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Super Guarantee Change – Deadlines, Payments & Everything Your Business Needs To Know Before The EOFY

Posted on 23 May, 2022 by admin

It is easy to get caught out with superannuation, particularly when you are the owner of a business. With so many things to occupy your mind, superannuation may slip from the forefront. But as a business owner, you must pay the superannuation guarantee for your staff, and you must pay it on time. A failure to pay it on time will mean that you are no longer able to receive a tax deduction for the payment for that financial year.  On top of that, you can face hefty penalties (which you won’t get a tax deduction for either!). Now imagine being five days late on a $10,000 super payment, losing the tax deduction on that payment and then copping a $20,000 penalty as well.  The first thing is to make sure that your super is paid well before the time it is due. This should be a priority payment (a payment that you make before anything else). As the end of the financial year approaches, it is time to be thinking about the June Super Guarantee payment. You may have until July 28 to make the payment but leaving it until then will not net you a tax deduction until […]

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How You Structure Your SMSF Could Impact The Trustees In The Fund

Posted on 16 May, 2022 by admin

The way in which a self-managed super fund is structured could change its legal compliance requirements. If you are in the process of setting up an SMSF, you will need to make a decision about how to structure it appropriately to suit.  An SMSF can be structured as a single-member fund or a multiple-member fund, with the trustees of those funds deemed as either to be individual trustees or a corporate trustee Examining the circumstances of your members could help to narrow down the structure that will be best suited. You can also work out from the requirements of each structure whether or not a fund structure would be suitable for the needs of your members.  Individual Trustees Individual trustees in a single-member fund will have two trustees within the fund. One trustee must be the fund member, but cannot be the other trustee’s employee (unless they are also relatives). An example of a single member trust fund structure could be a family super fund, where the members are trustees for the fund. Individual trustees in a multiple-member fund structure generally have between two to six members. Each fund member must be a trustee and each trustee must be a […]

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Your Work-Related Tax Deduction Checklist For This Year’s Tax Return Made Easy

Posted on 10 May, 2022 by admin

The end of the financial year is coming up next month (30 June), and you may be looking for ways in which you could make tax savings in this year’s tax return. This could be through tax deductions, expenses that you could make now for your work purposes or even with tax offsets introduced by the government. Whatever your tax situation, we’re equipped and ready to help you navigate the tricks and traps of income tax returns. Upon completing a tax return, individuals are entitled to claim deductions for expenses that are directly related to their income. These can come in a variety of forms, but must usually be work-related to be claimable.  There are three requirements individuals must meet to be able to claim a work-related deduction: the individual must have spent their money and not be reimbursed for it the expense must be related to their job and; there must be a record, like a receipt, to be able to prove it. If an expense was for work and private purposes, individuals can claim a deduction for the work-related portion. Here are some common types of deductible expenses taxpayers like employees and rental property owners can claim this […]

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Director Identification Number Compliance Reminder For Businesses

Posted on 2 May, 2022 by admin

As of 5 April 2022, new Directors will need to have applied for their Director Identification Number (DIN) prior to their appointment to the position. Existing directors were required to obtain a DIN prior to the end of the transitional period (30 November 2022), whereas directors of Indigenous Corporation have until 30 November 2023. Failure to do so could result in penalties for non-compliance. What Is A Director Identification Number? Previously a company or business was registered through ASIC, where a Tax File Number and an Australian Business Number would be required. These are obtained through the Australian Taxation Office (ATO) and are a critical part of setting up a business or company. Introduced in November 2021, there will be an additional step introduced in the registering of a company, involving a Director Identification Number (DIN). This director identification number is a unique identifier that a director will apply for once and keep forever. They were brought in as a part of a broader regulatory strategy to address the issue of phoenixing – this is where controllers of a company deliberately avoid paying liabilities by shutting down indebted companies and transferring assets to another company. DINs are recorded in a […]

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The Benefits & The Downsides Of SMSF Set UP

