More than 800,000 Australian employers are required to make super guarantee contributions on behalf of employees. For many, this can be a complex process, with multiple superannuation funds to which they contribute – each with their own specifications for accepting the contributions data and payments.
From 1 July 2014, employers with 20 or more employees need to have started making contributions using SuperStream. A 12 months period has been allowed for employers to make the change, which means by 30 June 2015, all employers with 20 or more employees are on SuperStream. From 1 July 2015, small employers (with 19 or fewer employees) will need to start making changes to pay contributions using SuperStream – there will be a 12 months transition period, which means by 30 June 2016, all employers are on SuperStream.
SuperStream is the new way for employers to make super contributions electronically. SuperStream will improve the back office processing of superannuation, making things simpler and quicker for most employers.
Under SuperStream, the exchange of information between super funds and employers is done electronically and in a standardised way.
Preparing for SuperStream may take a little time so it is important you start now.
Since employees choose which super fund they contribute to, employers have faced a growing administrative burden of processing employee contributions to numerous funds in different formats.
SuperStream removes many of the complexities employers currently face.
Under SuperStream, employers have a simpler and more consistent way of making contributions, especially those employers who pay contributions to numerous super funds. There are potential time and cost savings because there is a single channel for making contributions.
SuperStream is compulsory for all employers who make super contributions on behalf of their employees.
If employers have 20 or more employees, SuperStream started from 1 July 2014. From that date, employers must be implementing SuperStream and had until 30 June 2015 to meet the requirements. The ATO has provided flexibility until 31 October 2015 for these employers to get ready.
If employers have 19 or fewer employees, SuperStream starts from 1 July 2015. Employers have until 30 June 2016 to get ready for SuperStream.
We would be happy to discuss the SuperStream requirements with you in more detail. Please do not hesitate to contact your Harris Black team member.
Knowing your business's break-even point is fundamental in determining whether or not your business venture is successful, failing or ultimately worth pursuing.
A business's break-even point is the point at which the business's total revenue equals the total costs and expenses of running the business.
Knowing your business's break-even point is crucial when determining product prices, setting budgets and preparing business plans. It is the number that determines how much a business can spend and how much it needs to make. Even if a business turns over a lot of money, it could still be making quite a loss. Using the break-even point can help determine this.
There are several ways owners can calculate their business's break-even point. A simplified way of doing so is dividing the business's fixed costs by its gross profit margin.
Every cost a business incurs that doesn't vary in relation to sales is a 'fixed' cost i.e. rent, wages, power and insurance. The gross profit margin is the percentage of sales money that is left over after subtracting the production cost of goods sold from the total sales figure.
While this formula can help determine a business's break-even point, owners should remember that it has been simplified, so please give your Harris Black team member a call if you would like to explore this further.
Are you always on the go? Save time and keep your tax organised with the ATO app's myDeductions tool.
The myDeductions tool makes it easier and more convenient for you to keep your individual income tax-related deductions all in one place.
You can use the myDeductions tool to:
- capture and classify work-related expenses, gifts and donations or the cost of managing your tax affairs;
- store photographs of receipts; and
myDeductions is for individuals claiming work-related expenses as an employee. You can also record any gifts, donations or the cost of managing tax affairs. It is not for small business owners, including sole traders.
Whether you lodge your own return or use a tax agent, you can use the myDeductions tool to keep your deductions records. Next year at tax time, you can upload the completed deductions to the ATO and we will pre-fill your individual income tax return. You can also share your deductions data via email. Make sure you stay up to date with the latest version of the app to use this option in the future.
Watch the ATOs quick demonstrations to see how you can save time and keep your records organised:
myDeductions in action to see how you can save time and keep your records organised with myDeductions.
Managing your work-related car expenses with myDeductions.
Separate your claims for work and home use.
Keep your records electronically using myDeductions.
Never miss out on a deduction claim because of a lost receipt again. Simply download the ATO app now to start using the myDeductions tool – it's that quick and easy.
Christmas is undoubtedly the season of giving but it is also the season of spending. By the time the New Year rolls around many of you are desperately looking to get their budgets back on track. In this month's edition of Harris Black Top 10, Team Harris Black came up with some budget tips that will surely help your budgets and bank accounts back into a presentable manner.
