Posted in: money
If shopping centres aren’t even putting up their Christmas decorations yet, then the holiday period may seem to be a concern of the distant future. However, the season has a tendency to creep up on people and can often come with financial burdens. Planning your holiday expenses early can cut out one of the biggest stresses of the season and allow you to focus on enjoying the festivities and spending time with your loved ones.
If you’re worried you’re going to be tempted to dip into your savings, it can be a good idea to set up a Christmas saver account. This is typically done at the start of the year and is offered by some banks. You can make deposits throughout the year, but can only withdraw from the account when the festive season arrives, usually around 1 December. While interest is offered on these account savings, it should be noted that you can generally find better interest rates with other savings accounts such as a bonus saver or online savings account.
Alternatively, you can manually set aside an amount weekly or fortnightly in the months leading up to the holiday period. Setting up an excel sheet can help keep track of this, and can also be used to categorise different budgets for various needs (gifts, travel, food etc.). This can help you plan ahead and estimate how much you will need to cover the cost of the holidays, saving you from the bite of unexpected expenses and keeping you in control of your finances.
If you’ve left things a little late, it can help to cut out a few luxuries to save some extra money. Whether it’s having a cheap night in, or skipping a coffee run every now and then, a little can go a long way.
Posted in: business
Businesses looking to improve their profitability may need to consider cutting under-performing products and services that are unnecessarily draining resources. It might be time to discontinue if a product fits the following scenarios:
- Low profitability.
- Stagnant or declining sales volume or market share.
- Maintaining your market share is too costly.
- Risk of technological elimination.
- Poor fit with business’s strengths or declared mission.
When deciding whether to discontinue a product, there are a few ways you can examine your services and make the decision that is best for your business.
This rule states that businesses should focus their attention on the 20% of the products that generate 80% of revenue. Using this principle, companies should compile a shortlist of the products and services that bring in the most profit and scrutinise the products that fall short of this mark.
Try going a week to a month (no longer) removing all promotion and marketing for a product. This can help the business to visualise what it would look like without that service and see if there are any clients who miss it.
Cutting the costs associated with the business or increasing the price of the product without increasing production or operation costs allows the business to continue generating revenue on a failing service. Once the product ceases to provide a positive cash-flow, it can then be discontinued.
Posted in: super
Integrity measures included in Treasury Laws Amendment (2018 Superannuation Measures No. 1) Bill 2019 have now been enacted with an effective date of 1 July 2018. There have been amendments made to non-arm’s length income (NALI) provisions and Limited recourse borrowing arrangement (LRBA) amounts will now be included in total superannuation balance (TSB) calculations.
NALI provision amendments:
From the 2018-19 income year onwards, the ordinary or legal income of a super fund will be NALI and taxed at the top marginal rate. This has been introduced to ensure SMSFs and other complying superannuation entities cannot evade the NALI rules by entering into schemes involving non-arm’s length expenditure, including where expenses are not incurred. Any capital gains from a subsequent disposal of an asset may also be treated as NALI.
LRBA amounts included in TSB calculation:
Where an SMSF has an LBRA that was made under a contract that has been entered into on or after 1 July 2018, the calculation of an individual’s TSB will now include any outstanding LRBA amount attributable to each member’s interest. This will apply if:
- The LRBA is with an associate of the SMS. In this case, all members of the fund whose interest is supported by the asset purchased with the LRBA must include their portion of the outstanding balance of the LRBA amount in their TSB calculation. Or;
- A member of the fund met a condition of release with a nil cashing restriction. In this case, the member must include the outstanding LRBA amount attributable to their super interest in their TSB calculation.
If you’ve already lodged your 2019 SMSF annual return and are affected by these new measures, you may need to amend your return.
Posted in: tax
The margin scheme is a way of working out the GST you must pay when you sell property as part of your business. The amount of GST normally paid on a property sale is equal to one-eleventh of the total sale price. If the margin scheme is used, the GST is calculated on the difference between the sale price and your purchase price of the property or the property’s value. You can only apply the margin scheme if the sale of the property is taxable.
