Planning For Your Business’s Future For Next Financial Year

Posted on 9 June '21, under Business.

With the end of the 2020 financial year rapidly approaching this month, many businesses will be reflecting on how they managed to navigate and meet the challenges of a turbulent time (namely, the COVID-19 pandemic).

By taking what they have learned, what worked and what failed, businesses should be able to plan for their future for the next financial year and understand how to take their learnings from the previous year forward with them to create preventative strategies and coping measures.

A good business plan recognises these periods of change as opportunities to innovate, challenge the business and engineer a plan that allows them to take chances but remain safe at the same time.

Planning For Your Business’s Financial Future This Financial Year

  • Ensure that you are legally compliant with your approach to your employees by conducting an audit of all employment contracts.
  • Plan out and undertake a risk-management plan to identify vulnerable areas and what strategies you can employ to mitigate their effect. Include potential exit strategies for the business and a succession plan for worst-case scenarios.
  • If there were any excellent habits or innovations developed throughout the pandemic, retaining them should be a priority
  • Manage financial obligations, such as commitments to leases, staff, debt etc., and see how those can be managed in the event of volatility or turbulence. Revisit grants and support packages and see if these are still available/useful to you
  • Plot out guaranteed, likely and potential projects or income and your expenses, taxes, overheads, wages and subsidies that should be accounted for ahead of time.
  • Surplus cash generated can be used to pay down debt or take advantage of opportunities through reinvestment in areas such as hiring new staff or purchasing equipment (especially with the instant asset write off scheme being extended for another year)
  • Consider implementing reliable financial software (such as e-invoicing) to ensure everything from expenses and invoices to taxes and analytics are meticulously organised.

We are here to help you plan out your business’s future for the next financial year, including how to prepare financially for any eventualities, what might be the best path forward to deal with potential or existing debts, and what schemes or grants your business could be helpful to your business. Contact us for an appointment today.

Crypto Tax Crackdown Announced By ATO

Posted on 8 June '21, under Tax.

Cryptocurrency investments are on the ATO’s radar this tax return season, with 100,000 taxpayers to be alerted by the ATO of their tax obligations from their cryptocurrency investments this financial year.

It’s an outcome that has resulted from a growing concern that many taxpayers who invest in cryptocurrency believe their gains to be tax-free, or only taxable when their holdings are cashed into Australian dollars.

This proactive prompt to taxpayers is a repeat of the ATO’s 2020 attempt, which resulted (after contacting 100,000 taxpayers) in the lodgement of 140,000 returns.

Cryptocurrency’s current popularity as an investment solution for many taxpayers, due to the fairly consistent returns, is causing the ATO to evaluate the digital asset’s tax implications further.

Currently, those who invest in cryptocurrency need to be aware of the capital gains tax implications that may eventuate from selling or buying and any losses or gains that may come about due to investing, particularly in how it impacts their reportable income tax.

The ATO will also be heading into tax time with access to more data and the ability to track those investing in crypto-assets and ensure they are meeting their tax obligations.

The best way to ensure that your tax returns are lodged correctly when it comes to cryptocurrency reporting is to keep immaculate records. You should ensure that you have records of:

  • Dates of transactions
  • The value of the cryptocurrency in Australian dollars at the time of the transaction
  • What the transactions were for
  • Who the other party was (even if it’s just their wallet address)

Be sure that you are meeting your tax obligations this tax return season (especially to avoid the harsh penalties resulting from incorrect reporting or lodgements) by speaking with us. We can advise you further about your particular situation and give you the advice you need to suit your circumstances.

 

Getting a Double Deduction for your Super Contributions?

Posted on 7 June '21, under Super.

Each year we are entitled to a tax deduction for a certain amount of superannuation contributions. The tax deduction is available to your employer if they contribute on your behalf but it can also be available to you personally when you make extra contributions to super.

