A8-Group-2

Changes for Business From 1 July, 2023

by Advice

From 1st July 2023, there are a number of key changes to come into effect which will impact your business and employees.

SUPER GUARANTEE RATE RISE 

Don’t forget that the super guarantee rate increases to 11% from 1 July 2023. 

This means you need to calculate super contributions at 11% for your eligible workers for payments of salary and wages you make from this date. 

Your super contributions for the current quarter (ending 30 June, due by 28 July 2023) are still calculated at the 10.5% rate for payments of salary and wages made prior to 1 July.  

WAGES GO UP 

Wage increases kick in on 1 July, following a ruling from the Fair Work Commission. 

For employees who aren’t covered by an award, the minimum wage will go up from 1 July to $882.80 per week, or $23.23 per hour, and will apply from the first full pay period starting on or after 1 July 2023. 

For employees covered by an award, minimum award wages will increase by 5.75%, also applying to the first full pay period starting on or after 1 July 2023.  

PAID PARENTAL LEAVE CHANGES 

From 1 July, amendments to the Paid Parental Leave Scheme will come into effect.  

Notably, the Dad and Partner Pay (DAPP) scheme, which currently provides up to two weeks of paid leave, will now be combined with the 18-week paid parental leave scheme. This means eligible parent couples or single parents can share their 20 weeks of leave – aimed at greater gender equity in parental caring responsibilities. 

There are other changes, too, such as the whole 20 weeks of leave of instalments can be received flexibly in multiple blocks within 24 months of the child’s birth or adoption date, removing the previous requirement of 12 weeks in one continuous period. 

Also, note that employees now have greater rights to request an additional 12 months of leave (24 in total) – and employers need to show reasonable business grounds on which to refuse.

DOMESTIC VIOLENCE LEAVE INTRODUCED 

This entitlement has been in place since 1 February 2023 for employers with 15 or more employees.  For smaller employers who employ less than 15 employees, this entitlement will operate from 1 August 2023. 

Employees will be entitled to 10 days of paid family and domestic violence leave (FDVL) per year.  

Paid family and domestic violence leave is quite a sensitive topic, and there need to be procedures in place – for everything from how the HR or manager handles requests to the privacy issues around how it gets recorded on a pay slip.  

PENSION AGE AND ELIGIBILITY INCREASES 

For those businesses employing older Australians, it’s worth noting that from 1 July, the pension age will be raised to 67 for those born on or after 1 January 1957. 

Not only that but asset and income eligibility tests will also be revamped, which means singles can earn $204 a fortnight and couples $360 a fortnight, before losing their full pension.  

ENERGY BILL RELIEF ON ITS WAY 

With soaring power bills contributing significantly to business operating costs, $650 in bill relief is on its way from July for small businesses. 

To be eligible, your business must be on a separately metered business tariff with your electricity retailer and your annual consumption must be less than 100MWh.  If you run a business from home, you probably won’t qualify. 

You don’t need to do anything. If you are eligible, you will receive bill relief on your electricity bills from 1 July 2023.  

Note these are Queensland numbers.  There are different thresholds and bill relief for each state. 

If you require further information on any of these measures, please do not hesitate to contact our office on (07) 3367 3366.

Tax-Refund-3

8 Ways To Max Your Tax Refund

by Advice

The end of the financial year is now less than 3 weeks away.  It’s time to make sure your house is in order by targeting tax breaks, trimming loss-makers and invigorating wealth-creating strategies.

The following are eight strategies that can help you get the max from your tax return.

1. Get organised and claim what you are entitled to

The tax office is a big fan of paperwork to back up any claims you make.  We are seeing increased audit activity by the ATO so it is vital you have the receipts and proof to back up any claims you make in your tax return.  You don’t need to keep piles of paper receipts.  The ATO is happy with unedited scanned copies.  Just remember to save your documents for the five years that the ATO requires.

2. Work expenses

If you spent money in the process of making money, a whole range of work-related costs can be claimed on tax – everything from sunscreen for outdoor workers to the cost of laundering professional uniforms.

Transport costs are one of the most popular travel tax deductions. Generally, work-related travel in your car or on public transport is claimable with the exception of travel from home to work (and vice versa).
Other expenses you may be able to claim for are:

  • Clothing and laundry expenses of uniforms that are distinct to your job and company
  • Protective clothing and certain accessories for specific employees
  • Self-education expenses, including home office costs
  • Tools and equipment purchase and other related expenses
  • Fees of books and periodicals, as well as digital information and subscriptions.

