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Business Activity Statements – How To Take The Sting Out Of The Quarterly Payment

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Been hearing a lot about business activity statements, and feeling more than a little pressure?

Kicking off the new year for your business shouldn’t be shrouded in the darkness that can be a looming BAS. But how can you be certain that your business is prepared?

To start with, demystifying the BAS might alleviate some of that anxiety and pressure your business may have been facing. Essentially, a business activity statement (BAS) is a government form that all businesses must lodge to the Australian Tax Office (ATO). All businesses registered for GST need to lodge a business activity statement (BAS). This can be done with the assistance of a registered tax agent or BAS agent.

A BAS is a summary of all the business taxes you have paid or will pay to the government during a specific period of time. You may lodge your BAS monthly, quarterly or annually (depending on the size of your business you may not have the annual or quarterly option) or may do so through your tax/BAS agent.

When lodging your BAS, you need to include these payments within it:

A BAS is issued by the ATO either monthly or quarterly. A form needs to be lodged with the ATO and payment made to the ATO by the due dates as follows:

(as registered tax agents we are given an extension to most of these deadlines)

You may instead be eligible to submit an Instalment Activity Statement (IAS). In the IAS, the ATO tells you every quarter what your GST instalment amount is and where applicable your PAYG instalment amount is.  Essentially, the IAS is a form that is similar to the BAS, but simpler in that you do not have to be concerned about GST and some other nominated taxes.

Businesses that are not registered for GST and individuals who are required to pay PAYG instalments or PAYG withholding (such as self-funded retirees) use this form to pay PAYG.

IAS provides a little more flexibility in the arrangement as the instalments are advised by the ATO on what you need to pay to cover your liabilities.

You may be able to vary those amounts if you feel that the advised instalments are too much or not enough to cover your liabilities. You may also be able to pay the amount in one lump sum at the end of the year. Before changing the amount due, or the timing of the payment, it’s best to consult with us (or your registered BAS agent) for additional advice to suit your circumstances.

Preparing For Your BAS

Your IAS and BAS can be used to assist in monitoring your business finances. Though you only need to lodge these every quarter, waiting until the due date to get all of the information you require for the statements may cause you to miss out on critical observations (such as how much you may actually owe the ATO).

Daily tracking of your income and expenses can assist in calculating your GST and other liabilities on your BAS, and allows you to ensure that there won’t be any nasty surprises waiting for you.

Here are some tips on how you can prepare for your BAS or IAS this quarter

Read more.

Posted on 24 January '22, under Tax. No Comments.

SME Recovery Loan Scheme Rules Amended To Cope With Impact

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Are you an SME who has been impacted economically by COVID-19, and who could use financial assistance to get back on their feet?

The SME Recovery Loan Scheme has been extended to 30 June 2022 with a reduced Government guarantee of 50 per cent. This is known as the 2022 Scheme expansion, where loans will be available from 1 January 2022 at the new Government guarantee.

Earlier this year (April 2021), the Government announced the SME Recovery Loan Scheme (also known as the Scheme), which was designed to support economic recovery and provide continued assistance to small and medium enterprises dealing with the economic impacts of the coronavirus pandemic.

The Scheme was initially slated to be available from 1 April 2021 through to 31 December 2021 at a Government guarantee of 80 per cent of the loan amount.

The scheme is open to small and medium-sized businesses with up to $250 million turnover including self-employed and non-profits. The Scheme has been open to (so far) eligible SMEs that were:

These loans that are issued under the Scheme are able to be used to refinance existing loans, or for a broad range of business purposes, including to support investment. They cannot be used to:

These loans may be used to refinance any pre-existing debt of an eligible borrower, including those from the SME Guarantee Scheme.

Participating lenders are offering guaranteed loans on the following terms under the SME Recovery Loan Scheme (2022 Scheme expansion):

Loans that are backed by the scheme will be available through participating commercial lenders. The decisions to extend credit and the management of the loan remains with the lender.

The SME Recovery Loan Scheme may be a viable option for your business if it has been impacted by financial hardship. If you would like to know more about this scheme, you can begin that conversation with us or a participating lender.

Read more.

Posted on 20 December '21, under Business. No Comments.

Maximising Your Super Should Be Done 10 Years Before Retirement For Best Results…

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There are plenty of ways to maximise your superannuation contributions prior to your retirement at any time of your life. As the means of funding your nomadic lifestyle, your seachange or your downtime after retiring, you want to make sure your superannuation is equipped to handle it.

