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First Home Super Saver Scheme

The First Home Super Saver (FHSS) is a scheme that enables Australians to save for their first home inside their superannuation fund. The plan allows for faster saving with the before tax (concessional) treatment within super.

The 2017-18 Budget allowed individuals to make voluntary concessional and non-concessional payments into their super to save for their first home as of 1 July 2017. From 1 July 2018, individuals can apply to release their voluntary payments and associated earnings, to buy their first home.

To apply for the release of these funds, individuals must be at least 18 years old and:
– Never owned property in Australia (i.e., commercial or investment property, vacant land, a lease of land in Australia or a company title interest in land in Australia).
– Never requested the Commissioner to grant a FHSS release authority in relation to the scheme in the past.

An individual who has previously owned property in Australia may still be eligible if the Commissioner of Taxation finds they have suffered a financial hardship which resulted in losing ownership of a property.

When the Commissioner determines that an individual has suffered a financial hardship, they must also satisfy additional criteria at the same time they requested a FHSS determination.

Prior to saving, individuals should first:
– make sure their nominated fund will release the money, and;
– query their fund about any charges, fees or insurance considerations that may apply.

Any FHSS amounts received will also affect an individual’s tax for the year they request to release the funds. These individuals will receive payment summaries, where they will be required to include the assessable and tax-withheld amounts in their tax returns.

Individuals can also check their balances with their funds whenever they wish to see how much they have saved up. This will assist individuals to keep track of the maximum FHSS amounts they can request to be released.

Those individuals wanting a release of funds can apply to the Commissioner of Taxation for a FHSS determination and a release.

Posted on 30 May '18, under Super. No Comments.

Targeted amendments to Division 7A

The Government is widening the scope of Division 7A to include unpaid present entitlements from 1 July 2019.

This will apply where a related private company is entitled to a share of trust income as a beneficiary but has not been paid that amount (unpaid present entitlement).

Division 7A is an integrity rule that requires benefits provided by private companies to taxpayers to be taxed as dividends unless they are structured as Division 7A complying loans or where another exception applies.

The Government aims to clarify the operation of the Division 7A integrity rule to ensure the unpaid present entitlement is either required to be repaid to the private company over time as a complying loan or subject to tax as a dividend.

Additionally, the targeted amendments announced in the 2016-17 Budget, aimed at improving the operation and administration of Division 7A, have now been delayed to commence from 1 July 2019. This will enable all the Division 7A amendments to be progressed as part of a consolidated package.

From 1 July 2019, the following measures will be introduced:
– A self-correction mechanism to assist taxpayers to rectify inadvertent breaches of Division 7A promptly.
– Appropriate safe harbour rules to provide certainty and simplify compliance for taxpayers.
– Simplified rules regarding complying Division 7A loans, including loan duration and the minimum interest rate.
– A number of technical amendments to improve the integrity and operation of Division 7A and provide increased certainty for taxpayers.

Posted on 30 May '18, under Tax. No Comments.

Using storytelling to build your brand

Storytelling taps into your customers’ emotions, builds trust and can help form a stronger connection with your audience.

Many businesses are now using their business’ story in their marketing efforts to engage their current customer base and attract new customers to their brand.
Here are three ways to incorporate storytelling into your business’ marketing:

Share your story
Where did your business start? Talk your audience through your beginnings, including where your idea to start the business came from and how the business unfolded over time. Explain your approach to your business, your mission, highlights, and stories where your business made an impact. Your story does not need to follow a chronological timeline, for example, it may only include the challenges your business has faced and how you overcame them.

Provide insight
Stories can be compelling, but only when told effectively. Give your audience insight into your business by being transparent, authentic and even entertaining or humorous. Feature your valued customers in the story and share their experiences, showcase community activities and events you have been a part of, give your audience a behind-the-scenes look at your business, and so forth. The aim is to give your audience insight into your business’ core values and personality.

Inspire your audience
Your story should either invoke inspiration or provide a take-home message for your audience. This is why it is critical to be genuine in your storytelling efforts. Whether you are sharing your personal story or that of your team members’, try to relate it to the audience and avoid unnecessary and dull details. Rather than sharing a story which is self-promoting, focus on the heart of the message and what you’d like your audience to gain from hearing the story.

Posted on 25 May '18, under Business. No Comments.

Claiming personal super contributions deductions

More taxpayers can now claim a personal super contributions deductions this tax time due to the removal of the 10 per cent maximum earnings condition that came into effect from 1 July 2017.

Eligible individuals include those who earn their income from:

Those who wish to claim a deduction need to:

Posted on 25 May '18, under Super. No Comments.

GST at settlement

As of 1 July 2018, purchasers of new residential premises or potential land are required to withhold an amount from the contract price and pay the amount to the ATO before settlement.

A supplier (vendor, seller) of residential premises or potential residential land must notify the purchaser in writing whether they will need to withhold an amount. If the purchaser is required to withhold, the supplier will need to inform them of the amount and when it needs to be paid to the Tax Office.

Generally, if the property contract sale specifies an amount that is the price of the supply, i.e., the contract price, then the withholding amount is calculated on the contract price. However, there are some situations where the amount to be withheld must be calculated differently, including:
– Where the margin scheme applies to the supply
– The supply is between associates and is without consideration, or is for consideration that is less than the GST inclusive market value of the supply
– There is a mixed supply, for example, only partly a supply of new residential premises or potential residential land
– There are multiple purchasers (not joint tenants)

Once the supplier lodges their BAS and it is processed, the supplier will receive a credit for the amount the purchaser withheld and paid to the ATO.

Note, purchasers do not need to register for GST just because they have a withholding requirement.

