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Super funds boast high returns in 2017

Superannuation funds in Australia have delivered a return of 10.5 per cent for 2017 – the first double-digit growth since 2013.

According to recent findings, there was a 1.3 per cent rise in November 2017 and 0.6 per cent rise in December 2017 alone.

The new figures mark the sixth consecutive year of positive returns for super funds.

Super fund returns overtook returns in the property market, as property returns weighed in at 9.1 per cent last year.

Investors should review their super fund’s performance at the start of the new year and make sure it is delivering value for money outcomes.

Although the returns provide a degree of confidence for investors, it is important to remember that markets are volatile and having a long-term investment strategy in place is vital.

Posted on 11 January '18, under Super. No Comments.

ATO targeting mischaracterised lifestyle assets and private pursuits

The Australian Tax Office (ATO) is targeting privately owned and wealthy groups that display specific behaviours and characteristics in relation to their tax affairs and lifestyle.

A large focus is currently on lifestyle assets and private pursuits that generate deductions or are mischaracterised as business activities. The ATO is also looking at those assets and pursuits which are incorrectly accounted for in terms of Division 7A or Fringe Benefits Tax (FBT).

Activities that attract the Tax Office’s attention include:
– private aircraft ownership or activities
– art ownership and dealings
– car or motorbike racing activities
– luxury and charter boat activities
– enthusiast or luxury motor vehicles
– grape growing and other farming pursuits
– horse breeding, racing and training activities
– holiday homes and luxury accommodation provision
– sporting clubs and other activities involving the participation of principals or associates of principals of private groups.

The ATO is addressing the following tax risks:

Income tax
– Entities claiming deductions from ownership lifestyle assets or private pursuits against other income derived by the entity but not carrying on a business.
– Individuals disposing of assets and not declaring the revenue or capital gains on those disposals.
– Entities incorrectly apportioning deductions where assets have been used privately or periods not available for rent or hire.
– Division 7A – individuals purchasing assets through their business entities but applying assets to the personal enjoyment of a shareholder or associate of a private company giving rise to a deemed dividend.

FBT
– Individuals purchasing assets through their business entities but applying those assets to the personal enjoyment of an employee or associate giving rise to a FBT liability.

GST
– The purchasing of assets or expenditures concerning private pursuits for personal use through their business or related entities and claiming input tax credits they are not entitled to claim.

Superannuation
– SMSF’s acquiring assets but applying them to the benefit of the fund’s trustee or beneficiaries.

Posted on 11 January '18, under Tax. No Comments.

How to avoid the holiday slump

The summer holidays may be a period of increased sales for some businesses, but for many, it can be a quiet time with a heavily reduced cash flow.

Staying ahead financially, if you are the latter, can be difficult which is why you should consider the following:

Use it to your advantage
A lull in sales does not have to be a negative, you can use it to your advantage. You can use the quiet time to organise your administration and get everything in order for the New Year. Revising the books and taking care of any financial obligations that have fallen by the wayside throughout the year is perfect while you aren’t distracted by making sales.

Plan the New Year
The holiday season is the ideal time to plan for the New Year, particularly in regards to marketing strategies, increasing cash flow, the introduction of new products and/or services, and maximising customer satisfaction. Sit down with your team and map out a plan for heading into the New Year; give them projects or tasks to take ownership over, either individually or in teams.

Hiring and training
Taking care of the hiring and training during the holiday slump is a very clever strategy. It saves the new employees being thrown into the deep end and allows them to get used to the business as well as their the job role and what is expected of them.

Posted on 21 December '17, under Business. No Comments.

Super housing legislation

The First Home Super Saver (FHSS) Scheme and the downsizing contributions into superannuation measures passed Parliament on 13 December 2017.

As of 1 July 2017, individuals can make voluntary concessional and non-concessional contributions into their super fund as part of the FHSS Scheme. The scheme may help first home buyers save faster due to the concessional tax treatment within super.

From 1 July 2018, individuals can then apply to release their contributions, along with associated earnings, to help purchase their first home.

The downsizing contributions into super measure allows individuals who are 65 years and over to make a contribution into their super after selling their home.

Contributions of up to $300,000 from the proceeds of your main residence can be added into your super fund. Your spouse may also be able to make a contribution.

