Month: March 2020

What deductions can you claim on your website?

Posted on by Adam_Admin

Most businesses nowadays have some sort of website, but designing, creating and maintaining a website for your business can be complicated. Many businesses use website services to develop and design their website for them if they don’t have the expertise or time to do it themselves.

Often, this can be an expensive venture. Not only is there a fee to create the website, but there are often the continual costs of tweaks, maintenance and upgrades after the website are already up and running. small businesses can claim deductions for website development costs.

Businesses that incur the cost of developing a website before they begin running their business can typically claim 20% of the cost each year over five years upon starting up.

Businesses that are already up and running with an aggregated turnover of less than $2 million can use the simplified depreciation rules:

  • If the cost of the website development is less than the instant asset write-off threshold of $20,000, you can claim a deduction for the full expense amount in the income year they acquire the expense.
  • If the website costs are equal to or more than the instant asset write-off threshold, owners can allocate it to a general small business pool for accelerated depreciation deductions.

However, it should be noted that you cannot use the simplified depreciation rules if you choose to allocate expenditure on the software to a software development pool.

You can also claim an outright deduction for specific running and maintenance costs, such as server hosting fees, domain name and registration fees in the same income year the expenses are incurred.

What does the coronavirus stimulus package mean for businesses?

Posted on by Adam_Admin

Amidst the chaos of the COVID-19, better known as the coronavirus, and concerns for Australia’s weakening economy, the Morrison government most recently released a “coronavirus stimulus package” largely targeted at stimulating the Australian economy through cash payments and tax relief for small to medium-sized businesses.

Worth more than $17 billion, the stimulus package is planned to be spread across this financial year as well as the next, with half of the package scheduled for release into the economy before June 30th. In order for an immediate boosting effect on the economy, some changes have already been implemented and here’s a breakdown for you below:

  • Businesses can access an expanded instant asset write-off, from $30 000 to $150 000. This is to encourage immediate spending by businesses to improve cash flow.
  • Small businesses with an annual turnover of less than $50 million can claim tax deductions. Such tax deductions can go up to $30 000 for company vehicles, tools, office equipment and the like.
  • Small to medium businesses will receive cash payments between $2000 and $25 000 to help pay wages and increase the ability to employ extra staff. 700 000 small businesses will be given these cash payments, making up a significant portion of the package.
  • Businesses hiring apprentices will also benefit from the support package – with $1.3 billion in support payments aimed to keep hundreds of thousands of apprentices employed.
  • Larger businesses can also claim tax deductions. Up to $150 000 can be tax deducted for businesses with an annual turnover rate of up to $500 million.
  • Cash payments of up to $500 will also be paid to welfare recipients and pensioners to encourage more spending.

How to attract top talent

Posted on by Adam_Admin

Do you work in an industry where there is a lack of talented staff despite the demand for it? How can you ensure that job-seeking talents will want to work with you over all the other businesses in the industry? Here are a few tips to boost your chances!

Personalise your recruitment process:
Talented candidates are no longer satisfied with detached, vague and uninteresting job advertisements. Your job description needs to be inviting to those in the job-hunting market who are sifting through hundreds of advertisements a day. The most effective way to do this is to address your candidates personally.

Ring them up upon receiving an application, talk to them about their experiences and accommodate for any needs they might have during the recruitment process (e.g. adjusting interview times and how an interview is conducted). Make sure to converse candidly with your candidates, try to get to know them beyond their professional qualifications, and earn a reputation having a considerate and interaction recruitment process,

Be clear and concise about what you have to offer:
Most job seekers are looking for jobs with certain conditions in mind. Whether this is a pay rate, the business location, expectations of further career opportunities, always try to be as clear and concise as possible when describing your open role and other important business details. By prioritising clarity and including specific expectations, only the most interested of job-seekers will contact you and apply for your job with full knowledge of how to do the job right.

