Small Business

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

Five Tips To Get Your Business Ready For The New Year

January 24, 2019 By raadmin

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!

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

What To Do When You Want To Keep Your Business ‘In The Family’

October 26, 2018 By raadmin

Have you got a family business you love but want to have some peace of mind for when it’s time to step away? You aren’t alone as more and more Australians start their own business, we are hearing about more people worried they will have to sell or close down their business they have worked so hard for.

But this anxiety doesn’t have to plague you, transferring your family business to the next generation can be a very straightforward and hassle-free experience!

Who will take over the business?

This is an important question everyone asks themselves, and there are a few things to keep in mind when considering this. Skills should always be at the top of your list when you rattle through your list of candidates – you may have a great affinity to help out your daughter, but your son’s best friend may be better skilled for the position. Make sure you take the time to find the ideal candidate, hold a panel, a series of interviews, whatever will give you the best insight into the perfect candidate!

What’s the steps for handing over the business?

There are a number of steps if you are transferring to a family member and you will no longer be a part of the business and these may include:

Transfer business name or cancel your business name
Cancel tax registrations such as GST
Lodge all required tax returns
Pay outstanding bills, activity statements etc.
Make GST adjustments on your final activity statements
Transfer any other assets such as domain names or web domain registrations
Transfer business records, customer records and employee records
Cancel your ABN after you have met all of your obligations for lodgement, reporting and payments

Start planning now!

A succession/exit plan is integral to a smooth transition for you and the new business owner. When you develop this plan, remember:

Will you transfer both ownership and management?
Are you going to review the plan regularly?
Are you going to include direct family members in the business? What roles are they going to play?
Is training or mentoring required on your part for your successor?

A terrific guide issued by the Australian Government on what steps are best can be found HERE

How To Stay Safe Against The ATO Crackdown On Declared Income

October 19, 2018 By raadmin

Warning Time

The Australian Taxation Office (ATO) is closing in fast on everyone who doesn’t properly declare their income and pay the correct amount of tax.

As your Tax Accountants, we want to help you be aware of what the ATO is doing and how you can protect yourself.

How Does The ATO Know?

The ATO is linking databases of property sales, car purchases, international plane flights, dividends paid from shares, and sales of shares and investments with the income declared on your Tax Return.

If your Tax Return income doesn’t match with your spending or repayment of loans, then the ATO will probably “red flag” you for a tax audit.

These databases have not been linked before like this, so we’re expecting to see a huge increase in the number of tax audits over the next 12 months.

Business Cash Receipts Not Declared

Many small business owners pocket some of their cash takings each week and don’t declare this in their Tax Returns.

The ATO now has the tools to catch this out

When your business Tax Return is lodged, the ATO compares your profit and other key indicators as a % of your total sales with other businesses in your industry. If your profit % is lower than average, then the ATO may decide to do a tax audit just to see if you’re properly declaring all the income you actually receive, or if the expenses you’ve claimed are actually allowable as tax deductions.

Also, not declaring cash income from your business could result in you getting a much smaller price for the sale of your business. We’ll discuss this in a future article.

What Are We Doing To Help You?

We have 2 keys roles as your tax accountants.

Ensure you pay least amount of tax you legally should.
Assist you to lodge a correct tax return, so if you’re audited by the ATO you can sleep peacefully at night knowing that you’ve done the right thing.

While we don’t like paying tax just like you don’t like paying tax – at the end of the day it simply is a normal part of life and there’s nothing we can do about it except for obeying the laws and lodging a true and correct Tax Return.

If you don’t declare all income you receive and if you claim as expenses things that aren’t properly allowable tax deductions – then if you’re audited and lose you will have to pay back tax PLUS pay large penalties to the ATO.

Is this really worth it?

We’re On Your Side. Talk To Us Today!

Let’s talk frankly. If you’ve been naughty in the past, talk to our expert accounting team about it. There are option we can advise you on to help you and reduce possible fines and penalties.

