Customer service makes small businesses the first choice of consumers

Zendesk has released a newly commissioned report titled Big Expectations, Small Businesses: What Customers Want, revealing that small businesses have a distinct advantage over big businesses when it comes to the customer service they provide. In fact, customers are happy to pay more to a small business for this reason alone.

Almost all customers reported clear benefits from working with a small business when compared to a larger company. It’s the small, personal touches that make working with a small business so good. For customers, it comes down to working with someone who knows their specific situation and creates the feeling of having a valued relationship.

Beyond this, customers enjoy working with small businesses as they feel good about supporting smaller organisations and find the relationship convenient. As a result, customers are actively looking for ways to support small businesses. Over two-thirds of customers will find ways to work with small businesses – even when it is less convenient for them.

Amy Foo, Managing Director, Zendesk A/NZ said, “Australia is well known as being a nation that champions the underdog, and it is no different when it comes to purchasing behaviour.

“Small businesses have a unique advantage in the personalised, earnest customer service they provide, giving them the one up on larger businesses. By maintaining a focus on providing positive and unique experiences, small businesses have a great opportunity to be competitive against bigger, more well-known competitors,” Foo added.

With almost all Australians reporting a good customer experience with small businesses, this has a big impact on behaviour. Nine out of ten customers will positively change their buying behaviour following a good customer experience – by buying more or recommending a brand to friends and family.

While this is a clear advantage for small businesses, customers have now come to expect a high level of customer service. To meet these high expectations, business owners should ensure they are communicating with customers when, how and where they want.

Digital channels like social media, live chat and texting have become increasingly popular methods of communication. Yet, small business customers still show a preference to look for self-service options before reaching out. Making it easy for customers to answer their own questions is the first step in providing good customer service.

“One thing is clear – it’s not just about providing the best experiences for the customer. Small businesses should also be thinking about their front-line employees. Armed with the right tools and resources to have a complete view of the customer, they will be empowered and enabled to create better customer experiences,” Foo said.

Click here for original article source


Tax news views and clues October, 2019

Small business income tax gap: ATO update

New figures released by the ATO estimate that almost 90% of income tax from small businesses is paid voluntarily or with little intervention from the ATO.

“This shows that the vast majority of small businesses in the tax system are trying to do the right thing”, Deputy Commissioner Deborah Jenkins said. “Considering how much small businesses have on their plate, we’re grateful for the level of work they put in to get their tax right.”

The ATO estimates the 2015–2016 income tax gap for the small business sector to be approximately 12.5%, or $11.1 billion, with over $7 billion attributable to “black economy” behaviour.

TIP:Around 90% of small businesses use a registered tax professional to help them meet their obligations. Get in touch today to see how we can support you.

ATO sets its sights on undisclosed foreign income

Do you have any amounts of offshore income you haven’t declared to the ATO – perhaps interest from a foreign bank account? Even if it seems like a small amount, you must declare it. International data-sharing arrangements are making your overseas financial affairs increasingly transparent, so don’t get caught out.

The ATO is keen to emphasise that its techniques for detecting offshore amounts are becoming increasingly effective. Cross-border cooperation between different tax jurisdictions means your financial information is being shared more than ever before.

If you’re an Australian resident for tax purposes, you’re taxed on your worldwide income. This means you must declare all foreign income sources in your return.

If you’re a non-resident, you generally only pay tax on your Australian-sourced income.

TIP:The main test for tax residency is whether you “reside” in Australia. There’s no single factor that determines whether you meet this test.

What if you’ve already paid tax on the income overseas? You still need to declare it to the ATO. However, you may be able to claim an offset for the tax already paid in order to prevent double taxation.

Got any amounts you’ve overlooked? Now is a great time to get help from your tax adviser with making a voluntary disclosure. You’ll often receive a reduction in ATO penalties and interest that would otherwise apply – and the outcome is generally much more favourable if you make a disclosure before the ATO commences an audit of your tax affairs.

ATO announces “Better as Usual” program to improve your experience

ATO Commissioner Chris Jordan has announced the launch of “Better as Usual”, a new ATO program aimed at improving people’s experience with the tax system. The program will include four parts:

  • Whole-of-system experience:looking at the end-to-end experience to address people’s frustration at sometimes feeling like they have to start all over again when dealing with a new ATO area or staff member.
  • Quality of feedback loops:better understanding and documenting people’s past experiences and actions (eg mistakes versus evasion) to make better ATO decisions in the future.
  • Complex cases team:a dedicated team to work on the most complex cases, devoting the time and resources necessary to deal with complicated affairs that fall outside the ATO's normal processes.
  • Procedural and cultural safeguards:established to reduce (and ultimately eliminate) any cases where ATO mistakes could have a severe impact on taxpayers.

Salary sacrificing loopholes: are you receiving your full benefits?

Most workers understand that their employer must make compulsory super guarantee (SG) contributions of 9.5% of their salary and wages. However, things can get a little tricky when you choose to salary sacrifice.

Under current laws, employees who sacrifice some of their salary in return for additional super contributions may end up receiving less than they expected because of two legal loopholes. Employers may:

  • count the salary sacrifice contributions towards satisfying their obligation to make minimum SG contributions of 9.5%; or
  • calculate their 9.5% contributions liability based on the employee’s salary after deducting sacrificed amounts, rather than the pre-sacrifice salary.

Proposed new laws will close the loopholes by requiring employers to pay compulsory SG contributions at 9.5% of the pre-sacrifice amount of salary (that is, the salary actually paid to the employee plus any sacrificed salary). Further, any salary sacrifice contributions will not count towards the compulsory SG contributions. If passed, the new laws will apply to quarters beginning on or after 1 July 2020.

Claiming work trips for business owners

As a business owner, do you sometimes take work trips? When a trip is clearly for business purposes only, the rules for deducting your expenses are fairly straightforward. But what happens when you’ve planned a holiday or to catch up with family or friends while you’re travelling?

Airfares

Assume you travel to London for a two-week trade show and stay a few extra days for sightseeing. If business is the primary purpose of the trip, you can claim the whole cost of the return airfares as a business deduction, because the sightseeing is just incidental. If you have a significantly longer holiday, so the primary purpose of the trip is not just business, you may need to apportion your airfares. And if the primary purpose is clearly private with some incidental work activities, you generally can’t deduct airfares.

Accommodation

Accommodation deductions are limited to the nights that you’re required for the business purpose. In our London example, you couldn’t deduct your accommodation costs for the nights you stayed for sightseeing. This applies even though you could deduct the full airfares.

Record-keeping

Sole traders and partners must keep a diary if they travel for six or more consecutive nights, detailing each business activity, the location, the date and time it began and how long it lasted.

If your business runs through a company or trust structure, it’s not compulsory to keep a diary, but it’s strongly recommended.

TIP:For companies, be careful about your business paying for any private part of your travel, as this could have consequences under the “deemed dividend” rules about benefits for shareholders and their associates.

Thinking about setting up an SMSF?

SMSFs can be a great option for building retirement savings, but they may not be suitable for everyone. Before you jump in, make sure you understand the differences between SMSFs and other types of funds to help you make an informed decision. Here are a few issues to consider.