- Be Realistic;
- Work out annual costs, divide into monthly or fortnightly payments and save into a separate bill paying account;
- Go through at least 4 months of the previous year to pick up on all the expenses that you did not think of;
- Learn how to cook your meals instead of buying takeaway food;
- Prepare a weekly meal plan and try to only do one trip to the grocery store;
- Instead of putting anything left over from your pay into savings, create a 'payment to savings' and pay as soon as you are paid, that way it will never be missed;
- Have someone look over your budget to make sure it all adds up and that you haven't missed anything;
- Avoid overspending by paying yourself (and partner) as 'weekly wage' and sticking to it;
- Create an emergency fund by setting aside a little amount of money which can help you when something does come up; and
- Use cash instead of credit cards so you can make it easier to control your spending habits.
Public speaking can be a daunting experience for some; nonetheless it is unavoidable in a business environment whether it be a meeting, presentation or an interview.
Fortunately, there are ways to improve your public speaking to adopt a more persuasive and engaging style.
Your target audience will provide guidance to not only tailor the content of the speech but also the delivery. There are three known persuasive appeals to influence your audience including ethos (credibility), logos (logic) and pathos (emotion).
To develop credibility, the audience must trust and respect the speaker. Some ways to build credibility may involve following through on promises (creates trust), showing up early to a presentation and making yourself available after a presentation. Speaking to your audience in familiar language and using appropriate jargon helps to create similarity, further increasing your credibility level.
Most importantly, the argument presented should be logical, that is, understandable and make sense. If a speaker is not logical, they cannot be persuasive. The language conveyed such as the words, phrases and examples need to be understandable and delivered in a sequential order to avoid confusion. It is important to make the connection between premises and conclusions explicit to clarify important points.
The speaker can create an emotional connection with the audience (pathos) to anticipate an intended response. A common way to engage with emotion during a presentation is the use of stories. Stories are memorable and a quick way to gauge rapport. To further improve your storytelling consider adding in humour, visuals and analogies to relate to the audience. The better you know the people you want to persuade, the better you can use examples to motivate them.
Word-of-mouth is a valuable form of marketing that provides business owners with the opportunity to leverage technology such as social media to generate buzz around their business.
Word-of-mouth is generally thought to be organically created through recommendations from friends and family. However, businesses can drive these kinds of conversations by incorporating word-of-mouth tactics into their marketing strategy.
Customers are more likely to trust a third party source than a business's advertising which is why word-of-mouth is a crucial aspect not to be ignored. Word-of-mouth is powerful, and can cut through the noise of modern-day marketing quickly and effectively.
Here are some ways to incorporate word-of-mouth in your marketing strategy:
Influencers are specific key individuals that have the ability to influence your target market. An influencer could be a journalist, blogger, public figure, respected community member, or even a sports star. Influencers can bring many benefits to your business such as drive traffic to your site, increase your social media exposure and attract customers to purchase your products and services through their own recommendations.
Establishing a list of your target influencers is a good starting point. Before approaching your influencers take the time to learn about them and why they are influential to your business. Influencers have to be willing to promote your business on their own merit so avoid badgering them with endless calls and emails.
Word-of-mouth is accelerated online due to the speed in which messages are shared. Social media plays a large role in providing users with the ability to share your business's content, post reviews and recommendations and generate brand awareness with the use of hashtags.
Online word-of-mouth can dramatically affect your business's reputation as recommendations and criticisms are openly available to the public. Designating a professional to handle your social media affairs may benefit your business as you can quickly respond to customer feedback, both negative and positive, and monitor customer engagement.
Although, online communication is ever-increasing, offline communication should not be ignored. Offline conservations are more likely to have an impact as they involve emotion, a key part of the purchase of a product or service. Businesses need to create experiences for customers that are both topical and emotional.
Reviews and referrals form a central part of word-of-mouth marketing and can lead to increased credibility.
Online reviews may be considered as trustworthy as personal recommendations. Reviews appearing on external sites or your own site, can be a great way of monitoring conversation and developing customer confidence in your products and services.
Negative reviews can help your business to identify and fix weaknesses and address customer issues promptly. The way your business responds to negative feedback can provide customers with a good indication of how much you care about customer satisfaction.