The amount that you can claim as a tax deduction is limited to what is known as your Concessional Contributions Cap.  There is a standard Cap of $25,000, though that is increasing to $27,500 on 1st July 2021. There are certain people that can add amounts that haven’t been used in previous years to this cap amount.

If you go over your Concessional Contributions Cap, the excess contributions are merely added to your taxable income so you don’t get any tax benefits out of the contribution.

For example, let’s say your Concessional Contributions Cap is $25,000 but you make $35,000 in concessional contributions.  The extra $10,000 will be added to your taxable income but you will receive a credit for the $1,500 in contributions tax paid by the super fund.

But there is a little known trick to allow you to “bring forward” a tax deduction for your concessional contributions.  This “hack” is commonly known as a Contributions Reserving Strategy and it has been approved by the Tax Office.  If done correctly it allows you to take some of next year’s Concessional Contributions Cap and bring it into this financial year.  But it must be done correctly and if you take advantage of it, you need to lodge a specific form with the Tax Office to let them know. The ATO will almost certainly audit what you have done.

It is also important to note that it is really only achievable to do this strategy with a Self Managed Superannuation Fund.  It is also important to note that you are merely bringing forward your contribution (using it this year) and that you won’t be able to use that amount next year, so careful planning is also needed.

This type of strategy is used by people who will have an unusually higher taxable income this year than they will next year.  So, for example, you might have a large capital gain this year or you might be retiring and have no taxable income next year.

Leaving it until the new year to discuss this strategy is way too late and it absolutely cannot be done after late June so it is essential that you talk to us if you feel next year’s taxable income will be a lot lower than this year.

 

Downsizer Contributions – What Are They?

Posted on 3 June '21, under Super.

If you are aged 65 years or older, you are currently able to make downsizer contributions of up to $300,000 into your superannuation fund from the sale of your main residence (as of 1 July 2018).
The Federal Budget recently announced that the age limit for downsizer contribution payments will be reduced from 65 to 60 once the relevant legislation has been passed.

This means that you can increase your super fund’s balance without impacting on your contribution caps (as it is not a non-concessional contribution), and this contribution can still be made even if your superannuation balance exceeds $1.6 million. It does however count towards your transfer balance cap, which is currently set at $1.6 million (increasing to $1.7 million for most people on 1 July 2021).

The downsizer contributions scheme can only be accessed once, so it can only apply when you sell or dispose of one home, including selling a part interest in a home. It is a one-time deal essentially and is not a tax-deductible amount.

You can however make multiple downsizer contributions from the proceeds of a single sale, but the total of the contributions cannot exceed $300,000 less than any other downsizer contributions that you have made.

You and your spouse can (in certain circumstances) both make downsizer contributions from the sale of the home even if the house was only owned by one of you, provided you both meet all the requirements.

These contributions will also come into account for determining whether or not you are eligible to receive the age pension.

If you would like more information on how to proceed with downsizer contributions, are looking to sell your home and wanting to continue with downsizer contributions from the sale, or just looking for guidance, we can help. Come speak with us.

Taking Advantage of Free Marketing With Blogging

Posted on 1 June '21, under Business.

To gain a foothold in the online community, it is becoming more and more important that small businesses take advantage of and develop a web presence that they can use to engage and communicate with their customers.

Blogs are among the primary three forms of media used in most content strategies today. By consistently using blogging as a tool for building your business’s online brand and raising awareness, you’re using a cost-effective method of content creation and directing more traffic towards your website. Doing so also enables you to provide your target audience with relevant content that they might find helpful and establish yourself in a niche as an authority.

Reportedly, 89% of content marketers used blog posts in their content creation strategy in 2020. It’s a marketing strategy that over 86% of companies are employing as their primary form of online marketing distribution.

Here are some reasons why you should consider employing blogging as your next marketing move.

Search Engine Optimisation Boost

Blogging allows you to provide search engines with fresh, relevant content straightforwardly and cost-effectively. When you create content through a blog post for your business, you’re providing major search engines with new content to refer back to in search results. You can also insert keywords that pertain to your business into your content that you know your customers use to search for what you’re offering them, and which will then flag your blog in their search results.

