A guide to avoiding employment disasters
There are many things to get right when employing someone. And whilst employees are protected by Fair Work Australia, there is no such protection offered to employers. As an employer, you must get everything 100% right. Thankfully, a federal government has finally produced a guide to avoiding employment disasters.
The minister for small business Kelly O’Dwyer recently released a checklist by which small business owners can find all of the things they need to address and do and do so by going to just the one source.
The checklist also provides information on:-
- The various types of employment
- Awards
- WorkCover
- Employing foreigners
- Anti-discrimination
- Record keeping requirements
- PAYG WH and SG super obligations
- Health & safety
It also has a employee v contractor decision tool.
You can access the checklist at:-
At MRS, we will spend today planning for your success tomorrow.
Are you Super Stream ready?
Are you Super Stream ready? You need to be as it is the only way that employers can both report and pay employer super contributions after 30th June 2016.
It won’t apply to personal contributions nor to employer contributions to a related party’s self managed super fund. Every other employer contribution by every employer in the country must be made through Super Stream.
You can learn more by watching the following video from the Australian Taxation Office.
Or better yet ask us to help you personally.
At MRS, we will spend today planning for your success tomorrow.
$20,000 asset write-off – Part 2
One of the best tax planning options available to small businesses is the ability to claim a full tax deduction for the cost of any business asset costing less than $20,000. In $20,000 asset write-off Part 2 we explore 6 other important considerations and traps to take into account before committing a significant part of your cash reserves:-
- If you trade-in an asset, it is the cost of the new asset that qualifies. So if your business buys a car for $30,000 and trades in an old car for $12,000, there is no entitlement as the cost of the new asset exceeds $20,000.
- The $20,000 refers to the GST exclusive price. If however, a business is not registered for GST, it is the cost of the asset including GST.
- You can only claim the business portion on an asset that is used for both business and privately – such as a car or lap-top.
- As tempting as this limit is, don’t get too carried away and buy assets that your cash flow cannot support.
- If your business has current or carried forward losses in excess of your intended asset purchase(s), then your business will not gain any tax saving in this financial year.
- This accelerated write-off rate applies will remain in place until 30th June 2017 so next year is the last time you can utilise this generous arrangement.
If you haven’t done so already, please refer to last week’s post where we outlined 6 other important considerations. Moreover, please contact us if you have any questions in relation to this or any other pre year end tax planning issue.
At MRS, we will spend today planning for your success tomorrow.
$20,000 asset write-off
It’s nearly the end of the tax year and as the year’s result should now be clear, it’s now appropriate to address tax planning. One of the tax planning tips is to use the $20,000 asset write-off.
So if your business does need a small asset, now is the perfect time to buy it.
But before doing so, please ensure you have factored in the following considerations:-
- Only buy an asset if you need it. So if a company registered for GST buys and asset for $11,000, it will get back $1,000 of GST and will have a tax deduction of $10,000. It will pay $3,000 less company income tax. It will still be $7,000 out of pocket.
- You need to elect or have previously elected to use the small business general pooling depreciation method. A business qualifies as a small business if its current year or prior year turnover is under $2,000,000. If not, the $20,000 provisions do not apply.
- Your small business must own the asset. Your business either needs to pay for it or finance it by a loan, hire purchase or by way of a chattel mortgage contract.
- Leased assets do not qualify for the write-off as one does not own the asset until the final payment is made or the lease contract is paid out early.
- If you need to finance an asset purchase, then you need to act quickly, very quickly, as financiers will be inundated.
- To qualify, an asset must be installed or ready for use by 30th June.
We will list other considerations in our upcoming Part 2. In the meantime, please contact us if you have any questions.
At MRS, we will spend today planning for your success tomorrow.
Protect yourself from ransomware
You have heard the stories. Some business has been infected with ransomware and their data has been encrypted and locked. They have then been asked to pay a substantial sum into an overseas bank account after which they will (supposedly) have their system unlocked. The police reckon the incidences of this are much higher than reported. But is largely irrelevant – the point is you need to protect yourself from ransomware.
Andrew Leniart from Andrew’s Computer Help Zone has looked after our IT needs for the last 17 years – and that of many of your clients as well. Andrew has written a short article on how to protect yourself. Bottom line is that you should take proper protection and have a back-up plan that enables you to restore data and be operational again in the shortest period of time. Moreover, you should test the back-ups from time to time to ensure that they work. Our Paul Lethlean can tell you a number of stories from being a QA reviewer of accounting practices needing to restore a back-up only to find there was nothing or little there.
