Can you believe that ¾'s of the 2017 financial year has already passed! This is Harris Black's favourite time of the year where we can help you to comply with the tax law but at the lowest possible tax cost.
Our tax planning meetings provide:
a forum to discuss your current results and identify possible tax planning opportunities;
an estimate of your 2017 tax position;
a review of your structure to ensure it is working for you;
an opportunity to determine and document your 2017 trust distribution;
details of your upcoming cash flow requirements in relation to your tax obligations; and
an opportunity for your Harris Black team member to understand your business in its current environment so we can provide you with the most relevant up to date advice.
Have you booked your meeting with your Harris Black team member for tax planning this year? Please contact your Harris Black team member today.
Improving Workplace Productivity
Putting some serious effort into boosting productivity in your workplace will ensure that your business is working to its maximum potential.
A few well thought out productivity-boosting changes can have a dramatic impact on your business' overall culture.
The benefits of enhancing workplace productivity are numerous and extend beyond management to employees. Not only do businesses experience higher output and efficiency but staff morale is heightened due to job role satisfaction and improved workplace culture.
A common misconception is that working your employees harder is the key to improving productivity. However, increasing workplace productivity is all about making things work more efficiently as a whole to achieve a higher output.
Here are five simple ways to boost productivity:
Open communication channels
Communication is a key component in increasing workplace productivity. Liaising with each department and individual within the business on a regular basis will help ensure that everyone stays motivated and on track. Meeting with managers, supervisors, and other employees frequently to discuss team and individual performances, motivations, and other work-related issues will benefit everybody in the organisation.
Set goals and communicate expectations
It is pointless to expect a productive workplace if employee expectations are not clear. Both business and individual employee goals need to be communicated clearly and openly so that there is no confusion about job roles or business direction. Employee performance goals are more effective when set in measurable terms. This can be any goal with a quantitative value, e.g., sale targets, time-dependent or deadline driven, rating systems, or numerical based.
Organise your digital workspace
With so many businesses transitioning to paperless, it can be easy to feel that your office is an organised environment. However, digital clutter can be an issue when servers and hard drives become a disorganised mess. If staff have difficulty locating documents or programs, this can be a significant barrier to productivity. Additionally, it creates a sense of disorder that can impact their perception of management. Organising your business' digital workspace and encouraging individual staff members to be similarly organised, can go a long way in improving productivity.
Prioritise staff development
Employees are the most valuable aspect of your business; therefore it is essential that you invest in them. Training and development not only adds value to your business but it motivates your employees with continued growth and individual development. Providing regular workplace training is also proven to increase employee retention rates.
Rewarding employee achievements and contributions plays an integral part in increasing productivity. When your employees feel appreciated, they will be more motivated and in turn, will increase their work performance. Whether it is a monetary or non-monetary reward, any kind of recognition of your employees' merits will be instrumental in boosting their productivity.
Finding Your Point Of Difference
In today's competitive landscape, business owners need to be able to identify and promote their business' point of difference.
A differentiated brand helps businesses to stand out to customers and can prevent them from getting lost in the traffic. Businesses can differentiate themselves from competitors with
similar offerings by creating a unique selling proposition.
A unique selling proposition is a marketing statement used to sell products and services to prospective customers, highlighting a key selling point. Although it can be tempting to compete on price alone, providing your customers with additional value can help to reach your sales targets more successfully.
Here are a few things to consider when developing and marketing your unique selling proposition:
Understand your customers
Before pinpointing your core business strengths, it is important to understand what drives your customers to purchase from your business over competitors. Think about the factors that motivate your customers' behaviours and buying decisions. Consider what your customers want; if there are any underlying wants or needs they might be trying to satisfy, and if you currently match or exceed their expectations. Creating a profile of your typical customer, i.e. age, gender, income, purchasing patterns and so on, may help to reveal the main reasons why customers purchase from you.
Review your business' strengths
Once you have considered your customers' needs, you can begin to review the areas in which your business excels. Take a closer look at what your business does that no one else does - it may mean you offer specialist expertise or years of experience, provide quality products or deliver consistent customer service. Consider your competitive advantage and what you want your business to be known for, i.e. excellent results, convenience, a wide range of products and services, etc. If you are unsure, think about general feedback from customer reviews, or start prompting customers to provide feedback.
Market your unique selling proposition
Developing a unique selling proposition is ineffective unless it is incorporated in your marketing efforts. For example, you may choose to develop a sales slogan based on your point of difference, such as "fast delivery, service, and know-how." The slogan should encapsulate the main benefits associated with your business and how your business differs from its competition.
Harris Black Featured App: ATO myDeductions
Gone are the days where you need to manually record and keep receipts for all your deductions. There are a range of smartphone apps that will surely assist you in your recordkeeping and will satisfy the requirement of the ATO.
