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A $1.6 million cap on the amount of tax-free super savings a person can hold in retirement has been passed by the federal government. This new ruling is to begin July 2018, and after-tax contributions are also to be capped at $100,000 a year. Treasurer Scott Morison is calling the changed the “most significant change to protect the flexibility and ensure the sustainability of superannuation in more than a decade.” The originally proposed $500,000 lifetime cap on after-tax super contribution made since 2007 saw severe backlash from Coalition backbenchers resulting in the countered response of $100,000 cap. Whilst the changes were mostly welcomed by superannuation groups there were complaints that the Government had caved in to the super rich. This Government, however, views the change as a necessity in order to sustain a flexible superannuation policy for future generations. The changes will allow for more than 800,000 Australians to take advantage of their concessional contributions cap from July next year.

The Government is proposing to cut tax deductions for non-compulsory work uniforms in order to save the federal budget $30 million annually. In the 2013-14 Financial Year 492,000 taxpayers claimed $104 million in non-compulsory work clothing expenses, at an average of $211 each. For employees whose staff wear non-compulsory uniforms a tax deduction for expenses they incur to rent, purchase or maintain non-compulsory corporate uniform.

Rules currently specify that employees can only claim a tax deduction for non-compulsory uniform expenses, where employers have the uniform designs approved and entered on the Register of Approved Occupational Clothing (RAOC) by the Secretary of the Department of Industry, Innovation and Science. Cutting non-compulsory uniform deductions will save the RAOC $100,000 annually in administration costs. This is not the first time the government has tried to cut tax deduction with the Turnbull government failing to pass a proposal to cut all work-related deduction by replacing them with lower tax rates when it failed to result in a lower personal tax rate for all. Tax deduction rulings are yet to be changed as the government investigates concerns that the current approach may be causing unnecessary regulatory burden and costs on businesses.

To read more click here.

The Australian Small Business and Family Enterprise Ombudsman’s latest inquiry into payment terms that have affected the livelihood of almost five million Australians involved in small business has left me reflected on the experiences I have had with big companies and government enterprises. At my last job I was chasing up a substantial payment from a multi-million dollar, international company who was almost two months late on their payment. After repetitive, one-way conversations, office staff essentially told me that it would be paid when it was paid, despite the agreed upon 14-day payment terms they had signed prior to the job. The repercussions of this late payment had a chain reaction that affected payroll, budgets and financial position. This interaction between big companies and small businesses puts to question the effects of late payments on the owners of small businesses. Big companies and government enterprises are said to be owing at least $26 billion in unpaid invoices to small businesses. With 90 per cent of small businesses closing due to poor cash flow, the resulting unpaid invoices have led to small business owners taking out loans in order to pay suppliers and wages. “If small-to-medium businesses start falling off a cliff, economic conditions in Australia will certainly follow, so it’s incumbent on big businesses and governments to follow best practice and pay their bills on time,” (Kate Carnell, 2016). If you have a problem with late payments you can talk to your accountant for help with issuing reminders and debt collection, or just for help speeding up the payment.

Last year the ATO released a free tool for their app ‘MyDeductions’ in order to help taxpayers keep track of deductions and expenses, on-the-go. The app is simple and easy to use; all you have to do is add the date of purchase, amount and a description. You can also categorise your receipts into deduction labels whenever you like. Come tax time you will be given the option to upload your completed deductions data to the ATO and will be imported into your tax return pre-fill. The MyDeductions app allows you to keep a record of all work-related:

• Car expenses; point-to-point, odometer method or electronic log book
• Travel expenses; public transport, flights, taxi and Uber fares, tolls, parking fees, meals, accommodation and incidental expenses incurred while travelling for work
• Clothing, laundry and dry-cleaning expenses; compulsory uniform, protective clothing, occupation-specific clothing, and laundry expenses for these clothes
• Self-education expenses; costs of attending seminars, conferences, educational workshops, and job-specific course fees
• Other expenses; home office expenses, mobile, internet

You can also use MyDeductions to record non work-related expenses such as;

• Gift and donations
• Costs associated with managing your tax affairs

Download the ATO app from the app store to start using MyDeductions.

If eligible to sell your business property to your SMSF, you can receive a tax concession on investment earnings and hence, if you are eligible, you will only be taxed at 10% as per capital gain tax (CGT). Also, if you are careful and structure the sale transaction right you may pay no CGT when you sell the property, when paying a pension from your fund.

Like most things with the ATO, there are strict rules and guidelines surrounding the sale of a business property to a SMSF.

