Posts Categorized: Tips of the week

How can I claim car travel?

In order to claim car travel in your personal Tax Return:-

  • You must own the car.

  • You must have undertaken a trip for either your business or your employer.

You can claim under two methods:-

  • Log book, or

  • Cents per kilometre

Tip

You can use a log book kept for three months in the current year or in the last four years (provided the pattern of travel hasn’t changed significantly). 

Tip

You must have a properly kept log book.  You can do so by buying one in a stationers or you can access an electronic one form our firms app.

Tip

You can claim 68 cents per kilometre under the cents per kilometre method for up to 5,000 work/business strips.  This means you can still claim 5,000 km where you travel say 5,500km.  Some people choose to do so as it gives them a better claim than under a log book.  All you need is a reliable estimate of all trips undertaken during the year. 

Want to know what works best for you – call us.  We even have a salary sacrifice calculator so we work out the best way to package up a work car and minimise the Fringe Benefits Tax.

 

When can I claim a bad debt as a tax deduction?

When can I claim a bad debt as a tax deduction? 

You have to satisfy a few conditions:-

  • There must have been an enforceable sale.

  • All reasonable attempts have been made to collect it.

  • The decision to write off it off is evidenced in writing.

  • The customer hasn’t already gone into liquidation or you haven’ t accepted a deal to be paid only x cents in the dollar.

That all said, if you declare income on a cash basis then there is no deduction to be claimed for a bad debt as there wasn’t any taxable income in the first place.

So how do you avoid the cost of a bad debt?  Look out for future blogs including what the real costs of a bad debt can be.

Or better yet, ask us. 

We have dozens and dozens of ideas and strategies from dealing with hundreds of clients from many different industries.

 

Charging credit card fees

Just a warning on charging credit card fees on the back of the ACCC fining Europcar $350,000.

A business can on-charge the credit card fee that they are charged.  But no more.  

Eurpocar made the mistake of continuing to charge 1.43% despite the fact that the rate they incurred changed over time.  Their rate also took no account of different credit card providers charging different rates.

Please refer to the following blogs to learn more.

https://tinyurl.com/yyxuw9r2

https://tinyurl.com/y2py5wfl

 

STP and super payments

The roll-out of Single Touch Payroll (STP) has proved to be an interesting process! 

For some, it just meant clicking another button or two within their payroll program.

For others it meant changing the whole way they processed their payroll.

It has also uncovered some interesting practices.

We have been somewhat surprised to find that some clients weren’t making their employee SG super payments through a SuperStream, nor using a super clearing house. The former is the payment method, the latter is the notification of employee’s contributions.  We have also been surprised to learn that super funds, like some of the really big ones, have still been accepting cheques.

There are free solutions out there but the best solution is almost always the one built within your payroll software. Whilst there may be a cost, it is nominal and avoids double handling.

Please call us if you would like to discuss your situation and needs.

WorkCover remuneration certification

It may be time to complete your 2019 WorkCover remuneration certification. Large employers are required to submit early.

Other employers have delayed lodgement dates. That said, it still may be in your interest to lodge soon.  This is particularly the case if your remuneration will be significantly less in 2019/20 than for 2018/19.

You will get back what you over pay based off their estimate; but why over pay in the first place.

You will also ensure it is lodged.  Many employers forget to lodge and suffer from WorkCover’s default 20% annual increase.  So get it done now when you have finalised and issued the PAYG Payment Summaries.

Other STP tasks

Single Touch Payroll (STP) started for all non-large businesses two weeks ago.  So all business should by now be reporting wages at the time of payment.

For some this has meant using a payroll software program for the first time.  This was the perfect opportunity to ensure that all other HR employment requirements had been attended to.

If you are still struggling with all of this then please contact us so we can discuss ways in which we can help you.

 

Are STP extensions the answer?

Struggling with Single Touch Payroll (STP?

Or have you yet to take action?

There are two things you need to do:-

  • Move to a payroll software solution.
  • Tidy up your HR records.

We can help you with both.

So whilst there are extensions available, we recommend not relying on them – it just creates more work (and therefore cost) later.

Take the first step right now by contacting us (the first meeting is free).

STP starts next week!

Single Touch Payroll (STP) starts next week!

From Monday 1st July all businesses will be required to report to the ATO each employee’s gross pay, tax and super no later than the day of payment.

Whilst there are extensions available we generally recommend not using them as it only creates more work later – and therefore cost.

If however you need to rely on an extension, then you must have applied for one by week’s end.

Either way, you have to do so something.

We have been taking our clients through the transition journey principally by way of a series of weekly preparatory emails.

If your accountant hasn’t helped you then it is time to change accountants!  Contact us below and we can discuss how we can help you.

 

 

$30000 asset write-off limit

So what if you want to buy an asset costing more than $30,000 (ex GST)?

Well as a small business, you will be able to claim 15% depreciation on the cost of the asset.  So a $50,000 asset bought today will still generate a $7,500 tax deduction in the 2019 tax year (and $12,750 next year).

Buy the same asset on say 7th July, and your claim for next year is only $7,500.

And you still may be able to write-off the balance in the 2020 year for an asset costing more than $30,000.  The $30,000 limit also applies to the undepreciated pool balance.  We had one client buy a vehicle for $35,000.  Come July 1 2019, the pool balance will be $27,500 (as that is the only asset they are depreciating).  They can write off the balance of the car in the 2019/20 year.

Please refer to our three part series of 21 tips and traps for the instant asset write-off.  Or better yet, call us on 9899-7511 to discuss your situation and opportunities.

Super contribution warning

A quick super contribution warning.

In order to claim a tax deduction for a personal or employer super contribution, it must be paid by year end.

This year is a bit of a trap with June 30 falling on a Sunday.

Another trap is that I just read that the ATO’s own employer super clearing house requires payment to be made by the close of business on Monday 24th June.  Pay later than that and the contribution will go into the next financial year.  That’s a real problem if you have retired and are aged over 65 as you will thereby breach the work test rule in the first week of July 2019.

Some clearing houses and super funds close off earlier than the 24th.  Make sure you now what you cut-off dates are.