You can only claim a deduction if they are related to your job. A course that helps you be better for your current duties can be claimed. However, one that may aid you in getting a promotion or another job cannot be claimed.

If you’re unsure, just check with us or the Tax Office website for a virtual A-Z of expenses that are tax deductible.

3. Claim your work from home expenses

In February this year, the ATO changed the way you can claim deductions for costs incurred when working from home.  Firstly, they have revised the fixed rate method and what is covered by that rate. Then they increased the compliance obligations.

With these changes, we believe most clients will be better off claiming work from home expenses based on the actual costs incurred, rather than the cents per hour method. This is because the new fixed rate of 67 cents per hour now absorbs some tax deductions that you used to claim separately.

This method involves claiming the actual work-related portion of all running expenses. To claim this method, you must have an area set aside as a dedicated home office.

Compliance obligations include keeping detailed records for all the working from home expenses being claimed, including:

  • All receipts, bills and other similar documents to show you have incurred the expenses you want to claim.
  • A record of how you have calculated the work-related and private portion of the expenses (for example, a diary or similar document kept for a representative 4-week period to show the usual pattern of work-related use of a depreciating asset such as a laptop).

If you want to use the cents per hour method, then from 1 March 2023 you need to keep a record of the actual hours you worked from home.  Estimates or the 4-week representative log book will not be accepted.

4. Make strategic use of Super (and boost your retirement savings)

It used to be a case of ‘use it or lose it’. If you couldn’t contribute the maximum annual concessional (before-tax) contribution amount to your superannuation, the opportunity was lost.

However, from the 2019/20 year, if your super balance was below $500,000 at the previous June 30, you can use “catch-up” provisions to “legitimately breach” the annual limit.  From 1 July 2018, the ‘unused’ amount of your annual cap can be carried forward for the next five financial years.  After five years, that unused amount will expire.

Given that Superfunds are generally taxed at 15%, if you are on the top tax rate, these additional contributions can save up to 32% in personal income tax.

If you want to take advantage of this but are unsure of the catch up amounts available, we can quickly get this information from the Tax Office portal.

5. Cut capital gains

If you have a capital gain this year that is going to be taxable, then consider realising capital losses to offset against the gains.

To offset a loss against a gain, both must be realised.  This means you must sell both before 30 June to reduce your tax bill.

This is a chance to re-align your investment portfolio to be in line with the portfolio objectives, but also take the opportunity to potentially clean out any poorer performers and manage capital gains and losses.

6. Trust distributions

In recent years, it seems the ATO has decided they really don’t like Trusts.  Albeit they are a legitimate vehicle for transferring and managing wealth. One area that is getting focus lately is the need to complete a trustee resolution before June 30.

Failure to do so means the trustee could be assessed on the trust’s taxable income at the highest marginal tax rate.

Activ8 will be in touch with all our clients within the next week to follow up on this issue.

7. Instant Asset Write Off

If you’re a business that is looking to purchase an asset with a value greater than $20,000, ideally do it before 30 June. You will be able to claim 100% of its cost in FY23.  Note the asset needs to be installed and ready to use before 30 June to get the deduction.  If purchased after 30 June, then these assets will be added into a small business simplified depreciation pool and depreciated at 15% in the first year and 30% each year thereafter.

8. Make donations

Tax time is when the feel-good factor of charitable giving can really kick in. Donations of $2 or more to registered charities are tax deductible.

You’ll need a receipt for large gifts but if you’ve handed some loose change to a street collector you can still claim the donation without a receipt as long as it’s less than $10. Don’t forget to include donations for any workplace giving programs you are part of.

If you want to discuss any of the initiatives referred to above, or if you need help getting your taxes ready or coming up with a plan, don’t hesitate to reach out to Joanna or myself. We’d love to chat.

131556385_m_normal_none

2023 Budget – What It Means For You and Small Businesses

by Advice

The 2023 Federal Budget was very underwhelming tax-wise with the primary focus being measures aimed at lowering the cost of living or improving welfare.

This budget is a first-term government setting the tone to win a second and third term.  It’s not a big spending budget and the government is banking a lot of the tax windfall it will receive over the next 4 years.  The numbers are a bit rubbery, but it is a good start to repair the budget.