Business owners looking to increase productivity shouldn't overlook the important role of the office environment.
Office design is directly linked to employee wellbeing, and can significantly affect overall employee motivation and morale. A well-planned office space can assist employees to carry out their daily tasks effectively.
Some important influencing factors include:
Lighting is a primary aspect in good office design as it affects employee focus and concentration. Natural daylight should be complemented with internal lighting to best maximise productivity. Be wary of windows that are blocked by office equipment as exposure to daylight is critical to employee performance.
Artificial lighting such as ceiling mounted lights should provide substantial illumination without glare or reflection. Fluorescent lighting can cause eyestrain, headaches and irritability; whereas, dim lighting can produce fatigue.
Office furniture may be the cause of physical pain such as stiff necks, migraines, back pain and sore wrists. Seating should be comfortable and adjustable to minimise discomfort and prevent injuries. When using desktops ensure the screen is positioned correctly and consider a palm rest for the mouse.
The noise level of your office is dependent on the size of the team, company culture and office design. High noise levels can be a cause of frustration for staff but can be reduced by designating silent areas, soundproofing meeting rooms and encouraging the use of noise cancelling headphones.
The temperature of the office can dramatically impact on employee's concentration levels. Although it can be difficult to find a temperature to suit everyone, generally warmer office spaces lead to higher levels of productivity.
The spatial arrangement of office furniture is important. Cluttered and disorganised workspaces can contribute to unnecessary stress. To avoid noise and minimise distractions, employees should be positioned close to the tools and equipment needed. The office can be divided into different working areas depending on the task.
The Government has released exposure draft legislation that proposes to provide roll-over relief for small businesses that change their legal structure. The proposed measures were announced in the 2015–2016 Federal Budget, and will apply to the transfers of assets occurring on or after 1 July 2016. Public consultation closes on 4 December 2015.
The proposed measures will provide an optional roll-over where a small business entity transfers a business asset to another small business entity without changing the ultimate economic ownership of the asset. The roll-over can also apply to affiliates or entities connected with the small business entity for assets they hold that are used by the small business entity.
The roll-over will apply to gains and losses arising from the transfer of capital assets, depreciating assets, trading stock or revenue assets between entities as part of a small business restructure. Discretionary trusts may be able to access the roll-over if the assets continue to be held for the benefit of the same family group.
The proposed new roll-over is in addition to roll-overs currently available where a sole trader or partner in a partnership transfers assets to, or creates assets in, a company in the course of a business restructure. Note also that, with any proposed "tax relief", the devil is in the detail. Please contact our office for further information.
The ATO has commenced contacting more than half a million individual taxpayers to let them know that their recently submitted tax returns "are shipshape and will not be subject to further review". The ATO said people who receive one of its "certainty" letters (also known as "A-OK" letters) can be assured that the ATO is happy with their tax returns, and has closed its books permanently on their returns, providing there is no evidence of fraud or deliberate avoidance.
The letter is being trialled with a sample of people who meet certain criteria. This includes having broadly simple tax affairs, a taxable income of under $180,000, and a good lodgement and compliance history. Depending on the success of the trial, the ATO said it aims to expand the program to more taxpayers for Tax Time 2016.
Despite the aim to provide "certainty", it remains to be seen how the letters will operate in practice, particularly if the Commissioner can change his position on the issued letter if taxpayers amend their 2015 tax return or if the Commissioner relies on the concept of fraud or evasion to invalidate the certainty letter.
Direct borrowings by superannuation funds via limited recourse borrowing arrangements (LRBAs) are safe (at least for the next three years), following the Government's decision to reject the Murray Financial System Inquiry recommendation to ban or restrict LRBAs. This is welcome news for trustees of self-managed superannuation funds (SMSFs) who have faced uncertainty about the future of such borrowing arrangements, which have become popular for investments in direct property and shares.
In releasing its response, the Government said that it did not agree with the recommendation. While the Government noted there are "anecdotal concerns" about LRBAs, it said the data did not justify policy intervention at this time. However, the Government said it will commission a report on leverage and risk in three years' time. According to the Government, this timing will allow recent improvements in ATO data collection to wash through the system. The report will be used to inform any consideration of whether changes to the borrowing rules might be appropriate at a future date.