The Australian Taxation Office recommends that you should check how you can maximise your super at the bare minimum of 10-15 years before the age that you hope to retire so that you have the time you need to make a difference to your final super balance.

So, if you were thinking of retiring at your preservation age (which is the age that you can access your super), your superannuation should reflect the amount that you want to be able to access to fund that retirement.

While starting earlier does mean it may be easier to accumulate what you need to retire by the time of it occurring, it doesn’t mean that there’s a cutoff date or a deadline to have contributions in for maximised profits.

Here are 3 simple ways that you can make a difference to your superannuation fund which could impact your balance for retirement in the long-term(and the sooner you try them, the better).

Salary-Sacrificing

Your employer is required by superannuation law to contribute 10% of your taxable income to your super each year. This allows you to build up a steady balance as you work without having to actively contribute yourself.

However, if you have a position that pays well enough and allows you to do so, you may also be able to speak with your employer about arranging for some of your income to be ‘sacrificed’ to your superannuation, and contribute additionally to the balance yourself. These are known as concessional contributions.

So, for example, your employer may pay you $1,500 as your base salary pay. They also make the 10% contribution for your superannuation and pay $100 in tax. That leaves you with $1350. If you elect to salary-sacrifice, you might wish to pay $100 from your before-tax income. This means that instead of being taxed at a $1,500 base salary, you’ll only be taxed from the $1,400.

Track Down & Combine Your Accounts

There have been measures enacted to prevent additional super funds from being created for new employees who don’t elect to nominate a super fund – for those who may have existing multiple super accounts, it’s time to consolidate and combine them.

You can increase the rate that your super grows each year as a result of the compounding effect of additional funds and fewer fees, and ensure that your nest egg is nurtured by a provider that aims to grow. You just need to be sure to check that you don’t lose out on any benefits by transferring or consolidating to your chosen fund.

Tax & Super Can Work Great Together, If You Know How

If you are willing and ready to start saving, your superannuation can become a tax deduction gold mine (if you are eligible for the deductions that you are applying for.

One such deduction is the spousal contribution deduction.

If you make a contribution to your spouse’s super (and they earn less than $37,000 per year) any contributions that you make to their super can provide you with a tax rebate of up to $540. You can also claim back on any contributions that you may have made directly from your bank account to your super until you reach the contributions limit (known as a cap).

Discussing with a specialist or your super provider about the best course of action for you and your needs may be the step that you need to take to ensure the potential growth of your fund.

Read more.

Posted on 13 December '21, under Super. No Comments.

Can Christmas Parties Be Tax-Deductible?

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While your business may not necessarily be planning an extravagant bash after the events of this year, a Christmas party may be on the menu for your hard-working employees.

Planning out your Christmas party in a COVID-safe manner with a little knowledge of the tax deductions you might be able to claim back can make the giving a little sweeter this year.

The Venue

You can take advantage of the $300 (including GST) minor benefit and exemption rule to hold a Christmas function for your current employees and their spouses. To do so, the party would need to be held on the premises of the business, and during a business day. If your costs are below $300 per person, FBT will not be incurred but you will not be able to claim tax deductions or GST credits.

However, if you provide benefits to your employees over $300, it will incur fringe benefits tax (FBT). This means if the Christmas party that you hold is priced at over $300 per person (for the cost of food and drink consumed by employees and spouses) at your in-house party, you will incur and need to pay FBT on the expenses of your employee’s spouse or family members only.

If the party is being held at a restaurant or venue, you will not need to pay FBT if the costs remain under $300 as it is considered a minor benefit. If the costs rise to over $300, you will need to pay FBT for your employees, their spouses and their family.

Transportation

You may also choose to provide your employees with transportation to the Christmas party. Taxis provided to an employee will attract FBT unless the travel is to or from the employee’s place of work. If the party is held off-premises and you pay for your employee to travel by taxi to the venue and to their home after the event, only the first trip is FBT exempt.

The second trip may be exempt under the minor benefits exemption if you adopt its meal entertainment on an actual basis.

You can also provide other types of transportation to the venue, such as buses. These costs will form a part of the total meal entertainment expenditure and will be subject to FBT. If the threshold is not breached, then it may fall under the minor benefits exemption.

What About Meal Entertainment?

If your Christmas party does not include recreation, you may choose the value of food, drink, associated accommodation or travel as ‘meal entertainment’. This allows staff to pay less tax by claiming meals and drinks consumed in a restaurant/cafe or provided at a social gathering.

The taxable value of the meal entertainment can be made using a 50:50 method, 12-week method or actual method.

Want to know more about how you can make this merry time of the year more tax-friendly to your business? Consult with us about how we can make your Christmas parties and employee benefits work for your tax.