There is little to no structural change to the tax system, and they have left the stage 3 tax cuts alone.  The government is doing everything it can to not break promises and to send a message about economic competence.  Short of a drastic change in economic circumstances, I think the stage 3 tax cuts are here to stay.

The Treasurer, Dr Chalmers, has indicated that more “difficult decisions” will need to be made to sustainably fix the budget, but I think they are looking to the next term of government.  Labor wants to bank some trust and goodwill with the electorate before it brings any major tax reform to the table. 

BUDGET OVERVIEW

The key measures of the Budget affecting small business and what it means for you.

1. Temporary Full Expensing is Ending

Currently, most businesses that purchase business assets can claim 100% of its price in full, in the year that it’s purchased and ready for use. This will finish on 30 June 2023.

Recommendation: If you need to purchase a business asset and have the cashflow to do so, we recommend you purchase it BEFORE 30 June 2023 to be able to claim 100% of its cost in the 2023 year.

2. Instant Asset Write Off – $20K

Replacing temporary full expensing is the Small Business Instant Asset Write-off.  Businesses with a turnover of less than $10 million, will be able to immediately deduct the full cost of eligible assets costing less than $20,000 (incl GST).  Assets need to purchased and installed before 30 June 2024.

Assets that cost more than $20,000 will be added into a small business simplified depreciation pool and depreciated at 15% in the first year and 30% each year thereafter. Remember, this is a tax deduction, and it is not $20,000 cash back to you.

3. Low and Middle Income Tax Offset (LMITO) has ended

The temporary LMITO was introduced in the 2019 Budget and then extended during the COVID-19 pandemic.  It resulted in extra tax refunds of between $675 and $1,500 (depending on your level of income) for individuals. The Government didn’t extend the LMITO, so it has ended as at 30 June 2022.

Lower tax refund: Individuals who received an extra tax refund of up to $1,500 in 2022 will not receive it again this year in 2023.

4. Small business failure to lodge penalty amnesty

An amnesty has been announced for small businesses with a turnover of less than $10m, and have fallen behind on their tax returns.

A small business will not be charged failure-to-lodge penalties for outstanding tax lodgements that are lodged between 1 June 2023 and 31 December 2023 that were originally due between 1 December 2019 to 29 February 2022.

You’ve got 7 months to sort this one out and avoid some fines if you need to catch up.  Remember to reach out if you need a hand!

5. Super Stuff

The budget confirmed changes that were previously announced.  From July 2026 employers will have to pay super at the same time as wages, rather than quarterly.  This measure is designed to increase compliance with the legislation.

It won’t begin for 3 years but you will need to factor this into your future cashflow planning.

At the other end of the scale, very high superannuation balances will attract a higher rate of tax from 1 July 2025. Earnings on balances exceeding $3 million will pay tax on earnings at a rate of 30 per cent, 15% higher than the current rate of 15%. Earnings on balances below $3 million will continue to be taxed at the concessional rate of 15 per cent. Defined benefit interests will be appropriately valued and will have earnings taxed under this measure in a similar way to other interests to ensure commensurate treatment.

If you have a balance of more than $3 million in your Superfund you should do a complete review of your arrangements to determine the best tax strategies going forward.

6. Family Support

From 1 July this year, Parental Leave Pay and Dad and Partner Pay will combine into a single 20-week payment. A new family income test of $350,000 per annum will see nearly 3,000 additional parents become eligible for the entitlement each year. The Government has also committed to increase Paid Parental Leave to 26 weeks by 2026.

7. Tax incentive for energy efficiency

The Small Business Energy Incentive provides an additional deduction of 20% of the cost of eligible depreciating assets that support electrification and more efficient use of energy.

Up to $100,000 of total expenditure will be eligible, with a maximum bonus deduction of $20,000.

While the full detail of what qualifies for the incentive is not yet available, it is expected to apply to a range of depreciating assets and upgrades to existing assets such as electrifying heating and cooling systems, upgrading to more efficient fridges and induction cooktops, and installing batteries and heat pumps.

Some exclusions will apply including electric vehicles, renewable electricity generation assets, capital works, and assets that are not connected to the electricity grid and use fossil fuels.

