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.


John Peiper from Peiper Signs

Peiper Signs is a long-standing business which has built an excellent reputation. In this article, John shares his secrets to success and longevity.

1. J&J Peiper has been in business since 1981; what’s your secret to business success?

Working hard and trying to do the best possible job for the client that you would want to be done for yourself.

2. J&J Peiper is a family owned business. Many people shy away from working with their family. What is your advice about successfully working with family members?

All of our boys (4) have worked for me and my wife Jennifer, through schooling and beyond at various stages, we have enjoyed their involvement immensely.  They have all moved on to their chosen fields now with Jennifer, I am still working in the business. My advice would be to listen to their ideas and work as a team.

3. What challenges do you face as a small business owner?

The challenges of a small business are trying to juggle the workload when you are really busy. You have to learn to prioritise the jobs which need to be completed first.

4. How has McPhail & Partners helped you over the years?

Wayne Durdin has been tremendously helpful through our journey, offering advice and knowledge freely.

5. Technology has changed dramatically since you first started the business – how do you remain at the forefront of your industry?

When I started in the signage field as a 17-year-old most signage was done with a brush and paint which was time-consuming, but enjoyable. Overtime machines came into play that cut vinyl letters then going to machines that print the total sign.  Signwriters have always picked up whatever was new to aid us in the production of signs.

6. Who inspires you?

My father was most likely my inspiration at the beginning teaching me to work hard and be honest.

7. What marketing activities have you found over the years have worked?

Having your vehicle sign written is a great way to promote your business. Always have business cards printed and ready. Have a web page and online presence.

8. How have customers’ expectations changed over the years?

I don’t think customers have changed over the years as long as you give them value for money and honest personal touch.

9. What advice would you give to someone that wanted to start a business in today’s world?

Network and give people the best advice that you can. Have business cards and signage to promote yourself.  Always remember word of mouth is valued highly.

10. What have been three valuable lessons you have learned since growing the business?

Don’t be money hungry, do the right things, and the money will look after itself. Always keep track of invoices and follow up to make sure all is paid in a reasonable time. Look after your clients, and they will look after you.

For more information about John and his business, click here.


What small business owners can learn from the recent election

Not only did all the opinion polls get the recent federal election result wrong, but all the bookies got it wrong too. How did it happen? It’s hard to say definitively, but maybe the pollsters didn’t pay enough attention to the way we make decisions.

The study of behavioural economics analyses how we make decisions and the biases that influence our decision-making and a lot of them may have influenced behaviour during the election period.

Here are four biases that likely played a part in the recent federal election – they’re worth reflecting on because they could be affecting your daily decisions about small business and your money as well:

Confirmation bias

Confirmation bias describes how we often put the conclusion first, search for evidence to support the conclusion, and discount anything that differs from the conclusion. Many people were probably guilty of assuming that Labor would win, without looking for the indicators that suggested it could be closer than it was.

The lesson: Confirmation bias can be dangerous in small businesses if you start with a conclusion. You might believe that a new product will be well-received because you like it, but that doesn’t mean your clients will. Try to test your opinions before making decisions by encouraging your team to share a different view, or by holding a group pre-mortem together (where you imagine why a new initiative might fail in the future).

Loss aversion

Our fear of loss is twice as powerful as the feeling we get when we gain something. There were many policies discussed in the lead-up to the election, including Labor’s proposal for franking credit reform that would have removed benefits for a portion of Australian investors. In reality, this was only likely to affect a small number of investors but all people knew was that they might lose something called a “credit”. It’s likely that loss aversion bias influenced voters who were worried about losing something.

The lesson: Getting something extra is always great, but behavioural economics reminds us how clients feel if they lose something. It’s a very powerful emotion and businesses need to consider how they can use it as an opportunity rather than a negative.

Status quo bias

Status quo bias describes how we often, rightly or wrongly, favour the status quo and anything that differs is often incorrectly perceived as a loss. Perhaps the experts underestimated the power of status quo bias in the election.