Management

While public offer funds are managed by professional licensed trustees, for SMSFs the management responsibility lies with the members. Every SMSF member must be a trustee of the fund (or, if the trustee is a company, a director of that company). This is an advantage if you want full control over how your super is invested and managed, but it means the members are responsible for complying with all superannuation laws and regulations – and administrative penalties can apply for non-compliance.

Costs

Fees charged by public offer funds vary, but they are generally charged as a percentage of the member’s account balance. Therefore, the higher your balance, the more fees you’ll pay.

SMSF costs tend to be more fixed. As well as paying establishment costs and an annual supervisory levy, SMSFs must hire an independent auditor annually. Most SMSFs also need professional assistance, such as accounting services, financial advice, administration services and asset valuations. An SMSF can sometimes be more expensive than a public offer fund.

Investment flexibility

A major benefit of SMSFs is that the member-trustees have full control over investment choices. This means you can invest in specific assets, including direct property, that wouldn’t be possible in a public offer fund. SMSFs can also take advantage of gearing strategies by borrowing to buy property or even shares through a special “limited recourse” borrowing arrangement. However, with control comes responsibility. SMSF trustees must create and regularly update an “investment strategy” that specifically addresses things like risk, liquidity and diversification.

TIP:There are other important considerations for SMSFs, including decisions about insurance and arrangements for dealing with any disagreements between trustees. It’s important to ensure you have the whole picture and good advice before getting an SMSF started.

Clients should not act solely on the basis of the material contained in this article. Items herein are general comments only and do not constitute or convey advice per se. Also, changes in legislation may occur quickly. We, therefore, recommend that our formal advice be sought before acting in any of the areas. This article is issued as a helpful guide to clients and for their private information. Therefore it should be regarded as confidential and not be made available to any person without our prior approval.


Rebranding? Here’s why you don’t let your domain name lapse

Have you ever wondered what happens to domain names that you let lapse after your business is bought/sold or you rebrand and change to a new domain name? In this article, we'd like to share a true story, written by an experienced business writer, Ingrid Moyle.

True story

I admit to being one of those people who didn’t think too deeply of the implications when I let an old domain name that I had traded under for many years go.

After all, I had been trading under the new domain name for a few years, and the only emails that were going through to my old email address were spam, so no biggie if I just let it lapse. Right?

Wrong!

Scammers and hackers are always looking for new ways to do their thing, and re-registering lapsed domain names is simply the latest in their long arsenal of ways to stuff-up business owners.

In my case, the scammers found a way to circumvent the auDA domain name registration rules to re-register my expired domain name.

They then organised hosting with a hosting provider with a murky reputation and proceeded to scrape a full copy of my website from many years ago and make it live once again in a zombie parody of what it once was.

The scammers then filled the zombie site choc-full of malware and had the e-commerce component of the site redirected to their personal PayPal accounts.

For good measure, they added a stack of add-on domains selling male enhancement medications under my old domain name.

Why is this an issue?

Remember when I said that they scraped my content? This included photos of me and all of my marketing wording.

If someone searched for my name, my company or my services, the zombie site would pop up in the Google’s search results, and legitimate clients checking out my business would either pick up a dose of malware for their troubles, or potentially buy a product and get nothing in return leaving them less than impressed with my business.

But wait. There’s more.

They also added in a catchall email to the account, which meant that anyone sending email to the old email address communicated directly with the scammers and not me.

A growing security problem

The zombiing of websites as a way to either deliver malware or access old emails is rapidly becoming a significant security issue for business.

Gabor Szathmari, a cyber-security expert in Australia, had his company re-register six domain names of law firms in Australia that had re-branded to test the scope of the problem.

They then set up catch-all email accounts to monitor emails coming into the old domain names.

As part of the research, they were able to:

  • Access confidential documents of former clients;
  • Access confidential email correspondence;
  • Access personal information of former clients;
  • Hijack personal user accounts (LinkedIn, Facebook, etc.) of former staff working in their new jobs; and
  • Hijack professional user accounts (Commonwealth Courts Portal, LEAP, etc.) of former staff of the businesses.

In other words, if you let your domain name lapse and at any time you had an email account attached to the domain, you are potentially leaving your business wide open for disaster.

What happened in my case?

I would like to tell you that getting the domain name back from the scammers was super simple and straightforward. It wasn’t!

Stopping the scammers had more twists, turns and heart-stopping moments than a Marvel movie.

Getting the scam site taken down, the domain name registration cancelled and getting it back under my name took loads of paperwork, legal advice, a battle with an SEO company who got in the middle at the wrong time, and a few too many late nights and alcoholic beverages.

However, finally, good prevailed, and my old domain name is back under my control. Sure, it is now radioactively toxic from an SEO perspective, so will never again be used to host a site, or be redirected to my new site, but at least that is one cybersecurity gap closed.

Should you let your domain name lapse?

Domain Names are the new cyber vulnerability. The new rules for every business, no matter the size, is if you have ever had a domain name registered that had a website on it and/or an email account linked to it, NEVER LET IT LAPSE.

Domain names are something that you need to keep for life. Yes, you can let your hosting lapse if you don’t need a live site anymore, but never let your domain name lapse. Keep it under your control at all times.

And if you have changed your domain name and let your old one lapse, your first task for today is to see if you can re-register your old domain name. Do this before you take the first sip of your coffee (it is THAT serious)!

Source: FlyingSolo July 2019

 


Tax news, views and clues, September 2019

Warning to watch out for myGov and ATO tax scams

The government’s Stay Smart Online website warns there has been a surge in scammers impersonating myGov and the ATO to trick people into giving them money or personal details. These scams can take the form of emails, text messages and fake myGov login pages.

In June 2019, the ATO received 6,444 reports of tax-time scams impersonating the ATO. Emails with links to fake myGov login pages were the most widespread email scam.

The myGov system will never send texts, emails or attachments with links or web addresses that ask for your login or personal details. Never click on links in emails or text messages claiming to be from myGov.

Always log into your official myGov account to lodge your return and check if you owe a debt or are due a refund. You can do this by typing https://my.gov.au/ into your internet browser’s address bar.

Unfortunately, ATO and other scams continue well beyond the 30 October deadline for tax returns, as scammers know many people are waiting for a refund or information about debts. It’s important to watch out for scams throughout the year.

TIP:More information is available online at www.staysmartonline.gov.au/. If you’re unsure about a tax-related message or phone call, you can phone the ATO’s Scam Hotline on 1800 008 540.

Tax time updates

ATO has refunded $10 billion so far

The ATO says that $10 billion has been refunded to Australian taxpayers so far this tax time, an increase of over $2 billion from the same time last year, with most returns processed in under two weeks. The ATO aims
to process returns as soon as possible, and has announced that over four million refunds have already been sent out, compared to over three million refunds issued this time last year.

TIP:If you haven’t lodged your tax return yet, or you’re waiting on information about a refund or tax debt, we can help – contact us to find out more.

ATO watching for undisclosed foreign income

The ATO has reminded Australians who receive any foreign income from investments, family members or working overseas to make sure they have reported it this tax time.