Flexibility is key:
In order to attract the most talented of job-seekers, it can be more beneficial to prioritise the candidate’s desires over the business’. Offering flexible working conditions such as adjustable working hours, accomodating work arrangements (e.g. standing desks) and work-from-home opportunities will incentivise potential talents to choose your organisation over others. Sometimes, these flexible working conditions may even convince talents to choose you over other businesses with higher salaries or other benefits.

SMSF: Deductible expenses

Posted on by Adam_Admin

One of the downsides of running a self-managed super fund (SMSF) are the fees, but making sure you know what SMSF expenses are deductible can help you make the most out of your money.

Many expenses required for running an SMSF can be deductible unless they are related to gaining non-assessable income, such as exempt current pension income. Expenses that may be deductible include:

Management and administration fees:
These can include costs involved in preparing trustees’ minutes, postage fees and stationary, or other fees required for the running of an SMSF. If your fund earns both assessable and non-assessable income, then the costs can be apportioned. If the costs are completely incurred for the purpose of SMSF management and administration, such as obtaining an electronic service address to meet data standards requirement for the fund, then no apportionment is necessary.

Audit fees:
SMSFs require financial and compliance audits every year before lodging an annual tax return. The costs of getting an audit are deductible as they are associated with meeting lawful SMSF obligations. However, if your SMSF gains both assessable and non-assessable income, your audit expenditure must be apportioned accordingly.

ASIC annual fee:
The Australian Securities and Investments Commission (ASIC) annual fee required for your SMSF may also be tax deductible for corporate trustees – special purpose companies whose sole purpose is to act as a trustee of a regulated super fund.

Investment expenses:
Certain expenses relating to investment can also be tax-deductible for assessable income. If the investment-related advice covers non-assessable income, the fee can be apportioned. Some investment-related expenses include:

  • Interest expenses
  • Management fees or retainers paid to investment advisers
  • Bank fees, rental property costs, brokerage expense or other expenditure related to your investment portfolio
  • Investment adviser fees.

SMSF expenses that are not tax-deductible include:

  • Fines for non-compliance
  • Legal fees that are capital in nature
  • Expenses incurred to gain assets backing tax-exempt income streams.

Division 7A and expert predictions on the future

Posted on by Adam_Admin

Division 7A under Australian legislation is currently concerned with private company benefits given to shareholders which are taxable under the premise of income tax purposes. For two years, the Australian government has announced that they will be making changes to the law – however, experts predict that the changes may be deferred for the third year in a row.

Despite the proposed changes to Division 7A having been set to take effect from the 1st of July 2020, the Australian government has remained silent on any potential legislation drafts and have not yet consulted accountants nor tax practitioners on the promised amendments either.

There have been non-public consultations with the Australian government on Division 7A since October 2018 and even then, tax accountants were not happy with the changes the government were planning to make and their lack of attention for the recommendations put forward by the Board of Taxation.

Since late 2018, Division 7A has been a critiqued for its complex series of legislation, causing confusion for tax experts as well as the general public. Since the Board of Taxation’s call for major changes to revamp the government’s “band-aid” fixes on the law, the government has remained largely radio silent on its intentions to fix the legislation by following the recommendations from the Board of Taxation.

Such recommendations included the removal of the concept of “distributable surplus” which more broadly refers to the realised and unrealised profits in a company. The removal of the concept was petitioned for so that a deemed dividend can arise where there are no realised profits in the company, especially in the context of corporation laws whereby dividends are no longer required to be paid out of profits.

Perhaps the government’s silence on Division 7A thus far can be interpreted in a positive light, in that the recommendations by the Board of Taxation are being taken seriously and drafts with the respected opinion of tax experts are on the way. On the flip side of things, if Division 7A were to be released as it was originally drafted in the upcoming year, tax experts believe that things will get problematic.

Supers are merging – what will it mean for you?

Posted on by Adam_Admin

Since the second half of 2019, industry super funds have begun to merge their organisations in an effort to combat APRA’s growing potential in taking action against trustees of underperforming funds. While supers are assuring their members that funds are only merging for their best interest, what exactly will the merging of your super fund mean for you?