When purchasing a new residential property with the margin scheme being apart of the property transaction, withhold 7% of the contract price, including GST and the market value of non-monetary consideration. This amount will then be paid to the ATO at settlement. The margin scheme is not an automatic concession and the sale must be eligible for it to be applied.
The margin scheme can be applied to subsequent property sales depending on the original date of purchase and how GST was applied at that time. Property purchases prior to 1 July 2000 are eligible, as the property had not been subject to GST previously. For property purchases after 1 July 2000, the margin scheme may only apply to a subsequent sale when:
- The original seller of the property wasn’t registered for GST.
- The property was purchased as an existing residential premises.
- The original seller sold the property as a GST-free supply and was eligible to use the margin scheme, or;
- The seller sold the property and applied the margin scheme at that time.
There are limitations to the margin scheme in some situations such as; inheritances, the supplier being a member of a GST group or the property is GST-free (going concern or farmland). In these situations, if the supplier wasn’t eligible to use the margin scheme, the scheme cannot be used when selling the property.
Posted in: business
Each employment type has different entitlements and obligations that must be met by both the employer and employee. Before hiring a new worker, take the time to look at what each employment type would mean for you and your business.
Full-time and Part-time employees:
Though both permanent employees, a full-time employee will work an average of 38 hours a week whether as a part-time employee would work on average less than 38 hours a week, usually at regular times. The specific working hours in a week are agreed upon in the employee contract. Under the National Employment Standards (NES), there are 10 minimum entitlements that need to be provided to employees;
- Maximum weekly hours.
- Requests for flexible working arrangements.
- Parental leave and related entitlements.
- Annual leave, 4 weeks of annual leave are given every year based on ordinary hours of work. Leave that is left over at the end of each year carries over to the next year.
- Personal/carer’s leave, compassionate leave and unpaid family and domestic violence leave. Employees receive 10 days of this leave every year.
- Community service leave.
- Long service leave.
- Public holidays.
- Notice of termination and redundancy pay.
- Fair Work Information Statement.
A casual employee does not have a definitive commitment from an employer about how long they will be employed for or the days/hours they will work. A casual employee doesn’t get paid sick or annual leave, can end employment without notice, has a higher pay rate than equivalent full-time or part-time employees due to ‘casual loading’, two days unpaid carer’s leave and two days unpaid compassionate leave per occasion, five days unpaid family and domestic violence leave in a 12-month period and unpaid community service leave.
Posted in: super
The Treasury Laws Amendment (2018 Superannuation Measures No.1) Bill 2019 has passed both Houses of Parliament and reached royal assent on 2 October 2019. First announced in the 2018-19 Budget, the Bill allows eligible individuals, whose income exceeds $263,157 and have multiple employers, to nominate wages from certain employers to not be subject to the superannuation guarantee (SG).
Individuals with more than one employer, who expect that their compulsory super contributions will exceed the annual concessional contributions cap for a financial year, will be able to apply for an exemption certificate to release some of their employers from their SG obligations. Individuals will still need to receive SG payments from at least one employer.
From 16 October 2019, eligible individuals will be able to download an application form from the ATO. The application will need to be submitted at least 60 days before the start of the quarter in which you wish to receive the exemption. The lodgment period for the quarter commencing 1 January 2020 has been extended. Applications lodged on or before 18 November 2019 will be accepted.
The application form provides the Commissioner of Taxation with the information required to make an assessment. This includes which employers the exemption certificate will apply to and the quarter in the financial year for which the exemption is sought. Exemption certificates may be issued for multiple quarters within a financial year but cannot cover more than one financial year. Employees will need to talk to their employers before making an application as this arrangement and any changes to payments will need to be negotiated.
Posted in: tax
A business industry code (BIC) is a five-digit code you include on relevant tax returns and schedules that describes your main business activity. BICs come from the Australian and New Zealand Standard Industrial Classification (ANZSIC) codes and are added to by the Australian Tax Office (ATO) for tax return reporting purposes.
Employers must use the correct business industry code on their tax returns to ensure their return is lodged in the right category. Using the correct code for your business helps to reduce the risk of being incorrectly targeted for compliance activities, avoids processing delays and ensures employers receive services and information relevant to their business type.