New international data-sharing agreements allow the ATO to track money across borders and identify people who aren’t meeting their obligations. Under the new Common Reporting Standard (CRS), the ATO has shared data on financial account information with over 65 tax jurisdictions across the globe. This includes information on account holders, balances, interest and dividend payments, proceeds from the sale of assets, and other income.

TIP:If you’re an Australian resident for tax purposes, you are taxed on your worldwide income, so you must declare all of your foreign income no matter how small the amount.

Unusual claims disallowed

The ATO has published information about some of the most unusual claims it has disallowed. Around 700,000 Australians have claimed almost $2 billion of “other” expenses, including non-allowable items such as child care and even Lego sets.

Assistant Commissioner Karen Foat says a systematic review of claims found and disallowed some very unusual expenses. “A couple of taxpayers claimed dental expenses, believing a nice smile was essential to finding a job, and was therefore deductible. It isn’t!”

TIP:The “other” deductions section of your tax return is for expenses incurred in earning income that don’t appear elsewhere on the return – such as income protection and sickness insurance premiums.

ATO contacting small employers about Single Touch Payroll

From 1 July 2018, employers with more than 20 employees have been required to provide real-time reports to the ATO of salary and wage payments, super guarantee contributions, ordinary time earnings of employees and PAYG withholding amounts.

From 1 July 2019, this Single Touch Payroll (STP) reporting system has extended to all employers.

The ATO is now writing to small employers who haven’t yet started reporting or applied for a deferral, to remind them of their STP obligations.

TIP:Small employers have until 30 September 2019 to start reporting or apply for extra time to get ready.

There will be no penalties for mistakes, or missed or late reports, for the first year, and employers experiencing hardship or who are in areas with intermittent or no internet connection will be able to access exemptions.

Disclosing business tax debt information: ATO consultation

In its Mid-Year Economic and Fiscal Outlook in 2016–2017, the government announced it would change the law to let the ATO report business tax debt information to credit reporting bureaus (CRBs) where a business consistently avoids engaging with the ATO to manage a tax debt.

TIP:The ATO can’t currently pass on this sort of information because Australian law contains strict confidentiality requirements for ATO-held taxpayer information.

The ATO has said it “recognises the important role businesses play in the Australian economy [but] when an entity avoids paying its tax debts it can have a significant impact on other businesses, employees, contractors and the wider community.” It has released a consultation paper to facilitate consultation between the ATO, businesses and CRBs.

If passed in its current form, the amended law would allow taxation officers to disclose information about business tax debts when certain conditions are met. A business would need to have debts of at least $100,000 overdue by more than 90 days, and have not effectively engaged with the ATO to manage that debt.

Cross-border recovery of tax debts

The ATO has also reissued Practice Statement Law Administration PS LA 2011/13 Cross border recovery of taxation debts. This statement outlines options available for the ATO to recover a tax debt where the debtor is outside Australia, and sets out how the ATO deals with requests from other countries for assistance in recovering tax debts owing to the other country.

ATO superannuation focus areas

Lost super

As at July 2019, the ATO held 5.39 million super accounts worth $3.98 billion. It will aim to reunite $473 million with 485,000 fund members using the new Protecting Your Super measures.

TIP:You can find out about your lost or unclaimed super through ATO Online via myGov.

Pension cap indexation

The pension transfer balance cap (TBC) of $1.6 million could increase on 1 July 2020 or 1 July 2021, depending on movement in the consumer price index (CPI). The general TBC is indexed in increments of $100,000 when the indexation rate reaches prescribed figures (calculated using a formula set out in Australian tax law). Once indexation happens, there will no longer be a single TBC that applies to all super members with a retirement phase income stream. Instead, there could be a personal TBC for each member, depending on their individual situation and arrangements.

Compassionate release of super only available in limited cases

The ATO has recently seen a significant increase in queries about compassionate release of super(CRS). In most cases, the people concerned were ineligible because they were looking to use their super to pay for general expenses.

CRS is an option only for very specific unpaid expenses such as medical treatment and transport costs, palliative care costs, loan payments to prevent the loss of your home, the costs of home or vehicle modifications related to a severe disability and expenses associated a dependant’s death.

TIP:Any amounts released early on compassionate grounds are paid and taxed as normal super lump sums.

Personal services income rules: unrelated clients test

The Federal Court has set aside an Administrative Appeal Tribunal decision that income a business analyst derived through a company was subject to the personal services income (PSI) rules.

According to the Court, simply because an individual or personal services entity is able to provide services through an intermediary, such as a recruitment or similar agency, this does not constitute the making of an offer or invitation for the purposes of the relevant legislation. More than that is required for the purposes of the unrelated clients test.

Clients should not act solely on the basis of the material contained in this article. Items herein are general comments only and do not constitute or convey advice per se. Also, changes in legislation may occur quickly. We, therefore, recommend that our formal advice be sought before acting in any of the areas. This article is issued as a helpful guide to clients and for their private information. Therefore it should be regarded as confidential and not be made available to any person without our prior approval.


Getting a tax refund, bonus or inheritance - Top tips to make the most of your windfall

Getting a tax refund, bonus or inheritance - Top tips to make the most of your windfall

If one of your employees or yourself receive a tax refund, bonus or inheritance here are some smart ways to use this money that will give long-term benefits. At this time of year, your employees may be receiving a windfall. Please feel free to pass on these great tips. If you have any questions, please feel free to contact us.

Pay off your debts

You could use this money to pay off any short-term loans or credit card debt you have. Or, you could use it to reduce your personal loan or mortgage.

Smart tip

Pay off higher interest debts like payday loans or credit cards first.

If you have more than one credit card, pay off the one that charges the highest rate of interest or the smallest debt first. For more information, see our webpage on how to pay off multiple credit cards.

Paying off debts means you'll pay less interest and save money. Find out how you can reduce your debts faster by making extra repayments.

Work out how much you'll save in interest by making extra repayments - credit card calculator

Create an emergency fund

If you don't already have one, start an emergency savings fund. Open a high interest savings account and, if you can, aim to build up 1-3 months' worth of living expenses, so the next time life throws you a curve ball, you'll be ready to face it head on.

Compound interest will help your money to grow. For example, $3,000 in an account earning 3% interest would grow to $3,485 in 5 years' time. If you deposit extra money into this account, your savings will grow even faster.

See how compound interest increases your savings - compound interest calculator

How Australians spend their tax refund

Take a look at our tax refund infographic to find out the average refund and how people spend it.

Contribute extra to your super

Making extra contributions to your super can really boost the amount of money you'll have to live on when you retire.

If you're on a low income, the government will match your after-tax super contributions with 50c for every dollar you contribute, up to a maximum of $500. For more information on boosting your super see super contributions.

Work out how contributing more to super can affect your final super payout - superannuation calculator

Consider investing your windfall

Investing your windfall can help you grow your money and keep it safe. If you choose to invest, make sure you take the time to consider your investment goals.

If you're new to investing, our section on investing smarter is a great place to start.

If you would prefer to rely on professionals who are skilled in making investment decisions, you might consider a managed fund. These types of products give you access to a range of investment types with the benefit of having a professional investment manager choose which individual assets to invest your money in.