Posted on 25 May '18, under Tax. No Comments.

How to spot a fake loan

When shopping around for a personal loan, it is wise to be conscious of any potential scammers that may try and offer you a deal that sounds too good to be true.

Though a loan may look legitimate from a first glance, there are various tell-tale signs to watch out for to spot a fraudulent loan.

When applying for a loan, be wary if your lender:
– does not evaluate your credit report before approving your loan
– calls or emails you to advise that you are a candidate for a loan
– asks for an initial fee to be wired to a local or international bank account
– offers a low-interest rate
– approves an amount that is higher than you require or applied for
– emails you from a personal email address (i.e., hotmail or gmail)
– sends correspondence using an email address where the company name is misspelt
– gives you an immediate deadline to accept the loan
– has not provided a legitimate address

It is essential to ensure the company you are dealing with is legitimate. Find their number from an independent source and then call them. Never call a number provided in an email as the scam artist may be impersonating a legitimate institution.

To be more adept at identifying a fraudulent loan and to avoid being scammed, never solely rely on the advice of a lender. It is always better to do independent research before you finalise your decision.

Posted on 17 May '18, under Money. No Comments.

Why your business needs a mission statement

A compelling mission statement will give your small business the purpose it needs to grow. In just a few clear and succinct sentences the statement should announce your driving business strategy.

However, it is not enough to merely generate a statement and slap it on your website. A mission statement will do little to impact your business unless you take active measures to embed its ideology into the workplace culture.

Apply your mission statement as a guiding principle when making any strategic decisions at management level.

This approach will influence you and your team to plan long-term by focusing core strategies on things that will remain constant, rather than those that will not.

Invest all your time and energy into things that are always changing, like technologies or the competition, and you will continuously need to revise your core strategies.

It is critical to use your driving purpose to form long-term strategies for your business that way they will still be relevant in five years from now.

While impacting the way you create strategies at a management level, the guiding principle must also influence how your staff complete their everyday tasks. In this way, the ideology can be embraced at every level in the workplace.

Posted on 17 May '18, under Business. No Comments.

How the new super measures will apply to SMSFs

The Government has introduced new measures to allow SMSF members to access their super for their first home or make contributions to their super from the sale of downsizing their home.

SMSFs should be aware of the following:

Downsizing
From 1 July 2018, SMSF members who are 65 or over and exchange a contract of sale of their main residence may be eligible to make a downsizer contribution of up to $300,000 into their super without affecting their total super balance or contributions cap for the year.

This contribution will count towards the transfer balance cap and be taken into account for determining eligibility for the age pension.

SMSF members do not have to purchase another home to access this measure. However, the contribution can only be made once; it cannot be used for the sale of a second main residence.

The First Home Super Saver Scheme
SMSF members looking to get into the property market can now use some help from their SMSF under the First Home Super Saver Scheme.

As of 1 July 2018, SMSF members over 18 years of age can apply to release their voluntary concessional and non-concessional contributions made from 1 July 2017, along with associate earnings to purchase their first home.

Voluntary contributions made since 1 July 2017 of up to a maximum of $15,000 from any one financial year, or $30,000 across all years can be applied for.

Posted on 17 May '18, under Super. No Comments.

Focus on work-related car expenses

The Tax Office has flagged work-related car expenses as a concern this tax time.

The ATO is targeting those who make mistakes or deliberately lodge false claims. Examples include:
– Claiming things they are not entitled to, i.e., private trips such as work to home travel.
– Making claims for trips that did not occur.
– Claiming expenses that their employer has already reimbursed them for.

Advancements in data-matching technology allow the ATO to match individuals with peers in similar occupations, earning similar amounts of income. Analytics is also used to identify claim patterns, i.e., over 800,000 people claimed exactly 5,000 kilometres under the cents per kilometre method last year.

The best way to avoid making a mistake include:
– only making a car claim if you paid for the expense yourself and were not reimbursed;
– it was directly related to earning your income; and,
– you must have a record to support the claim.

An example of a legitimate car claim is travelling between work sites or between jobs as part of your job.

Before you submit a car claim, consider if your employer would agree you needed to undertake the trips as part of your job. Employers may be contacted if your claim raises a red flag.

Posted on 17 May '18, under Tax. No Comments.

Morning habits matter

How do you like to begin each day?

The daily routines of successful entrepreneurs prove that ‘when’ and ‘how’ you choose to start your morning significantly impacts the rest of your day in the office.

Incorporating positive habits into your morning routine will help to increase your productivity and creativity throughout the day, and lead to a healthier and balanced lifestyle.

Regular sleep patterns
Consistently sleeping 7 to 8 hours every night is fundamental to leading a healthy lifestyle. As an entrepreneur, you may deal with long days at the office, and it is important to give your body and mind the most appropriate amount of time to refuel each night.

Rising early
Many high-profile entrepreneurs make a habit of always rising early. Getting out of bed provides more hours in the day to achieve your goals. Consistently rising early helps to form a disciplined routine.

Morning workouts
Waking up earlier allows time to exercise in the morning. Working out as soon as you wake up is a great way to get moving and start your day on a high. Studies show that consistent exercise can boost brain activity better than coffee and other caffeinated drinks, giving you a higher level of focus throughout the day.

Eating breakfast
Breakfast matters. Your mind and body require nutrients to keep running until lunchtime. Eat a healthy and nutritious breakfast after you complete your exercise routine. This will help you to avoid becoming tired or irritable at work.

Remember, consistency is essential.

No same morning routine is right for everyone, but the best routines are the ones that are followed every day.

Posted on 11 May '18, under Business. No Comments.

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