Help Through Troubled Times

What a year it has been so far.  We thought that it was important for us to remind you that we care about our client’s psychological well-being as well as financial well-being.  For those who are managing the stress of working from home, reduced income and an uncertain economic future, we understand completely how difficult it is.

Thankfully a wide range of assistance is available to help us get through these unusual circumstances.

  1. Majority of banks have put together Coronavirus support for businesses, including refund of merchant fees, moratorium on loan repayments and offering unsecured Business loans for working capital purposes.
  2. Housing Victoria has provided ‘’Coronavirus Rent Relief Grant’’ for up to $3,000 for people experiencing rental hardship
  3. Department of Health and Human Services also provides ‘’Utility Relief Grant’’ for eligible accountholders for up to $650 in a two-year period
  4. Beyond Blue which provides mental well-being services has a dedicated line to provide support for people struggling to cope during the pandemic
  5. National Debt Helpline also provide free services for people who need any form of debt management assistance
  6. JobKeeper #2 is about to be rolled out
  7. ATO Cash Flow Boost still has payments until end September
  8. Another round of Support Grants to be issued from the Victorian Government
  9. The ATO are being very understanding about outstanding debts and lodgements (at the moment)

When we have Treasury clarification on the new round of assistance that is being rolled out by end of September, we will keep all clients updated further, just as we have since the beginning of the pandemic.

Until then, please all stay well and let us know if we can help you in any way.

 

Fenting Lin – Accountant

CPA

How To Avoid A Tax Debt

Sometimes when you were expecting a nice little tax refund into your bank account and you end up with a tax debit, it can be a little hard to swallow and leave you wondering why!?  If you have been in this position, we have put together a few points on how to avoid this same situation happening next year and how you can prepare in advance!

If your refund is less than you expect, these are the most common reasons which you may not have taken into consideration:

  • The refund amount has been offset against another debt, either another tax debt (previous income tax bill, or activity statement debt), or another government agency debt (Centrelink, or Child Support Agency)
  • Compulsory payments, such as: Higher Education Loan Program (HELP); Trade Support Loan (TSL); VET Student Loan (VSL); or Student Financial Supplement Scheme (SFSS) repayments
  • You need to pay Medicare levy surcharge because you stopped paying private patient hospital cover and your income is above a certain threshold
  • New or amended income tests
  • Excess concessional contributions to a super fund
  • Your employer incorrectly reporting reportable employer superannuation contributions on your payment summary
  • Tax was not withheld from a taxable payment (such as Jobseeker payments) and your total income for the year was more than the tax-free threshold
  • You incorrectly claimed the tax-free threshold.
  • You are an employee and enough tax has not been withheld from the payments made to you by your employer
  • You are a sole trader and have not paid enough tax to the ATO throughout the year
  • Receive other income where no tax was withheld such as Centrelink payments
  • Working for more than 1 employer and have compulsory payments, such as: Higher Education Loan Program (HELP); Trade Support Loan (TSL); VET Student Loan (VSL); or Student Financial Supplement Scheme (SFSS) repayments

TIPS FOR AVOIDING TAX DEBT AT THE END OF THE YEAR

  • Claim tax free threshold only from 1 employer in a financial year
  • If you have HECS debt and you are working for 2 employers, you need to pay extra tax based on percentage of your total income from both employers. Check your HECS repayment rate on https://www.ato.gov.au/Rates/HELP,-TSL-and-SFSS-repayment-thresholds-and-rates/
  • Set up PAYG instalment payments with ATO if you are sole trader
  • Ask Centrelink to withhold tax on any benefits received from Centrelink
  • Seek financial advice if you are planning to contribute a big amount to your super fund.
  • If you are earning more than $90,000 or earning more than $180,000 as a family, seek advice to get private health insurance cover to avoid Medicare levy surcharge
  • Know in advance if you have any debts with ATO or Centrelink or another government agency.

 

Kim Sandhu – Senior Accountant

CPA – B.Com M.Acc

2020 Tax Returns + 3 Ways To Make The Most Out Of It!

Did you know that the average Australian received a tax refund of $2,381?  That’s enough to splurge on some new furniture or an LED Smart TV, right?  Well, before you head down to your local shopping centre with your tax refund in hand, take a look at three ways we’ve come up with to spend your tax return.  We’re confident that the following strategies will help you make the most out of your tax return and create positive change in your life.

#1 SET UP AN EMERGENCY FUND

Research conducted in last year’s Financial Consciousness Index found that a concerning 13.4 million Australian’s do not have emergency savings to fall back on if there were unable to earn an income for more than three months.  The study also found that 7.5 million Australian’s struggle to pay their bills and are not saving money regularly.  With this is mind, why not use this year’s tax return to set up an emergency fund and make this the start of your savings plan.  Our team at Canny Advisory can help you with budgeting and saving to ensure that you have the right financial plan in place to set yourself up for success.

TIP // speak to one of our Financial Planners or Advisers to find out the easiest way to make this happen without even noticing!