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Posted on 6 December '21, under Tax. No Comments.

Minimum Rate Increase To 21 Awards – Is Your Business Compliant?

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From 1 November 2021, minimum wages in 21 awards were increased. If you are not paying your employees this new rate of pay, you may find yourself facing significant penalties for failure to comply with the Fair Work Ombudsman. This increase is to be applied to anyone who is paid the minimum award wages or the national minimum wages.

As an employer of workers, you must pay them a fair wage according to the award that their profession exists under. That wage must meet the minimum wage expectations for the award, which is the minimum amount an employee can be paid for the work that they’re doing. Employees may be paid more than that wage, but the bare minimum that they can be paid is set out in the awards and as a part of the national minimum wage base rate.

The national minimum wage was increased from $19.84 per hour to $20.33 per hour, or 772.60 per week (increased from $753.80). This increase should have applied from the first full pay period starting on or after 1 July 2021. In addition, employees who are covered by awards should also have had their base rates increased by 2.5 per cent, though these increases may begin on different dates for different groups of awards.

Most award wage increases applied from 1 July 2021, though there were 21 awards where the Fair Work Commission deemed there to be exceptional circumstances in place that would affect the increase. Those 21 awards were increased from 1 November 2021, and include:

This increase is a result of the Fair Work Commission’s announcement after conducting its Annual Wage Review.  The Fair Work Commission is the independent national workplace relations tribunal. It is responsible for maintaining a safety net of minimum wages and employment conditions, as well as a range of other workplace functions and regulations.

Workplaces are expected to ensure that all of their employees are being treated fairly and paid the minimum rate relevant to their circumstances (award/base minimum rate).

Employers and employees can visit www.fairwork.gov.au or call the Fair Work Infoline on 13 13 94 for free advice and assistance about their pay and compliance requirements.

Are you concerned about potential non-compliance with the new minimum wage, want to know more about the other increases to different kinds of rewards? Trying to get your head wrapped around the new superannuation guarantee requirements, or after some business planning advice in the approach to the new year? We’re the people you can speak to about any concerns you may have for your business and its future.

Read more.

Posted on 29 November '21, under Business. No Comments.

How Do You Make Sure Your Super Goes To The Right Person When You Die?

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What happens to your super when you die? It might not be a question that has cropped up in many people’s minds, but it is something that you should be concerned about.

Upon the untimely death of someone, their superannuation may be one of the elements of the estate that can be bequeathed and divided between their loved ones (trustees of the estate and beneficiaries. 

This is not done through your will though, as it isn’t automatically included unless specific instructions have been given to your super fund. Often this is done through a binding death benefit nomination. These payments are usually paid out in lump sum payments and split between beneficiaries as dictated by the deceased.

However, like any property or asset that can be challenged, the death benefits from superannuation and SMSF can be a legal quandary if the appropriate succession planning measures have not been put into place.

Death benefits are one of the most commonly occurring legal issues that plague the superannuation and SMSF sector for individuals. Many court cases involving death benefits are the result of poor succession planning, as individuals who were not stated to be recipients of the payments miss out on what may be supposed to be theirs.

In the event of an individual’s death, the deceased’s dependent can be paid a death benefit payment as either a super income stream or a lump sum. The non-dependants of the deceased can only be paid in a lump sum. The form of the death benefit payment (and who receives it) will depend on the governing rules of your fund and the relevant requirements of the Superannuation Industry (Supervision) Regulations 1994 (SISR).

If succession planning around who the superannuation is to be left to is in place by the deceased, those who may be classed as dependents and non-dependents can become legally blurred.

In any event, dependents are defined differently depending on what kind of law they are being examined under (superannuation law and taxation law).

Under superannuation law, a death benefits dependant includes:

Under taxation law, a death benefits dependant includes:

Depending on the type of law that the beneficiary is classified under affects how they can interact with the death benefits.

How Do I Make Sure My Beneficiaries Will Receive The Death Benefits That I Want Them To Have? 

Death benefit payments need to be nominated by the holder of the superfund, as superannuation is not automatically included in your will. If you fail to make a nomination, your super fund may decide who receives your super money regardless of who is in your will.

That’s why succession planning is important when it comes to death benefits, no matter the situation. Even if you are at your healthiest, you’ll want to be prepared for any eventuality.

To get your succession planning right, here are 5 tips that will help you during the process.

Read more.

Posted on 22 November '21, under Super. No Comments.

What Happens To My Tax If I Have More Than One Job?

