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Conducting your business’ health-check

Posted on 28 May, 2020 by admin

With the current economic slowdown, now is the perfect time to review your business strategy and conduct a business “health check” to come out the other side improved and ready to go. Analyse whether or not your business is in the state that you want it to be in and any improvements you can make to prepare for when the economy starts to recover. Clients and customers Client and customer loyalty is a trait all businesses should appreciate, but if your clients’ values are misaligned with yours, conflict is inevitable. Hence, now is the time to re-evaluate which clients you want to keep loyal and which ones you can see a cooperative future with. Re-assessing your target audience and deepening your understanding of the wants and needs of your clients would also be beneficial, as you can perfect your marketing strategies now while you have the time. If you have clients who frequently struggle to pay you on time, rude to your service and employees and generally disrespectful to your business, take the time to assess whether your attention is worthwhile and if you would like to continue to work with them when the economic situation improves. Employees Your employees […]

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Spouse contributions – when are you eligible for a tax offset?

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Contributions made on behalf of your spouse to a complying superannuation fund or a retirement savings account (RSA) may be eligible for a tax offset. The 2019/2020 tax rules allow you to claim an 18% tax offset on super contributions up to $3,000 on behalf of your spouse. While you are able to contribute more than $3,000, there will be no spouse contribution tax offset over this amount. The amount you can claim depends on your spouse’s annual income: $540 for spouse income of $37,000. $360 for spouse income of $38,000. $180 for spouse income of $39,000. The tax offset may be available for individuals who meet the following eligibility requirements: Your spouse’s assessable income, fringe benefits amounts and employer superannuation contributions equate to under $40,000. Contributions made on behalf of your spouse were not deductible to you. You and your spouse were Australian residents at the time of contributions. Your spouse did not have non-concessional contributions that equated to a higher amount than their non-concessional contributions cap, or they did not have a total superannuation balance of $1.6 million or more at 30 June 2018. Your spouse is younger than their preservation age, or are not retired while being […]

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What you need to know about fringe benefits tax

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A fringe benefits tax (FBT) is a tax paid on benefits provided to employees (usually non-cash). FBT is calculated based on the gross taxable value of benefits employers provide to their employees. Employees must lodge their return and pay the total FBT amount they owe for the previous FBT year. Due to COVID-19, the FBT lodgement deadline has been extended from 31 March 2020 to 25 June 2020. The following are the types of fringe benefits you must lodge before the extended due date: Car fringe benefits: when a car your business owns or leases is available for employee private usage. Debt waiver fringe benefits: when you waive or forgive an employee’s debt (including those you write-off as a genuine bad debt). Loan fringe benefits: when you provide a loan to an employee and charge a low rate of interest or no interest during the GBT year. Expense payment fringe benefits: when you reimburse an employee for expenses they incur or pay a third party for expenses incurred by an employee. Housing fringe benefits: when you provide an employee with accommodation as a usual place of residence for the employee. Living-away-from-home allowance fringe benefits: any payments you make to compensate […]

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How to support your employees through COVID-19

Posted on 19 May, 2020 by admin

Supporting your employees during chaotic times as an empathetic leader will improve your relationships within your business and boost personal confidence. Here are some ways you can support your employees mentally and financially during these uncertain times. Be open with your employeesAs businesses implode due to current economic circumstances, employees want transparency and closure over the state of the business and their employment. Thus, being open about your business’ finances and both your short-term and long-term growth initiatives when communicating with your employees will earn their trust and appreciation. Being transparent over your employees’ job security is also a good idea, as unemployment is becoming a major concern for all Australians. Reassuring your employees and guaranteeing their safety will also boost productivity levels and business morale as a major source of anxiety is lifted off of their shoulders. Take mental health seriouslyYou can support your employees’ mental health by encouraging a healthy work-life balance (especially if they are working from home) as well as offering tutorials, professional mentoring sessions and online webinars on mindfulness and effective stress management strategies. Be more lenient with your employees who are struggling with productivity due to mental fatigue and enforce healthy lifestyle habits. Another […]

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Your current employer superannuation obligations