#2 MEET WITH AN ESTATE PLANNING LAWYER

As the saving goes, there are only two certainties in life; death and taxes.  Unfortunately, more than half of Australian adults do not have a will.  So, with this year’s tax return, why not protect your loved ones and sit down with an estate planning lawyer to draw up a will or testamentary trust.  Our team at Canny Legal can help you with your estate planning needs, including wills, enduring powers of attorney and medical power of attorney.  Getting this sorted can be the final way you say ‘I love you’ to the people you love the most.

TIP // check out www.cannygroup.com.au/wills to complete your Will in the comfort of your own home, without having to leave your couch!

#3 STARTING YOUR SIDE HUSTLE

If you have an idea of starting a side business, use this year’s tax return to kick-start this once and for all.  it doesn’t take much more than $2,381 to get started these days: a basic website and some Facebook or Instagram ads to attract your first paying customers.  Why not make this the start of your side hustle and see if you can generate a return on investment and get your business off the ground.  It’s also worth keeping in mind that our team at Canny Accounting can help you to take your side hustle to the next level.  We will ensure that you’re equipped with the knowledge to manage your side hustle the right way and take advantage of opportunities as they present themselves.

TIP // speak to one of our team to ask them about booking your ticket to our FREE Side Hustle webinar to help you get started the right way!

So, how will you spend your tax return this year?

 

Chris Graham – Client Services

HAPPY EOFY – Tax Tips for Small Business + Sole Traders

What a time we have had over the last six months, first with the devastating bush fires and now with the Covid-19 pandemic, it certainly has been a different time, the likes that many of us have not seen before.

Many small businesses and sole traders would have been entitled to receive Government assistance during this period including grants and concessional loans for those affected by the bush fires and JobKeeper reimbursements, cash flow boost for employers and State Government grants for those affected by the Covid-19 pandemic.

Of these assistance packages some will be tax-free, while others will be considered taxable income.  Here are some of the packages and their tax treatment:

  • DISASTER RELIEF PAYMENTS [BUSH FIRES] // these are non-taxable payments + do not need to be included in your tax return
  • JOBKEEPER REIMBURSEMENT [COVID-19] // as the name implies, these are reimbursements + are therefore considered taxable income
  • CASH FLOW BOOST [COVID-19] // these payments are tax free.  They are not required to be paid back once the business’ cash flow improves
  • STATE GOVERNMENT BUSINESS SUPPORT FUND GRANT [COVID-19] // this one-off payment to eligible businesses is considered taxable income

Due to Covid-19, your business income may have been affected to such a degree that you will not have any issues with the 2020 Financial Year tax, but if you will here are some tips to help reduce your taxable income:

  • SUPPLIER INVOICES // pay any supplier invoices prior to 30 June, even if they are not due until July or later.
  • SUPERANNUATION // pay the June quarter superannuation obligations prior to 30 June.  Generally, it takes 5-7 business days for payment to be received by the employees superannuation fund, so payment will need to be processed earlier to allow for this.
  • BUSINESS OWNERS // if you are a business owner, you could pay an additional superannuation contribution to maximise the $25,000 concessional contributions cap.
  • SOLE TRADER // if you are a sole trader, you may take a concessional contribution to your superannuation fund and claim a tax deduction for it.
  • INSTANT ASSET WRITE-OFF // the threshold currently stands at $150,000, so any piece of equipment or business vehicle, below this threshold, will be able to be deducted in full in the 2020 financial year, if purchased and in use by 30 June 2020.

 

Danny Grigg – Senior Accountant

BComm CA

 

HAPPY EOFY – Tax Tips for Individuals

It’s that time of year again, Tax Time! For individuals who have a tax agent, like Canny Group and their accounting team on hand, we will lodge your tax return for you on your behalf and you have until 15 May 2021 to do this.  However, if you are lodge your own tax return you have until 31 October 2020 to have it lodged.

Either way, we have put together some tax tips that you should consider before 30 June 2020 to help; reduce your taxable income, maximise deductions, take advantage of tax offsets, accessing free money from the Government as well as COVID-19 incentives and advice for retirees.  Everyone has been impacted by COVID-19 in many different ways, and we have put together these tips to help you be as prepared as possible and hopefully empower you to maximise your refund when it comes to lodging your tax return.

TAX TIP #1… Ways to reduce your taxable income!

SUPER CONTRIBUTION // make a personal deduction superannuation contribution.  Check with payroll to determine how much has been contributed so far.  The concessional contribution cap is $25,000 for the 2019/20 income year.

UNUSED CONTRIBUTION // do you have any carry forward unused concessional contribution from the 2018/19 income year?  If your total superannuation balance is under $500,000 at 30 June 2019, you may benefit from making a catch-up deductible super contribution.  This may be especially beneficial to those who have additional income due to sale of investments such as shares or property.

