Archive for 'General news'

Lump sum payments received by healthcare practitioners

Posted on 4 April '17 by , under General news. No Comments.

The ATO has provided further guidance for healthcare practitioners dealing with lump sum payments from healthcare centre operators.

The Tax Office is concerned with some practitioners who have received lump sum payments and have incorrectly treated the payments as a capital gain. These practitioners have then applied the small business CGT concessions to reduce the capital gain, in many instances reducing it to nil.

The ATO has clarified that a lump sum payment from a healthcare centre operator is more likely to be ordinary income of the practitioner for providing services to their patients from the healthcare centre rather than a capital gain. Practitioners are required to include the full amount of the lump sum payment in their assessable income.

Healthcare practitioners who are considering any arrangements that relate to a lump sum payment for commencing or providing ongoing healthcare services should note that the ATO is looking closely at these arrangements to determine if they are compliant with income tax laws and whether the anti-avoidance provisions may apply.

The Tax Office is aware that some practitioners are using a private ruling that was issued to another taxpayer, however, you can only rely on a private ruling if you applied for it.

Healthcare practitioners entering or planning to enter into an arrangement of this type are encouraged to seek independent professional advice, ask the ATO for a private ruling or make a voluntary disclosure to reduce any penalties. Please contact our office if you have any questions about these arrangements.

Investing on arm’s length

Posted on 23 March '17 by , under General news, Super. No Comments.

Running a self-managed super fund requires trustees to adhere to complex laws and follow a number of onerous rules.

One of the most fundamental investment rules for SMSFs is that the trustees must transact on an arm’s length basis to ensure no conflict of interest arises. An arm’s length transaction requires trustees to conduct on a commercial basis as if there was no relationship between the parties.

This means the purchase and sale price of fund assets should always reflect the true market value of the asset, and the income from the assets held by the fund should always reflect the true market rate of return.

SMSF trustees must obtain independent valuations for assets which are not listed on a public market. Furthermore, if a SMSF sells an asset to a related party or member of the fund, the sale price must be at market value.

Any non-arm’s length income is taxed at the highest marginal tax rate. The ATO considers non-arm’s length income as income which is derived from a scheme in which the parties were not dealing with each other at arm’s length and if it is more than the SMSF might have been expected to derive (if the parties had been dealing on a arm’s length basis).

Investing on arm’s length

Posted on 23 March '17 by , under General news, Super. No Comments.

Running a self-managed super fund requires trustees to adhere to complex laws and follow a number of onerous rules.

One of the most fundamental investment rules for SMSFs is that the trustees must transact on an arm’s length basis to ensure no conflict of interest arises. An arm’s length transaction requires trustees to conduct on a commercial basis as if there was no relationship between the parties.

This means the purchase and sale price of fund assets should always reflect the true market value of the asset, and the income from the assets held by the fund should always reflect the true market rate of return.

SMSF trustees must obtain independent valuations for assets which are not listed on a public market. Furthermore, if a SMSF sells an asset to a related party or member of the fund, the sale price must be at market value.

Any non-arm’s length income is taxed at the highest marginal tax rate. The ATO considers non-arm’s length income as income which is derived from a scheme in which the parties were not dealing with each other at arm’s length and if it is more than the SMSF might have been expected to derive (if the parties had been dealing on a arm’s length basis).

Investing on arm’s length

Posted on 23 March '17 by , under General news. No Comments.

Running a self-managed super fund requires trustees to adhere to complex laws and follow a number of onerous rules.

One of the most fundamental investment rules for SMSFs is that the trustees must transact on an arm’s length basis to ensure no conflict of interest arises. An arm’s length transaction requires trustees to conduct on a commercial basis as if there was no relationship between the parties.

This means the purchase and sale price of fund assets should always reflect the true market value of the asset, and the income from the assets held by the fund should always reflect the true market rate of return.

SMSF trustees must obtain independent valuations for assets which are not listed on a public market. Furthermore, if a SMSF sells an asset to a related party or member of the fund, the sale price must be at market value.

Any non-arm’s length income is taxed at the highest marginal tax rate. The ATO considers non-arm’s length income as income which is derived from a scheme in which the parties were not dealing with each other at arm’s length and if it is more than the SMSF might have been expected to derive (if the parties had been dealing on a arm’s length basis).

Understanding cloud storage

Posted on 1 March '17 by , under General news. No Comments.

Cloud-based storage is becoming increasingly advanced with age. The service’s easy access, tight security, and flexibility are attracting both big and small business owners.

Cloud storage refers to an online space that is used for the storage of data. It allows its users to backup data to a network of servers that are hosted by a cloud service provider. This data is then available through any Internet-connected device.