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Paying your employees superannuation is an integral part of being an employer. Superannuation provides income for your workers in retirement and it is your legal obligation to make sure you are paying your eligible employees the right amount, on time, to the right place and also in the right way. The ATO has also introduced a few schemes to help employers meet their super obligations due to financial strain caused by COVID-19. Your super obligations are summarized in the following: Check the eligibility of all your employees (some contractors or freelancers may be entitled to superannuation payments). Pay your eligible employees 9.5% of their ordinary time earnings. Super payments must be made at a quarterly minimum (employers who do not pay their superannuation on time may need to pay a superannuation guarantee charge). Pay super into your worker’s fund of choice. Pay the SuperStream way (both payments and data are sent electronically in a standard format). Streamline your payment process with Single Touch Payroll. Keep evidence to show that you have met your super obligations as an employer. While the usual obligations apply, the ATO has also introduced assistance schemes in response to COVID-19 for employers. The superannuation guarantee amnesty, […]

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Tax implications for workers with COVID-19 mobility restrictions

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Employees who are not living or working in their regular location due to COVID-19 mobility restrictions need to be aware of the tax implications that apply to their situation. Individuals who ordinarily work and live in Australia but are temporarily overseas due to COVID-19 restrictions will not experience any changes to their Australian tax obligations. If the employee is paying foreign income tax overseas, they will receive a foreign income tax offset to reduce their Australian tax payable. Foreign residents working from Australia who are not able to leave as a result of COVID-19 restrictions will not experience Australian tax impacts if their stay in the country is under three months. However, non-residents working in Australia for longer than three months may need to lodge an Australian tax return if they earn any assessable income from an Australian source. Other than this, their Australian tax obligations will remain unchanged. Employment income will not be taxable in Australia if the employee: Is not an Australian resident; Are intending to leave as soon as they are able to; Has no employment connections to Australia other than the fact that they are performing remote work in the country. Employees who typically reside in […]

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Increasing workplace flexibility

Posted on 14 May, 2020 by admin

Businesses now working from home can take the opportunity for employers to learn from the experience and consider new work structures coming out of COVID-19. This could mean increased flexibility for employees when it comes to working remotely. Here’s why you should consider flexible work arrangements with your employees. Increase productivity Flexible work arrangements can increase the productivity of employees by allowing them to work when they feel most motivated. Some people may naturally be more productive at night time and do their work then, which would not be possible with regular office hour restrictions. Remote work also saves time on excessive staff chatter and workplace distractions, such as ringing telephones and colleague drop-ins. Offering flexible work arrangements can show your employees that their lives are valued, which can lead to higher levels of performance and hard work to justify the flexible arrangements. Reduced expenses When employees are working from home more frequently, it means that your office doesn’t have to sustain as many people and you can reduce rent and utility expenses. This doesn’t mean that your employees have to pay too much more; the ATO has introduced an easier way of deducting work from home costs during the […]

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What happens if your SMSF is non compliant?

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While there are benefits to running an SMSF, they do not come without their compliance responsibilities. This includes lodging your fund’s annual return on time, attending to reporting obligations, and having an investment strategy. SMSFs who do not meet their obligations are subject to penalties by the ATO through the following measures. Education direction An SMSF trustee who does not meet compliance requirements can be given a written direction to undertake a course of education that is designed to improve their ability to meet their obligations, reducing the risk of future non-compliance. The course may be completed online within a nominated timeframe. Failure to comply with an education direction can result in an administrative penalty of 10 units. Administrative penalties SMSF trustees are liable to pay administrative penalties if they contravene provisions of the Superannuation Industry (Supervision) Act 1993 (SISA). This includes contraventions of borrowings, in-house assets, education direction, duty to notify of significant adverse events, and accounts and statements. The minimum penalty is $1,050 and the maximum penalty is $12,600. Enforceable undertaking SMSF trustees may be able to rectify non-compliance by providing a written commitment to an enforceable undertaking. The ATO may or may not accept the undertaking, which […]

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JobKeeper GST turnover test released