The business industry code describes the main activity of the business. This can change over time if your business diversifies its products and services. The code is broken down into sections:
- ANZSIC system is first divided into 19 divisions, described by one letter (A to S).
- Divisions are broken down into subdivisions numbered with two digits. There are a total of 96 subdivisions.
- Subdivisions are broken down into groups. Each group is numbered with three digits, with the first two digits derived from the subdivision to which it belongs.
- Groups are broken down into classes. Each class is numbered with four digits, the first three digits derived from the group to which it belongs.
- The ATO adds a fifth digit to this system to provide further specifics.
Posted in: money
In an increasingly technologically dependent age, it can be useful to keep up with new forms of currencies in the digital space. Cryptocurrency is internet-based, digital money that is not controlled by any central authority. Currently, the most prominent cryptocurrency is Bitcoin, which has a market capitalization of over 155 billion U.S. dollars.
How do you buy cryptocurrencies?
Ensure a cryptocurrency is legitimate and trustworthy by researching before you buy. Most of the time, it is a good idea to choose a popular one that is already widely used and trusted by other crypto users, such as Bitcoin. There are a number of popular websites and apps that simplify the process of buying cryptocurrencies. Once you have purchased cryptocurrencies, you can store them in a digital crypto wallet for security and easy accessibility.
- Fast: Transaction speeds are usually fast, making things like paying bills and shopping online easier.
- Low Fees: There are generally minimal to no transaction fees in crypto exchanges, so using cryptocurrencies can be a good way to avoid online banking fees and charges.
- Anonymity: Making transactions online with traditional banking methods generally requires information such as your name, credit card number, phone number and address. However, cryptocurrencies allow you to be anonymous in these transactions by only showing your crypto ID or a nickname of your choosing.
- Security risks: While it is harder and more technical to steal digital money as opposed to physical cash, cryptocurrencies are still susceptible to skilled hackers and scams. Because cryptocurrencies are decentralised with no authoritative control, any loss of cryptocurrency due to theft or scams cannot be recovered.
- Value instability: Cryptocurrencies tend to fluctuate in price and value, which can reduce their reliability as you can never be certain how much they will be worth the next day.
- Lack of merchants: Many companies have not taken the step to adopt cryptocurrencies as a form of payment, so it can lack usefulness in everyday transactions.
Posted in: business
Promoting your business can seem tricky to navigate and expensive, especially when there are budget and staff restrictions to think about. However, there are a number of ways to promote your business easily and cost-effectively.
Posting well-written and relevant blog content on your website can help boost website traffic while capturing the trust and engagement of potential customers. Regular content that aligns with the interests and needs of your audience will generally work best in gaining profile views.
While social media may seem like an obvious channel to keep running on as a background form of promotion, it can be worthwhile to invest more time and resources to get the most out of your business’s social media presence. Keeping the aesthetics and content of your social media pages regularly updated and relevant can be a great way to establish a brand image and gain attention from your target audience.
Growing your mailing list can be a great way to establish customer loyalty and to encourage customers to remember your business and revisit your website. Websites like Mailchimp and Benchmark are free email marketing services that are easy to use with predesigned templates.
Posted in: super
From 1 October 2019, if an SMSF is more than two weeks overdue on any annual return lodgment due date and hasn’t requested a lodgment deferral, the ATO will change their status on Super Fund Lookup (SFLU) to ‘Regulation details removed’. This status will remain until any overdue lodgments have been brought up to date.
On the first business day of each month, the new process will update SFLU depending on the situation:
- SMSF trustees who haven’t lodged their SMSF annual return on time and are more than two weeks overdue, the ATO will change their SMSF regulation status to ‘Regulation details removed’ on SFLU.
- All overdue lodgments were received for an SMSF during the previous month, the ATO will update SFLU to reinstate the SMSF’s ‘complying’ status.
By having a status of ‘Regulation details removed’, APRA funds won’t roll over any member benefits to the SMSF and employers won’t make any super guarantee (SG) contribution payments for members of the SMSF. While the fund’s status is ‘Regulation details removed’, members should alert their employer to make any SG payments into the employer’s default super fund or a fund of the member’s choice.
SMSF trustees who don’t think they can meet lodgment requirements should call, before the due date, to seek a deferral to lodge.