The lesson: In business and life, this bias can affect us in many ways, including not scrutinising our utility companies, service providers and super funds as closely or regularly as we should because it’s easier to remain with someone we know. Regularly review the fees you’re paying for services, investing, superannuation and insurance – yes, it takes time but it’s easier than it used to be to shop around and make sure you’re getting the best deal available.

Present bias

Present bias describes how most people favour more immediate benefits over benefits that may affect us in the future. Some benefits politicians proposed wouldn’t be seen for a long time, whereas changes to tax policy can really tap into our desire for an immediate benefit.

The lesson: This bias particularly influences our money and investments and can severely affect our retirement savings. While it can be very tempting to spend today instead of saving for tomorrow (or to borrow so you can spend today) remember the benefits of compounding interest on your savings and investments. Your future self will thank you.

Ted Richards, Director of Business Development, Six Park


News, views and clues June 2019

Requirement registered to lodge 2019 tax and other returns

The Notice of Requirement to Lodge a Return for Income Year Ended 30 June 2019 has been registered. This covers income tax returns and other lodgments for franking account returns, including special rules for late balancing corporate tax entities that elect to use 30 June as a basis for determining their franking deficit tax liability; venture capital deficit tax returns; ancillary fund returns; trustees of SMSFs; and member information statements by superannuation providers.

The Notice also covers use of approved forms for lodgment, lodgment deferrals, lodgment exemptions, and penalties for non-lodgment.

The Notice of Requirement for Parents with a Child Support Assessment to Lodge for the Income Year Ended 30 June 2019 has also been registered.

Payment summaries and STP this tax time – taxpayers may need a myGov account

While it is being reported that many businesses are not ready for Single Touch Payroll (STP), one report suggests that 70% of small and medium-sized entities (SMEs) are not ready, the employees of businesses that are operating STP face some changes.

As a result of the introduction of STP, taxpayers may need a myGov account in order to get the payment summary details they need to complete their 2019 tax returns. How taxpayers receive their payment summary or income statement from their employer depends on how their employer reports their income, tax and super information to the ATO.

Employers need to let employees know if they won't be giving them a payment summary this year.

Employees with more than one employer may receive both a payment summary and an income statement. In that situation, employees will need to check that income from their payment summaries is included in their tax return.

TIP: This major change for 2019 will see many taxpayers needing to set up a myGov account and link it to the ATO. This is not necessarily a straightforward process. If taxpayers have a myGov account already linked to other services such as Centrelink or Medicare, adding the ATO can be problematic. For example, the name on each account must match exactly – the ATO is likely to have a taxpayer's full name whereas a Centrelink account may only have first and last name. This may prevent the ATO from being added to a taxpayer's myGov account. The situation can be rectified but may require a trip to a Centrelink office.

STP exemptions and deferrals – ATO reminders

With reported unpreparedness for Single Touch Payroll (STP), mainly among small businesses, and with employers having less than 19 employees needing to report their employees' tax and super information through STP from 1 July 2019, the ATO has reminded businesses about the STP exemptions and deferrals that are available.

There are exemptions for reporting through STP for a particular financial year, for certain payments, or for certain employees.

TIP: Where there are extenuating circumstances that impact an employer's ability to regularly report on or before pay day (eg regular intermittent internet connectivity issues that result in the ATO receiving its report a couple of days after pay day), they can apply for a recurring deferral.

Ombudsman calls on ATO to cease small business recovery action where tax disputes are before AAT

The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) has issued a report into the ATO's enforcement of debt recovery. In a press release, the ASBFEO called for the ATO to immediately cease debt recovery action where tax disputes were before the Administrative Appeals Tribunal (AAT).

The report contains three key conclusions and seven recommendations. The ASBFEO also reminds small business taxpayers in dispute with the ATO of its Small Business Concierge Service, which started on 1 March 2019. This service provides legal assistance for AAT appeals for a limited cost.

The ATO issued a press release outlining its response to the report stating its long standing policy on debt recovery for cases in dispute at the AAT is to only pursue disputed debt in "exceptional circumstances" and that there are only ''very rare cases'' (eg in 2017-18, it took garnishee action against small business in just four cases).

The ATO further stated that it will give consideration to the report's recommendations while it awaits the Australian National Audit Office's review of how the ATO manages tax debts for small business.