Get financial advice

For large amounts of money, such as an inheritance or a redundancy payment, you might consider getting professional financial advice. An adviser can help you develop a plan to make the most of your money.

We have tips on what to look out for when you are choosing a financial adviser.

Commit to making the most of your tax refund

Publicly committing to your goals is a great way to motivate yourself to achieve the things you're aiming for. Decide how you'll use this year's tax refund to boost your finances, and share it on your own Facebook page.

I commit to making the most of this year's tax refund, instead of spending it on something I don't really need. SHARE TO Facebook

You could also follow MoneySmart's Facebook page. It's a safe and supportive community that will encourage you to stay on track to reach your money goals.

Don't have Facebook? Here are some other options

If you don't use Facebook, or would prefer to make a commitment another way, why not write it down on a post-it note and keep it in a place where you'll see it every day.

This could be:

  • in your wallet
  • on your bathroom mirror
  • on the fridge
  • above the coffee machine
  • near your desk at work.

Alternatively, set a reminder in your calendar about your tax refund commitment when you lodge this year's tax return.

Think through your options and use your windfall to give you a real financial boost.

Source: ASIC's Moneysmart July 2019 

Reproduced with the permission of ASIC’s MoneySmart Team. This article was originally published at www.moneysmart.gov.au/life-events-and-you/life-events/getting-a-tax-refund-bonus-or-inheritance

Important note: This provides general information and hasn’t taken your circumstances into account.  It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.  Past performance is not a reliable guide to future returns.

Important
Any information provided by the author detailed above is separate and external to our business. We do not take any responsibility for any action or any service provided by the author.

Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.


5 Habits to use technology more mindfully

Technology has become imperative to our daily work, activities and social life. It is an expectation that we are always “connected” to maintain our place in modern society. So, what do we do? What does using technology to enhance our lives, but not detract from it, really look like? I believe that, as in most things, balance is the key.

Keeping technology usage in balance is equal to keep consumption of anything in balance. We can overeat, over-shop, over party, oversleep, and the list goes on. It’s even possible to drink too much water, which seems crazy, but it is true. Minimalism has found its way into our thoughts when we consider needs versus wants for our home decor, our closets, our food, even our finances.

In contrast, technology can feel like a need versus a want, so it is harder to minimize this category of our lives. I have found multiple effective ways to balance my technology usage AND remain connected. The core always goes back to asking yourself that classic minimalism question, “Does this add value to my life?” Once you determine yes, this or that technology adds value to my life or is a need, then making sure using the tech doesn’t leave you feeling used in return is an absolute must!

5 Habits to Use Technology More Mindfully 

If we find the balance that works for us, we can utilize tech as a way to enhance our lives and prevent the negative effects of over-consumption. The below actions can take dedication to embrace, but when you do, your technology usage will improve your life, not detract from it.

Habit 1. Phone Minimalism

Let’s start here and take the phone for its primary purpose, not as a smartphone with its many uses. The “smart” things I will cover separately below. I consider the phone one of the most infiltrating forms of technology in the world, even without the added smart elements. This device is the first one that we decide is a need not a want, so it is the first to get abused and hardest to keep in balance.

TURN OFF YOUR RINGER MAJORITY OF THE TIME

Most of my friends do this; I love them for it. When I hear a phone ringing, it is almost shocking to me these days. It is disruptive to your company if you are with someone and its as annoying as a car alarm to strangers when you are out. It’s best to limit your use of this feature for you and everyone else.

How? An obvious answer is to turn off the ringer. I got so used to this that now I only turn my ringer on when I am waiting for an urgent call, or I have flexible time and am open to a spontaneous call from someone. I know that’s not feasible for everyone, though. A solution for this is iPhone's impressive feature called “Do Not Disturb.” Other phones have this feature, but it’s called something different on each device. Essentially, this is like a call screener.

You program in specific numbers that you must pick up if they call, like your child’s school or your sick relative. When the numbers you programmed as VIP call you, your phone rings as normal. Every other call is silent or is sent directly to voicemail depending on your device settings. Think about which numbers you would pick up even if you were in the bathroom, or in an important meeting. Those are the ones you might add to this feature. All others can usually wait to get a call back shortly after you realize you missed the call.

Phone Screen Minimalism

MINIMALIST PHONE SCREEN

This has been an amazing life-changer for me. When you pick up your phone, what are you looking for? Usually, it’s something specific. You’re checking for missed calls or messages. As soon as the screen lights up more often then not you see a long list of notifications and when you enter the phone you see red bubbles with numbers that are growing by the second. These red bubbles are found on many apps that update regularly and capture your attention.

More often then not you are drawn to click on the app and see what notification you missed. That was not your primary purpose for picking up your phone. You didn’t miss any calls, yet all of a sudden 15 minutes have disappeared reviewing app notifications that were not time-sensitive at all. So, making the primary screen clear so it doesn’t distract you from your purpose is important.

How? Screen Minimalism will look very different for each person depending on what matters to you and comes in 2 primary parts.

TURN OFF NOTIFICATIONS

Turn OFF notifications for any apps that aren’t time-sensitive. This is specific to each person. Keep only the ones that truly matter to you. As an example, I have turned off almost ALL of my notifications. Consider what information you find valuable and actionable and important to receive so instantaneously. Everything else, turn off the notifications for and proactively look around in your phone to address the rest when you have set aside the time.

CLEAR YOUR HOME PAGE

This may seem radical but can be the most effective minimal phone technique. If you light up your screen to minimal or no apps you atomically will take a pause and ask – “What was I looking for?” The magic happens at this moment. Sometimes you were looking for nothing! The amount of times we pick up our phone is habitual, not purposeful.

A person committed to minimizing their tech will approach it purposefully so they are doing something proactively not reactively. Clearing your home page can be the perfect catalyst to help with this.

Habit 2. Email Minimalism

This is another technology need that easily becomes overwhelming. When my email red bubble grew to the number 911 – yes, nine hundred and eleven unread emails – I decided that was a sign! HELP!

My email seemed to scream at me and I spent considerable time over the weeks after that researching and brainstorming the best way to handle my usage of my email so that it can be a tool for me, not a source of stress. The following we essential in getting me very close to inbox zero more often than not.

UNROLL ME

The biggest culprit of email stress for me is the flood of emails from signups that you didn’t sign up for, that you only needed once, or that you want at a lower frequency. Enter Unroll Me. I am sure there are better, similar services out there now but this one was the best I found a few years ago when I minimized my email.

It works like this: You get ONE email with a chosen subset of your emails listed inside, similar to an email news feed. Instead of opening each email separately you get one email with visual images of your emails in a thread. To me, it feels like Instagram within an email for all your “rolled up” emails in your inbox. This feature makes reviewing email very quick and easy. It also consolidates a large chunk of your “junk mail” into one email so your overall inbox receives fewer emails and is cleaner.

What is most amazing about this service and what got me out of the 911 email zone was its super quick unsubscribe feature. Within the Unroll Me account, you can scroll through all of your email subscriptions like a checklist. You can select whichever email you no longer want with a little checkmark and “unsubscribe” to a mass of emails at the same time!