8. Plan for higher PAYG instalments in 2024

Normally, PAYG instalments toward next year’s tax are adjusted using a GDP adjustment or uplift.

In 2022-23, the Government reduced this uplift factor to 2% instead of the 10% rate that would have applied. And now for 2023-24, the Government has set the uplift factor to 6% instead of the 12% rate that would have applied.

If you continue to make good business profits with tax to pay, you will need to budget for slightly higher PAYG instalments. 

OTHER STUFF FOR SMALL BUSINESS 

A few other “watch this space” announcements for supporting small businesses:

  • $23.4 million Investment in Cyber Security
  • $392.4 million Investment in an Industry Growth Program
  • $18.1 million Investment in Buy Australia Plan

These types of investments tend to filter down through state government grants so keep an eye out.

These are the main measures affecting small businesses from this budget.  Remember, these are subject to the measures passing through Parliament.  If you require further information on any of these announced measures, please do not hesitate to contact our office on (07) 3367 3366.

improve your business

5 Tips For Using Your Financials To Improve Your Business

by Advice

With preparation of year-end financials getting underway, it’s timely to explore where the opportunities for improving business results can be found in your financials.

Changing the outcomes of business results rarely happens by continuing to do what has been done in the past, but understanding what you have done, what that has achieved and how that can be changed will arm you well to make decisions for the future.

Here are 5 tips to apply when reviewing your financials which can lead to actions to improve your business.

1. Sales and Gross Profit

Your top-line sales figure for this year compared to last year gives you limited information, so drill down to explore the reasons for the change.  Have there been particular product or service lines that have performed stronger this year, what was the driver for that and did it really improve profitability? For example, your sales may have increased because you cut your prices, but if that didn’t generate sufficient volume increases you may be no better off.  Say your gross profit margin is 35 percent and you reduce your prices by 10 percent; your turnover has to increase by 40 percent just to maintain profit levels.

A simple yet effective profitability benchmark is your average dollar sale, to calculate that divide your total sales by the number of transactions. Compare this year’s average dollar sale with the results from a year ago to see some trends. To improve business year on year, set yourself a target, supported by a few initiatives, to increase this by 10 percent in a year’s time — it’ll do wonders for your profitability.

2. Breakeven point

The availability of your financials is an opportunity to update your breakeven point, which is a fundamental piece of information you need to know about your business.

If you know what cash you need to collect from your customers to cover your outgoings each month, it’s a truly motivating factor and a very early indicator of impending success or challenges on the horizon. We refer to outgoings rather than overheads or expenses because you need to factor in your drawings or tax as well as overheads when calculating your breakeven point.  This number can then be used to drive activities from salespeople and accounts staff to ensure the work is processed, invoiced and funds received month on month.

3. Solvency

Review your balance sheet with particular attention to your current assets and current liabilities, items in there include cash at bank, accounts receivable and short-term debt.  When classified as ‘current’ they are expected to be received or paid within 12 months and reviewing this comparison is a very good indicator of business solvency.

Can you pay your bills as they fall due, or are you dependent upon some extended trading terms of suppliers to continue to trade?  As directors of trading businesses, you have a legal duty not to take on liabilities you cannot repay and doing so puts yourself at risk of disqualification from directorship and severe financial consequences.  Identifying a solvency concern, determining the options available and taking action early is the best approach to ward off future issues.

 

 

4. Cash flow statement

It’s not unusual for business owners to look at a profit number only to ask “where has that profit gone?”. If your financials include a cash flow statement, use this to identify where all your profit has gone if it’s not sitting as cash at bank.  Alternatively, request a source and application of funds summary to be provided with your financials.

A cash flow statement or summary will show the sources of funds and how they have been applied over the period, which is essential because many of the outgoings of a business will not appear in the profit and loss account (for example, drawings, tax or loan repayments).  Use this Source and Application of Funds summary to understand where the profit from the last 12 months has gone and decide on future actions in light of this information.  Some common places you might find your profit sitting include the debtors, reduction of loan principal and tax payments.

5. Advance to and from directors/shareholders

How much money does the business owe you, or do you owe money back to the business? If the business owes you a substantial sum, it is good practice to consider each year if it is time to begin planning to draw this money down.

This could trigger a restructure of your finances if the business profitability is suitable and replace your advance account with a business loan. This will enable you to withdraw the money you are owed to build wealth outside the business or reduce personal debt.

