May, 2015

Business Management – getting the work/life balance right

Are you doing too much?

As a small business owner it’s hard to juggle your work and personal life.  It’s important to run your business effectively and still have a life outside the office.  You need a good balance between work and play for your health and well-being.  Small business owners often fall into the trap of working too hard, ending up exhausted from the constant work demands associated with their business management.

Why you need balance

Working too much without taking time out for yourself and your family can quickly become counterproductive.  You’ll be tired, stressed and irritable, leaving you unable to perform optimally and your business management will suffer.  As a result, you’ll be more likely to make mistakes and snap at people who are important to you and your business.

Some dangers of overworking include:

  • Missing opportunities because you’re too busy.
  • Being short-tempered with your staff, affecting their attitude and performance.
  • Treating your family poorly, resulting in an uncomfortable home life.
  • Working to the point of burn out or illness.
  • Losing the passion that prompted you to start your business in the first place.

Avoid burn out

There are a number of things you can do to scale down your workload and regain a sense of balance; some of the following will help.

Start delegating

Delegating will take some of the pressure off you, free up time for more urgent and important tasks and allow you some leisure time to relax.

Create good systems

Develop a clear operations manual for each process in your business.  When set up, this will let you and key staff take a break; it will also streamline training when someone new joins the business.

Stretch and walk

Take a few minutes every so often to get up from your desk to stretch and go for a walk.  It’s good for your body and will help you stay focused.

Talk to your family

Ask them for suggestions and input – they’ll probably see things that you can’t.

Network with other business owners

Chat to other business owners who seem to be working normal hours.  You’ll stop feeling so isolated and you might get some valuable advice.

Take mini breaks

Schedule mini breaks in your diary such as taking a day off once a month, a week off every 12 weeks, or perhaps take every second Friday off.

Re-evaluate your client base

Do you have customers who take up far too much of your time for very little gain?  Find a polite way to stop doing business with them or pass them on to staff members to deal with.

Stay motivated

Staying passionate and motivated to do your best in your business is important.  If you find you just don’t have the energy you once had, your staff and business will suffer.  Take action before you start to enter a negative downward spiral.

You could try the following:

  • Set exciting and challenging new goals.
  • Share your goals with your staff so everyone understands what you want to achieve.
  • Set measurable ‘stepping stones’ to the main goals and celebrate each achievement.
  • Refresh your daily routine.  Allocate time in your diary for key daily activities such as checking emails, meetings, and visiting clients.

By staying motivated and avoiding burnout you’ll have the foundations in place to enjoy running your business again, while also retaining a fulfilling life outside of work.

If you need help with Business Management in Perth, call us today on 9204 3733 or  Contact Us – we will be happy to help.  We can offer our Management Consulting service which can assist you.

Federal Budget Changes 2015

Some key points that could affect your business

Immediate changes:

  •  Small Business Entities (SBE) (annual turnover < $2M) can immediately deduct assets (plant and equipment, motor vehicles) acquired for use in the business costing less than $20,000, as opposed to $1,000 previously.
  •  Assets > $20,000 can still be pooled and depreciated at 15% in the first year then 30% the second year onwards.
  •  Pool can be fully written off once balance falls below $20,000; includes existing pools.
  •  These changes only apply from 12 May 2015 (7.30pm AEST) to 30 June 2017, after which the previous $1,000 threshold reverts.

Changes effective 1 July 2015:

  •  28.5% tax rate for SBE companies (30% rate for non SBE companies remains).
  • Maximum franking credit rate still 30% for all companies.
  • Taxpayers with business income from an unincorporated business - e.g. individuals, partnerships, trusts (must be an SBE) eligible for small business tax discount, being 5% of income tax payable on the business income only.  This discount is capped at $1,000, delivered as a tax offset.
  • Car deductions to change as follows:
    • Cents per km flat rate of 66 c/km only regardless of engine size and type.
    • 12% of original value and 1/3 of actual expenses methods to claim no longer available.
    • Individuals wishing to claim for > 5,000 kms will be required to claim under the log book method.
  • Zone Tax Offsets limited to individuals actually residing in zones > 183 days, FIFO and DIDO workers being excluded from zone offsets.
  • Professional expenses (legal fees, accounting fees) for setup of businesses immediately deductible as opposed to being amortised over 5 years.

Changes effective 1 July 2016:

  • SBEs can change structure without attracting a CGT liability at that point (however no mention of stamp duty costs, which will apply).
  • Primary producers can immediately deduct capital expenditure on fencing and water facilities such as dams and water towers; as for fodder storage assets such as silos, they can be depreciated over 3 years.