Despite the Government's "green light" for LRBAs, a decision to establish an SMSF and invest in property using an LRBA is not one to be taken lightly. It would be prudent to obtain professional tailored advice on any possible LRBA issues that should be considered before committing to purchase a property via an SMSF.
A Bill is currently before Parliament that introduces two important changes. Key details are as follows.
The Bill proposes to repeal the "12% of original value method" and the "one-third of actual expenses method". Taxpayers will continue to be able to choose to apply the "cents per kilometre method" (for up to 5,000 business kilometres travelled), or the "logbook method", depending on which method in their view best captures the actual running costs of their vehicle.
The Bill also proposes to provide a streamlined process for calculating the "cents per kilometre method" by providing a single rate of deduction. That is, the current three rates based on vehicle engine capacity will be replaced with a single rate of deduction. In the 2015–2016 income year, the rate will be set at 66 cents/km. The changes are proposed to apply from 1 July 2015.
So the Government will set 66 cents/km as the rate for using the "cents per kilometre method", irrespective of a car's engine size. Based on 2012–2013 figures, this would see those who drive smaller vehicles getting a slight increase in deductible expenses, and those who drive larger cars having a decrease in their deduction.
The Bill proposes amendments to the law governing fringe benefits to introduce a separate grossed-up cap of $5,000 for salary sacrificed meal entertainment and entertainment facility leasing expenses for certain employees of not-for-profit organisations, and all use of these salary sacrificed benefits will become reportable. The changes are proposed to apply from 1 April 2016.
Note that organisations affected include public and not-for-profit hospitals, public ambulance services, public benevolent institutions (except hospitals) and health promotion charities. It may be prudent to discuss with your adviser as to whether the above changes apply to your circumstances.
Two company taxpayers have been unsuccessful before the Federal Court in seeking to set aside statutory demands issued by the ATO.
The matter essentially involved two individuals who carried on property development activities through several entities (including the taxpayers) and their recollections of an alleged "global deal" with the ATO at a meeting on 10 April 2014 to resolve various debt recovery disputes – including security arrangements – while objections and appeals were on foot. The taxpayers contended that, after the meeting, the ATO sought demands that were contrary to the "deal" (this included a demand for a security in the amount of $8 million in relation to a related trust) and made "threats" to issue statutory demands. The statutory demands against the two taxpayers were issued in September 2014.
The Federal Court dismissed the taxpayers' applications to set aside the statutory demands. The Court said it did not doubt that the individual representing the taxpayers held a "genuine subjective belief" that he and the ATO had entered into a binding legal agreement at the April 2014 meeting that went beyond the terms of the Deeds of Agreement, which were subsequently executed. However, it considered the representative's subjective belief was not supported by either objective documentary evidence or by the evidence of the ATO representatives who attended the meeting, which it preferred. Among other things, the Court accepted the ATO's evidence that the negotiations involved only "established debts" reflected in a spreadsheet that was used at the meeting and did not include further tax liabilities, including those of the trust.
The above case demonstrates that to avoid confusion among negotiating parties, particularly in relation to future treatment of liabilities, agreements as to arrangements and the terms must be reached and agreed to by the parties in a subsequent written Deed of Agreement.
Harris Black celebrated their Christmas party at the Victoria Park Golf Course. We enjoyed an afternoon of Putt Putt, good food and Mojito's. Broken into five teams: Team 1 "I Like Big Putts & I Cannot Lie', Team 2 "Santa's Little Caddy's", Team 3 "Weapons Of Grass Destruction, Team 4 "Dude, Where's My Par?', and Team 5 "Who's your Caddy?" we battled it out on the Putt Putt course, with Team 3 taking out the Putt Putt trophy.
After a relaxing Christmas break with family and friends, the Harris Black team is back refreshed and energised to start the New Year. We look forward to working with you in 2016.
December monthly business activity statements due for lodgement and payment except for small business clients (that is up to $10 million turnover).
Super guarantee contributions for quarter 2 must be paid to the fund by this date.
December 2015 monthly business activity statement for small business clients (that is up to $10million turnover).
January 2016 monthly activity statements - due for lodging and paying.