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Are you in the process of getting a second job to supplement your income? Or have you already received one, and are now simply confused about what you are being taxed on?

Gaining employment in a second position or job means that you may have a higher amount of tax withheld from your pay. Though this might sound daunting, it is simply because you are already claiming the tax-free threshold from another paying job.

The tax-free threshold in Australia is $18,200. If you are claiming your tax-free threshold, you are not paying tax on the first $18,200 earned in each income year. The tax-free threshold is equivalent to earning:

Withholding tax at a higher rate means that you are less likely to have a tax debt at the end of the income year

You may be receiving pay from two or more payers at the same time if you:

In these instances, your new employer will give you a Tax file number declaration to complete. Centrelink is also a payer who will give you this form if you apply for their payments.

When you fill in this form, you can choose whether to claim the tax-free threshold from your employer. However, if you are:

If you are in the position of having two jobs, it is recommended to claim the tax-free threshold from the payer who usually pays the highest salary or wage. Your other payers then withhold tax from your income at a higher rate, which is known as the no tax-free threshold rate. This is likely to reduce incurring a tax debt at the end of the financial year.

Sometimes the total tax withheld from all sources may be more or less than the amount you need to meet your end of year tax liability. These tax withheld amounts are credited to you when you lodge your income tax return. If too much tax is withheld, it may result in a tax refund. However, if not enough tax was withheld, the difference may need to be paid to the Australian Taxation Office (ATO) so that you have paid enough tax for your income.

Confused, concerned or a little perplexed about what having a second job could mean for your tax obligations? Want to know more about what happens if the tax withheld isn’t enough? You can speak with a registered tax agent like us about your tax liability in the event of a second job.

Read more.

Posted on 18 November '21, under Tax. No Comments.

Are You Suffering From Unpaid Super?

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Australia’s superannuation laws are designed with the intent to ensure that your nest egg for retirement is protected and able to continue to grow throughout your career.

Your employer is expected to make contributions to your superannuation by law, known as the Superannuation Guarantee, as a part of your wages and salary package. The current rate for the SG is 10% in 2021-22.

Up to a quarter of Australian workers may have been underpaid or unpaid when it comes to parts of their super. During these turbulent times of financial insecurity or instability, many employers may have found it difficult to prioritise making SG contributions on your behalf. The reporting obligations and quarterly payment schedules could result in them not meeting their SG obligations in a timely fashion.

There is a rising issue occurring from superannuation laws that employers may possibly be exploiting, which could significantly affect their employees’ retirement outcomes.

The Government recently offered an amnesty to employers to catch up in their superannuation guarantee obligations but it appears that there are many that are still not complying with the rules.

According to Industry Super Australia (ISA), underpaid and unpaid superannuation costs almost 3 million Australian workers an average of $1,700 each year. Some of the more common occupations in which unpaid and underpaid SG contributions occur may include those in the hospitality and trades sectors and occur more frequently with young and lower-income employees.

If this were to happen to you, the shortfall dealt to your retirement income can be a significant detriment that could affect you greatly. For example, if you were employed for 30 years with the same employer with whom you were suffering this superannuation loss, you could lose out on up to $50,000 in superannuation.

There are minimal circumstances in which an employer does not have to pay super contributions to their employees due to the employee’s eligibility. These instances may include:

In the event that you are not receiving superannuation contributions from your employer, but you do not fall under those circumstances mentioned above, you may be one of the 3 million Australians who are losing out.

If you are in this position then you need to take action as soon as possible.

The Australian Taxation Office can become involved with the reclamation of underpaid super contributions by employers.

In the event that your employer is not doing the right thing, you can:

Under current law, if your employer misses an SG payment, or doesn’t pay by the lodgement deadline, they are required to lodge an SG charge statement and pay a late fee.

Read more.

Posted on 8 November '21, under Super. No Comments.

Rent Concessions, Property & Commercial Enterprises – What Do You Need To Know Tax-Wise?

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Over the last 12 months, there have been many notable schemes promoted by state and federal governments to assist businesses and individuals with much-needed tax relief. Numerous relief schemes have been put into place to assist those with rent relief for their businesses.

Rent is a major business expense. It is one that many businesses across the country have often had to face in one way or another.

To address the issues that many businesses faced with lockdowns and cashflow issues as a result, some businesses were eligible to apply for rent concessions as a result of the impact of COVID-19, which could be as either a waiver or as a deferral.

Waiver

In the event that a waiver is the available rent concession, the tenant no longer needs to pay the amount of rent that has been waived.