Supers which are considering merging with their peers are typically only forming partnerships with companies with similar levels of funds under their management. This generally means that there will be no big changes concerning fees or interest rates made to all members despite the merge. The only changes will come with the transferring of certain super accounts and minimal changes in super services, simply due to the fact that one of the two super funds will become the parent company over the other.

In most cases of supers merging, members of one of the two super funds will have their accounts transferred to the other, just for coherence purposes. While the transferring of your super account may seem like a stressful process, the two companies will take into account your existing super options and preferences and will apply similar options to your new super account under the partnered company.

Super members who will have their accounts transferred will also be issued with a guide to the merger, detailing any impacted services and identifying any necessary actions that may be needed before the merge and after it as well. No guides will be given to super members whose accounts will remain under their original fund unless explicitly requested for.

In the case that your super is merging with more than one other super fund, things won’t get much more complicated either. Super funds are generally looking to merge with others which have members from the same industry (e.g. hospitality workers, the general public, corporate workers, etc.) and have similar services so that your transfer will be kept simple and easy. Owning a super account in a larger super fund (due to merging procedures) will also see security benefits, as the chances of your super fund losing out in profits or being targeted by APRA regulations on smaller super companies dramatically decrease.

Overall, if your super were to merge with another, there is no need to stress, as your super fund will most likely merge with others that already have similar interests and account transfers have already been proven to be quite a simple process.

AUSkey is getting replaced this month. Are you prepared?

Posted on by Adam_Admin

With a quarterly business activity statement (BAS) due next month, it is important that you have updated your lodgement options according to the new system.

From 27 March 2020, AUSkey, including Manage ABN Connections, will be replaced by myGovID and Relationship Authorisation Manager (RAM) and you will no longer be able to access government online services through an AUSkey. Device AUSkeys will be replaced by new machine credentials.

Business owners will need to set up a myGovID if they haven’t already done so and link it to RAM. Your myGov ID is separate from your myGov account and will allow you to prove your identity online. RAM is an authorisation service that uses your myGovID to provide you with access. When linked with your myGovID, RAM will allow you to act on behalf of your business online.

In compliance with modern security standards, desktop and browser-based versions of myGovID will not be supported as these devices are easily accessible. To set up your myGovID, you will need an email address (that you do not share with anyone else) and a smart device that uses iOS 10 or later on Apple devices, or Android 7.0 or later (not including devices that use Android Go operating systems). You can download the myGovID app for free through the AppStore or Google Play.

Depending on what government online services you wish to access through myGovID, you will have to provide certain identity documents to authenticate your account. You can generally have a Basic or Standard identity strength. A Basic identity strength is where you provide only one or no identity documents, aside from your personal details (such as your date of birth and email address). Only some government online services will accept a Basic identity strength, such as Bankruptcy Register Search, ACMA Lodgement Portal and Debt Agreements Online.

A Standard identity strength requires two Australian identity documents, such as:

  • A passport, no more than three years past its expiry date
  • A driver’s license, including a learner permit
  • A birth certificate
  • A Medicare card.

This will allow you to access all participating government online services, including the Business Portal where you can lodge your BAS.

How to manage your money through your bank

Posted on by Adam_Admin

Gone are the days of your visits to the bank to check on your credit balances. With banks consistently improving their client services and moving to easily accessible platforms such as the web and apps, there are more and more opportunities for you to self-organise your money with the services your bank provides. Here are some tips on how to manage your money through your bank.

Sign up for online banking:
Online banking is the new norm for money management within your bank accounts and has certainly made life easier for all of its users. Online banking is a viable option for anyone with a computer, laptop or phone and condenses all the information you need into one easily navigable web page.

You can access your bank account wherever and whenever you prefer, not to mention make payments, transfers and check for your cash movements within your accounts with a few quick button clicks.

Take note of automatic transfers:
With automation processes on the rise, your bank services can largely be automated as well. No longer do you need to personally visit a bank or go online to make a payment – for regular money transfers and payments between bank accounts (such as bills), you can automate them through your bank! Simply set up a time and frequency you’d like to make your transfers and your bank’s IT system will handle it all for you.