DEFER INCOME // are you nearing retirement?  It may be worthwhile to defer your income until after 30 June if your income will be smaller in the subsequent year.

TAX TIP #2… Maximise deductions!

MOTOR VEHICLE EXPENSES // individuals who use their car for work related travel can claim 68 cents per kilometre up to 5,000km for business travel or claim under the log book method of car expenses.  Canny Group’s team of accountants will be able to determine which method yields the greatest deduction.

WORK-RELATED EXPENSES // consider if you need any work-related items such as tools of trade, computer, subscriptions or work clothing and whether you could purchase or pay for those expenses before 30 June to increase your deductions.

DONATIONS // or gifts of $2 or more to a deductible gift recipient are tax deductible.  Where spouses are on different marginal rates, consider making donations by the spouse that is in the higher tax bracket to maximise the benefit of the deduction.

HOME OFFICE // if you have been working at home due to COVID-19, you may be eligible to claim a rate of 80 cents per hour for all your running expenses from 1 March to 30 June.  Multiple people living in the house could each individually claim the 80 cents per hour rate.

PROTECTIVE CLOTHING // did you buy protective items such as gloves, face masks, sanitiser to use at work due to COVID-19?  If your specific employment duties require you to have physical contact or be in close proximity to customers or clients while carrying out your duties or you are involved in cleaning premises, you can claim a deduction for protective items.  The ATO considers those that work in the following industries or occupations are exposed to the risk of illness in the course of working:

  • Medical Industry
  • Cleaning Industry
  • Airline Industry
  • Hairdressing + Beautician Industry
  • Retail, Cafe + Restaurant Industry

TAX TIP #3… Take advantage of tax offsets!

SPOUSE OFFSET // receive a $540 tax offset by making a personal contribution up to $3,000 to super on behalf of your spouse.  Only available if your spouse’s taxable income is less than $37,000.  A lower tax offset may be available if you contribute less than $3,000 or your spouse earns between $37,000 and $40,000.

LOW + MIDDLE INCOME OFFSET // individuals on a taxable income of $37,000 or less will receive up to $255 tax offset and those on taxable incomes between $48,000 and $90,000 will receive the maximum $1,080 offset.  Incomes between $90,000 and $126,000 will receive partial offset.  This is not a tax refund but a tax offset.

TAX TIP #4… Access free money from the Government!

CO-CONTRIBUTIONS // receive a Government co-contribution of up to $500 paid into your superannuation by making an after-tax superannuation contribution of $1,000 or more.  Full amount is available to those with taxable income less that $38,564 and a reduced amount is available to those with taxable income less that $53,564.

TAX TIP #5… COVID-19 impact!

JOBKEEPER + JOBSEEKER // JobKeeper and JobSeeker payments are assessable income and need to be included in your tax return.

STIMULUS PAYMENT // the $750 stimulus payment that was provided to social security, veteran and other income support recipients and eligible concession card holders is tax free and does not need to be included in your tax return.

CORONAVIRUS SUPPLEMENT // the $550 Coronoavirus fortnightly supplement is taxable income and will need to be included in your tax return as income.

EARLY RELEASE OF SUPER // individuals who have applied for and received the early release of superannuation will not nee to pay tax on the amounts release from super.

TAX TIP #6… Retirees!

REDUCE PENSION // the minimum drawdown requirements for account based pensions has been halved for the 2019/20 and 2020/21 income year.  This will benefit retirees with account based pension by reducing the need to sell investment assets to fund minimum drawdown requirements.

SOCIAL SECURITY // in light of the low interest rates on savings, the Government has reduced social security deeming rates from 1 May 2020.  You could be eligible for Centrelink entitlements such as the age pension or Commonwealth Seniors health care card with the lowering of deeming rates.

 

Helen Yau – Manager + Financial Planner

CA, BCom, Dip FP, SSA

Business Pivot OR Business Adaptation?

As we look forward to relaxation of lockdown in our lives and businesses, it can be difficult to find or maintain motivation.  But let’s take a look at a quote attributed to Albert Einstein: “In the midst of every crisis, lies great opportunity”.So, the question is, what opportunities are there for you, or for your business?

Business Pivot or Business Adaptation – What is your “great opportunity”?

You might think in these JobKeeper days that you or your business has to undertake a significant “Pivot”, and radically change the way you do things to ensure not just survival but success.

But equally, that may not be what you want, or more importantly what your customers want. You may need to make smaller changes, refine processes, update your systems or even just modify the language you use to talk to your customers.

Be it Pivot or Adaption, considering your customer needs and wants should be a significant part of your plan.

Now, this article is about motivation, so the words above are about WHY you may want to change. The most difficult part can be making the first step.


STEP ONE // DO NOT LET THE OPPORTUNITY PASS

STEP TWO // WHEN IN DOUBT, REFER TO STEP ONE

 

Every one of you who has got this far does need to find your own motivation.  Is the crisis enough, or is there something about your situation that you really want to change?  Sometimes the biggest obstacle is not knowing how you can possible achieve your goals.  This is where the team at Canny Group can really help. We spend time with our clients understanding goals.