Strengthen Relationships With Customer Base (Old And New)

Engaging with your customers is an element of online marketing that you do not want to neglect, as they have the power to make or break your business. Blogging allows you to engage and connect with your customer base informally and builds up trust between you and them as a reliable source of high-quality and particularly relevant information.

Make Your Business The Industry Leader In Information

By providing your customer base with trusted, high-quality information that you know they’ll find relevant, you can establish credibility for your business and yourself as a “knowledge expert” in the field or niche you’ve carved out for yourself. Writing regularly about helpful and informative topics will make you the point of call within the industry, leading to more inquiries and higher conversion rates (clickthroughs, purchases, etc.).

Connect People To Your Brand

Blog posting allows you a more informal, conversational platform to create a dialogue with your customers and show them a more personal side to your business. You can establish a brand message and voice, engage existing and prospective customers, and show them a sense of your business’s corporate standard, character, vision, and personality.

Create Opportunities For Sharing

Sharing the link to your blog is something that your customers who engage with your content can do, which creates the potential for viral traffic and exponential growth in the market. It’s free and as easy as a simple click.

Blogging is essentially a must for any small business looking to increase its outreach into the digital landscape. Suppose you don’t have the time, resources or necessary expertise to write blog content. In that case, you can outsource the posts to a digital marketing agency and have them begin your company’s blogging journey.

Don’t Copy/Paste Your Tax Return From Last Year

Posted on 31 May '21, under Tax.

Due to the impacts of COVID-19, how Australians claim work-related expenses on their tax returns every other year is sure to be different this year. The ATO is warning Australians that they will be watching what is claimed and how the impacts of COVID-19 are reflected in tax returns.

During the 2020 tax return season, up to 8.5 million Australians claimed nearly $19.4 billion in work-related expenses, with new trends and figures of claims reflected in their returns.

Expenses in the 2021 tax return season are expected to reflect the changing nature of how Australians work, given the ongoing impact of COVID-19 is still being felt by workers.

In 2020, the value of car and travel-related expenses decreased by nearly 5.5% (as a result of lockdowns, office closures and the pandemic). There was a slight increase of up to 2.6% in terms of clothing expenses (in part a result of frontline workers’ first time needs for items such as hand sanitiser and face masks so that they could continue doing their jobs.

As an example, though working from home claims are expected to rise in this year’s tax returns, the ATO would not expect to see a marked increase in claims for travelling between worksites, laundering uniforms or business trips in those same returns for someone who was predominantly based at home, and not working out and about.

Though some work-related expenses may still be the same this year, the ATO is warning against simply copy-pasting tax returns from previous years, as without significant evidence or record of the claim, you may find yourself in legal difficulties.

So how can you ensure that you’re doing the right thing when making claims on your tax return? Knowing exactly how COVID-19 may have affected what exactly you can claim on your tax return is a good starting point.

As a result of COVID-19, the ATO introduced the temporary shortcut method to quickly calculate the expenses of working from home at an all-inclusive rate of 80 cents per hour for every hour that you work from home. All you need to do is multiply the hours worked at home by 80 cents, keeping a record such as a timesheet, roster, or diary entry showing the hours you worked.

Personal protective equipment that you may have purchased for use at work, paid for by you and not reimbursed by your work, can be claimed as a work-related expense on your tax return. These items could include gloves, face masks, sanitiser or anti-bacterial spray but must be linked back to use at your workplace. You must have a record to support the claim, but this can be done simply with a purchase receipt.

Similarly, with the marked decrease in the value of work-related expenses for cars, travel, non-PPE clothing, and self-education due to the introduction of travel restrictions and limits on the number of people who could gather in groups, tax returns are expected to reflect your claims regarding these amounts. If you are working from home due to COVID-19 but need to travel to the regular office sometimes, you will not be allowed to claim the cost of travel from home to work in this instance as these are private expenses.