To be eligible for a downsizer contribution, you must have entered into the contract of sale on or after 1 July 2018 and have owned the home for 10 years or more.

Downsizer contributions will be taken into account for determining eligibility for the age pension.

Posted on 21 December '17, under Super. No Comments.

Earning income from the sharing economy

The holiday season is a peak time for activities in the sharing economy to increase. During this time those participating in the sharing economy must not forget their tax obligations.

The most common sharing economy activities around the festive season include:
– Providing ride-sourcing services for a fare.
– Completing jobs or errands for payment.
– Renting out a room or a whole house or unit.
– Renting out a vehicle or a car parking space.

Depending on the activity, the tax obligations vary. The ATO is reminding those that participate in the sharing economy to consider the following:
– declaring income in their tax return
– what income tax deductions and GST credits they can claim for expenses related to earning income and what they can’t claim because of personal use
– how all of their sharing economy earnings added together affect their income tax and GST obligations
– keeping records of their income and expenses to meet their tax obligations

Posted on 21 December '17, under Tax. No Comments.

Getting out of small business debt

Managing debt in your small business is essential in maintaining the financial health of your business as well as preventing bankruptcy.

Consider the following tips to ensure your small business debts do not spiral out of control:

Reshuffle or remove expenses
Reviewing your expenses is one of the first steps to take when tackling debt. Look at the costs you can cut out and find alternative solutions. Whether this means cancelling unnecessary subscriptions, getting rid of expensive systems or selling assets such as a company car. If you cannot completely cut out costs plan to delay them. For example, take the full amount of time to pay an invoice so you have some extra cash to pay for unexpected expenses.

Increase revenue
Consider incorporating low-cost marketing techniques to generate additional revenue. Create low-cost promotions, such as special discounts for loyal customers, coupons, limited-time sales or offering discount codes in your email marketing for subscribers. Look for opportunities for improvement within your business – there may be an underutilised area that could make more sales and needs heavier promotion.

Prioritise debts
Evaluate all of your debts and prioritise them according to the size of each debt and interest rates. Depending on the debt amount and what types of debt you have acquired, you could either choose to pay off the debt with the highest interest rate first or pay off the smallest debt first. Paying the smaller debts first may help psychologically as you may feel as though you are making progress. However, paying off debts with higher interest rates can help you save money on interest over the long run. Regardless of which option you choose, be sure to continue making the minimum repayments of all your debts.

Talk to creditors
Don’t be embarrassed to contact creditors to inform them of your situation. Letting your creditors know your financial situation may put you in a better position to negotiate payment terms and conditions. For instance, if you have debt through a bank you may be able to arrange a hardship plan or consolidate your loans into one single monthly payment and so on.

Posted on 15 December '17, under Money. No Comments.

Managing work-life balance

Maintaining a healthy work-life balance may seem impossible as a business owner, but it is achievable, if not, necessary in running a successful business.

Not carving out time and space to enjoy your personal life, such as spending time with loved ones, exercising, travelling or enjoying your hobbies, can have a negative impact on your stress levels, ability to concentrate, and may even damage your relationships.

Consider the following tips to achieve a better work-life balance:

Delegate
Overcommitting is a surefire way to add unnecessary pressure. Overscheduling your day, saying ‘yes’ to everything, and fearing delegation will see you lose time and efficiency in your business. You cannot perform at your best if you are trying to do too many things at once. Instead, give yourself some flexibility by delegating tasks and outsourcing where possible. This could mean paying an external company to manage your marketing, hiring an office cleaner or asking a staff member to take on a new task such as invoicing, etc.

Lead a healthy lifestyle
Living a healthy lifestyle helps to support your overall wellbeing and equips you with the tools to manage stress and hassles in the workplace more effectively. If you don’t think of yourself as “healthy,” a good starting point is to simply become more aware of your behaviours and coping mechanisms. For instance, you may notice you reach for a sugary drink when feeling overwhelmed or stay back at work late every day to “catch up on jobs.” Identifying these behaviours helps to map out options for dealing with unhelpful coping strategies.

Time management
Setting manageable goals daily helps to prioritise your workload and provides a sense of control over your day. Having control helps to ease associated stress and feel positive towards the work you are doing. Goal-setting is also useful in motivating you to meet your deadlines and eliminating unhelpful behaviours such as procrastination. Achieving your work-related goals also reinforces you to focus on your “personal” goals – therefore, creating more work-life balance.

