News/Blog

Garnishee orders

The Australian Taxation Office appears to have become more proactive in recent months as far as debt collection is concerned, particularly in the case of recalcitrant taxpayers with significant levels of debt.

The usual garnishee orders employed by the ATO direct banks and other financial institutions to withdraw and remit from client bank accounts the full amount of the debt or 30%  of the available monies held or debt owing, whichever is the LESSER amount.  Further, the orders were effective at the time of service, and did not extend beyond!

We have now encountered  broader garnishee orders which require the taxpayer’s financial institution to also deduct and remit the lesser amount up to 30% of the debt but effective for a three month period i.e. any amounts received/held within that period were covered by the order.

Further, this variation of  garnishee orders extends beyond the three month period in that, to quote “Deductions are to be made until the end of the three month period OR until any money not yet due becomes available, WHICHEVER IS LATER”.

Clearly, the extended garnishee orders will impact on cash flow and at that stage after service of the garnishee order, it is too late to apply a remedy other than payment!

Should you be in these unfortunate circumstances it is important you maintain contact with the ATO and keep it informed, either through us as tax agent, or direct.

How to Improve Debt Collection Results

Want to know how to improve debt collection results? If your business carries debtors you will no doubt have experienced a slowing in your debt collection rate. You may also be sick and tired of the continual follow up of debtors, or the need to issue and reissue statements and invoices, particularly when relatively small amounts are concerned. It’s time to review your debt collection processes!

These days technology can be used to great advantage! Many tradies and other service people carry portable hand held devices which allow on the spot payments by credit card or EFTPOS to be made.

Not only is there instant payment but the invoice/receipt can be sent to the customers email address immediately. So before you’ve even left the client’s premises, the invoice has been issued and payment made!  It is that simple and avoids the need to carry debtors not to mention all the extra paperwork. Beats debt collection every time!

Maybe your business could benefit from this kind of technology to improve your debt collection results and therefore your bottom line?

Contact us today if we can be of assistance.

$1.6 million superannuation cap

The government recently introduced a $1.6 million superannuation transfer cap. For those of you fortunate to have a member balance of $1.6M or more in your superannuation fund account, you will no doubt be familiar with the changes introduced:

        • If you had a pension account balance of more than $1.6M on 30 June 2017, you are required to transfer the balance over this cap amount back into accumulation
        • Any balance transferred into accumulation may remain in the fund but is subject to 15% income tax.
        • If pension commenced at $1.6M or less but growth in assets subsequently results in the $1.6M cap being exceeded, the excess simply remains in the pension account.
        • If total superannuation balances across all funds, whether in accumulation and/or pension, exceed $1.6M you are not entitled to make any non-concessional contributions or receive any government co-contributions.

Contact us today if you need help with the $1.6 million superannuation cap or your superannuation generally, especially if you have your own SMSF.

GIG Economy Impacts Self-employed Super

Self-employment among Generation Y workers (born between the early 1980s and late 1990s, also known as “millennials”) is reportedly on the rise and predicted to increase dramatically, driven by the proliferation of tech-based platforms. This GIG economy impacts self-employed super and businesses’ need to be more agile! This trend, coupled with the reluctance of most individuals to make voluntary superannuation contributions, means that the outlook is bleak for millennials to achieve comfortable standards of living on retirement several decades hence.

The superannuation guarantee or mandatory superannuation is designed for employees and is ill-equipped to facilitate superannuation for the self-employed; an increasing proportion no longer work in traditional style jobs, hence are outside the superannuation net, and vulnerable ultimately to low retirement provisions!

ATO data from 2014/2015 suggests that around 75% of the self-employed millennials do not contribute to superannuation and therefore miss out on the consistency of regular contributions and the benefit from compounding interest! Yet, self-employed individuals up to 75 years of age, making voluntary contributions to superannuation may now claim full tax deductions for contributions of up to $25,000.00 per annum!

The perceived threat to self-employed workers’ retirement wellbeing, from changing work practices and inadequate superannuation contributions is generating calls for expansion of the compulsory superannuation charge to the self-employed!

Preferably, the self-employed need to be educated to take advantage of the full tax deduction for voluntary contributions and also benefit from the consistency of regular contributions and compounding interest over the long term – their retirement financial wellbeing depends on it!

Invitation to New Clients

Most accountants have far more work on hand than can be professionally attended to in a timely fashion and are constantly under pressure to provide clients with the appropriate level of service.

We, however, are now in the unique position of having excess capacity of trained professional staff.

Several years ago, we introduced Banklink software for bookkeeping and changed software programmes for our accounting, taxation and superannuation fund clients.  We also engaged additional professional staff for the implementation of the change.  Having successfully bedded down the new software and coped with the conversion work involved, as well as continuing to provide service to our existing clients, we are now able to offer our services, with confidence, as an invitation to new clients.

We assure new clients of prompt and professional service. CLICK HERE to contact us.