If you owe money back to the business, keep this in check, reviewing it annually with a view to repaying it with priority.  Approach management of the advance account with full support from your Mazars adviser to plan for any tax consequences of these actions.

Good business operators take a keen interest in using annual financials as a means to understanding the financial well-being of their business.  There are no silly questions when it comes to clarifying elements within the financial statements and using the historical performance to set goals for the future.

At Activ8, we are focussed on supporting the development of efficient profitable businesses and can assist in identifying opportunities for improvement from your financials.  The preparation of monthly or even quarterly financial statements will provide more timely information, which will further allow for the identification of areas of improvement in your business.

Tax tips

8 Business Tax Tips

by Advice

The best way to save tax in business is to consider and apply strategies prior to 30 June each year. After year end, the options available to improve your tax position are severely restricted. Activ8 are business tax specialists. In this article we share some of our best tax tips.

Tip 1. Maximise Your Super Contributions

Superannuation is a fantastic vehicle for tax effective investments. We recommend that every year you maximise the amounts you put into super. The maximum you can claim each year changes and you need to take into account contributions made by your employer, including your own business, and personal contributions. Remember to speak to your financial planner about how super fits into your personal financial plan. Our advice is purely focused on the tax benefits alone.

Tip 2. Take Advantage of the Instant Asset Write Off

The temporary full expensing of assets purchased for business use has been extended to 30 June 2023. This means that businesses can get an immediate tax deduction for the full amount of the asset’s cost in the year it is purchased.

Therefore if you are planning some equipment purchases, get them completed before 30 June to maximise the deduction in this financial year.

Note – cars are capped to a maximum claim of $60,733 for the 2022 year.

Tip 3. Do a Stocktake at 30 June

Does your business have trading stock? Do a stocktake at 30 June. This not only helps to get accurate profit figures, but you are eligible for a tax deduction for obsolete or worthless items still on the shelf.

Tip 4. Write Off Your Bad Debts

Subject to how you report income on your BAS, you have likely paid tax and GST on income you have invoiced but not yet collected. If you have deemed the debt to be uncollectible, you are entitled to a tax deduction as well as recouping the GST paid to the ATO.

Tip 5. Pay Your Employees’ Super on Time

If you pay super late, you will miss out on the tax deduction. In addition the ATO will impose interest and penalties for late super. We recommend that super is paid each pay cycle so you’ll never be late and you don’t get a big lump sum at the end of the quarter.

Another tip for super at year-end is to pay any June quarter before 30 June to get the tax deduction in the current year. Note – allow 7-10 days processing time to ensure the superfund processes the payment before 30 June.

Tip 6. Keep a Log Book For Your Business Cars

A compliant log book is essential to maximise your motor vehicle claim. Whilst they can be cumbersome to keep a log book, they are only required for 12 weeks and it remains valid for 5 years.

Tip 7. Defer Income to Next Year

If it makes sense to do so, deferring income until after 30 June means you pay tax on it next year, not this year. You can do this by holding off invoicing until 1 July, where appropriate.

Tip 8. Prepay Expenses

Cashflow permitting, you can prepay expenses like interest and rent up to 12 months in advance to boost the tax benefit in this financial year. This does not apply to stock purchases, but basically any other business expense can be paid before 30 June to allow the tax deduction in this year. This is particularly good where you have had a good year and have a bigger than usual impending tax bill.

We hope you find these tips insightful. There are plenty of other tax strategies you can put in place to minimise the tax you pay. It’s never too late to start taking advantage of tax benefits.

If you need any guidance or advice in relation to these tips, contact Activ8 Accountants & Advisors and we can guide you through them. Call us on 07 3367 3366.

 

superannuation changes

Superannuation Changes from July 2022

by Advice

Several key superannuation contribution changes are set to take effect from 1 July 2022. These changes create opportunities for all SMSF members, young and old, to grow their retirement savings.

WHAT ARE THE CHANGES?

Originally announced in the 2021 Federal Budget, the following changes apply from 1 July 2022:

  • Individuals of age 67- 74, will no longer need to meet a work test to make voluntary, non-deductible, contributions
  • Individuals up to the age of 75, with a total super balance under $1.7 million, will have the opportunity to make large non-concessional contributions (possibly up to three years’ worth) in a single year
  • The minimum age to make downsizer contributions will reduce to 60, allowing more individuals to use the proceeds from the sale of their home, to fund their retirement
  • The Superannuation Guarantee (SG) rate will increase to 10.5% p.a. for all and the $450 minimum income threshold for SG contributions, will be removed.