FBT:

  • From 1 April 2016, the fringe benefits tax exemption which applies in respect of the SBE employer providing an employee with one portable electronic device primarily for work related use only, has been expanded to include multiple portable electronic devices.
  •  From 1 April 2016, a separate single grossed up cap of $5,000 for salary sacrificed meal entertainment and entertainment facility leasing expenses will be introduced and apply to employees in “not for profits”; where exceeded may be counted in calculating whether an employee exceeds the existing cap of benefits generally in “not for profits”.
  • From 1 April 2016, all meal entertainment benefits will be reportable.

Other changes:

  • From 1 July 2017, GST will be extended to cross border supplies of digital products and services imported by consumers.
  • Individuals with a HELP debt going overseas for more than 6 months will be required to register with the ATO from 1 January 2016, and those residing overseas will be required to repay the debt.
  • From 1 July 2016, individuals will not be able to receive government assistance for Parental Leave Pay if their employer provides parental leave entitlements.
  • Medicare Levy low income thresholds for 2014/2015 as follows:
    • Individuals $20,896 (up from $20,542)
    • Families $35,261 (up from $34,367)
  • A new single Child Care Subsidy (CCS) will be introduced on 1 July 2017. Families meeting the “activity test” (workplace participation) with annual incomes up to $60,000 will be eligible for a subsidy of 85% of fees and this will taper to 50% for families with incomes of $165,000.  For families with annual incomes of $180,000+ the CCS will be capped at $10,000 per child per year.

For a full list of available documents please CLICK HERE.

If you need help or advice in your business and are looking for an accounting firm that listens, then Contact Us.  We look forward to hearing from you.

Employers and Superstream – what does it mean?

Employers with fewer than twenty (20) employees need to be “superstream” compliant by 1 July 2015!

The advent of “superstream” will enable employers to make a single payment for superannuation to a nominated superannuation ‘clearing house’, which itself will distribute to the various funds used by employees.  As far as the employer is concerned, after the upfront registration of employees’ preferred fund detail is incorporated in the process, the employer simply inserts the relevant amounts for each employee then makes only one online payment.

The use of the clearing house should facilitate compliance with legislated superannuation obligations and do so with minimum time, paperwork and cost!

To register with a clearing house the employer will need to provide it with the following detail:

ABN

Email address

Employee detail

-        tax file number

-        employment start date

-        fund’s bank account information

-        electronic service delivery address for receipt of contribution data messages

Essentially, the process requires employers to remit contributions electronically in a standard format with linked data and payments!  Employees with self-managed superannuation funds need to provide their employer with the fund’s ABN and bank account details together with an ‘electronic service address’ or ‘alias’ to enable the fund to receive confirmation of amounts and reference details.

The ‘electronic service address’ is different to a regular email address and may be obtained from various ‘message providers’ – a list of registered SMSF message providers is available online at www.ato.gov.au/superstream.

The Australian Taxation Office provides a free online service through the Small Business Superannuation Clearing House and registration can be undertaken online through www.ato.gov.au.

The MYOB AccountRight version 2015.2 software ‘PaySuper’ currently being released complies with superstream requirements.

Contact Us for any advice or assistance you may require in the introduction of these new procedures.

Superannuation Contributions 2014 2015

Concessional / Deductible Contributions by Employers for Employees

Maximum contributions for each employee up to 75 years of age, including “salary sacrifice” (needs to be proactive) and superannuation guarantee payments without incurring excess concessional contributions tax:  $30,000*

Condition: Over 65 years must satisfy the work test, over 70 years work test applies and only contributions received before the 28th day after the end of the month in which member turns 75 are deductible.

Concessional / Deductible Personal Contributions by Individual Taxpayers, including Investors

Maximum contribution by each individual up to 75 years of age without incurring excess concessional contributions tax:  $30,000*

Conditions:

  • Less than 10% of assessable income including reportable employer superannuation contributions and reportable fringe benefit amounts are attributable to employment.
  • The individual must notify the fund of intention to claim a deduction (form NAT 71121) and the fund must acknowledge the notice.
  • Contribution cannot create or increase a loss (deduction cannot exceed taxable income).
  • Over 65 years must satisfy work test.
  • Only contributions received before the 28th day after the end of the month in which member turns 75 are deductible.

*Transitional Concessional / Deductible Employer and Personal Contributions

The concessional limit in 2014/2015 is $35,000, for persons 49 years or over on 30/06/2014.

 High Income Earner Contributions (Division 293)

From 1 July 2012, an additional 15% “contributions tax” is applied to those with adjusted taxable incomes (broad definition) exceeding $300,000.

Non-Concessional / Non-Deductible Contributions by Individual Taxpayers

Maximum contribution by each individual up to 75 years of age without incurring excess non-concessional contributions tax:  $180,000

Note:   Over 65 years the work test will need to be satisfied.

Note:   An individual taxpayer who is under 65 years of age in an income year can bring forward two years’ entitlements and make one contribution of $540,000 without exceeding the cap ─ i.e. no further contributions over the three years.