Make use of online and mobile budgeting tools:
Most banks nowadays also provide you with customised budgeting tools, detailing your expenditures, comparisons with your earnings, your patterns of cashflow and other personalised statistics for you.

All this accurate information can help you with your budgeting struggles, as you can easily set limitations on yourself based on your recorded spending habits and budget accordingly. You can even use third-party apps which securely link your bank accounts to their platform to track your monetary movement in even more detail.

Turn on your notifications:
A simple tip is to have notifications go off on your phone whenever money enters or leaving your bank accounts can be effective in helping you manage your money. Simply being reminded via consistent notifications on how much your daily coffee costs, that new subscription service you signed up for, or when your bills are paid can make a huge difference in how you manage your money.

How to start and grow your own business blog

Posted on by Adam_Admin

A website is no longer the only way to get your business more online visibility. Business blogs are now emerging as new and effective marketing channels in addition to main websites but rarely are they fully utilised as a connected business channel. Here are a few key steps to consider when building a successful business blog.

Use an existing blog builder:
There is no need to start from scratch when there are many low-cost and professional blog building tools available to you. These blog building platforms often have free trials and options for you to experiment with and can provide you with a variety of website templates to get you inspired.

Plan your content for your audience:
Before launching your blog, it is best to decide the type of content you want to create and who your target audience is. Whether your target audience is existing or potential clients, it is wise to plan out some categories of content you want to produce and a uniform writing style to apply across all your blog posts.

Blog frequently and consistently:
If you are just starting a new blog, it is important to attract as much traffic as you can to optimise your business’ online presence and thus, it is best to blog frequently. Publishing blog posts frequently and consistently will increase your chances of attracting new clients through search engine activity.

Open your blog to interaction/shareability:
Similar to using social media, one of the main purposes of having a blog is to improve communication between you and your clients. By minimising the gap between you and your customers, your business can perform market research more accurately and gain a better sense of your clients’ wants, any problems within the business and how you can better grow as a company. Make sure your blog includes interactive measures such as links to social media accounts and comment sections.

All about diversity and inclusion in the workplace

Posted on by Adam_Admin

Diversity and Inclusion is a growing concept that many businesses – from SMEs to MNCs – all around the world are grappling to understand and implement into their workplace. But what exactly does D&I entail and why is it becoming so important for businesses and employees?

Social inequality has long been a complex global problem and to this day, stakeholders from individuals to governments and businesses are working towards resolving the unfair distribution of opportunities due to individual differences. In the business world, this means accepting, hiring and including employees of all ethnicities, cultures, sexualities and with physical or mental disabilities.

Harmonious workplace culture has always been an integral aspect to business success and D&I is evolving into a necessary addition to all internal workplace procedures. In Australia, D&I mostly consists of diverse cultural recognition and free expression of sexuality, through employee programs and services.

While difficult to implement and even harder to enforce, D&I has become vital to businesses and employees because of a couple of reasons:

Employee Engagement:
A company which stands for cultural, ethnical, sexual and more types of diversity and protects the freedoms and social rights of its employees is bound to earn the favour of its workers. Not only do employees feel safe to express themselves at work, but they also learn to accept the different circumstances of their peers.

Company Confidence:
With happy employees comes a happy and successful business. With workers feeling safe and appreciated at their workplace, productivity naturally increases and workflow also becomes smoother. Business operations automatically become more efficient and profitable, adding positively to the company’s image and confidence.

Attracting Potential Talent:
Similar to employee engagement, a harmonious and safe workplace will attract potential employees and talents. For example, if a company was to have a disability-inclusive program for its employees, disabled and capable talents are more likely to reach out and work with the business.

Currently, D&I is still a relatively new concept to businesses and it has been difficult for businesses to implement D&I strategies effectively considering there are not many earlier examples to follow. However, it is never too late to learn more about D&I and consider implementing the idea into your workplace culture.