But it is the next part that can be the “secret to motivation”.  Rather than stopping at identifying goals, we can work with you to identify the action steps, what you actually have to do, to move toward your goals. Not only that, we can keep you accountable to those actions.

This could be to do with your business goals, where our Accounting team will work with you.

It could be to do with your financial or retirement goals, where our Advisory team will work with you.  And if you have goals with succession planning, litigation or asset protection the Legal team will work with you.  Best of all, if you have goals the encompass a mixture or all of these, you can rest easy knowing we will work together to help you achieve them all.

A FINAL WORD ON MOTIVATION FOR CHANGE:

“It is not the most intellectual of the species that survives; it is not the strongest that survives; but the species that survives is the one that is best able to best adapt and adjust to the changing environment in which it finds itself”

This quote could almost have been tailored to the times we find ourselves in today, but is also one that is often mis-represented as being a quote from Charles Darwin tied to his work “On the Origin of Species”.  It was actually written by the significantly less famous Leon C. Migginson in “Civilisation Past and Present” in 1963.  Fast forward 57 years and the quote holds true.

 

Adam Ramage – Senior Business Adviser + Accountant

B.Bus CA

Keeping Vigilant During Troubling Times

The COVID-19 crisis has shocked and astounded us all, and we are a long way from knowing where it will end.  Both the local and global economies are under tremendous pressure and we are all being heavily tested on multiple fronts.

It is pleasing to hear some early good news, with signs that here in Australia, and in other parts of the world the tough measures that we are taking seem to be having an impact and slowing the number of cases.

Sadly, though, while our minds are all so focused on this important situation, cybercriminals are using this crisis as an opportunity to exploit people and to fill their own pockets.  We are intercepting an increasing number of COVID-19 related email threats, as well as other malicious email scams, so this is not a time that we allow ourselves to complacent in keeping our computers, and personal information safe from threats, and even more so now that many are working from home, on personal computers, laptops and mobile devices, and perhaps have lower security configurations that those of workplaces and manages office systems.

Last week AustCyber [The Australian Cyber Security Growth Network], a federal government initiative, also shared similar sentiments encouraging Australians to:

  • TRAIN THEIR TEAMS, WITH CYBER SECURITY TRAINING
  • STAY ACROSS THE LATEST SCAMS, INCLUDING THOSE EXPLOITING COVID-19 CRISIS IN PARTICULAR
  • REPORT IT IF YOU’VE RECEIVED AN SMS OR EMAIL YOU THINK IS A SCAM TO SCAMWATCH [OR YOUR LOCAL AUTHORITIES] TO VERIFY IF WHAT YOU’RE SEEING IS REAL OR MALICIOUS
  • USE LOCAL IT SUPPORT SPECIALISTS TO PROTECT YOU AGAINST THREATS + PROVIDE INFORMED ADVICE ON HOW TO ADVICE BEING TAKEN ADVANTAGE OF

So, in light of the above, here are just a few ways that scammers and cybercriminals are using to take advantage of the unsuspecting.  Knowledge is power, so simply being aware of these mechanisms with thwart cybercriminals and give you back some much-needed control and prevent you, your workmates and loved ones from being exploited.

1. PHISHING EMAILS // the word “phishing” [aka “fishing”] was coined around 1996 by hackers stealing America Online accounts and passwords.  By analogy with the sport of angling, these internet scammers were using e-mail lures, setting out hooks to “fish” for passwords and financial data from the “sea” of internet users.

In layman’s terms, scammers sent out [literally] millions of emails to unsuspecting users by pretending to be from a legitimate source.  For example, from a social media or email account [Facebook, LinkedIn, SnapChat, Gmail, Microsoft Office, Telstra Bigpond], or from a web page you use for internet banking or financial services [Westpac, NAB, Commonwealth Bank, PayPal, Western Union], or from a whole myriad of other businesses.  Because we do so many things online, it’s really easy to grab a business that has a login page online, and pretend to be that businesses.

Here is an example which we recently received which was actually really professionally done:

  • A Scammer sent an e-mail pretending to be from “Westpac” to indicate that the person’s bank account had fraudulent activity and had been “locked” to prevent any possible exploitation.
  • The e-mail asks the user to click on the link contained in the email and to enter their username and password for the person’s internet banking in order to confirm that the activity was from them and to prevent the account being locked.
  • If the customer was to click on that link it would take them to a “bogus” web site which the scammer has copied to look like the normal login page for Westpac Internet Banking, but is really just a front.  When the person types their real username and password t o log into their bank account, they are simply giving up their details directly to the scammer.
  • The website then [automatically] diverts the customer back to the “real” Westpac site where the message will pop up that they entered their details incorrectly, and to retry.  The customer enters them again, and then they login to their normal internet banking, none the wiser that they have just given cybercriminals the keys to the financial bank accounts.
  • A short time later the cybercriminals will login to Westpac using the customers *actual* login details and proceed to transfer funds to their own accounts [usually via a series of other stolen or illegal money laundering accounts or other bank accounts etc.]
  • By the time the customer realises that their account has no money left, the criminals have withdrawn the funds or transferred them to offshore bank accounts which are no longer accessible, leaving the end user high and dry, leaving them to try and sort out with their bank to try and recover their money.