Superannuation rules can be very complex.  Should you require further assistance, please feel free to contact our office for further information on (07) 3367 3366.

 

2022 budget

2022 Budget Brief

by Advice

The federal budgets for the past two years have had overwhelming stimulus measures designed to get businesses to spend their way out of the covid recession.  This year’s budget has relatively little for businesses with the main focus being on cost of living payments.

Coming out of the Omicron wave that hit us at the start of the year, we have been confronted with a prevalence of bad news.  From the war in Ukraine to natural disasters closer to home.  On top of this, we have inflation on the increase, concerns about the cost of living, and potentially higher interest rates.  It is no wonder that household confidence levels are at their lowest levels since September 2020 (Westpac Consumer Confidence Index).

The Budget seeks to ease some of these concerns and boost consumer confidence with several temporary measures.  There is also little doubt the forthcoming election played a big part in this Budget.

This brief summarises the key tax and superannuation announcements that we expect will most affect Activ8 individual and business clients.

INDIVIDUALS

The key announcements for individuals include:

  • Low and middle-income tax offset to be increased by $420
  • One-off $250 welfare payment to ease cost of living pressure
  • Work-related Covid-19 tests tax deductible from 1 July 2021
  • 50% temporary reduction on fuel excise
  • Paid parental leave scheme streamlined to 20 weeks
  • Medicare low-income threshold has increased
  • Increased support for affordable housing and home ownership with Home Guarantee Scheme places increased to 50,000
  • Income tax rates remain unchanged.

BUSINESSES

The key announcements for businesses include:

  • New tax incentives to help small businesses with turnover of less than $50 million/year, adopt digital technology and train and upskill employees.
    • Until June 2024 for every $100 a small business invests in external training courses for their employees they will get a $120 tax deduction (Skills and Training Boost).
    • Until June 2023 for every $100 a small business spends on new digitalising their business (for items such as cloud accounting, online security and eInvoicing software) they will get a $120 tax deduction up to $100,000/year (Technology Investment Boost).
  • Apprenticeship wage subsidy extended
  • Primary producers – Concessional tax treatment for carbon abatement and biodiversity stewardship income
  • Expanded access to unlisted company employee share schemes
  • PAYG income tax instalment system set for structural overhaul
  • Business registry fees to be streamlined
  • Indirect taxes – excise and customs duty reduction and concession
  • Various tax administration changes.

One long-standing policy that has been repeatedly extended is the instant asset depreciation program. This was not extended in the Budget and could end on 30 June 2023.

SUPERANNUATION

The only measure announced relating to superannuation was the extension of the temporary reduction in minimum drawdown rates.

Overall, this Budget is designed to provide relief from cost of living pressures and minimise ‘losers’ from any policy decisions. Attention will now turn to next week’s Reserve Bank Board meeting to understand how this Budget may impact the Bank’s thinking around interest rates. Then the focus will be firmly on the timing of the federal election.

Please note these are just announcements and cannot be regarded as law until legislated.  Whilst Labor has come out in support of many of the “proposed” announcements earlier in the week, some of the budget measures may not pass parliament if they win the election; the election must be announced within two weeks.

If you require further information on any of these announced measures, please do not hesitate to contact our office on (07) 3367 3366.

 

director ID

ID Requirement For Directors

by Advice

From November 2021, company directors will need to verify their identity as part of a new director identification number (director ID) requirement.

A director ID is a 15 digit unique identifier that a director will apply for once and keep forever. This will apply to all company directors including if you’re a director of a corporate trustee of a self-managed super fund.

The aim is to help prevent the use of false or fraudulent director identities, and to make it easier to trace director relationships across companies.  In particular, they are seeking to identify and eliminate involvement in actions such as illegal phoenix activity.

There are transitional arrangements for when you must apply by.  Individuals who are currently a director or will be acting as a director in the future must apply for a Director ID based on the transitional arrangements specified in the table below:

director ID

Directors must apply for their director ID themselves because they will need to verify their identity. No one can apply on their behalf.

The new Australian Business Registry Services (ABRS) is responsible for the implementation and administration of director ID. ASIC will be responsible for the enforcement of associated offences.