Posted on 25 April, 2022 by admin

One of the benefits of establishing or opting for an SMSF is due to the control they are given over where the money is invested. While this sounds enticing, the downside is that they involve a lot more time and effort as all investment is managed by the members/trustees. They are also often the targets of fraud and scams. Firstly, SMSFs require a lot of ongoing investment of time: Aside from the initial set-up, members need to continually research potential investments. It is important to create and follow an investment strategy that will help manage the SMSF – but this will need to be updated regularly depending on the performance of the SMSF. The accounting, record keeping and arranging of audits throughout the year and every year also need to be conducted up to par. Data shows that SMSF trustees spend an average of 8 hours per month managing their SMSFs. This adds up to more than 100 hours per year and demonstrates that compared to other superannuation methods, is a lot more time occupying. Secondly, there are set-up and maintenance costs of SMSFs such as tax advice, financial advice, legal advice and hiring an accredited auditor. These costs are […]

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Car Parking Benefit Readdresses FBT Definition, Employers To Benefit

Posted on 18 April, 2022 by admin

It’s getting closer to the time that FBT returns need to be lodged, so it’s important to understand that there may be a change to the FBT liability of your business when it comes to one employee benefit. Car parking as an FBT benefit is provided on a particular day when, between 7.00am and 7.00pm: a car is parked at a work car park for the minimum parking period; an employee uses the car in connection with travel between their place of residence and primary place of employment at least once on that day; the work car park is located at or in the vicinity of the primary place of employment, on that day; a commercial parking station is located within a one-kilometre radius of the work car park used by the employee; the lowest representative fee charged by any commercial parking station for all-day parking within a one-kilometre radius of the work car park exceeds the car parking threshold; the parking is provided to the employee in respect of their employment, and the parking is not excluded by the regulations. However, a car parking benefit provided in respect of an employee is exempt where: the car is not parked […]

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Paid Parental Leave Scheme Update For Federal Budget Announcements

Posted on 11 April, 2022 by admin

If you have employees who are expecting to expand on their family (whether they are adopting or looking to become pregnant), the Federal Budget 2022-23 announced a change to paid parental leave that could impact you and your employees. Single parents and fathers are now eligible for longer paid parental leave after the government proposed an ‘enhanced’ 20-week scheme from announcements made during the Federal Budget 2022. Under existing arrangements, up to 18 weeks of paid parental leave can be taken by whoever is designated a baby’s primary carer – usually the mother – at the minimum wage, while a secondary carer is eligible to take two weeks. If the secondary carer does not use the two weeks, it is lost. As a result of the recent announcements made in the Federal Budget 2022-23, the secondary carer’s leave will be merged with the 18 weeks of Paid Parental Leave to increase the government-funded scheme to 20 weeks of leave. Single parents will see two additional weeks of paid parental leave added to what they normally would be entitled to, whereas two-parent households will be able to split the Paid Parental Leave as they would like. However, this leave must be […]

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Superannuation Changes To Affect Pensioners (And What You May Still Need To Take Into Account From Last Year’s Budget)

Posted on 4 April, 2022 by admin

The Federal Budget was released last Tuesday, announcing key changes to taxation and business. For superannuation, the minimum pension drawdown amount was in the spotlight. The reduction in the minimum pension drawdown amount for superannuation pension recipients has been extended for another year by the Federal Government, as announced in the Budget for 2022-23. The minimum pension amount will be only 50% of the general amount (the balance from which the pension is drawn). For example, a 65-year old would usually need to draw down 5% of their opening balance as a pension payment throughout the year. For the 2022-23 financial year, the minimum amount will be reduced 50% (dropping this to 2.5%). This measure is set to cost the Federal Government around $19.2 million dollars for the 2022-23 years, but you need to be alert and conscientious about it. Why Is That? Whilst it is a great outcome to keep as much of your money in your super as is possible (if it’s not required for you to live on), you do need to be conscious that at some point, the remaining balance will be passed onto the next generation, potentially as a part of their inheritance. When this […]

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COVID Deductions Rely On Work-Related Purposes (So Here’s What You Might Be Able To Claim)