Note:   The annual maximum amount will be indexed and remain at six times the concessional amount.

Excess Concessional / Deductible and Non-Concessional / Non-Deductible Contributions

An excess contributions tax of 31.5% and 46.5% was previously payable in respect of concessional and non-concessional contributions which exceeded the maximum amount allowed; however, from 1 July 2013 excess concessional (only) contributions will be taxed at the member’s marginal tax rate and an interest charge applied.  The excess may be withdrawn from the fund.

The punitive taxes remain for excess non-concessional contributions.  The tax rate for excess non-concessional contributions increased from 1 July 2014 to 47%.

Government Co-Contributions

The co-contribution made by the Government of up to $500 is available to employees and the self-employed less than 71 years of age at the end of the income year who make non-concessional/undeducted personal superannuation contributions of up to $1,000 and whose total income (assessable, reportable employer superannuation contributions and reportable fringe benefit amounts) is less than $49,488; the lower threshold of $34,488 allows for the full co-contribution 50c/$1.

Conditions:

  • 10% or more of the person’s total income is attributable to employment or carrying on of a business.
  • Salary sacrifice superannuation contributions are included in assessable income from 1 July 2009.

Government Contributions for Low Income Earners

From 1 July 2012, concessional contributions made by or on behalf of individuals with adjusted taxable incomes of up to $37,000 will be matched by the Government up to an annual maximum amount payable of $500.

Contributions for Spouse – Tax Offset

A taxpayer making a personal non-concessional/non-deductible contribution for his/her non working or low income spouse is eligible for a tax offset of up to $540 where a contribution of up to $3,000 is made for a spouse whose assessable income, reportable fringe benefit and reportable superannuation contribution amounts do not exceed $10,800.  The offset is phased out at $13,800.

Condition:

No work test is applied if the spouse is under age 65, but between 65 and 70 years the spouse must satisfy the work test.  No offset over 70 years of age.

Fund Acceptance of Contributions – Age and Work Test

A regulated superannuation fund may accept contributions as follows:

  • If the member is under age 65
    - all contributions made.
  • If the member is 65 or more but under 70 years
    - mandated employer contributions
    - employer or member contributions provided the work test is satisfied.
  • If the member is 70 or more but under 75 years
    - mandated employer contributions
    - employer or member contributions up to the 28th of the month in which the member turns 75 and the member satisfies the work test.
  • If the member is 75 years or more
    - mandated employer contributions.

A person satisfies the work test if gainfully employed at least 40 hours in a period of not more than 30 consecutive days in that financial year.

Superannuation Guarantee Contribution Rate

From 1 July 2014, the contribution rate has increased from 9.25% to 9.5%, and will remain so until 1 July 2021 when it will increase by 0.5% each year until the rate is 12%.

Reportable Employer Super Contributions (RESC)

From 1 July 2014, the payment of salary sacrifice superannuation and other additional* superannuation over and above the compulsory superannuation guarantee charge of 9.5%, paid by employers for employees, will need to be recorded on employees’ year end PAYG summaries.

*where employee influences the rate or amount of employer contributions.

An employee is considered to have the capacity to influence if he or she can directly negotiate the rate or amount of employer contributions.

As a guideline, the capacity to influence may be shown by:

  1. The employer’s relationship with the employee. For example, the employee is the spouse of the employer.
  2. The employee’s involvement in negotiations/preparation concerning the terms of any industrial agreement governing super contributions.
  3. The amount contributed for the employee relative to the compulsory contributions the employer is required to make.
  4. The employer’s super contribution arrangements for other employees.
  5. Any non-arm’s length dealings.

Contact Us for any advice or assistance you may require in the introduction of these new procedures.

Tax Office Scams

Have you received distressing phone calls regarding your taxation affairs?

Several of our clients have recently been subjected to aggressive, even threatening, telephone scam attempts by persons purporting to represent the Australian Taxation Office.  In each case, the conduct of the scammer was quite distressing to our clients with accusations of fraud and immediate legal sanctions which could only be overcome by a significant payment!  There had been no previous approach or correspondence, and these clients were up to date with lodgements, had no outstanding tax returns and had no amounts owing on their income tax and/or integrated client accounts with the ATO.  We were able to assure our clients that the ATO most certainly did not conduct business in that manner and if there was any further contact, the caller should simply be referred to us, the tax agent.

In our role as tax agent we are the first point of call for the ATO in any circumstances relevant to our clients’ taxation affairs.   Further, the ATO has a disciplined and lengthy process which it follows, so there will never be a direct, initial call to any taxpayer on our tax agent’s listing.  Also, as your tax agent, we have online access to the ATO income tax and integrated client accounts in your name, hence any allegations of monies owing can be instantly refuted.

In the event that you receive such a call, refer the caller to us on 08 9204 3733

 www.ato.gov.au

www.scamwatch.gov.au