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Not only did we celebrate a new year a couple of weeks ago, but we welcomed a new decade.  It is at this time we find ourselves not only reflecting on the year that has just been, we are also reflecting on the decade that has just gone.

At the beginning of the last decade, our office operated quite differently. Looking back at 2010, we were just beginning to implement Xero and our processes were drastically changing into electronic form.  All our correspondence was via snail mail, email was used sporadically to converse with clients; and working away from our desk was next to impossible due to all our files & software being on a server which we could only use via ‘Remote Access’.

This last decade has drastically improved our processes.  So much so, that we would not want to return to where we used to be.  Now, we are very proud Gold Xero Partners, well and truly using and loving our beautiful accounting software, all our correspondence is via email allowing instantaneous contact between ourselves and our clients, and all our files and software are ‘in the clouds’ which allows us to work away from our desks easily, and in turn, improving our work/life balance.

Trying to imagine where we will be at the beginning of next decade is mind boggling, but exciting!

For many people a new decade brings with it an increased sense of ‘New Beginning’ and starting with a ‘Clean Slate’.  In small business, often the break between Christmas and New Year allows us time to evaluate the past and consider how we can tackle the coming year with improved efficiencies.  How can we make our business grow, be more successful and find a better work/life balance.  Perhaps, if you haven’t made the jump yet, this is your year to improve your data processing and bookkeeping by jumping onto Xero.  It will most definitely not be a change you regret!  For those of you who do use Xero, perhaps there is an add-on which you have been considering implementing – this is the time to jump on board.  While you are feeling refreshed to tackle the year ahead, get the ball rolling, it’s the best time to implement a change.

From all of us at RA Business Advisors, we wish you a very successful year ahead!!

Company Directors can be held personally liable for a company’s unpaid employee superannuation. 

Any unpaid superannuation is payable to the ATO after three months as a Superannuation Guarantee Charge (SGC). The ATO can issue a Director Penalty Notice for unpaid GSC and the Company Director’s personal assets can be sold to pay for the debts in the penalty notice. In other words, Company Directors can be held personally liable for the company’s unpaid superannuation. 

If a company fails to pay superannuation, but it lodges its SGC Statements by the SGC Statement due dates, the ATO can issue a Director Penalty Notice to the company’s directors. The Directors can become liable to the ATO for the amount of SGC claimed in the Director Penalty Notice. Directors can avoid personal liability if the SGC is paid by the company. 

If a company fails to pay superannuation and it also fails to lodge SGC statements by the SGC Statement due dates, the Directors are automatically personally liable for unpaid superannuation. In these circumstances:

• The ATO can estimate unpaid superannuation if it chooses 
• The ATO can and will issue a Director Penalty Notice to recover superannuation from the Directors 
• Placing the company in liquidation or voluntary administration will not avoid liability for the Directors 
• The ATO can and will issue Director Penalty Notice after a company is already in liquidation or voluntary administration 

In May 2019, new legislation was passed to change the date upon which company directors become automatically liable for SGC amounts. The new date is the date which SGC Statements are due, which are: 

If your company cannot pay superannuation, the best thing to do to avoid liability is to lodge SGC Statements within three months of them being due. If this is done, then you will be able to avoid liability under any Director Penalty Notice issued by placing your company in liquidation, if this is the best option available. The ATO will also not be able to issue you with a Director Penalty Notice after your company has been placed in liquidation. 

But if your company is unable to pay superannuation within three months of it being due, then it probably has some underlying financial problems and you should see advice regarding the company’s circumstances, strategies which may be put in place and risks to you as a Director personally. 

Contact our expert Accountants for assistance if you have any questions about this information or if you need help in working out what to do if you have unpaid superannuation in your company. Don’t leave this too late. If you do, then your personal assets will be at risk! 

‘Tis the season to be jolly!  

Fringe Benefits Tax (FBT) can be confusing, especially when there is no separate FBT category for Christmas parties. You may encounter different circumstances when providing these parties for your team and preparing gifts. We understand your struggles and have simplified things for you. 

1, Christmas Parties and Gifts for staffs 

If you are not a tax-exempt organisation and do not use the 50-50 split method for meal entertainment, the following explanations may help you determine whether there are FBT implications arising from a Christmas party. 

• Exempt Property Benefits:

  The costs associated with Christmas parties (such as food and drink) are exempt from FBT if they are provided on a working day, on your business premises and consumed by current employees. These costs are an “Exempt Property Benefit”. The property benefit exemption is only available for employees. 

• Exempt Benefits – Minor Benefits:

  The provision of a Christmas party to an employee may be a minor benefit and exempt if the cost of the party is less than $300 per employee and certain conditions are met. The benefit provided to an associate of the employee may also be a minor benefit and exempt if the cost of the party for each associate of an employee is less than $300. The threshold of less than $300 applies to each benefit provided, not to the total value of all associated benefits. 

• Gifts provided to employees at a Christmas party:

  The giving of a gift to an employee at Christmas time may be a minor benefit that is an “exempt benefit” where the value of the gift is less than $300. 