Deferral

The tenant is still required to pay the amount of rent deferred, but the amount can be paid at a later stage (in the event that the ruling of the rent concession is as a deferral on payment).

Tenants who receive rent concessions from their landlords and landlords who give rent concessions to commercial tenants need to be aware of the difference between payments that are waived and deferred. Getting the two wrong can be costly, as rent payments are often a significant impact on the cash flow of a business. Missing payment due to a misunderstanding of the rental concession type you may have been afforded could be detrimental.

Property and tax is a tricky subject that goes beyond these rent relief measures and concessions. As the schemes start to dial back, it’s important to remember that tax and your dealings with property is an ongoing conversation you may need to revisit and reacquaint yourself with.

If you own, lease or rent a property that is used for business purposes (whether commercial, such as a shop or an office, or even your own home) you need to be aware of the tax implications and obligations that you will have to fulfil.

If you are in possession of a property that is used in such a manner, you:

In your dealings with property, you will also likely have additional tax obligations, including those relating to one-off transactions (such as the buying, selling, leasing or developing of property).

This could result in the Australian Taxation deciding that those one-off transactions should deem you as conducting an enterprise. If the turnover from these activities is more than the GST registration turnover threshold (what you are allowed to bring in before reaching a limit), you may be required to register for GST.

Ensure that your tax obligations and consequences are met by consulting with us. We are equipped with the knowledge to assist you. You can also enquire about potential tax concessions surrounding rent and property with us, as there may be more available to you and your business than you might think.

Read more.

Posted on 1 November '21, under Tax. No Comments.

Director Identification Numbers And What Companies Might Need To Do To Get Prepared

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Did you know that there are 31 different business registers that a business or company may need to be registered with that are a part of ASIC? Some of these registers are being brought together, in what will be known as the Australian Business Registry Services (ABRS).

The Commissioner of Taxation was appointed in April 2021  as the Commonwealth Registrar of the ABRS. In the near future, registering a company will be done through the ABRS instead of ASIC. This is a part of the government’s move towards a more efficient digital economy.

Previously, a company or business was registered through ASIC, where a Tax File Number and an Australian Business Number would be required. These are obtained through the Australian Taxation Office (ATO) and are a critical part of setting up a business or company.

Beginning from November 2021, there will be an additional step introduced in the registering of a company, involving a Director Identification Number (DIN).

This director identification number is a unique identifier that a director will apply for once and keep forever.

Every company director will need to have a DIN prior to 30 November 2022, with Indigenous directors having an additional year (till 30 November 2023) to adhere to the new requirement.

This applies to directors if their organisation is a company, registered foreign company, registered Australian body or Aboriginal and Torres Strait Islander corporation.

In the future, registering a company will be done through the ABRS instead of ASIC. This is a part of the government’s move towards a more efficient digital economy.

Directors will need to apply for their director ID themselves because they will need to verify their identity. Eligible persons that have sufficiently established their identity, will be provided a DIN that they will keep for their lifetime – even if they cease to be a Director.

No one else will be able to apply on their behalf.

The new DIN Requirements apply to appointed Directors and acting Directors of Australian corporations and registered foreign companies, which includes those companies who are responsible for managed investment schemes and registered charities. This is set out under the Corporations Act 2001 (Cth). 

As of the time of writing, the DIN requirements do not extend to unincorporated bodies, de facto or shadow Directors, or company directors.

DIN’s will be recorded in a new database to be administered and operated by the Australian Tax Office and be made available to the public.

The ATO will also have the power to provide, record, cancel and re-issue a person’s DIN. A DIN will be automatically cancelled if the individual does not become a Director within 12 months of receiving the DIN.

Following the DIN, the ARBS will then take over the Australian Company Register, the Business Names Register, and the Australian Business Numbers (currently on the Australian Business Register).

The ABRS is responsible for the implementation and administration of director IDs. ASIC will then be responsible for the enforcement of associated offences.

It is expected that around 10% of all Australians will require a DIN.

Despite the small number, it is a crucial part of the plan to prevent and halt phoenix directors from being appointed to companies, who then rack up significant debts that no one is held accountable for.

It is believed that this change will make the process cheaper, faster, and easier, as companies will no longer need to be first set up through ASIC before dealing with the ATO for an ABN and TFN.

If you currently have a company and do not already possess a MyGov account, now is the time to rectify it in the move towards DINs.

Read more.

Posted on 25 October '21, under Business. No Comments.

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You can contact us at the following;

Office Location
18 Francis Street
GERALDTON WA 6530

Mailing Address
PO BOX 1865
GERALDTON WA 6531

Phone: 08 9921 8218
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