The first time I did this I had over 200 subscriptions, many I never signed up for! I unsubscribed from over 100 email subscriptions within 5 minutes and felt a weight lift off me. Now, I regularly set aside time to go into the software and unsubscribe to a set of email subscriptions all at once. It feels amazing. Bye inbox clutter.

STOP CHECKING YOUR EMAIL

This doesn’t mean what you think it means. Instead of constantly checking your email, set aside a significant amount of time to check your email deliberately. It can be once a day, once an hour or once a week. Setting aside a block of time to look at your email ensures that when you open your email that you have the time to reply or give attention to whatever action you read.

I can’t count the number of times I used to open my email, scroll through it, see I have 5 different emails that need my attention and close my email because, after checking my email, I didn’t have the time right then to reply. The emails that needed my attention stayed unread and in the back of my mind were added to the “do later” list.

You probably know where this is going. Later didn’t happen for the majority of emails and I got up to 911 unread emails. Oops! Now, I open my email when I have time to answer, delete or archive whatever came through and I have been able to keep my inbox at 25 or fewer emails majority of the time.

Habit 3. Social Media Minimalism

SOCIAL MEDIA DATE

Make Social Media enhance your life by setting a social media date with yourself. No one feels good emerging from a Facebook, Instagram or YouTube vortex. You look at the clock and are in disbelief of the time that went by, this is the vortex. Don’t let it take your time, choose to give it your time during “x”. Some examples of “x” are, only look at Social Media on your commute, on your lunch or after dinner. Setting this date will make it a proactive enjoyment, not a time drain.

THE COMPUTER IS KING

Look at your Social Media primarily on your computer instead of your phone or tablet. On a computer, you can set your social media pages to open to a specific subset page instead of your feed. If you open to your feed we are caught by curiosity right away. When you enter deliberately to your calendar of events, a favourite group or your personal page you will select more mindfully where you go from there to invest your time consciously while on the platforms.

Stop and think who you are curious about and type their name in, send them a message or better yet after viewing their profile get offline, send them a personal message via phone and make their day. To often we are consuming and scrolling but the real point of social media is connecting – use it that way or let it go.

SET AN ALARM OR TIME LIMIT

This is very effective. If you know you only want to use social media 1 hour or less per day monitor your usage and get your life back. Living minimally involves valuing your time. It doesn’t come automatically. Most of us have to practice the discipline and there are many tracker apps to help with social media specifically based on your device. Use them. You will be shocked to see your usage.

At the end of the year, you can easily amass 2 full weeks on social media. Would you rather have done something else with those two weeks of your life or did the time spent online add to your life? For me, there is always a tipping point. I learned my perfect amount of time spent online by timing myself and adjusting accordingly.

Habit 4. The Internet Vortex

My absolutely most effective internet vortex prevention tool has been to create a “research later” list. You were just going to look up something, 3 hours later you have read and watched so many things you wouldn’t be able to recall any of the information even if you tried. You also didn’t get the information you went on the internet for in the first place anyway.

This is the struggle with the internet. There is SO much information. Instead of getting trapped in the vortex when you just needed to look something up, create a list of things to look up later that you check off one by one while you are online. This will make sure you are using your time and the internet effectively.

Habit 5. Selective Specialty Devices

There are so many smart devices now it is important to make sure these are enhancing your life not taking your life. Gaming Consoles, TV, Home Stereo, Smart Watches, Activity Trackers… Smart – Lightbulbs, Door Locks, Toothbrushes, Water Bottles (yes, these are real and will track your water consumption for you). When you choose which of these to bring into your life ask yourself, “Does this make my life better, easier, AND when I use it is it a good use of my time?”

Only you get to decide but make sure it enhances not detracts from your life. Gaming is the perfect example. For some, it is a community, a decompression activity, a sport or just a playful past time. It can turn into a stressful activity, an activity that leaves you without much-needed sleep and it can slowly replace meaningful face to face connecting with other people. Be honest with yourself and choose to use devices in a way that leaves you feeling your best. Your future self looking back on your life will thank you.

Hopefully, these have offered you some new, easy to incorporate habits and at the very least, I hope you try 1, dedicate to it and let me know if you notice any changes. I am counting on it that you will feel the difference!

This article by AnneMarie Skin Care was originally published at https://www.foodmatters.com/article/5-habits-use-technology-more-mindfully


Tax news, views and clues, August 2019

ATO will inform certain tax agent clients their information is "Tax ready"

If tax agent clients' employers report through Single Touch Payroll (STP) and the clients are linked to ATO online services through myGov, the ATO will send them a myGov Inbox message to let them know that their end of year payment summary (income statement) has been marked by their employer as "Tax ready" and can be used in their tax return and they can access their income statement in ATO online services through myGov, or the tax agent can give them the information.

If tax agent clients do not already have myGov accounts, agents should let them know they do not need one for the agent to lodge their tax return. Tax agents can access their employment data and lodge for them once their information is "Tax ready".

Top mistakes to avoid this tax time: ATO

The ATO has revealed some of the most common mistakes people make at tax time. Top mistakes include lodging before all prefill data is available or failing to report all income and claiming the wrong thing – work-related expenses is one area where people commonly make mistakes. To help taxpayers work out what they can claim, the ATO has developed 30 occupation guides for specific occupations; forgetting to keep receipts; and claiming for something never paid for.

Pension deeming rates cut from 1 July 2019

The Government has announced that it will lower the social security deeming rate from 1.75% to 1.0% for financial investments up to $51,800 for single pensioners and $86,200 for pensioner couples. The upper deeming rate of 3.25% will be cut to 3.0% for balances over these amounts.

The Minister for Families and Social Services, Senator Anne Ruston, said the changes would benefit about 630,000 age pensioners and almost 350,000 people receiving other payments. Under the new rates, age pensioners whose income is assessed using deeming will receive up to $40.50 a fortnight for couples, $1053 extra a year, and $31 a fortnight for singles, $804 a year.

The reduced deeming rates have been backdated to 1 July 2019. Any additional pension payment will flow through into pensioners' bank accounts from the end of September 2019 in line with the regular indexation of the pension.

Personal tax cuts Bill passed without amendment, now law

The Treasury Laws Amendment (Tax Relief So Working Australians Keep More Of Their Money) Bill 2019 fully implements the personal tax cuts measures announced in this year's 2019-20 Federal Budget. Starting immediately, low and middle income earners with an income up to $126,000 will receive up to $1,080 in low and middle income tax offset (LMITO), or $2,160 for dual income couples, with the increased tax relief to apply from the 2018-19 income year.

As a result of the amendments, the Treasurer said around 94% of Australian taxpayers are projected to face a marginal tax rate of 30% or less in 2024-25.

ATO statement on administration of the low and middle income tax offset (LMITO)

The ATO announced on 5 July 2019 that it is implementing the necessary system changes so taxpayers that have already lodged their 2018-19 tax returns will receive any increase to the low and middle income tax offset (LMITO) they are entitled to. Any tax refund will be deposited in the taxpayers nominated bank account.