If you are unsure about any of the expenses that you are looking to claim on your tax return this year or are concerned about claiming for the wrong expenses, you can come and speak with us for clarification on what you can and cannot claim on your tax return this year.

Why You Need To Consider Your Options When It Comes To Financial Advisers

Posted on 28 May '21, under Money.

A financial adviser can assist you with making financial decisions and planning for your future. Advice from a financial adviser may include advising on budgeting, investing, super, retirement planning, estate planning, insurance and taxation.

Finding and choosing a financial adviser to suit you is made simpler by keeping these essential tips in mind.

Decide What You Want From Financial Advice

It’s crucial to know precisely what you’re looking to get out of a financial advisor if you want financial advice. Depending on your stage of life, how much money you have available and what you’re trying to achieve, your needs must be accommodated appropriately to ensure that you’re receiving the right kind of advice. Think carefully about what you are aiming to get out financial advice.

Choose The Right Financial Advice For You

A financial adviser can give two types of advice. Financial advisers can provide general financial advice that doesn’t consider personal situations or goals or how you may be affected personally. Essentially, it’s not advice that may take into account your best interests.

However, personal advice must be based on a careful review of your financial situation and goals and align with your best interests. It can include:

  • Simple, single-issue advice – Assistance with one financial issue (e.g. how much should you contribute to your super)
  • Comprehensive financial advice – Assistance in developing a financial plan to reach your financial goals
  • Ongoing advice – Regular monitoring and review of your financial plan and affairs

Find A Financial Adviser

Once you have a clear financial goal in mind, it’s time to look into finding someone who can help you achieve it. You can find a licensed financial adviser through:

  • A financial advice professional association
  • Your super fund
  • Your lender or financial institution
  • Recommendations from people you know
  • Speaking with us.

A good adviser will get to know you, keep you informed, and help you achieve your goals. They’ll also discuss how much risk you’re comfortable with. Going on this journey with your financial adviser can assist you in setting up your financial future comfortably. Begin a conversation with us to see if we can assist you on this journey.

Why You Need To Consider Your Options When It Comes To Financial Advisers

Posted on 28 May '21, under Money.

A financial adviser can assist you with making financial decisions and planning for your future. Advice from a financial adviser may include advising on budgeting, investing, super, retirement planning, estate planning, insurance and taxation.

Finding and choosing a financial adviser to suit you is made simpler by keeping these essential tips in mind.

Decide What You Want From Financial Advice

It’s crucial to know precisely what you’re looking to get out of a financial advisor if you want financial advice. Depending on your stage of life, how much money you have available and what you’re trying to achieve, your needs must be accommodated appropriately to ensure that you’re receiving the right kind of advice. Think carefully about what you are aiming to get out financial advice.

Choose The Right Financial Advice For You

A financial adviser can give two types of advice. Financial advisers can provide general financial advice that doesn’t consider personal situations or goals or how you may be affected personally. Essentially, it’s not advice that may take into account your best interests.

However, personal advice must be based on a careful review of your financial situation and goals and align with your best interests. It can include:

  • Simple, single-issue advice – Assistance with one financial issue (e.g. how much should you contribute to your super)
  • Comprehensive financial advice – Assistance in developing a financial plan to reach your financial goals
  • Ongoing advice – Regular monitoring and review of your financial plan and affairs

Find A Financial Adviser

Once you have a clear financial goal in mind, it’s time to look into finding someone who can help you achieve it. You can find a licensed financial adviser through:

  • A financial advice professional association
  • Your super fund
  • Your lender or financial institution
  • Recommendations from people you know
  • Speaking with us.

A good adviser will get to know you, keep you informed, and help you achieve your goals. They’ll also discuss how much risk you’re comfortable with. Going on this journey with your financial adviser can assist you in setting up your financial future comfortably. Begin a conversation with us to see if we can assist you on this journey.

Preparing For Your Employee’s Performance Review

Posted on 28 May '21, under Business.