Cryptocurrency: record keeping requirements and data matching program

The Commissioner has published a gazette notice setting out the record keeping requirements for cryptocurrency owners and traders. The ATO advises that it is undertaking a data matching program for 2014-15 to 2019-20 for such entities.

The data obtained from cryptocurrency designated service providers (DSPs) is being (and will continue to be) used to identify the buyers and sellers of crypto-assets and quantify the related transactions. Data will be matched against ATO records to identify individuals who may not be meeting their registration, reporting, lodgment and/or payment obligations.

The ATO will be working with other regulators, in particular, the Australian Transaction Reports and Analysis Centre (AUSTRAC) and the Australian Securities and Investments Commission (ASIC) to ensure that tax law requirements align with a whole of system approach.

Super death benefit for de facto partner upheld

The Federal Court has dismissed an appeal against a decision to pay a superannuation death benefit pension to a fire fighter's de facto partner instead of a lump sum to his estate in Howard v Batistich [2019] FCA 525.

The trustee of the Crown Employees Superannuation Fund determined that the respondent, Ms Batistich, was a "de facto partner" of the deceased at the date of his death under the Superannuation Act 1916(NSW) and the Interpretation Act 1987(NSW). Accordingly, the trustee determined that Ms Batistich was entitled to a fortnightly pension. If there was no spouse (including a de facto), a lump sum death benefit of $350,000 would have been payable to the deceased estate.

The deceased's parents, as the administrators of his estate, complained to the Superannuation Complaints Tribunal that Ms Batistich did not meet the definition of de facto partner.

In dismissing the appeal, the Court said it was not satisfied that the SCT had misunderstood its task or failed to take into account all the circumstances of the relationship.

Protecting Your Super – how new law may affect SMSFs

The Treasury Laws Amendment (Protecting Your Superannuation Package) Act 2019introduces a number of reforms to protect individual's super savings from undue erosion by fees and unnecessary insurance. The ATO says it will now be able to proactively consolidate eligible unclaimed super money into eligible active super accounts, including SMSFs and small APRA funds, if an individual hasn't requested a direct payment of this money or for it to be rolled over to a fund of their choice. Under the Protecting Your Superpackage, the ATO says SMSFs may receive a rollover of consolidated unclaimed super money for members.

ATO reminds SMEs about paying super for backpackers

The ATO has reminded businesses that employ backpackers that they may need to pay superannuation guarantee (SG) for them.

Backpackers on working holidays are considered temporary residents, and are entitled to superannuation guarantee if they are paid $450 or more before tax in a calendar month. Once they leave Australia, they can claim the super paid to them as a Departing Australia superannuation payment (DASP) providing all requirements are met.

TIP: Determine if backpackers on working holidays are eligible for super by using the ATO's Super guarantee eligibility decision tool.

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.


Single touch payroll - are you ready?

From 1 July 2018 businesses with 20 or more employees were required to report payments such as salaries and wages, pay as you go (PAYG) withholding and super information to the ATO directly from their payroll solution when they pay their employees. From 1 July 2019, all employers -regardless of your number of employees- will be required to report through Single Touch Payroll (STP).

Through STP, your business is required to submit your employee’s payroll and super information to the ATO directly from your chosen payroll software upon completion of each pay run.

Some key information to note:

  • Pay cycles can remain as they are. You can still choose to pay your employees weekly, fortnightly or monthly.
  • Employees weekly, fortnightly or monthly.
  • The due date for payment of PAYG withholding and super contributions will remain unchanged; however, your business will now have the option to make payments earlier.
  • Payments which are reported through STP will be pre-filled into your monthly or QuarterlyBusinesses Activity Statements
  • There will be no need to provide your employees with a payment summary at the end of the financial year as current salary, and wage information will be made available to them via their myGov account, or their accountant can access this information via the Tax Agent Portal.

If you’d like to know more about Single Touch Payroll, please contact us, as we can help you prepare and ensure your accounting software is STP compliant.


Our goals and our progress so far!