The amount of the offset taxpayers may be entitled to, and the amount of any refund, will differ for everyone depending on individual circumstances such as income level and how much tax was paid throughout the year.

STP reporting irregularities: ATO contacting businesses

The ATO has advised tax agents that it is currently emailing Single Touch Payroll (STP) enabled employers who have either ceased reporting for over 45 days; or have submitted employees under multiple payroll or BMS IDs. Some of these businesses may be tax agent clients. These reporting irregularities may cause their employees to see incorrect, incomplete or multiple entries in their income statements.

Employees guide for work expenses: ATO

The ATO has released an employees guide for work expenses to help employees decide whether their expenses are deductible, and what records they need to keep to substantiate them. The Guide says that not all expenses associated with employment are deductible and also debunks some myths about work expense deductions.

FBT, taxi travel and ride sourcing – ATO clarifies

For businesses, taxi travel by an employee is an exempt benefit if the travel is a single trip beginning or ending at the employee's place of work. The ATO says taxi travel can also be an exempt benefit if it is a result of sickness or injury.

For Not-For-Profits, depending on the type of NFP organisation, certain benefits they provide to employees may receive concessional treatment from FBT. However, some benefits may be exempt from FBT altogether.

New ATO data-matching program – overseas movement data and HELP debt

The ATO said it will acquire overseas movement data from the Department of Home Affairs (DHA) for
 individuals with an existing HELP, VSL or TSL debt. The data matching program will be conducted for the 2019-20, 2020-21 and 2021-22 financial years.

Those living and working overseas with a Higher Education Loan Program (HELP), Vocational Education and Training Student Loan (VSL) and/or Trade Support Loans (TSL) are required to update their contact details and submit an overseas travel notification if they have an intention to, or already reside overseas, for 183 days or more in any 12 months; and lodge their worldwide income or a non-lodgment advice.

GST on low value goods – "very successful initiative", says ATO

The ATO says it has now collected over $250 million in additional GST since the GST on low value goods measure began on 1 July 2018, outstripping forecasts by $180 million.

As businesses do not need to register unless they meet the A$75,000 GST turnover requirements, most small independent operators do not need to register and have not been affected by this measure.

Super downsizer contributions reach $1 billion: Minister

The Assistant Treasurer, Michael Sukkar, has announced that older Australians downsizing from their family homes have contributed $1 billion to their superannuation funds. The downsizer measure, which commenced on 1 July 2018, allows older Australians choosing to sell their home and downsize or move from homes that no longer meet their needs, to contribute the proceeds from the sale of their home into superannuation up to $300,000.

Reasonable travel and overtime meal allowance amounts for 2019-20

Taxation Determination TD 2019/11, issued on 3 July 2019, sets out the amounts the Commissioner treats as reasonable for the 2019-20 income year in relation to employee claims for overtime meal expenses; domestic travel expenses; and overseas travel expenses.

For employee truck drivers who receive a travel allowance and are required to sleep (take their major rest break) away from home, TD 2019/11 provides separate meal expense amounts for breakfast, lunch and dinner.

Clients should not act solely on the basis of the material contained in this article. Items herein are general comments only and do not constitute or convey advice per se. Also, changes in legislation may occur quickly. We, therefore, recommend that our formal advice be sought before acting in any of the areas. This article is issued as a helpful guide to clients and for their private information. Therefore it should be regarded as confidential and not be made available to any person without our prior approval


10 Minutes with Matt Drew – His views on the economy, success, technology and more

1.Interest rates are at an all-time low. What effect do you believe this will have on a small business?

With interest rates at record lows, there is an opportunity for small businesses to borrow funds to invest in their growth. Whether that be to bring on more staff, spend more on marketing or possibly to access the Small Business Instant Asset Write Off by purchasing new equipment and claiming an immediate tax deduction for assets costing less than $30,000.

2.We have recently seen the introduction of Single Touch Payroll [STP]. How important is it that business owners embrace technology rather than shy away from it?

Like it or not, we are now operating in a digital age, and it is essential that business owners keep up with changes in technology or risk being left behind. In some cases, for example, STP, business owners are left with no choice but to embrace technology to meet their obligations as the Government pushes forward with its plan to move more and more functions into an online environment.

Change can be scary, and it is always tempting to stay in our comfort zones and simply maintain the status quo. However, by embracing technology, we can bring new opportunities to our businesses to help them grow and prosper.

3.How does McPhail & Partners keep up with technology changes?

For us, it really comes down to a combination of connecting with the right business partners and having a team with curious minds. Technology is developing so fast that it’s impossible for a small business to keep on top of everything. We have strong partnerships with our IT and Software providers who keep us abreast of significant developments that can positively impact on our business.

We also encourage our team to investigate ways to improve our internal processes and procedures where they feel we could benefit from new technologies. For example, the team is currently looking at utilising some of the Xero Apps to streamline the expense claim process and integration with our payroll system.

4.What would you say are the most significant risks to business at the moment?

Risks will vary from business to business and from industry to industry. For example, in the retail space, those businesses with physical shopfronts face the challenge of more people buying online rather than in-store. The hospitality industry faces reputational risk as social media can have such a powerful impact, both positively and negatively, on their businesses. Cash flow is always a challenge for small businesses, particularly those in the building and construction industry where significant resources and finance are required up-front.

It is crucial for all businesses to understand the risks specific to their circumstances and put plans in place to minimise the impact these risks can have.

5.What are the biggest pitfalls when selling a business at the moment?

I think for someone selling a small business, the biggest challenge is harnessing their emotions and looking at things objectively. A potential buyer is looking at the purchase as a business decision and will look at the financial performance, market position and perhaps synergies with their existing business.

They don’t see the years of blood, sweat and tears that have gone into developing your business, or all those late nights at the kitchen table doing the BAS returns or paying the accounts. With all that effort that has been put in to build the business, it can be difficult to set realistic expectations of its true market value, which can make the negotiation process extremely stressful and challenging.

6.Small business is the cornerstone of the Australian economy. Do you believe there is enough support for a small business owner; affordable support to help them navigate running and growing a business in today’s times?

There is a lot of support out there for small businesses, but business owners might not be aware of the resources at their disposal. Having a strong relationship with your Accountant and, if relevant, your bookkeeping is essential as we can help to guide and advise you.

Additionally, the Government has some great resources available for free online which can assist with running a small business such as Business Victoria (www.business.vic.gov.au), the Fair Work Ombudsman (www.fairwork.gov.au), the ASIC (www.asic.gov.au) and even the ATO (www.ato.gov.au).

Outside of these Government resources, there are also other organisations that businesses can join, such as the Victorian Chamber of Commerce and Industry (www.victorianchamber.com.au), to assist. It is also a good idea to join your local council business group where you can network with other local business owners to share ideas and hopefully build your referral network.

7.Five years from now, what can we expect from McPhail & Partners?

As part of our ongoing succession plan, we will see some changes of the next five years as we look to position the business for hopefully another 75 years of success. We will still maintain the values that we pride ourselves on, such as honesty, integrity and professionalism so that we can continue to provide our clients with the level of service they expect.

