Posts Categorized: General

Single Touch Payroll

Single Touch Payroll will apply to all employers from 1st July 2019.  Whilst extensions have been offered we recommend not relying on them in the majority of cases as it will create more work later.

There are a number of things to do and matters that as an employer you need to have in order before July.  Keep an eye out for notification of our upcoming webinar.

In that webinar we will set out the when, what, why and how of Single Touch Payroll.

We look forward to seeing you then.

Contractor or employee?

Contractor or employee? You better get it right as the implications for doing so can be financial crippling.  And then there is the time and mental frustration of dealing with such disputes.

The critical thing is to get the classification right.

You then have to get the right documentation in place.

  • If they are an employee then you need to do a few things including determine the right award, give them a letter of offer and issue the National 10 Employment Standards.
  • All too many business owners fail to document a contractor relationship. Agreements are looked through by investigators to avoid shams and find the true relationship. Sadly though, some business owners lose the fight as they have don’t have a contractor’s agreement to prove their position – leaving the investigators to pretty much accept whatever the payee claims.

Does it cost to establish a contractor’s agreement? Yes (but it’s insignificant considering what it can save you)

Should you get one off the web? No (how many times do do it yourself lawyers use say a USA agreement or be clueless about the differing considerations used by the ATO, State Revenue Office and WorkCover).

Will the process reduce the possibility of any claim as both parties are fully aware of the relationship? Absolutely.

We would welcome the opportunity to discuss your situation.

Upcoming March quarter deadlines

For those of you who are employers, Friday 26th April is the end date for satisfying your SG super obligation for the March quarter.  Late payments will attract interest and penalties.  As such, this obligation is an employer’s most important commitment so best not to leave it until the last minute; particularly as payments through some super clearing houses take 5 days or more to clear.

For those who lodge a paper (non-electronic) quarterly BAS or IAS, your March quarter activity statement is due to be lodged by Monday 29th April.

Personal services entities

If you have a personal services entity (you will know if this relates to you as we will have discussed this with you many times over the years), your entity will be required to pay at least 80% of its income to you as salary/wage and remit the tax thereon within this BAS.

Lodgement tip

Please note that lodgement of an activity statement (even if it is nil statement) and payment are two separate requirements. Late lodgement attracts a minimum non-deductible fine of $210 for every 28 days that a form is lodged late whereas as late payment results in an interest levy. More importantly, BAS’s and SG super which is not reported and remains unpaid after 3 months becomes a personal debt of directors (please refer to the September 2012 edition of Tips and Traps for further details on the Directors Penalty Notices system) – and the ATO are actively issuing DPN notices.  That said, the ATO are agreeable to entering into payment arrangements.

STP reminder

And a quick reminder about Single Touch Payroll (STP). STP will be mandatory for all employers from July 2019.  You will shortly receive an introductory letter which will be followed by a series or reminders and steps to be implemented before 30th June.

 

$30000 instant asset write off trap

There are a few traps with the $30000 instant asset write off trap to be wary of.

To qualify you need not only to buy the asset but have it installed ready for use before 1st July 2019.

And please note that this increased threshold only applies to asset acquired after Budget night (2nd April).

$30000 asset limit

The Senate has already passed the bill that allows a small business to fully deduct assets costing less than $30,000 (excluding GST).

However it only applies to assets bought after Budget night (2nd April).

From 1st July 2018, the ex GST limit was $20,000.  In case you missed it, the limit was increased to $25,000 for any assets bought on or after 29th January 2019 (and which applies to assets bought before 2nd April 2019.

The $30,000 is generous. It brings a number of quality new cars and second hand cars into the fold.

And even though the expenditure will match the cash flow, please understand that the tax saved is only a percentage of the outgoing cash.

Want to know how your cash flow will be impacted?  Ask us.  We can show our or cloud accounting clients what the real impact will be on their cash flow.

A Budget warning

A Budget warning!  A Federal Budget is only a series of announcements. No announcement has effect until it is legislated.  For that to happen, a bill must be passed by The House of Representatives before being passed by the Senate.  From there it is effectively a formality for abill to receive Royal Assent.