You can read Andrew’s article at:-
If you would like help protecting your business then we happily recommend you to Andrew Leniart or John Braakhuis (0433 004 288).
At MRS, we will spend today planning for your success tomorrow.
She may not be right mate & death benefit nominations
She’ll be right mate. Australians have a great outlook on life don’t they? Sometimes though this casual nature can come at great cost. Like with not ensuring their estate and in particular their super gets into the right hands.
Upon death, super can be paid to anyone who is a dependent. Close family members can receive it tax free. All of this is critical in ensuing that the pool of your life’s hard work and sacrifices gets into the right hands and does so in the most effective manner.
Super is today most people’s biggest or second biggest asset. The way of ensuring it gets into the right hands is to make a death benefit nomination. There are various forms of nominations – the right one for you depends on your circumstances and what you wish to have happen. This is all critically important where large sums are involved, particularly in respect of a self managed super fund as control may fall to just one side of the family.
If you would like to know more, then attend the upcoming Maggs Reid Group seminar on death benefits. This free seminar will also explain what is good and bad and the opportunities from the 2016 Federal Budget. We will also be exploring some great business tools and solutions to small and medium sized business owners alike.
At MRS, we will spend today planning for your success tomorrow.
Great by Choice
Many of you will know of or have read Jim Collins famous book Good to Great. Over the weekend I finished another one of his books called Great by Choice.
Great by Choice is a fascinating examination on the role of luck and preparation in the success of a business. It is a highly readable book full of real life examples as well as some most interesting analogies such as Scott and Amundsen’s respective efforts to reach the South Pole.
Collins and his co-author Hanson studies lead to some interesting discoveries including that the best leaders were not greater risk takers, were not more visionary and were not more creative than their competitors. They were however more disciplined, understood their industry better and as the authors described, more paranoid. Consequently, bad luck did not derail them and they were better place to take advantage of good luck and opportunities when they presented themselves.
Although it is a book written with American businesses as case studies, it is highly relevant to anyone in business anywhere.
And like any great business book, don’t try reading it before you go to bed – you won’t be able to sleep as your mind will be racing too fast.
Our new reception features this and many other famous business books which you are welcome to borrow.
At MRS, we will spend today planning for your success tomorrow.
Good news in the Budget
Amongst all the politic game playing and doom and gloom reporting, there were actually some good news in the Budget.
Whilst the Company Tax rate cut took all the headlines, more medium sized businesses will now be able to avail themselves of the tax concessions previously restricted to small businesses.
What accountants call Division 7A (which is incomprehensible to the typical business owner) will be reviewed. Division 7A requires repayments of loans made by companies to shareholders and their associates (which includes trusts) and which can require significant tax to be paid. Whilst the statements were brief and vague, it is clear they are going to reduce the compliance burden and related costs.
The further restrictions to super certainly took front stage. However, there were some very valuable announcements that many will be able to benefit from as well as some just plain common sense changes.
If you would like an informed analysis of how you may benefit from the Budget, please e-mail Alex and ask for a copy of our briefing paper.
At MRS, we will spend today planning for your success tomorrow.
The Budget
The following public domain You Tube clip from BT Financial Group is a great summary of The Budget as it affects most people.
It is an interesting one with some bad news, a few sweeteners but also some changes that will benefit many
There are however a range of other tax changes which we will address in upcoming blogs that will benefit businesses and individuals alike.
Super work test
If you watched the analysts on TV after the budget or read the press thereafter, you would understandably think that there was only bad news in the 2016 Federal Budget. Not so. One welcome announcement will be that the super work test is to be removed as form July 2017.
So from July 2017, anyone aged between 65 and 75 will automatically be able to make a contribution into super. Currently, those aged between 65 and 75 can only make a contribution into super after they have satisfied a work test of having worked 40 hours in a 30 day period.
This will be a very welcome change for those wishing to still make deductible (concessional) contributions to reduce their tax. It is also a way for those who fail the life time non-concessional cap of being able to get money into super.
Keep an eye out for future blogs on other ways you might benefit from the 2016 Federal Budget.
At MRS, we will spend today planning for your success tomorrow.