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The ATO has published a ruling on the decline in turnover test for businesses applying for the JobKeeper scheme as part of the Coronavirus Economic Response Package (Payments and Benefits) Rules 2020. This turnover test requires businesses to calculate their ‘current GST turnover’ and ‘projected GST turnover’, subject to modifications to the definitions outlined in the Payments and Benefits Rules. The new ruling outlines the aspects of the decline in turnover in the following steps: Step A: what supplies are relevant when calculating projected GST turnover and current GST turnover, Step B: how you allocate supplies to relevant periods, Step C: how you determine the value of each supply that has been allocated to a relevant period, and Step D: The ATO compliance approach, which effectively allows you to work out Step B and Step C at the same time. The turnover test period must be either a calendar month that ends after 30 March 2020 and before 1 October 2020, or a quarter that starts on 1 April 2020 or 1 July 2020. During the turnover test period, businesses will satisfy the decline in turnover test if: Their projected GST turnover falls short of their current GST turnover for […]

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Managing money on a low income

Posted on 4 May, 2020 by admin

Increasing living expenses and commitments can make it challenging to manage and save money, especially for low income earners. Here are some tips that may help you reduce financial pressures on a low income… Prioritise high-interest debts:If you have a lot of different debts to pay off, prioritise them by their interest rates. Paying off high-interest debts first can prevent you from unnecessarily losing money from interest fees. Track your income:Keeping track of all your income, whether it’s wages, government support or investments, can help you get a good sense of how much you’re able to spend and at what time. This can prevent you from spending too much too soon before your next income payment, and plan out the best time to pay major expenses without running out of money. Budget:Creating a spreadsheet with your expenses and income can help you maintain an appropriate amount of spending and tell you if you’re overspending. It may take a few tries to develop a budget that suits your lifestyle, but trial and error will provide you with an accurate estimate of how much you need to set aside for different expenses. Sticking to your budget will help you grow your savings […]

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firm news

Conducting your business’ health-check

Posted on May 28, 2020 by admin

With the current economic slowdown, now is the perfect time to review your business strategy and conduct a business “health check” to come out the other side improved and ready to go. Analyse whether or not your business is in the state that you want it to be in and any improvements you can make to prepare for when the economy starts to recover.

Clients and customers

Client and customer loyalty is a trait all businesses should appreciate, but if your clients’ values are misaligned with yours, conflict is inevitable. Hence, now is the time to re-evaluate which clients you want to keep loyal and which ones you can see a cooperative future with. Re-assessing your target audience and deepening your understanding of the wants and needs of your clients would also be beneficial, as you can perfect your marketing strategies now while you have the time. If you have clients who frequently struggle to pay you on time, rude to your service and employees and generally disrespectful to your business, take the time to assess whether your attention is worthwhile and if you would like to continue to work with them when the economic situation improves.

Employees

Your employees are another stakeholder to check up on during this downtime opportunity. Your employees will always be your business’ representatives so make sure they are up to standard and help them improve on their skills now when they have the time to. Take the time to teach your employees more about your business goals and strategies and improve the team atmosphere by introducing team recreational activities. Your relationship with your employees now during a global crisis will dictate how they feel about you as a leader and if they can rely on you in the future. Foster respectful, strong and healthy bonds between you and your employees and only good things will be coming your way.

Suppliers

The key question to ask when reviewing your suppliers is whether or not you are getting what you need from them at a reasonable cost. Of course, not all sales deals are made equally and while you may get the bad end of the stick now, that is sometimes for the benefit of the long term. However, if this is not the case and you feel that your suppliers are asking too much from you, letting you down with their product quality or causing other complications, take the time now to look for other options. As most businesses struggle through current economic conditions, more and more suppliers are becoming competitive and hence, there are more options to consider. Do your research and decide on the suppliers you want to work with for the long-term future.

Financing

Managing your finances is always a difficult task but it is now more important than ever. Your budget and profit predictions for this year are likely going rogue so reevaluate your finances and research other funding options such as commercial rent, interest rates and banking services. Consider how you can minimise cost while maximising efficiency and productivity, save as much money as you can during these downtimes, and review your investments in detail to determine whether or not they are worthwhile.

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