It’s better for us to help you declare past sins before the ATO finds out and starts their attack on you.

We’ll help you fight the ATO if the occasion is needed. But you need to do the right thing – even if you disagree with the tax laws.

Please – don’t doubt our resolve to help you.

Contact your expert team at RA Business Advisors today on 07 or by email at mail@raaccountants.com.au

We’re your good friends. And we’re here to help you!

Downsizer Contributions – Is It Time To Sell Your Home?

September 5, 2018 By raadmin

As of July 1 2018, super funds are now able to accept downsizer contributions from their members. The federal government introduced the initiative to help relieve housing affordability pressure, encouraging seniors to relocate to smaller homes.

What is a downsizer contribution?

Downsizer contributions were introduced as an easier means for those selling their home to deposit up to $300,000 into their super fund from the sale. These are available for those who are 65 years old or older and meet the eligibility requirements. Until the total balance is re-calculated, the contribution doesn’t affect total super balance.

How do I make a downsizer contribution?

There are 7 eligibility requirements you must satisfy, if you meet the 65+ age requirement:

The contribution must be from the proceeds of selling your home, where contract of sale was exchanged on or after July 1 2018.
The home was owned by you or your spouse for 10 years or more prior to the sale.
Your home is in Australia and is not a caravan, houseboat or other mobile home.
Proceeds from the sale of the home are either exempt or partially exempt from CGT under the main residence exemption or would be entitled to this exception if the home was a CGT rather than a pre-CGT asset.
You have completed the downsizer contribution into super form before or at the time of making downsizer contribution.
The downsizing contribution is within 90 days of receiving the proceeds of the sale.
You haven’t previously made a downsizer contribution for another home.

What are the benefits of making these contributions?

There are two main benefits from making these contributions – the amount doesn’t count towards contribution caps or total superannuation balance for the financial year. The contribution also doesn’t have the standard ‘work test’ for voluntary contributions attached to it, which applies to Aussies aged 65-74. Members should be aware that downsizer contributions are not deductible.

However, members who are receiving/hoping to receive the Centrelink aged pension should be vigilant for the impact this has on eligibility. Assets within a super fund contribute towards the asset test which determines eligibility to receive a pension, once at pension age.

If you are an SMSF with members starting to ask about downsizer contributions and don’t feel prepared, give us a call! We are experts in SMSF and small business; we can help you meet your customer needs without sacrificing your own.

Single-Touch Payroll: How Is It Going To Change Things For You?

August 17, 2018 By raadmin

While the name may suggest some weird form of physical payroll, single-touch payroll (STP) is a new initiative from the ATO which came into effect at the start of this financial year. STP is currently applicable for employers with 20 or more employees. However, STP will also be used for employers with fewer than 20 employees from the start of next financial year.

What is single-touch payroll?

STP enables employers to report salary or wages, PAYG withholding and super information directly to the ATO at the same time they pay their employees. STP will send a copy of these to the ATO automatically when these are sent to the employee. The system is designed to make reporting easier for employers, as well as addressing the unpaid superannuation crisis.

How do I report through STP?

Reporting is easy as the process of STP is automatic, once your reporting software is STP-enabled. Before lodging your first report, make sure you authorise people to lodge reports on behalf of your business. As well as checking if you are in need of an AUSkey, this identifies you as the representative for your business when using online government services.

There are some payments which cannot be reported through STP, these include:

payments that are generally not paid through a payroll process;
payments made by payers to recipients that are generally not their employees

Are there any issues that could arise from STP?

As long as you are up-to-date on your super payments there is no need to worry. However, for smaller businesses that don’t pay super on time due to limited cash flow, consider breaking down these payments to be more regular to meet your obligations under STP. If you’ve missed superannuation payments in the past, there is an amnesty period until May 2019 to rectify any past non-compliance without penalty. Grievances can be backdated as far as 1992, so make sure you are on top of your superannuation!

Are there any benefits for employees?