There are a whole host of variations on the above scam.

In another variation of the scam, a hacker tries to “phish” out a business username and password to an e-mail account, and then [once has access] will sift through the sent items folder looking for invoices or statements that the business has sent to their clients, and will then form them, changing the bank account payable details on the invoice and re-sending them to the original recipients, asking them to take note that the business has changes their bank account details and to make payment into the [criminal’s] bank accounting instead of the legitimate one.  The list of variations on such scams is endless, but the fact of the matter is that the cybercriminal does not actually “hack” into anyone’s systems, they just fool the legitimate owner into simply “telling” the criminal what their login details are, and then it’s easy street for them to take advantage of that to exploit wherever and however possible.

The lessons to be learned from the above:

  • NEVER click on links directly in e-mails to get to websites
  • NEVER call back numbers sent to you as an SMS
  • ALWAYS treat e-mails or SMS text messages asking you for login detail or personal information as suspicious, and never give anyone your personal details, logins or passwords either via email, or over the phone.
  • REMEMBER that your bank, or ISP, or service provider will already have your details, and they can reset your password if you have lost it.
  • IF YOU DO NEED to verify a suspicious transaction, call your bank, ISP, service provider on their known, registered phone number, and ask them to verify and suspicious activities.
  • CHANGE YOUR PASSWORD REGULARLY, and especially if you feel something suspicious has happened – change it anyway, just to be safe.
  • IF POSSIBLE, use 2-factor authentication on any/all of your online services wherever possible to thwart illegal transactions occurring without you knowing.

2. VIRUSES + WORMS // as our PCs, laptops and phones become more and more sophisticated, viruses, trojans and worms [all different types of programs used to infect your technology] are becoming scarcer, however, there are still viruses out there which are still seen from time to time.  Once again, the aim is to exploit the end used by any means possible.

Cryptolocker is a really nasty virus, for example, that will infect a PC or Mac and systematically “scramble” all documents, files, photos, videos, emails and other critical data on your computer, and then demand a ransom payment in order for you to get your information back.

Others are less obvious – for example another type of virus called a “keylogger” will sit quietly on your computer just “looking” at you typing all your personal information, and then sends it to a listening criminal.  It’s the more sophisticated variation of the “phishing” scam, but you are unaware it’s even happening.

To protect yourself from viruses and hackers:

  • NEVER click on links directly in e-mails to get to websites
  • NEVER click on random links on websites which are dubious and resist the temptation of clicking into illicit websites [many criminals will deliberately host porn sites and other questionable web pages purely to lure unsuspecting users, and then use it as a springboard to infect computers].
  • ANTI-VIRUS, make sure you use a reliable anti-virus package and keep your anti-virus up to date [and yes, Mac Users, that means you too – Macs CAN and DO also fall prey to most scams and also have viruses, there are just fewer Mac users than PCs, so they are less publicised].
  • IF YOUR COMPUTER IS INFECTED, [particularly with a cryptolock virus] DO NOT pay any ransom demands – you will NOT get your data back, even if you do pay, you’re just going to lose money to top losing your data.
  • BACKUP, make ABSOLUTELY sure that you BACKUP your data.  Syncing your data to the OneDrive, DropBox or other Cloud service is NOT good enough – that can also be scrambled.  Use a verified, secure, offline backup mechanisms to that if something does happen to your data, you have something to recover from.

3. SCAM PHONE CALLS OR SCAM E-MAILS // this is also becoming extremely prevalent these days.  Scammers [usually from overseas] will just systematically call numbers listed in the phone book and spin up a story to fool you: “Sir/Madam, this is John Doe from Microsoft and I’m calling you because we have detected a virus which has been sent from your computer“, then try and get you to allow them to connect to your computer remotely so that they can [again] perpetrate some kind of scam to either exploit you, siphon funds from your bank account, or perhaps convince you that your computer is infected, and charge you a “bogus” amount of money to “clean” it for you.

A variation of this is being perpetrated about the current COVID-19 virus asking for donations to support fundraising efforts for a cure or asking for some kind of payment.

And then you have the classic scam where someone tells you that you have a “long lost relative” who has died, and you have some fortune to inherit, but you just need to pay for some legal/admin fees in order to access it.  The mind boggles on the sheer number of variations criminals use to exploit people.

