tax file number as phone contacts

·         Choose obvious passwords (such as your date of birth or cat’s name) that even your kids can work out

·         Replicate the same codes everywhere (such as your bank account pin)

·         Allow your computer or phone to automatically save passwords

·         Hand over old mobile phones to your kids without clearing all sensitive data first

Think about the worst case scenario: your phone gets stolen. For many of us, this doesn’t just mean losing a device. It also means losing passwords. And your digital identity.

Every day, there are reports of email accounts being hacked, phishing emails being sent with the aim of collecting credit card details and bank account numbers, and credentials stolen from one website and then used against other sites to see if username and passwords have been replicated.

Macpherson says over 80% of breaches occur via stolen or weak passwords, with email as the primary method of attack. So it’s highly important to keep sensitive employee and customer data safe via modern security practices, especially while running a sustainable and trusted modern business.

How can I improve my phone security?

Now is the time to brush up on your security awareness.

Prouse recommends utilising apps such as LastPass and Google Authenticator for encryption and a second layer of security for important business and personal websites. However, you can’t just download them and consider yourself completely covered.

“As a business owner, your smartphone itself needs to be safe and secure too,” says Prouse. “Make sure there is a fingerprint scanner, facial recognition, and good password security.”

And when it comes to passwords, Prouse suggests thinking outside the box.

“You might like to check out Stay Smart Online for some good tips and policies around passwords. Don’t just use your date of birth, postcode, or banking pin numbers. Pick random numbers; the authorisation apps will remember them for you.”

It’s also key to remember that if you have an existing authenticator app setup on your old phone, you need to set it up on your new device before disposing of your old one.

So if you’re getting your hands on the new iPhone X, take some time to set up the security as a priority. Because, admit it, downloading Instagram was otherwise first on your list!

Filed Under: Technology Tagged With: data safety, data security, mobile phone data, small business, xero

Staying Safe At Tax Time Begins Now!

November 16, 2018 By raadmin

As the year comes to a close and the financial year moves forward at full-steam, it’s important to be on top of your tax time practices now to prevent heartbreak later.   

The ATO have profiled the five most common mistakes Australians are making during the end of the financial year period:  

  • Leaving out some of their income (for example, money earned from cryptocurrency etc.) 
  • Claiming deductions for personal expenses (for example, between work travel, personal phone calls etc.) 
  • Forgetting to keep receipts or records of their expenses (around half of the adjustments the ATO makes are because the taxpayer had no records, or they were poor quality) 
  • Claiming for something they never paid for 
  • Claiming personal expenses for rental properties (either claiming deductions for times when they are using their property themselves, or claiming interest on loans used to buy personal assets like a car or boat) 

If you are worried about what you can claim for work-related personal expenses, just remember these three golden rules:  

  • You must have spent the money yourself and not have been reimbursed 
  • It must be directly related to earning your income 
  • You must have a record to prove it 

With ATO efforts to crack-down on tax time cheats increasing, it’s more important than ever to ensure you don’t get caught off-guard when June 30 comes around. 

If you are worried about any of these, don’t hesitate to get in contact with us! Especially if you are worried about ensuring you are on top of your receipts over the year. Through utilising apps such as ReceiptBank with Xero you can streamline your business and won’t have to worry about storing receipts ever again!  

 

Filed Under: Tax Tagged With: ATO, mistakes, Receiptbank, tax, xero

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