At the beginning of the year we shared what our individual goals were because when we meet with you, we ask you what your goals and aspirations are so we thought it only fair to share ours too! With the EOFY soon approaching many of us take the time to reflect and measure our progress against our set goals. In this article, we do just that! We're keeping ourselves accountable. You can see below what each of our goals was and how we are progressing. As you scroll down you'll see some great achievements and a few excuses [stumbling blocks!] but what's important to note is that we are sharing our goals and research shows that by writing our goals down and sharing them means we increase our chance of achieving them.

Brian McPhail

Goals
Catching up more with friends by arranging lunches every fortnight together.
Visiting our daughter in Oxford in July.
Help organise the volunteers for the Presidents Cup Golf in December.

Update - I have not been able to catch up with friends as planned as I have had multiple priorities at work. Have booked the flights in July to visit my daughter and I am in the process of organising the volunteers for the Presidents Cup.

Wayne Durdin

Goals
To declutter.
Having recently moved (downsized) I now have boxes of things that I have not seen or used in years & need to decide what to keep, what to donate & what to throw out by April 2019.

Update -I have effectively achieved my goal. I do still have a few “family” items that need sorting & which are out of my control, otherwise, I believe I have achieved my goal.

Matthew Drew

Goals
To turn back the clock and run another half marathon by following a 12-week running plan by March 2019.

Update - My training was going well, however, I found my progress was moving slower than I had expected.  I had to reassess my strategy to focus on general health and fitness first to enable me to meet my goal which meant a change in my timeframe.  Unfortunately, a burst appendix put an end to the training for the time being however the goal is still to achieve a half marathon by the end of the year.

Andrew Beltramello

Goals
Build a deck in the backyard by July 2019.

Update - Unfortunately I will have to reassess my goal and postpone the building of a deck until next year.

Rebecca Rosario

Goals
Increasing the days I volunteer to two days a week next year.
Recommence dance classes once a week.
Connect more with relatives by catching up with them at least once a month.

Update - I volunteer almost regularly twice a week - I am on a team for Alpha which runs for 11 weeks and I do my current volunteer work at Careline once a fortnight. Also in April, I joined the Brotherhood of St Lawrence where I do occasional volunteer work as an urban camp leader. Re-commenced dance classes in May 2019. Have not had a chance to achieve my goal and connect more with the family will focus on it in the next 6 months.

Monika Murti

Goals
Design and renovate the laundry area by June 2019.

Update - We have ripped out old cabinets and sink area. We had a plumber come in and reallocate taps and plumbing. We have booked in the plastering to waterproof the walls. Next step is to get a cabinet maker to fit out the laundry.

Stephen Howard

Goals
Travel to Italy by July 2019 and win a cricket premiership by March 2019.

Update - We didn’t manage to win a cricket premiership but was selected in my club’s team of the year. Italy trip postponed until 2020.

Lewis Morgan

Goals
My 2019 goals are to increase my knowledge surrounding accounting topics and improve my efficiency and accuracy when completing tasks at work.

Update - Since I wrote my last goal I feel that I’ve made great progress in my knowledge, efficiency, as well as accuracy, but I still have a long way to go. I would like to thank the managers and partners for supporting me throughout my time here so I can continue to improve.

Prisca Languila

Goals
By saving $200 every fortnight and go back to Mauritius by December 2019.

Update - My savings are on track for the trip in December and have started looking at flights to find the best dates for travel.

Louise Davey

Goals
Travel to New Zealand by July 2019.

Update - I have successfully achieved my goal by travelling to the North Islands of New Zealand between 19th – 29th of April.

Chathu DeSilva

Goals
To get ripped 6 pack abs by September 2019 by exercising at least 4 times a week and by eating healthy at least 5 days a week.

Update - Although I have not achieved my goal yet, progressing towards the goal I have set has made me feel more fit and healthy. I have been going to the gym at least 4 times a week and eating healthy at least 5 days week.

Goals don't need to be complicated, but they do need to be written down, shared and worked towards otherwise they are just a dream!

Do you have a new goal that we don't know about yet that we can help you achieve? Perhaps you know someone who could benefit from our advice and support? Please feel free to contact us.