When fully established, the ABRS will bring together the Australian Business Register and over 30 ASIC registers. This work is being delivered under the government’s Modernising Business Registers program. Visit the ABRS website for more information.

Please note – if you are a company director and Activ8 is your ASIC Agent, we will be in touch with instructions on how to obtain your Director ID in due course.

stapled super

Stapled Super Changes

by Advice

Employers get ready – there’ll soon be an extra step involved when it comes to hiring new employees – if they don’t choose a super fund.

You may now need to request their ‘stapled super fund’ details from the ATO.  A stapled super fund is an existing super account of an employee that follows them as they change jobs. This change aims to stop your new employees paying extra account fees for unintended super accounts set up when they start a new job.

You may need to request stapled super fund details when:
•           your new employee starts on or after 1 November 2021
•           you need to make super guarantee payments for that employee, and
•           your employee is eligible to choose a super fund but doesn’t.

What you need to do from 1 November 2021

Step 1: Offer your eligible employees a choice of super fund

You need to give your eligible new employees a Super standard choice form and pay their super into the account they tell you on the form. Most employees are eligible to choose what fund their super goes into.

There is no change to this step of your super obligations.

Step 2: Request stapled super fund details

If your employee doesn’t choose a super fund, you may need to log into the ATO Online services and go to ‘Employee Super Accounts’ to request their stapled super fund details. If you don’t have online access then Activ8 can do this for you.

The ATO will provide your employee’s stapled super fund details after they have confirmed that you are their employer.

If the ATO provides a stapled super fund result for your employee, you must pay your employee’s super using the stapled super fund details they provide you.

In most cases, a request can be made after you’ve submitted a TFN declaration, or a Single Touch Payroll (STP) pay event linking the new employee to your business.  Responses will usually be received through the online portal in minutes.

Step 3: Pay super into a default fund

You can pay into a default fund, or another fund that meets the choice of fund obligations if:

  • your employee doesn’t choose a super fund, and
  • we have advised you that they don’t have a stapled super fund.

Remember, an employer cannot provide recommendations or advice about super to its employees, unless the business is licensed by the Australian Securities and Investments Commission (ASIC) to provide financial advice. Penalties may apply if your business fails to meet the “choice of super fund” obligations.

Full details can be found here on the ATO website.

campaign-creators-pypeCEaJeZY-unsplash

Taxation and Superannuation Updates for New Financial Year

by Advice

As the new financial year commences, we’d like to provide some timely reminders, key dates and information ahead of finalising your tax affairs for 2020/21, and some things you need to be aware of over the next 12 months.

Key Dates for July

14 July – Single Touch Payroll finalised

21 July – Monthly BAS return for June due.

28 July – Make quarter 4 super guarantee contributions to funds by this date (if not paid earlier)

 

Three End Of Financial Year Payroll Tasks

1. Single Touch Payroll Finalisation

Due date is 14th July 2021

2. All Employers (including those with closely held employees) need to be using Single Touch Payroll (STP) Compliant software from 1 July 2021

​​For example if you operate your business through a company or trust structure which employs you, you will need to adopt STP compliant software into your business.  Most accounting software providers have a solution available, speak to your bookkeeper or accountant if you aren’t sure.

3. Reminder that the Superannuation Guarantee (SG) Rate increases from 9.5% to 10% from 1 July.  Look out for any communications from your payroll software provider

Super changes for 2021/22

 

  • SGC Rate: As mentioned above, the SGC rate increases to 10% for all wages paid from 1 July.
  • The concessional contributions cap has now increased to $27,500, up from $25,000.
  • The non-concessional contributions cap is now $110,000, up from $100,000.

 

Claiming Work-Related Deductions

When you do your tax do you just claim “what you claimed last year”?

Technically that is not allowed. You need to be able to substantiate your deductions and circumstances may change so you need to be considering that.

For example, if you are working from home more, then your travel and laundry expenses will be substantially different.

The ATO is data matching everything this year and checking if people are claiming the same as last year.

As the pandemic forced swathes of the workforce to work from home, work-related expenses are expected to spike for the 2021 income year. However, the ATO also expects some expenses, like travel, will decrease compared to prior years.  In general, the ATO expects to see a downward trend in expense claims related to clothing & laundry, self-education, car and travel.