Posted on 15 December '17, under Business. No Comments.

Excess Transfer Balance Determinations from January 2018

The Australian Tax Office will start sending Excess Transfer Balance (ETB) Determinations from January 2018.

ETB determinations will be sent to any individuals who have exceeded their transfer balance cap and have not taken any steps to correct this error.

If you manage a SMSF and have exceeded the balance transfer cap by less than $100,000 on 1 July 2017 as a result of income streams in existence prior to 20 June 2017, you have until 31 December 2017 to commute the excess capital, under transitional rules.

If you manage a SMSF and have exceeded the balance transfer cap by more than $100,000, under the transitional rules, you may receive the ETB determination. The ATO becomes aware of transitional balance cap breach based on information APRA funds pass on.

If you receive an ETB determination from the ATO, remember the following:
– The quicker the member rectifies the amount owing set out in the ETB Determination from the retirement phase, the lower the amount of excess transfer balance tax they will be required to pay.
– The SMSF trustee must report information relevant to the member to the ATO, so that they have all the relevant information needed. It is important to do this straight away, if it has not already been done.
– You must commute the amount owing as listed on the ETB Determination from retirement phase. If you choose to remove the amount by making a large pension payment, you will still be in excess of your transfer balance cap as the large pension payment will not, under the circumstances, result in a debit on your transfer balance account.
– You may keep the excess amount determined in the ETB Determination in an accumulation phase account, unless you are commuting a death benefit income stream. If you are, the amount needs to be removed from the super stream.
– Ensure minimum pension payment standards are met at the time of commuting money into your income stream.

If you have any questions or queries regarding Excess Transfer Balance Determinations and how this may affect you, please do not hesitate to contact our office.

Posted on 15 December '17, under Super. No Comments.

Annual ATO closure

The Australian Tax Office (ATO) will be closed from midday Friday 22 December 2017 to 8.00am Tuesday 2 January 2018 over the festive season.

The Tax Agent Portal Dashboard and BAS Agent Portal Dashboard will be available to check portal availability.

The ATO’s technical help desk will be available from 7.00am to 6.00pm weekdays, excluding public holidays and 10.00am to 4.00pm Saturdays to assist with technical log on, connection, firewall and VPN issues.

The Tax Office will hold returns and forms not processed before the annual closure until processing resumes in the New Year.

Lodgements made after 7 December may not issue until the New Year.

Posted on 15 December '17, under Tax. No Comments.

Celebrating Christmas in your office

Christmas can be a very exciting time for many, and it can also be the dreaded season for others.

Consider the following tips for celebrating Christmas in style, to ensure that all your staff get the most out of this period.

Office Christmas party
Holding a work Christmas party can be risky, particularly if alcohol is provided. People can take advantage of this and can see you and the business liable should something go wrong. For many employees, attending a Christmas party, especially one outside of business hours, can be quite a hassle.

The safest and easiest option to have a great Christmas party is to hold it in the office. Cater with delicious food, decide whether you want some kind of entertainment such as challenge games with a prize for the winning team, or a performer such as a comedian. If providing alcohol, limit the supply and be sure to provide low-alcohol options and soft drinks as an alternative. And most importantly, let everyone go home early after the party has wound up so they can spend time with their family or prepare for Christmas.

If you’re giving gifts, put thought into them
Giving gifts can take up your time; time that you could be spending with your family. So if you’re going to give gifts, put thought into them and make it worthwhile, otherwise there is no point. Perhaps instead of getting something meaningless for all your staff, organise an office Kris Kringle, with a monetary value for the present. To avoid anyone getting a useless gift, they can write three options for gifts within the monetary value they would appreciate, making it easier for everyone to purchase a great present.

Decorate
Christmas is one opportunity to bring excitement and fun into the office. Decorating can bring the team together and make the stress of work seem to disappear. Not only do decorations make the working environment more pleasant for employees, but it also makes it exciting for customers.

Posted on 7 December '17, under Business. No Comments.

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Office Location
18 Francis Street
GERALDTON WA 6530

Mailing Address
PO BOX 1865
GERALDTON WA 6531

Phone: 08 9921 8218
Fax: 08 9964 3818
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