We are always looking at ways to improve our service offering to meet the needs of our clients, which we will continue to do. This will come from a combination of engaging with new technologies, keeping up to date with legislative changes and also developing new skills and offerings to help clients navigate through their own financial journeys.

8.We live in an App era! There seems to be an App for everything these days even budgeting and rounding up Apps to help save money. What’s your advice about using these Apps? Can they be useful when it comes to budgeting?

There are several great apps out there that can help you track your finances and manage your budget. The challenging part is having the self-dedication to update and review them regularly and to hold yourself accountable for the results.

These Apps do serve a purpose but should be used as part of the bigger picture of managing your overall financial objectives.

9.McPhail & Partners has recently moved offices. ‘They’ say that moving can be one of the most stressful experiences known to man! Having been through the process, what advice would you give to others that are considering relocating?

DON’T DO IT! Just Kidding!

Honestly, it was a stressful process at times, and we certainly learnt some lessons throughout the move. In hindsight, there were some things we did really well, but equally, there are some things we would have done differently if we had to do it again. The key items I would highlight for anyone looking to move would be:

-Have a clear plan of what you want to achieve but be flexible and open to change as the process unfolds

-Set a realistic budget and don’t overextend yourself

-Communication! There are so many moving parts, and there needs to be clear communication between all the stakeholders, so things run smoothly

-Ask for help – you can’t do everything yourself (especially if you are also running your business) so build a team and engage others to help you

-Enjoy it – despite all the stress and long hours involved there is real satisfaction in seeing your vision for the future of your business come to life in front of you


A guide to working with independent contractors for small business owners

Hiring independent contractors may be an effective way to get more work done without onboarding new, full-time resources, but there are a few things small business owners should be aware of before taking the plunge.

If you need to start delegating tasks in your business or don’t have the necessary expertise in-house to complete certain jobs, you may want to hire a contractor.

Here is the rundown on everything small business owners need to know about working with independent contractors.

What is the difference between an employee and a contractor?

Employees, whether part-time, full-time, or casual, are hired to work within someone else’s business.

They’re paid a wage and receive entitlements during the year, such as annual and sick leave.

Their work is performed on site, in most cases, and there are other controls about how, where, and when they do their job.

Independent contractors, on the other hand, differ in a variety of ways.

READ: Employee or contractor? Know your obligations

Although there is no one factor or combination of factors that determine a worker’s status, usually contractors:

  • Are their own boss, working for themselves but selling their services to others
  • Control their working times and work as many hours as are needed to complete a job
  • Work from home or other premises of their choice, or complete work on business premises for a short amount of time
  • Provide their own equipment and tools
  • Create their own processes to complete tasks
  • Accept or refuse work as they see fit
  • Work for many clients at once

Also called ‘sub-contractors’ or ‘subbies’, independent contractors are hired to complete a set task or project based on terms set within a contract.

They’re paid per hour, per day, per task completed, or via another agreed calculation.

Contractors can choose to delegate or subcontract some of their work if they want to, too, unless this has been specifically forbidden in their contract.

Businesses often hire contractors for their specialised skills, when such skills are required for a short, or pre-determined, amount of time.

The rights and responsibilities of businesses hiring contractors

If you decide to hire a contractor for a project, be aware that your rights and responsibilities are different from those when dealing with employees.

Unlike with in-house staff, when you use contractors, you don’t have to pay them sick leave, annual leave, superannuation, or other related benefits.

You don’t have to take tax out of your payments to contractors, either (although contractors may request this in rare cases). Tax matters are up to independent contractors to sort out.

READ: Changes to Taxable Payments Reporting in 2019

Businesses negotiate a set price for the work contractors are to perform and pay them accordingly.

Independent contractors supply an invoice for the work. Businesses must make payment within the agreed-upon timeframe noted in the contract and/or on the invoice.

If unhappy with the work done by a contractor, entrepreneurs should read the contract to understand payment terms and conditions.

Contractors usually bear the responsibility and liability for poor work, but not always.

Try to resolve payment issues amicably, or make use of a mediator. You may need to get legal advice, too.

Don’t just withhold payment if you’re not pleased with a contractor’s work. Doing this can give them the right to terminate the contract because you failed to meet payment obligations. Contractors might then claim damages from you for that breach.

Contractors are not entitled to a minimum wage, but they’re after an acceptable rate for their work. They typically always bear the financial risk for making a profit or loss for each job.

Under the Fair Work Act, contractors are protected from various adverse situations, though.

For example, as a business owner or manager, you can’t terminate a contract because a contractor made a complaint to a regulator about their workplace rights.

Businesses must not threaten to take action against contractors as a means of coercing them not to exercise their workplace rights, either. Nor can they force contractors to join (or exclude themselves from) a trade group or other relevant association.

The Independent Contractors Act also protects self-employed workers in the matter of contracts.

Contractors can ask a court to review contracts they see as harsh or unfair.

If a case goes to court, factors considered include contract terms, bargaining strengths of each party, unfair tactics used against any party, and the comparison of the total remuneration against standard industry rates.

Be aware that if courts deem a contract to be harsh or unfair, they have the power to order contract terms to be changed (e.g. added, removed, or edited), to nullify certain terms of the contract, or to set aside the entire contract so it no longer has any effect.

Since contractors typically work off-site, businesses aren’t usually responsible for keeping contractors safe.

Contractors need to take out their own insurance and legal covers to protect themselves and others, as applicable.

But, if a contractor does have to work at your business site or use your equipment, your firm could be liable if harm comes to the contractor as a result of your dangerous workspace or equipment.

Contractors are usually liable for any defects or other problems with their work, too, although again, this can vary from contract to contract.

The pros and cons of hiring contractors

There are numerous reasons to hire a contractor. Benefits include:

  • Quick access to the additional skills, experience, or technology your business needs, particularly during growth stages or periods of uncertainty
  • Organisational flexibility, since you hire contractors only when you need them
  • Ease of termination, as you can end most contracts with just a few weeks’notice
  • Lower overheads due to the fact you don’t need to pay superannuation, holiday pay, sick leave, and other benefits
  • Reduced legal liability as contractors provide their own insurance

There are also some potential downsides to be considered when hiring contractors rather than employing people in-house. For example:

  • Lack of stability in your business, because contractors come and go
  • Time wasted training contractors how to do tasks to your liking; contractors take knowledge with them once a contract finishes
  • Less team cohesion, since contractors work independently and usually don’t get involved in team discussions or events
  • When you use contractors, you don’t end up adding value to your core business. Over the long term, investing in employees often pays better dividends than spending money on contractors year after year
  • While you will likely get a contractor to sign a non-disclosure agreement, there are risks in giving them access to sensitive information

Utilising contractors in your small or medium business can be a smart tactic in many circumstances. But, always do your research, be careful about which contractors you hire, and get advice from accountants and lawyers to ensure adequate protection before going ahead.

The information provided here is of a general nature for Australia and should not be your only source of information. Please consult an experienced and registered business advisor, as well as a professional legal advisor, as each individual’s circumstances will vary.

Source: MYOB

Reproduced with the permission of MYOB. This article by Kellie Byrnes was originally published at www.myob.com/au/blog/.