The main advantage of cloud storage is the flexibility of anywhere access. The data stored in the cloud can be accessed through any Internet-connected device, such as an iPhone or laptop at any location.

Cloud storage is cost-effective when compared to traditional security measures for protecting data. Traditionally, businesses had to pay for equipment, software, and personnel to ensure the security of their private data. The cost of data security in cloud storage is generally covered through a subscription cost.

Another advantage of cloud storage is the ability for businesses to easily scale up or down and only pay for what they actually use. Business owners have been wary of storing private information in the cloud due to the threat of data hacking and privacy concerns. However, cloud security is far stronger than any security devices a company can offer.

Current cloud providers are highly concerned with the security of their systems. They will often utilisecutting-edge data encryption and other security tools to protect data from being hacked. Some of the advanced cloud providers can include advanced intrusion detection, allowing security teams to fend off hackers even before they attack.

Also, physical data storage, such as an external hard drive, can easily be damaged or lost. Data that exists in the cloud is not physical and, therefore, cannot be fractured in the same way an external hard drive can.

There are a lot of benefits to making the switch to cloud storage. The software is provided immediately, and there is no wait on what the business has paid for. Working on the cloud allows businesses to be nimble, efficient and cost-effective.

When considering making the switch to cloud-based storage it is necessary to do some competitive shopping first. Business should consider the following:

  • how much they are willing to pay, or whether a free account is the best idea

  • their need for customer management, help and guidance

  • the licensing arrangements of each service provider

  • the capacity constraints of each provider

  • whether the provider can still benefit the business in the future

Marketing habits to ditch in 2017

Posted on 16 February '17 by , under General news. No Comments.

Ever-changing trends, increasing competition and changes in customer buying patterns are just a few reasons why business owners should review marketing efforts regularly.

Past marketing activities that were once successful can easily go out of date. There are always new marketing techniques to experiment with but first it is important to let go of the marketing activities that are holding your business back.

Here are three marketing habits to ditch in 2017:

Wasting time on certain social channels
Not all social media channels will deliver results. The reality is your target customers will most likely have a preference for certain channels over others. For example, Facebook and Instagram may be better-suited mediums than Twitter and Snapchat for real estate agents; however, fashion retailers may utilise Instagram and Snapchat. The key is to experiment with different social channels to gauge levels of interest and engagement from followers, then decide on which channels are best to primarily market your business.

Failing to update your goals
It is common for small business owners to use the same marketing plan they created years ago. This can be quite problemsome especially if marketing tactics are not accurately reflecting your business’ current goals. Take the time to review your marketing plan at least annually or when new opportunities and threats arise.

Ignoring mobile
Mobile has now surpassed desktop as the primary device for internet browsing. Website content and social media posts need to be optimised for mobile users to ensure optimal browsing experience. Businesses that fail to customise their online services for mobile will fall behind, as mobile users favour optimised sites.

Marketing habits to ditch in 2017

Posted on 16 February '17 by , under General news. No Comments.

Ever-changing trends, increasing competition and changes in customer buying patterns are just a few reasons why business owners should review marketing efforts regularly.

Past marketing activities that were once successful can easily go out of date. There are always new marketing techniques to experiment with but first it is important to let go of the marketing activities that are holding your business back.

Here are three marketing habits to ditch in 2017:

Wasting time on certain social channels
Not all social media channels will deliver results. The reality is your target customers will most likely have a preference for certain channels over others. For example, Facebook and Instagram may be better-suited mediums than Twitter and Snapchat for real estate agents; however, fashion retailers may utilise Instagram and Snapchat. The key is to experiment with different social channels to gauge levels of interest and engagement from followers, then decide on which channels are best to primarily market your business.

Failing to update your goals
It is common for small business owners to use the same marketing plan they created years ago. This can be quite problemsome especially if marketing tactics are not accurately reflecting your business’ current goals. Take the time to review your marketing plan at least annually or when new opportunities and threats arise.

Ignoring mobile
Mobile has now surpassed desktop as the primary device for internet browsing. Website content and social media posts need to be optimised for mobile users to ensure optimal browsing experience. Businesses that fail to customise their online services for mobile will fall behind, as mobile users favour optimised sites.

Overview of the upcoming super reforms

Posted on 16 February '17 by , under General news. No Comments.

The reforms to superannuation made in the 2016 Federal Budget are on their way with most of the changes commencing from 1 July 2017.

Some of the changes to take place from 1 July 2017 onwards will include:

Lowering the concessional and non-concessional contribution caps
The cap on concessional (before-tax) contributions will be decreased from $30,000 (for those under the age of 50) or $35,000 (for those aged 50 years old and over) to the flat rate of $25,000 per year for all age groups.