Peace of mind. Through establishing the STP system, the ATO will get a report every time an employee is paid and will be able to instantly verify the superannuation payments are up to date. Employees will also be able to complete Super Choice forms and TFN declaration forms through their myGov account.

Staying Competitive as a Small Business in the Amazon Age

July 19, 2018 By raadmin

Amazon has been operating on Australian shores for some time now, but the ‘Amazon Effect’ has yet to hit. Amazon’s launch has signaled a culture shift for shoppers, with eCommerce sales set to almost double in the next five years. With this in mind, how can you ensure your small business doesn’t get left behind?

Consider how you could use Amazon to your advantage

Amazon’s Marketplace platform provides opportunities to reach a whole new segment of customers. With the recent introduction of Fulfillment by Amazon, small businesses can use Amazons capabilities for storing and sending products. This is especially useful for when their Prime service launches later this year, offering flagship shipping times. The service also processes returns, freeing you up to focus on what you do best.

Focus on your delivery times

If you decide you aren’t going to use Amazon’s logistics services, make sure you are nailing your shipping times. As Amazon keeps growing, delivery speed is going to be a growing driver of business, according to Deloitte’s David White.

Get your online right

Reports from Hitwise and OFX show Australian consumers are eager for a multi-channel shopping experience. Focusing on options such as click-and-collect are critical to bridge the gap between online and in-store customers.

The largest demographics using online shopping are the 25-34 and 35-44 age groups, think about how you can effectively reach these audiences and convert them into customers. Effective online presence is key for this, especially for small business, have a read of our article on online presence HERE.

Brand loyalty was also shown to be increasingly more important in the current retail landscape, that means continuing to engage with customers post-purchase through online newsletters, deals, or targeted ads.

Remember the power of price

Amazon sells products at a premium to US prices with their advantage coming from their range of products and delivery, not their price. Focusing on delivering prices that blow customers away is a simple way to compete against Amazon.

Tick Tock, Time’s Almost Up

May 31, 2018 By raadmin

EOFY is just around the corner, so business owners beware. If you haven’t gotten it done, there is still some time left! If you’re a start-up founder, then pay extra close attention as I guide you step by step into your first business EOFY.

Step 1. Get your ducks in a row

Getting your documents in order is absolutely crucial when that panic sticking EOFY rolls around. If you don’t know what your number looks like it’s hard to make a plan on what to do. As we keep telling you, we are XERO experts and we believe in most circumstances that is the best place to get your business numbers sorted. For a start-up, there may be more cost-effective options to get you going and we can guide you through that decision.

Step 2. Seek expert advice

Many problems arise when tax time comes around; the biggest one is lack of understanding. That’s why our taxperts (link) are well versed in all the laws regarding tax. We provide both taxation and business advice to arm you with all the knowledge you need. Penalties apply if your business isn’t compliant with legislation, so avoid unnecessary fees by talking to one of our advisors today!

Step 3. Claiming is the game

Small businesses that purchase new assets under $20,000 are eligible for a tax write-off to the full value of those purchases. Traditionally, you’d have to wait potentially say five years to realise this return but thankfully this upfront deduction has been extended. One catch: the assets must be purchased prior to EOFY and businesses cannot write-off expenditure that they are trying to also claim through an R&D tax incentive. Other deductions such as superannuation contributions (new rules this year) can also make a big difference to your tax bill.

Step 4. Be aware

Tax rule changes are as frequent as Christmas these days, no matter what they change every year. It’s critical that you stay up to date with these changes. Last year the tax rate for small companies dropped from 30% where it had been stuck for quite some time. This year the rate is 27.5% for businesses earning under $10 million and 30% for businesses earning more.

Step 5. Arm yourself

Before the technological age really took off, owning a small business was a living nightmare. Thankfully the ATO has kept up with the times by offering an endless supply of small business administration information. Or if you’re really a tech head, there’s an app for that. Check out the ATO website for information ranging from start-ups to large businesses. There is also a huge array of clever apps on the market that can help streamline your business and free up your time for the more important things in life.