Some simple guidelines to follow:

  • NEVER trusts a total stranger cold calling you.  If you have any doubts, call back businesses or organisations using their *published* known phone numbers.
  • NEVER divulge personal information over the phone.
  • NEVER make payment or provide credit card details or banking information to anyone on the phone, and never allow anyone access to your computer remotely unless you know they are a reputable IT support provider [preferably ones that you know personally].
  • AND if something sounds too good to be true – it probably is.  [If you really had a long-lost uncle John who was the sole heir to a fortune, they you will soon know about it via official channels when the executor of their will sends you the details].

I hope the above examples give you reason to pause when dealing with e-mails, text messages and phone calls, and disarming criminals from doing you any harm.

Despite the increased risk to you or any of your staff members – whether they’re on the front line in high-pressured healthcare or emergency services roles or working remotely to keep the economy on its feet, our IT managed services and my team are committed to stopping any threats intent on doing your business harm.  That’s the last thing that you need right now.

If you find yourself doubting an e-mail, text or phone call, then pause and seek help and clarification.  Please reach out to our support team should you require assistance, at support@universal.com.au or on our dedicated support lines for customers and partners on +03 5277 9797.

To our customers and partners here in Australia, and to those throughout the world, my thoughts are with you and your teams for continued good health and safety.  In times like these, it is important that we stick together and survive personally and on the business front, and I sincerely appreciate you sticking with us.

 

Nenad Saflin – Managing Director

Universal Computer Solutions

COVID-19 // Economic Stimulus + Survival Guide

The Federal Government and State Government have together announced multiple stimulus packages to help support everyone affected by Covid-19 [Corona Virus].  With that in mind, we want to try to provide you with a brief and up-to-date rundown of the benefits for individuals and Small to Medium Sized Businesses [SME’s].  Please note that this is not exhaustive, and we have provided links to original Government releases, so you can double check all information and keep abreast of developments.

April 2020

April Announcements
If you are an EMPLOYER – click here.  

Also important for employers to register with the ATO here AND here.  If you are an employer and have a State Revenue Office payroll tax registration click here.

If you are an EMPLOYEE – click here

If you are a SOLE TRADER – click here.  

Also important to for sole traders to register with the ATO here AND here.

If you need information on ACCESS TO CREDIT for small business – click here

If you employ APPRENTICES – click here

If your income falls BENEATH $1,075 p/fortnight you may be entitled to the Coronavirus Supplement – click here

If you are a VICTORIAN small business with a turnover of +$75,000 – click here

If you are a TENANT – click here

 

March 2020

March Announcements
Small – Medium Businesses – https://treasury.gov.au/coronavirus/businesses

  1. Businesses with turnover of less than $50M who employ workers will be eligible for the “Boosting Cash Flow for Employers Package”.  All employers will receive a minimum payment of $10,000 [increased from the initial $2,000 announced in mid-March] and the maximum is calculated as 100% of the PAYG withholding withheld from employee wages up to a maximum of $50,000.  The amount is calculated on PAYG withheld between January and June 2020 and calculation varies depending on how often you lodge your activity statements.
  2. An additional payment is being introduced from the July – October 2020 period.  This amount will be exactly the same as the original amount received by the business.  This effectively doubles the amount received to a minimum of $20,000 and a maximum of $100,000 https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Cash_flow_assistance_for_businesses_0.pdf.
  3. The Victorian Government has announced that SME’s with a yearly payroll of less than $3M, will be provided with 12 months Payroll Tax relief.  Businesses that currently pay payroll tax [ie. business with payroll, including superannuation, of greater than $54,166 per month] will receive a refund to their bank account of any payroll tax paid for the period 1 July 2019 to 29 February 2020.  In addition, there will be no further payroll tax payable up to 30 June 2020.  The Victorian Government advises that refunds will be accessed by 27 March 2020 https://www.premier.vic.gov.au/economic-survival-package-to-support-businesses-and-jobs/.
  4. There are also measures to temporarily assist businesses in financial distress, https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Providing_temporary_relief_for_financially_distressed_businesses.pdf.
  5. Instant asset write-off is increased from $30,000 to $150,000 for those of you who are not concerned about cash-flow and view this as a good time to invest in assets for your business, https://treasury.gov.au/sites/default/files/2020-03/Fact_Sheet-Delivering_support_for_business_investment.pdf.  There are also measures around depreciating fixed assets faster, https://treasury.gov.au/sites/default/files/2020-03/Fact_Sheet-Delivering_support_for_business_investment.pdf.
  6. Wage subsidies are available for up to 50% of an apprentice or trainee’s wage for the nine months from 1 January to 30 September 2020.  Employers will be reimbursed to a maximum of $7,000 per quarter per apprentice/trainee, https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Cash_flow_assistance_for_businesses_0.pdf.

March Announcements
Support for Cash Flow Needs for Small – Medium Businesses – https://treasury.gov.au/coronavirus/business-investment

  1. The Federal Government will provide a guarantee of up to 50% of loans made to SME’s https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Supporting_the_flow_of_credit_1.pdf.
  2. Lenders will be provided with a temporary exemption from the responsible lending obligations to provide loans to existing small business clients to enable faster approval and provision of loans to SME’s, https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Supporting_the_flow_of_credit_1.pdf.

