Posts Categorized: News

Taxable Payments Annual Report

28^th August is the end date for lodging the ATO’s Taxable Payments Annual Report. This form requires those businesses within the building and construction industry to report all payments to contractors within the building and construction industry.

Building and constructions includes more services than one might think as evidenced by the following link – http://tinyurl.com/y7hrnfxm

You need a good accounting system to simplify the reporting of Taxable Payments Annual Report as you need to report the following for each contractor:-

Name
ABN
Address
Gross payment including GST as well as the total GST amount. It is important to note that for those who run an accrual accounting system, reporting is based not off the date of the contractor invoices, but they year in which they are paid.

If you are struggling with this reporting requirement, we would be happy to help you or refer you to a good book-keeper.

Ways you can lodge the Taxable Payments Annual Report

The main software providers enable the Taxable Payments Annual Report to be lodged from the software.
You can also lodge by paper.
You may also wish to view the following YouTube clip from the ATO on how to lodge the Taxable Payments Annual Report through the Taxpayer Portal.

https://www.youtube.com/watch?v=SRhFsB-k1Uc

So what to the ATO do with all this data?

They crossmatch all payments reported to each business within the building construction industry to their reported income. The ATO had a field day some years ago with a pilot program of plasterers within the Hunter Valley. Obviously it is paying dividends if the ATO still requires this reporting – so much so that it has now been expanded to other industries from July 2018.

2018 Company Tax rate

At last we know what the 2018 Company Tax rate will be for small and medium size businesses! So whilst the House of Reps was in uproar today, at least the Senate did something.

What a joke it is that only now do we know with certainty what tax rate applies from 1st July 2017.

Finally we can finalise Tax Returns with certainty!

If you would like to read more about this, please refer to our August edition of Tips & Traps.

Reasonable travel allowances & how they help you

It is now time for Victorian employers to lodge their annual Pay-roll Tax declaration. One of the dangers of Pay-roll Tax is not complying with grouping provisions.

The grouping provisions assess a number of employers against the remuneration threshold (now $650,000). Remuneration in excess of that threshold is subject to Pay-roll Tax at 4.85%.

Employers can be assessed as a group where:-

There is common ownership and control, or
Where an employer performs duties for another business.

The latter one is commonly misunderstood. Having a larger business answer the phone of a smaller business (with unrelated owners) for 30 minutes over lunchtime can be enough to treat a business as grouped. So it could be that a small business with remuneration of only $100,000 has to pay Pay-roll Tax of $4,850 for the sake of 2 ½ hours a week of phone minding. A phone answering machine or service would seem to make more sense!

If you would like to know more about grouping, you can go to:-

https://www.sro.vic.gov.au/grouping

You can also watch the Victorian State Revenue Office’s video on grouping at:-

https://www.sro.vic.gov.au/videos/payroll-tax-grouping-provisions-webinar

With we welcome any question you may have in respect of this or any other employment related matter.

Pay-roll Tax and the danger of grouping provisions

It is now time for Victorian employers to lodge their annual Pay-roll Tax declaration. One of the dangers of Pay-roll Tax is not complying with grouping provisions.

The grouping provisions assess a number of employers against the remuneration threshold (now $650,000). Remuneration in excess of that threshold is subject to Pay-roll Tax at 4.85%.

Employers can be assessed as a group where:-

There is common ownership and control, or
Where an employer performs duties for another business.

If you would like to know more about grouping, you can go to:-

https://www.sro.vic.gov.au/grouping

You can also watch the Victorian State Revenue Office’s video on grouping at:-

https://www.sro.vic.gov.au/videos/payroll-tax-grouping-provisions-webinar

With we welcome any question you may have in respect of this or any other employment related matter.

Great news – the $20,000 instant asset write-off has been extended

Great news – the $20,000 instant asset write-off has been extended for another 12 months to June 2019.

This concession was supposed to stop at 30^th June 2018. Now you have another 12 months in which you can claim a full deduction on assets costing less than $20,000 ex GST. If you really need any asset(s), you might as well still buy it now. Otherwise, you can now sit back and find the best time to commit a qualifying purchase.

If you want to know more about important considerations and traps, click on the following link:-

http://www.mrsaccountants.com.au/tips-traps-to-the-20000-asset-write-off/

We would welcome your call if you have any queries.

We will of course raise this as part of our year end tax planning process.

And on that subject, we have been quantifying the savings our clients received as part of our planning advise last June. We are both pleased and proud to report the collective savings to our clients has now been quantified to exceed $2,300,000. And that is not even taking into account the savings from other advice during the year!

Bitcoin & the blockchain – what’s next

Many are asking what is the future of Bitcoin? That is a very good question after the wild ride in its price. After nearly touching $US20,000 just before Christmas it has since fallen to around $US8,000. Some have made eye watering amounts based on when they got in and out; others have lost spectacular amounts. There are more than 1,000 crypto currencies and most of those have also seen wild fluctuations in their price. Bitcoin has certainly been subject to speculation. It’s rise was larger than that of the Dutch tulip bubble of the 17^th century. Arguably it’s more at risk than other famous asset price bubbles as nothing underpins the currency as does say the Reserve Bank to the Australian dollar.

The creator of Bitcoin Satoshi Nakamoto (or at least his/her pseudonym) announced Bitcoin to the world as “a new electronic cash system that’s fully peer-to-peer with no trusted third party.” There is certainly appeal to such a system.