That all said, the increased instant asset write-off of $30,000 has passed the Senate.

With an election pending, other announcements may never see the light of the day.  Many announcements morph into quite different legislation.

Keep an eye on our posts to find out what is eventually becomes law and how you will benefit or be affected.

$30,000 instant asset write-off

It was announced in the Federal Budget on Tuesday night that the instant asset write-off threshold would be increased to $30,000.

Well the $30,000 instant asset write-off has already passed both houses of Parliament.  It now just awaits royal asset (which is a formality).

Please note that this limit only applies to assets bought AFTER 2nd April 2019.

Keep you eye out for more upcoming tips and traps about this valuable tax saving concession.

Receipt Bank – another way to better help you

We are always looking for ways to make your life easier.

Our latest initiative is Receipt Bank, a tool which allows a more automated bookkeeping workflow, solves typical specific compliance problems and serves as a back-up system.  It does so in a most cost effective manner.

Receipt Bank allows you to upload your business receipts, invoices and expenses into your software or provide them to us seamlessly and easily.  You can do so via photo on a mobile app downloaded to your smart phone or via personalised @ Receipt Bank email address.

The twelve main benefits from using Receipt Bank:-

  1. You save time on sending in your paperwork, time that you can spend on your core business services or more time not attending to paperwork.
  2. You can use up to any one or combination of four methods to submit information to Receipt Bank.
  3. The two main methods are taking a photo on your mobile phone or on-forwarding an e-mail.
  4. It is great solution to those who incur lots of costs on the road whether it be coffee meetings or receipts from Bunnings that are paid by cash or credit card.
  5. You limit the number of questions we ask.
  6. You don’t have to forage for receipts from up to 23 months ago.
  7. You save space as there’s no need to retain your physical documents (if you so wish), with all documents easily searchable and securely stored on the cloud.
  8. Or you can still keep those physical records but sleep easy in the knowledge that you have a back-up. Furthermore, you can rest easy knowing that your data is stored securely and encrypted.
  9. You now have real time information flowing into your accounting system, which allows us to provide you with better and more timely insights to improve your business.  Receipt Bank works best with Xero and QuickBooks Online.
  10. No more lost receipts & invoices!  No more paying too much tax or GST because you lost invoices and receipts.
  11. You can access your records from anywhere anytime.
  12. You can also rest easy in the knowledge that you have read only access after your business has ceased operating.

We welcome your call so e can explain the benefits to you – and other ways we can both simply and improve your life.

LRBA’s to go?

LRBA’s to go?

Labour says so according to the Shadow Treasurer Chris Bowen.

Missing from the statement is how this and all the other proposed changes  to super are going to further limit one’s ability to provide for one’s own retirement.

It flies in the face off all initiatives made between 1983 and 2006 – by Labour and the Coalition alike.

 

Loans by companies – welcome relief in sight

 

Accountants call loans by companies to the shareholders and trusts as Division 7A loans. It requires corrective action to avoid being penalised.

It’s an area of tax law that clients just don’t understand. It is so incomprehensible that some four years ago the Board Of Taxation recommended a simplification of the rules.  This welcome idea was backed up and supported by a statement within the 2016 Federal Budget.

Only trouble was that Treasury released a position paper in October 2018 that is a complete 180 in the other direction with:-

  • Suddenly retrospectively penalising positions that were previously OK.
  • Greater penalties.
  • More complex rules.

And it’s all supposed to start from July 1 2019!

I have read this morning that the assistant Treasurer has stated that he and the ATO (of all people) are in line. He also said that he and Treasury are not in line with each other.

Thankfully sanity has returned. Pity though that it has taken over four months as Treasury has created great concern and panic.  Hopefully they will now go back and do what they were asked to do and formulate a simplified set of rules.

What is left to explain is how it ever came to be that Treasury took off hard 180 degrees in the opposite direction….

And why the picture of the owl?  Well they are supposed to be quite intelligent and able to turn their head back to normal after turning it 180.  Over to you Treasury…