March Announcements
Individuals + Households – https://treasury.gov.au/coronavirus/households

  1. Income support payments and coronavirus supplements to existing and new recipients of some Centrelink payments, https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Income_Support_for_Individuals.pdf.  There will also be streamlined application for Centrelink benefits and reduced waiting times for payments.
  2. Two separate payments to recipients of social security, veteran and other support payments from Centrelink.  These are due to be paid as $750 on 31 March 2020 and $750 on 13 July 2020, https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Payments_to_support_households.pdf.
  3. Temporary early release of superannuation amounts up to $10,000 for the financial year 2019-20 and again for the financial year 2020-21.  There will be no tax payable on the amounts withdrawn and they will also not effect Centrelink or Veterans’ Affairs payments, https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Early_Access_to_Super_1.pdf.
  4. Temporary reduction in superannuation minimum drawdown amounts for those receiving a pension from their super fund, https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Providing_support_for_retirees_to_manage_market_volatility.pdf.
  5. Reduced Centrelink deeming rates to support retirees, https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Providing_support_for_retirees_to_manage_market_volatility.pdf.

Self-Education

It’s February and so in keeping with the ‘Back to School’ theme I thought I would revisit the opportunities that are available for self-education and professional development.

Whether you are supported by your employer or not you may be able to claim a tax deduction for self-education expenses if they relate to your current work activities.  You cannot claim the costs however if it is for the purpose of new employment or to open up a new income earning occupation. Some of the costs that you can claim are:

  • COMPUTER + STATIONARY CONSUMABLES EG. PAPER, PRINTER CARTRIDGES
  • COURSE FEES [IF PAID BY YOU]
  • PURCHASE OF EQUIPMENT, OR IF THE COST IS OVER $300, DEPRECIATION OF EQUIPMENT
  • INTERNET USAGE
  • STUDENT UNION FEES
  • TEXTBOOKS
  • TRAVEL; BETWEEN HOME + THE PLACE OF EDUCATION + BETWEEN WORK + THE PLACE OF EDUCATION

Likewise, there are also opportunities to claim the cost of professional development.  If you are in an occupation that requires a certain number of certified professional development hours, the costs of attending relevant seminars and conferences can be quite high, however if they are relevant to your employment they can be claimed as a tax deduction.  If you are a business paying this cost for your employees this is a claimable business expense.

Aside from the bonus of a tax deduction, it is a great idea to keep up to date with ideas, techniques and changes in the law no matter what industry you are in.  Maintaining your knowledge is both good for your self esteem and enhances your chances of maintaining your employability.

If you are thinking of taking on additional study and are unsure about how this will affect your tax or your business, just call our office and one of our qualified team will be happy to help you.

 

Amanda Wilkens – Director

CPA

Kick-Ass New Years’ Resolutions

It is common to come up with New Years’ resolutions in January that reflect the way we feel after all the celebrations over Christmas and New Year.  We can pretty much guess that the resolutions will revolve around:

  • Partying less;
  • Eating more healthily; and
  • Exercising more.

That’s all great, however these reflect only the prior three weeks.

What if we could put together resolutions that reflected the prior year or several years?  These resolutions would generally revolve around;

  • Holidaying more frequently;
  • Spending more time with family and friends;
  • Purchasing a house or paying off the one we have; and
  • Becoming more financially independent and secure.

These resolutions are great to work with, and the good news is that they don’t exclude the first set of resolutions – there is no reason why we can’t do both!  Here are the top three questions I am asked by clients starting their road to a “kick-ass” financial future.

  1. WHEN SHOULD I START?  NOW, NOW and NOW!  It’s easy to think that you don’t have anything yet and don’t earn a lot so can’t start – but it’s wrong!  I started saving at 18 years old by putting away $70 a month in a savings plan.  This isn’t a lot but I found I didn’t miss the money.  When it was time to buy a house 12 years later I was well on my way to a deposit.  Remember that everyone has to start somewhere.
  2. HOW OLD SHOULD I BE TO START PLANNING A “KICK-ASS” FINANCIAL FUTURE? There’s no age required, but start now! The sooner you start the sooner you are on your way.  We have probably all heard the Chinese proverb “A journey of a thousand miles begins with a single step” and I suspect we all use this.  I know I think of that whenever I have to complete a mammoth task.  Runners often count steps on long runs, cyclists count kilometres and we all count sleeps to Christmas [even if it’s for our kids].  The best way to achieve anything is to simply start.
  3. OKAY, I’M GOING TO START – WHAT DO I DO?  There are several things to do – all steps on your journey to a “kick-ass” financial future.  Don’t be overwhelmed and don’t think you need to do them all today.  Here are a few things to look at, and I recommend aiming to tackle one item per month [or two months if your life is hectic]:
  • Review your income protection insurance. You may or may not need it, and it totally depends on your circumstances.  However, if you are the main income earner for a family and you have others relying on your income, you at least need to review it.
  • Have wills and powers of attorney prepared. Again, horses for courses, but if you have children you at least need to consider who will look after them if you are no longer able to.  Make sure you document your wishes as it isn’t enough to verbally pass them on.
  • Review your death cover. Once again, you may or may not need it, but if there will be debts within your family should you pass, you need to at least consider whether you should have death cover that is sufficient to pay off the debts.
  • Review your superannuation. Your super may be able to include income protection and death cover, so you may want to review this first.
  • Start saving. A financial plan, or even a small savings goal will put you on the right path.  Set a budget and put away even a few dollars each week.