What interests me far more is the blockchain, the system which underpins Bitcoin. The blockchain is an encrypted open ledger which records all transactions. There is no central storage system; it’s an open ledger system that is verified every ten minutes and in which every transaction is date stamped. With transactions cleared every ten minutes, funds can knowingly be received on average in five minutes – makes a three day cheque clearance seem slow doesn’t it!

The co-founder of Netscape Marc Andreessen has been quoted as saying that the blockchain is one of the most fundamental inventions in the history of computer science. I think that that is an under-statement. With seemingly everyone tapping to pay for even the cheapest item and with a verified transaction base, the ATO may seek to receive GST at the time of sale. Various world governments are looking to store anything and everything on the blockchain – including such things as land titles. Kodak, arguably the camera company most affected by the digital camera explosion last month had its share price surge some 70% after it had announced it was developing a crypto currency where the underpinning blockchain would enshrine photographers’ copyright.

I keenly await to see how others adopt the blockchain to revolutionise the way we do things.

At MRS, we will spend today planning for your success tomorrow.

Unclaimed monies – what to do

In 2012, we sent out a warning e-mail in respect of the then new unclaimed monies regulations. Those laws have now been in effect for 6 years, the importance of which will become clear as you read through the blog.

Today there is more than $1,100,000,000 in unclaimed bank accounts, shares and life insurance.

The balance of any bank account unused for more than 7 years is transferred to the government. So too is a life policy which is not claimed within 7 years of maturity also becomes unclaimed money.

It is not easy to reclaim one’s money as what one might think. So to avoid the problem of trying to recoup unclaimed monies, you need to:-

Transact on any bank account every seven years. Please remember that charges debited or interest credited by a bank to your account do not keep an account active so you need to either make a payment from or deposit into an account for it to be considered active.
In our initial post, the time limit was 3 years. Since December 2015, a bank account
Keep contact details up to date and after a move.
Create and check a list of bank accounts, shares and endowment life insurance policies.

If you want to know more or undertake a search on a closed bank account or shareholding or matured life insurance policy, go to http://tinyurl.com/qjozgon

At MRS, we will spend today planning for your success tomorrow.

The one thing

So you have had a Christmas break, recharged the batteries and come back to work with new ideas. Hopefully you have formulated a plan, or better yet, updated an existing one. Hopefully you have followed up on last week’s blog.

No doubt you have identified one key thing you are going to do. Equally as important though, have you identified one thing you are not going to continue to do?

The reality of small businesses is that owners have to do and be good at so many things.

However, I often see time and costs demands as well as perfection desires of small business owners resulting them in:-

Doing some low level activity that someone else should be doing as they are equally or reasonably capable of doing – such as administration and book-keeping. The loss here is that an owner loses the chance to do something(s) more important that generates a greater return(s).
Doing something that should be done by someone else because they are better at it – such as recruitment and web development. The loss here is twofold in that a lesser result that consumes too much time.

So what are you going to stop doing?

Create a list of 5 that you should not be doing. Against each item, state what the benefit will be from not doing that thing – whether that be freeing up time, generating more revenue or obtaining a better outcome. Resolve which is the most important one and determine what the replacement action will look like and require. Sign it off to commit yourself to action. And add it to your 90 day plan so you can monitor your performance and results.

At MRS, we will spend today planning for your success tomorrow.

Business planning tools that work

I trust you had a great holiday. And like many other business owners, no matter how much you managed to switch off during the Christmas break, I bet you still had plenty of thoughts as to how to improve your business in 2018 and beyond. I also bet you would love to have business planning tools that work.

The problem with thoughts though is that they so rarely amount to anything. Numerous studies over the years have shown that those who put their plans in writing are far more successful than those who don’t.

Why is this? Some reasons include:-

Writing down goals helps identify goals. It also allows goals to not only be identified but to also be ranked.
You can then drill down as to what are the most important actions that must be taken on a daily, weekly and monthly basis to ensure that you are moving towards achieving those key goals.
It allows you to consider how you are going to measure and track how you are moving towards achieving those goals.
It allows you to consider what can and can’t be done with the available resources. Do you get more resources or do you focus on the more important goals at the exclusion or deferment of others?
It enables you to identify the things that you shouldn’t be doing?
It allows you to share your goals and vision with your team.

Over the holidays, I read a book called Mastering the Rockefeller Habits by Verne Harnish (which has been more recently republished as Scaling Up). It is short, concise, highly relevant across so many business areas and provides you with a link to suggested tools. In fact, if I could recommend you to read just one business book, then this would be the one.

As important as developing a written business plan is, most plans are too long. Harnish’s tools are practical and simple. They are also easy to update and refer to on an on-going basis. We can help you with many of the subject areas. We are also in the process of rolling out new business diagnostic tools to gain greater insight into your business (including your cash flow). We look forward to assisting you on your path to making your business more successful.

At MRS, we will spend today planning for your success tomorrow.

How do you find lost super?

The ATO has reported that at 30^th June 2017, there was $18,000,000,000 of lost super within 6,300,000 lost super accounts. That’s an average of almost $3,000 per account! So how do you find lost super?

Whilst super funds hold lost uncontactable and lost inactive accounts, the ATO holds unclaimed super monies.

You currently have two ways to find lost super:-

Complete and send off the Searching for Lost Super form – which you can access at https://www.ato.gov.au/Forms/Searching-for-lost-super/
Log into your or open a myGov account – https://my.gov.au/LoginServices/main/login?execution=e1s1

Most of these unclaimed super accounts tend to belong to younger people. Perhaps you may wish to check whether your kids know where all their super is. Or perhaps they should just lodge an enquiry anyway – they have nothing to lose and the application won’t cost anything.

At MRS, we will spend today planning for your success tomorrow.