The performance review process is an integral part of a business that ensures that all staff (old and new) know their roles and responsibilities and perform them satisfactorily. It allows employers to directly give feedback to their employees in a formal setting that employees can then direct back into and shape how they perform their role.

Performance reviews may include praise about performance, suggestions for improvement or raise professional concerns, or assist in their career development and growth by planning for a future with clear strategic goals.

To be sure that the performance reviews conducted benefit you and your employees, It is essential to make sure that you are fully prepared and able to articulate your feedback. It’s important to have a plan, and a well-organised agenda of how you want the meeting to go can be a valuable tool to employ.

Make a note of any critical issues or points that you wish to discuss with your employee, as having the physical prompt should assist you in keeping the meeting on track and examine all of the relevant points that you want to pursue with the employee.

Essentially, you should cover in the performance review:

  • Each employee’s goals or KPIs, and how well those goals are being met/achieved
  • Areas where they have excelled
  • Places where they may need more improvement

You can also ask your employees to assess their performance and see what they may identify differently from what you have highlighted. You can do this by simply having them conduct a self-analysis on how their performance has been in reaching (or not reaching) their goals

If you are after a more formal approach to a self-analysis, you can ask employees to complete a more formal SWOT analysis, which identifies their strengths and weaknesses, opportunities they’ve taken advantage of to enhance their performance and any threats that may have impacted or may impact their performance.

Performance reviews can also identify and highlight areas for improvement in the business that may have otherwise gone unnoticed.

Typical Things To Address In A Performance Review

  • The employee’s quality of work and ability to meet particular metrics
  • Dependability and punctuality
  • Leadership, communication and team skills
  • Progress made towards personal career goals
  • Innovation and problem-solving skills

Performance reviews should be conducted periodically and methodically to ensure that you get the most benefit from them. It will also keep you informed about progress and issues within the business. It is recommended that you conduct performance reviews every three or four months, but half-yearly reviews are also perfectly suitable.

Preparing For Your Employee’s Performance Review

Posted on 28 May '21, under Business.

The performance review process is an integral part of a business that ensures that all staff (old and new) know their roles and responsibilities and perform them satisfactorily. It allows employers to directly give feedback to their employees in a formal setting that employees can then direct back into and shape how they perform their role.

Performance reviews may include praise about performance, suggestions for improvement or raise professional concerns, or assist in their career development and growth by planning for a future with clear strategic goals.

To be sure that the performance reviews conducted benefit you and your employees, It is essential to make sure that you are fully prepared and able to articulate your feedback. It’s important to have a plan, and a well-organised agenda of how you want the meeting to go can be a valuable tool to employ.

Make a note of any critical issues or points that you wish to discuss with your employee, as having the physical prompt should assist you in keeping the meeting on track and examine all of the relevant points that you want to pursue with the employee.

Essentially, you should cover in the performance review:

  • Each employee’s goals or KPIs, and how well those goals are being met/achieved
  • Areas where they have excelled
  • Places where they may need more improvement

You can also ask your employees to assess their performance and see what they may identify differently from what you have highlighted. You can do this by simply having them conduct a self-analysis on how their performance has been in reaching (or not reaching) their goals

If you are after a more formal approach to a self-analysis, you can ask employees to complete a more formal SWOT analysis, which identifies their strengths and weaknesses, opportunities they’ve taken advantage of to enhance their performance and any threats that may have impacted or may impact their performance.

Performance reviews can also identify and highlight areas for improvement in the business that may have otherwise gone unnoticed.

Typical Things To Address In A Performance Review

  • The employee’s quality of work and ability to meet particular metrics
  • Dependability and punctuality
  • Leadership, communication and team skills
  • Progress made towards personal career goals
  • Innovation and problem-solving skills

Performance reviews should be conducted periodically and methodically to ensure that you get the most benefit from them. It will also keep you informed about progress and issues within the business. It is recommended that you conduct performance reviews every three or four months, but half-yearly reviews are also perfectly suitable.