If you decide you want to start your journey to a “kick-ass” financial future, contact us!  Our team can cover the financial advice, legal and accounting to get you on your journey.

If you just feel like you’d like more information and want to learn more before you start – our Health and Wealth seminar is for you.  It’s free and will give you lots of practical tips to start your journey.  You’ll also have the chance to meet our team in a casual relaxed setting.  Just go to our website and use the links to register.

 

Krystine Canny-Smith – Director

CPA

Christmas + FBT

It’s coming up to the Christmas holiday period which means scheduling the staff Christmas party and purchasing gifts for your employees, but as we skip into the month of December, it’s important that we remember what is deductible in relation to gifts and entertainment provided and how fringe benefits tax [FBT] relates with these actions.

FBT is payable by employers on the value of certain benefits that have been provided to their employees in respect of their employment. The purpose of the legislation to ensure fair tax treatment between cash paid to employees and benefits provided to them during their employment. Fringe benefits can include but are not limited to: providing an employee a vehicle that is owned by the business to drive, providing a loan to an employee with no interest, and also functions and gifts provided to an employee at Christmas time.

Towards the end of December, many employers schedule a work breakup or event to celebrate the holidays with their employees or purchase a gift for the employees and their families. These events can include costs such as venue hire, food and alcohol purchases or booking entertainment such as a band. Are these expenses tax deductible? Is the employer entitled to claim goods and services tax [GST] back on those expenses incurred?

Generally, providing entertainment to an employee is not tax deductible unless FBT is paid. Employers cannot claim deductions for the cost of Christmas gifts purchased for employees if the gift directly provides entertainment by way of food, drink or recreation. Similarly, the expense of a staff Christmas function would not be deductible as it involves the provision of entertainment.

However, there are some exceptions. The cost of a Christmas party is tax deductible if provided on a working day on the business premises and consumed by current employees. Another exception is providing a minor benefit by ensure the cost of the Christmas party and gifts are less than $300 per employee. And when it comes to GST, the credit is available if FBT is paid or the benefit is exempt from FBT and a tax deduction can be claimed.

If you are providing more than salary and wages to an employee, now is a good time to book an appointment with one of our accountants to ensure you are not inadvertently paying more tax than necessary by providing a non-cash benefit to your employees.

 

Jamie Arrington – Manager

B.Com CA

Financial Plans Are COOL

IT IS PRETTY COOL TO HAVE AN ACTUAL FINANCIAL PLAN AND NOT JUST ‘ONE IN YOUR HEAD’

Whilst seeing a client, our discussion often turns to managing personal cash flow.  Some people are happy just living from pay-to-pay and don’t give much consideration to plans for the medium or long term.  Others haven’t really given the idea any thought but think it will all be “OK”.  However, more and more people are thinking about this, but don’t know where to start.

Financial management and retirement planning help people determine their personal saving targets, what they can afford to spend, and how best to arrange their financial affairs.  Retirement planning can quantify how much you need to have saved to retire.  When you are years away from retirement and your personal finances are ever-changing, this can seem like a challenging concept, but it is important to remember that a financial plan is a process, not a product.  It is something that requires discipline to start and at least annual maintenance and review.

A financial plan should include:

  • INVESTMENT PLANNING;
  • INSURANCE + RISK MANAGEMENT;
  • FINANCIAL MANAGEMENT;
  • RETIREMENT PLANNING;
  • TAX PLANNING; +
  • ESTATE PLANNING + LEGAL ASPECTS

Most people insure against at least some of the risks of financial loss due to death, medical issues and damage to property.  You could look at a well-structured and maintained financial plan as insuring against financial difficulty later in life.

Estate planning may also be an overlooked financial planning exercise.  The thing about estate planning is that it should go beyond simply preparing a will just to check off a box and say that it is done.  In a financial planning context, it is important to consider things like who your beneficiaries will be, joint asset ownership, income tax liabilities.  In the same way a married couple may plan for retirement together, it is important to consider what might happen if one spouse or the other died prematurely.  This may be as much a financial planning exercise as an estate law one.

Our financial planners – Samantha Butcher and Helen Yau can get you started on this journey and will assist and advise along the way.  Why don’t you call and make an appointment today, it’s that easy!

 

Amanda Wilkens – Director

B.Comm CPA