 

 

 

 

 


Tax news, views and clues July 2019

Tax planning

With the end of the 2019 income tax year upon us, this issue draws attention to year-end tax planning strategies and compliance matters that you need to consider to ensure good tax health. It focuses on the most important issues for small to medium businesses and individuals to consider.

TIP:This is general information, but we’ll take your particular circumstances into account to help you achieve good tax health. Contact us to find out more.

Deferring derivation of income

If your business recognises income on an accruals basis (when an invoice is raised) and your cash flow allows, you may consider delaying raising some invoices until after 30 June, meaning the assessable income will be derived after the 2019 income tax year.

For business income derived on a cash basis (interest, royalties, rent and dividends), you may consider deferring the receipt of certain payments until after 30 June 2019. For example, setting term deposits to mature after 30 June 2019 rather than before.

Bringing forward tax-deductible expenses

To qualify for deductions in the 2019 income tax year, you may be able to bring forward upcoming expenses so that you incur them before 30 June 2019. Small businesses and individual non-business taxpayers may prepay some expenses (such as insurances and professional subscriptions) up to 12 months ahead. This should only be done subject to available cash flow and where the prepayment makes commercial sense.

Tax relief for individuals and small businesses

Instant asset write-off

The instant asset write-off threshold for small businesses has been increased to $30,000 and extended to 30 June 2020. And from 2 April 2019, the instant asset write-off has also been expanded to include businesses with a turnover from $10 million to less than $50 million.

If you purchase an asset (new or secondhand) costing less than $30,000 and it is used or installed ready for use from 7:30pm on 2 April 2019, you can claim a deduction for the portion your eligible small business uses. Different thresholds and deduction amounts apply for assets purchased before that date.

You can purchase and claim a deduction for multiple business assets as long as each asset is under the relevant threshold. Assets costing $30,000 or more can't be immediately deducted. You can continue to deduct them over time using the small business pool.

Low and middle income tax offset

A new low and middle income tax offset (LMITO) will be available for individuals, providing a benefit of up to $255 if you earn under $37,000 and up to $1,080 for if you earn between $48,000 and $90,000. The offset reduces by 3 cents for every dollar in excess of $90,000. There is no offset for individuals who earn more than $126,000.

Individuals

Deduct work-related expenses

People overclaiming deductions for work-related expenses like vehicles, travel, internet and mobile phones and self-education are on the ATO’s hitlist again this year. There are three main rules when it comes to work-related claims:

  • You can only claim a deduction for money you have actually spent (and that your employer hasn’t reimbursed).
  • The expense must be directly related to earning your work income.
  • You must have a record to prove the expense.

Deductions are not allowed for private expenses (eg travel from home to work that’s not required to transport bulky equipment) or reimbursed expenses (eg for the cost of meals, accommodation and travel). And although you don’t need to include records like receipts with your tax return, the ATO can deny your claim – and penalties may apply – if you can’t produce the evidence when asked.

TIP:The ATO now uses real-time data to compare deductions across similar occupations and income brackets, so it can quickly identify higher-than-expected or unusual claims.

Don’t forget sharing economy income

Money that you earn from “gig” jobs through platforms like Uber, Airtasker and Airbnb, such as transporting passengers or renting out a room or house, counts as your assessable income. This means you must declare it on your tax return.

Depending on your gig activities and expenses, you may also be able to claim deductions related to this type of income, but it’s important to keep evidence to support your claims.

Superannuation contributions and changes

Both employees and self-employed individuals can claim a tax deduction annually (maximum $25,000) for personal superannuation contributions, provided the super fund has physically received the contribution by 30 June 2019 and the individual provides their fund with a “notice of intention to claim” document.

Important to note!

New rules mean that insurance coverage will be cancelled on “inactive” superannuation accounts from 1 July 2019, unless the fund member informs the fund in writing that they want to keep the insurance. Also, where an inactive account has a low balance (under $6,000) the fund will have to send that super to the ATO for consolidation and safekeeping.

If you haven’t made contributions or rolled over your super in the past 16 months, no matter what your balance, it’s important to check in with your fund now to keep your account active and maintain the insurance you want.

TIP:The new law also bans super funds from charging exit fees when you want to leave the fund, which should make it easier to change and consolidate your super accounts when you need to.

Businesses

Lower company tax rate

From 1 July 2016, the income tax rate applicable to qualifying companies has reduced to 27.5%. For the year ending 30 June 2019, this lower tax rate now applies for companies with aggregated turnover of up to $50 million, as long as they satisfy the “passive income test”.

Small business restructure rollover relief

Small businesses (<$10 million turnover threshold) have access to the small business restructure relief, which allows eligible taxpayers to transfer assets between related entities, including companies, trusts and individuals, without any income tax or CGT consequences. While this rollover can be very beneficial to a small business, and can lead to substantial tax savings, the eligibility rules can be complex, so care is needed.

Super guarantee contributions

The rate for super contributions paid by employers on behalf of their employees under the super guarantee for the year ended 30 June 2019 is 9.5%.

If you’re an employer, you must make super guarantee contributions for your employees quarterly, within 28 days after the end of each quarter (September, December, March and June).

TIP:Although the June 2019 quarter super guarantee contribution doesn’t have to be paid until 28 July 2018, it’s worth considering an early payment – you can only claim deductions on this year’s return for contributions that employees’ super funds receive by 30 June 2019.

Single touch payroll

From 1 July 2018, employers with 20 or more employees will have to run their payroll and pay their employees through accounting and payroll software that is Single touch payroll (STP) ready. This is a major reporting change, as employers will report payments such as salaries and wages and allowances, PAYG withholding and super information to the ATO directly from their payroll solution at the same time employees are paid.

From 1 July 2019, this system will extend to all employers.

TIP:STP reporting also means changes for employees, who will see year-to-date tax and super information in myGov. Employers no longer have to give employees payment summaries (group certificates) for information reported through STP, because this information will appear on an employee’s employment income statementin myGov at the end of the financial year.

Beware of ATO impersonation scams at tax time

The ATO warns taxpayers to be alert to malicious scammers who are using increasingly sophisticated methods and technology to impersonate the ATO. A new tactic on the rise is “spoofing”, where scammers mimic a legitimate ATO phone number caller ID to call or send SMS messages, or mimic a legitimate email domain to send emails.

SMSs and emails may ask you to click on a link and provide your personal details to get a “refund” from the ATO. Scammers may also say you need to pay a (fake) tax debt. The ATO warns that these scammers may intend to steal not only your money, but also your identity by using your personal information.

TIP:If you’re not sure whether a communication is really from the ATO, don’t respond, don’t click any links and don’t open any attachments. Call the ATO’s scam hotline on 1800 008 540 to check its legitimacy.

Clients should not act solely on the basis of the material contained in this article. Items herein are general comments only and do not constitute or convey advice per se. Also, changes in legislation may occur quickly. We, therefore, recommend that our formal advice be sought before acting in any of the areas. This article is issued as a helpful guide to clients and for their private information. Therefore it should be regarded as confidential and not be made available to any person without our prior approval.