The new annual cap for non-concessional (after-tax) contributions will be reduced from $180,000 to $100,000. This will remain available to individuals between 65 and 74 years old if they meet the work test. Individuals under the age of 65 will be able to bring-forward three years of contributions, i.e. $300,000.

Transfer balance cap
The introduction of a $1.6 million cap on the total amount that can be transferred into the tax-free retirement phase for account-based pensions. These pensions are commonly provided to defined benefit funds but may be provided to other funds, including some self-managed super funds.

Reduction of Division 293 threshold
The Division 293 threshold will be lowered from $300,000 to $250,000. Individuals with income and concessional super contributions exceeding the $250,000 threshold will have an additional 15 per cent tax imposed on the amount over the threshold, up to the total amount of concessional contributions not exceeding their concessional contributions cap.

Changes to transition to retirement income streams (TRIS)
Currently, where a member receives a TRIS, the fund receives tax free earnings on the super assets that support it. The Government will remove the tax-exempt status of earnings from assets that support a TRIS. Earnings from assets supporting a TRIS will be taxed at 15 per cent regardless of the date the TRIS commenced. Members will also no longer be able to treat super income stream payments as lump sums for taxation purposes.

Spouse tax offset
Currently an individual can claim a tax offset up to a maximum of $540 for contributions they make to their spouse’s eligible super fund if, among other things, the total of the spouse’s assessable income, total reportable fringe benefits and reportable employer super contributions is under $13,800.

The spouse’s income threshold will be increased to $40,000 from 1 July 2017. The current 18 per cent tax offset of up to $540 will remain as is and will be available for any individual, whether married or de facto, contributing to a recipient spouse whose income is up to $37,000. As is currently the case, the offset is gradually reduced for income above this level and completely phases out at income above $40,000.

Preparing for the super changes

Posted on 8 February '17 by , under General news. No Comments.

Tighter superannuation rules will apply from 1 July 2017 as part of the super reforms announced in last year’s Federal Budget.

The new rules include the introduction of a $1.6 million super balance cap for after-tax contributions; a maximum of up to $25,000 for concessional contributions; and the removal of the current “bring-forward” rule allowing $540,000 of contributions in one year.

Although the new rules will come into effect from 1 July 2017, individuals can take advantage of the current rules to top up their nest egg.

Individuals under 65 who wish to make a large contribution, in particular, those with inheritances or who have recently sold a property or other large asset can make the most of this last-chance opportunity to contribute up to $540,000 until 30 June.

From 1 July 2017, individuals will only be able to bring forward up to three year’s worth of after-tax contributions, i.e $300,000 over three years.

The bring forward rule can not be accessed by those aged between 65 and 74 who meet the work test, however, they can still make annual after-tax contributions.

Those with balances in excess of the $1.6 million cap will need to review their super before 30 June to continue to make after-tax contributions. Furthermore, individuals with a balance close to $1.6 million will only be able to bring forward the annual cap amount for the number of years that would take your balance to $1.6 million.

A guide to performance reviews

Posted on 21 December '16 by , under Business, General news. No Comments.

When carried out effectively, formalised performance reviews can be beneficial for both you and your employees.

It is an opportunity for you to demonstrate how much you appreciate your employees’ contributions and undertake collaborative reflection on potential business improvements.

However, there are a lot of potential pitfalls that can undermine the effectiveness of performance reviews, sometimes even resulting in negative outcomes. If the review is unfocused it will fail to bring about any tangible results, which can lead to anxiety, confusion and occasionally even job dissatisfaction.

Additionally, unproductive performance reviews can be a waste of valuable resources. Here are some guidelines to help ensure that your performance reviews are as rewarding as possible:

A review is part of an ongoing process
Performance reviews cannot provide the same benefits as having continuous channels of communication between management levels. It is problematic when performance reviews become the designated time in which issues are addressed. If an employee has been underperforming then you should not wait until their scheduled review to address the problem.

Your company will benefit from creating a culture in which there is an ongoing informal review process, with managers and subordinates communicating effectively about expectations, difficulties and outcomes.

Be specific
Every aspect of the performance review should be specific to the individual employee and their responsibilities. Your comments and questions should be targeted, drawing on and requesting examples to back up any claims. The performance indicators you use do not need to be uniform, and should be individualised to staff members.

Turn your findings into actions
The information you collect throughout performance reviews can guide you in many business decisions. For example, you may see the need to make changes to remuneration packages, redefine job descriptions, or pursue further staff training.

Most importantly, the review process is a chance for you and your employees to take some time out from the day to day operations of your business and reflect on the bigger picture.

The ultimate end goal should be to reach a consensus on future aspirations and cement milestones that are both challenging and achievable.