Eligibility

•  Must be defined as a business real property, meaning it needs to be a freehold or leasehold interest in real property that is capable of assignment or transfer.
• Needs to be wholly and exclusively in one business
• If the property is being acquired from a related party, then related party transaction rules apply
• Business real property doesn’t include property used partly for running a business and partly for residential purposes.

Exceptions

• Above restrictions do not apply to farmers whose SMSF can own a farm and lease it to a member
• The predominant purpose of the entire rural property can’t be for private of domestic purposes
• Small businesses can use their SMSF monies to own their business premises

Alternatives

For a list of alternate options and useful mechanisms, click here. 

Interested in learning about how you can sell you business property to your SMSF? Give us a call today to talk to one of our small business experts or book a meeting with our director.

The ATO is warning small businesses who have yet to sign up to SuperStream that time is running out. With a deadline on 28 October 2016, businesses not set up are at risk of being not-compliant with no individual extensions to be granted. As mentioned in previous blogs, SuperStream is an electronic reporting standard for superannuation payments to staff. Luckily, 75% of small businesses are SuperStream compliant but there is still a way to go to make everyone compliant. The SuperStream system is designed to save administration time and costs.

If you are yet to set up your SuperStream now is the time to do so. Take a look at our ‘SuperStream Changes’ blog, visit the ATO for a step-by-step guide, or contact us to hear how we can make you compliant before the deadline.

In one of our first ever blogs, back in December 2011, we discussed “What is the Cloud” after holding our first information session with a small group of clients and non-clients. Now, five years on, who would have guessed the technological innovations the cloud would have helped us achieve? From multimillion dollar businesses such as Uber and Airbnb, to internet giant Amazon, it has so far seemed that cloud technology may not just be for big companies with big IT budgets. CTO at Amazon, Werner Vogels, believes that greater competition and consumer power has put cloud technology in the hands of smaller companies and average households. He stated that “almost anything that draws a current will eventually become connected to a network.” You will be able to talk to your appliances to turn them on, much like the movie “Parental Guidance” smart house. This rapidly growing technology will soon be part of everyday households and our everyday lives.

Last week over 2,000 bookkeepers, accountants and software partners came together for the 2016 Xerocon South. Xerocon launched a number of new and exciting elements Xero had been working on including;

The introduction of the Government’s Enterprise Tax Plan Bill, if passed, will see important tax breaks for small businesses with a turnover of up to $10 million. Australian Small Business and Family Enterprise Ombudsman, Ms Kate Carnell noted that “An important element of this budget is empowering small businesses to generate much needed economic growth though tax breaks that allow them to re-invest and grow their business.” From 2016-17 financial year, small businesses with an annual turnover of less than $10 million may see a company tax cut to 27.5%. This is expected to decrease the tax of 870,000 companies. This is part of a 10 year government plan to eventually decrease all company tax by 25% to encourage investment and higher-paid jobs. A 5% tax discount is proposed to be introduced for unincorporated small businesses as well as immediate deductibility on assets under $20,000.

Xero has many excellent add-ons, the newest have been discussed below.

Expensify
Expensify offers one-click expense reports in real-time, which allows you to track your business and personal expenses. The Xero integrations allow you to customize how expenses are coded to Xero accounts, tracking categories, customer contacts, and more. This integration leads to a more seamless accounting and bookkeeping experience and alleviates the headache of business administration. Expensify is focused on building for the small business, and making sure a customer never outgrows their product.

Hubdoc
Hubdoc extracts key information from your receipts, invoices and bills and stores them in one secure location on the cloud, easily accessible wherever you are. Hubdoc works by snapping, emailing, or scanning an invoice or receipt and then, based on the information in the document, files it to its appropriate folder. You can then publish the document data to Xero, making for seamless integration and bookkeeping process. Now this may sound like ReceiptBank but one cool feature HubDoc has that ReceiptBank doesn’t is the ability to automatically pull bills and statements from your online accounts. This means you don’t need to log in every month to ten different sites to collect your monthly invoices such as your phone bill. Hubdoc can help you simplify your business, go paperless, and offers bank level security for your documents.

TSheets
TSheets is a mobile timesheet app which simplifies and streamlines tedious tasks like payroll, invoicing and labour costing. TSheets mobile time tracking allows for employers to see who is working and where they are working. This is ideal for maintaining employees who work remotely or switch locations regularly. TSheets allows employees to clock in and out in real time or enter their time manually and allocate time to custom fields, projects or tasks. Easily track and manage employee sick leave, annual leave and paid time off. You can schedule employees by shift, job or task and send your roster to your employee’s phones as soon as it is ready. Simple to use, easy to edit and always in sync, with customisable alerts and calendar integrations.