Posted on 28 March, 2022 by admin

People across different industries may have different items for work that they can claim a deduction on their tax returns for, but this season may see a few common occurrences across individual tax returns for 2022. On your individual tax return this year, you may notice a few expenses pertaining to COVID-19-related purchases, such as masks, hand sanitisers and RATs tests that you may be able to claim (depending on your circumstances). These deductions may have specific conditions and requirements that must be met, and failure to comply may result in the Australian Taxation Office disallowing these claims. Masks and hand sanitiser are claimable deductions for those who have required them to work in their industry (e.g. retail, hospitality, education). This is because they can be claimed as PPE (Personal Protective Equipment), but they must be directly connected to how you earn your income (for example, many State governments mandated at various points last year that hospitality workers were required to wear masks while working). If your place of employment did not provide this PPE to you, and you had to purchase it yourself, it may be claimable. Rapid Antigen Tests (RATs) however, must be purchased for a work-related purpose. […]

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Passing The Business To Family? Here Are Three Things You Probably Hadn’t Considered

Posted on 21 March, 2022 by admin

Succession planning for the family businesses has a number of factors that could impact the decision to pass the business onto the next generation. Namely,  you’ll be looking for someone in the family who is willing to assume the responsibility. But if you intend to pass your business down the family tree there are also a number of taxation, financial and managerial considerations that need to be taken into account for a successful succession. Taxation Implications When transferring your family business and placing it in the name of another family member you may trigger a myriad of taxable consequences, including Capital Gains Tax (CGT), wine equalisation tax, fuel tax credits and excise duty. You need to consider, when preparing the business for succession include:     Consulting the ATO to check if you are eligible for tax concessions     Document all business restructuring operations and the tax impact in the succession plan Consider A Family Trust It is often suggested before a younger family member gains ownership of the business they should first assume managing responsibilities to prove themselves. If you want to relinquish control gradually rather than permanently, re-structuring the business as a family trust is an option. […]

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Super Guarantee Change – Deadlines, Payments & Everything Your Business Needs To Know Before The EOFY

Posted on May 23, 2022 by admin

It is easy to get caught out with superannuation, particularly when you are the owner of a business. With so many things to occupy your mind, superannuation may slip from the forefront.

But as a business owner, you must pay the superannuation guarantee for your staff, and you must pay it on time. A failure to pay it on time will mean that you are no longer able to receive a tax deduction for the payment for that financial year. 

On top of that, you can face hefty penalties (which you won’t get a tax deduction for either!). Now imagine being five days late on a $10,000 super payment, losing the tax deduction on that payment and then copping a $20,000 penalty as well. 

The first thing is to make sure that your super is paid well before the time it is due. This should be a priority payment (a payment that you make before anything else).

As the end of the financial year approaches, it is time to be thinking about the June Super Guarantee payment. You may have until July 28 to make the payment but leaving it until then will not net you a tax deduction until the next financial year. From a tax perspective, this may not be what you want to do (unless you know that in the next year, you will need more tax deductions).

Superannuation also has a few strange rules when it comes to claiming a tax deduction.  For employee superannuation, it is critical that it is paid on time.  More than that, the money has to actually be in the bank account of the super fund for you to claim a tax deduction.  

Unlike other expenses where you can show the money coming out of your bank account, this money needs to be present in your super fund for you to make the claim. If your super guarantee payment hits the bank account of the super fund on June 30th then you can claim a tax deduction for that year.  If, however, it hits the bank account on July 1st then the tax deduction is claimed in the financial year after.

Problems arise when you are paying your super through a clearing house, which takes a number of days to clear your payment and get it to the super fund. For example, you may pay the clearing house on the 25th of June, but your super fund does not receive it into their bank account until the 1st of July. 

The ATO’s Small Business Superannuation Clearing House usually has some concessions in these instances.

If you want to get a tax deduction for your June Super Guarantee payment, you need to work out with your clearing house the latest day that they can guarantee that the super fund will then receive the payment this financial year.  Some of these clearinghouses are quoting that you should be paying as early as the 14th of June.

Finally, with regards to Super Guarantee, remember that the rate increases to 10.5% from 1st July.  This rate applies to wages paid on or after July 1st so make sure your payroll system either automatically updates the rate or that you have updated it to reflect the increase.

Employers who fail to meet their Super Guarantee obligations may also be liable for a range of penalties or charges on top of the super guarantee charge. 

Paying super is an important part of being an employer. To ensure your business remains compliant, remember to: 

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