Where a Christmas gift is provided to an employee at a Christmas party, the benefits are associated benefits, but each benefit needs to be considered separately to determine if they are less than $300 in value. If both the Christmas party and the gift are less than $300 in value each and the other conditions of a minor benefit are met, they will both be exempt benefits. 

2, How about Client gifts? 

As the gift is an expense to your business, it is generally considered to be a tax deduction. The ATO has considered the act of gift making to clients, and several cases exist where the tax treatment has been tested in the courts. If there is an expectation that the gift will either generate future business from the client or motivate them to refer your services to others, it is considered that the expense of the gift was business promotion and is a tax deduction. 

It should be noted that the gift does not constitute the provision of entertainment which is a non-taxable deduction. 

If you are unsure about the FBT implications of your Christmas party or gifts, please contact our expert Accountants today, and they can assist you! 

Australia’s current tax deduction system has been a hotly debated issue in recent months. There have been strong opposing views, with one side claiming that the current system is severely flawed, due to the sheer amount of fraudulent and petty claims occurring. However, many are claiming that the current system should be kept in place, and stating the problem as being with the public not being educated enough when claiming work-related expenses.

Joanne Dunne, director at Accounting firm PwC is strongly in the corner of a reform of the current system, stating that the current tax deduction system is “out of control”. Dunne has claimed that the current system is inefficient, due to “silly expense claims” that are burdening the ATO’s resources. Dunne also stated that the time spent on these trivial claims should be allocated to “more important” work, and also claims that the cost of investigating these false claims outweighs the costs recovered. The proposition of a simple yearly $1000 blanket deduction for each taxpayer has been discussed, with the view of simplifying the system and nullifying any incorrect claims made.

This has proven to be an unpopular recommendation for some; with Ram Pandey from the ATO expressing disapproval of this idea. Pandey has defended the current system, explaining that the actual problem lies with the public’s misunderstanding of what should be claimed. He argued that a complete overhaul of the system would not be practical, and that it should undergo some gradual tweaking and enhancement instead.

We found this debate quite interesting; we believe that any changes in the tax system are definitely worth keeping an eye on for any small business owner. Our taxation accountants are also very knowledgeable in this area, if you’re looking for some specific advice or simply want to speak with an accountant about your tax planning options, call us today to schedule an appointment on (07) 3367-0852.

Post Contributor:
Andrés Pascoe

An interesting tax avoidance scam has been uncovered recently, involving thousands of tradesmen around Australia and hardware chain Bunnings Warehouse. Because of the amount of cash transactions that occur in the trade industry, a large number of these service providers have been able to circumvent the tax system.

Large amounts of contract workers in Australia have been able to beat the system by replacing their own ABN number with Bunnings ABN number on invoices, making the transactions untraceable to their actual recipients. This has created a black economy of sorts for tradesmen as a result of the large amount of unaccounted for payments. Paul Drum, a member of the government’s national tax liaison group has responded to this issue, proposing that the Government implements a system “to make sure we can verify ABNs on a real-time basis”. This new system would ensure that all contractor transactions are accounted for in real time, eliminating the possibility of contractors escaping tax payments and ensuring the Government does not lose out on hundreds of millions of dollars.

Understanding Your Tax Obligations

If there is a chance that you are not fully aware of all of your tax obligations, there are a range of online guides that can help you. The ATO website has a comprehensive guide to what payments need to be reported each year, including details about businesses in building and construction. We recommend giving the website a look by clicking here, as it is a valuable resource designed to help you make sure that you are fulfilling your tax obligations. As always, you are welcome to contact one of our taxation experts on (07) 3367-0852 if there are any further questions you had regarding your tax planning options. We would love to hear from you!

Post Contributor:
Andrés Pascoe

Usually, January 1 is the common new year celebration. We get together with our friends and family to say goodbye to the year that was and welcome the new year with excitement. It’s a chance to set personal goals to improve ourselves in hope that the coming year is greater than the last.

As accountants, we have a second New Year’s celebration on June 30. Traditionally we complete our performance reviews, we detail our work achievements from the previous year, document our career goals for the current year and our 5 year plan. It is the time of the year we focus on our careers and how we personally want to see them advance in the coming year/s.

After all of this, we head to our local watering hole and celebrate all that we have achieved and aim to achieve. It’s never hard to find an excuse for celebration, but Financial New Year is certainly never an occasion we miss.
At this time of year it is quite common to find our clients thinking about how they can improve their business, their income, their investments, particularly after completing the reports for the previous year and seeing results which they wish were better. June 30 seems to be the time of year for people to reassess the financial aspect of their lives. It’s something many of us think about but not necessarily seek assistance with.

We, as Business Advisors, find that this is a great time to put plans into action, make adjustments to current business activities and if necessary, convert to Xero from other accounting software systems. A five year plan is great for business too, as it gives us as business owners, direction and something to aim towards. At the end of all our hard work the income is great, but achieving business goals to encourage growth is a great feeling and form of motivation. It’s just another way to receive more self-satisfaction for something that absorbs so much of our time, making it all worth while.

From all of us here at Rush Associates, we wish you a Prosperous New Financial Year FULL of Achievements and Growth!!!