The Australian Taxation Office has introduced myDedcutions tool that makes it easier and more convenient to keep your tax deductions and income records all in one place. The tool can be used by individual claiming general or employee work-related expenses. Sole traders can use this app as well to keep track of business income and expenses.
Claiming deductions just got easier with myDeductions Source: ATO YouTube
There are lots of benefits in using myDeductions app:
it's a fast and easy way to capture information on the go;
you can claim deductions you might otherwise miss out; and
it's an easy way to give your tax agent your records.
To know more about this app, please contact your Harris Black team member today.
Harris Black Featured Video: The Happy Secret To Better Work
The Happy Secret To Better Work
Source: Ted Talks YouTube
"Happiness inspires us to be more productive…" Shawn Achor
Opening A Second Location
Businesses experiencing a growing customer base and increasing sales may be eager to expand by opening up a second location; however, business owners must tread carefully.
Managing one location can be challenging enough, so it is crucial to examine and prepare for the ramifications of opening up a second store. Here are some things to consider before taking the leap:
Evaluate your current business
Before expanding into another location, you must look at how your current business is performing. Does your business have healthy sales, strong cash flow, loyal customers, an adequate amount of staff, etc.? Reviewing your first location is critical as it needs to be stable and provide security while you are focusing on opening a second store.
Opening a second store is not as simple as "expanding" a first store; it will often require just as much time, money and energy as your initial store opening. Understanding your overall goal is critical for a smooth transition and sustainable growth.
Consider staffing and management
Running one business location alone is a huge responsibility. Once another location is added
you will need to consider how and who will run the second location. In most circumstances, you will require additional support. This may be a current employee stepping up into a managerial position, or it may mean you need to hire new staff.
There are many benefits of using existing staff. Existing employees are usually familiar with the business' processes and procedures as well as its stakeholders, equipping them with important knowledge and know-how. However, existing employees may not be suitable or interested in taking on a senior management role, and business owners may be forced to outsource staff. This can become a significant factor in your decision to expand.
Review your budget
Expansion requires sufficient cash flow and funding. Even if your first location is running smoothly; there will be additional expenses such as rent, inventory, equipment, advertising, new staff members and so on.
Where possible, avoid outside funding. Business loans are always an option; however, you should have a solid business plan and financials to back up your investment. It is also worth preparing a contingency plan for unexpected expenses, based on your current earnings.
Research industry trends
It is important to be realistic about the chances of a second store succeeding. Is a large part of your business' success due to its location? Is your current business fulfilling a market need? Will there still be demand in one year, five years?
When researching your ideal second location observe competition, neighbourhood trends and products and services that saturate the market. Ideally, your business should provide an offering to meet the needs of customers in the selected neighbourhood. When choosing a second location, be mindful of the distance between your current location as you do not want each store to compete with one another.
Consider your alternatives
Business growth does not necessarily need to come in the form of opening up another location. Instead, you can grow your business by expanding your online services, diversifying your products or services, or targeting new markets and audiences. If you do decide to expand with a second location, ensure you do your research and if possible conduct a trial with target customers in your proposed second location. For example, you may set up a pop-up stall in your proposed location to gauge customer interest.
Claiming Motor Vehicle Expenses
There are now only 2 methods to claim your motor vehicle deductions:
Method 1 – Cents Per Kilometre
All motor vehicle claims using cents per kilometre method have a rate of 66c per business related kilometres travelled up to a maximum of 5,000 kilometres.
To claim this method, you must keep a record of all business related kilometres you travelled during the financial year.
Method 2 – Log Book
Your log book needs to be kept for 12 consecutive weeks and this period should be representative of your travel throughout the year. This log book is then valid for a period of five years as long as your business use does not substantially change.
The ATO has listed the following requirements of your log book:
Date the log book begins and ends.
The car odometer readings at the start and end of the log book period.
The total number of kilometres travelled during the log book period.
For each journey you will need to record the following:
o kilometres travelled;
o start and finishing times;
o odometer readings at the beginning and end; and
o reason for travel.
The business-use percentage for the log book period.
The odometer readings at the start and end of each income year you use the log book.
It is also important to keep all of your details in relation to expenses for the vehicle including:
Repairs and Maintenance
Making it Easier!
Gone are the days where you need a manual log book in the glove box, filled out after every trip and a car floor full of petrol receipts!
There are a range of smart phone apps that satisfy the requirements of the ATO. The apps will track your travel through your smart phone and some of them will even allow you to store all of your vehicle expenses, such as petrol receipts, in the app. This will ensure you never miss a deduction.
If you would like to know more about the issue raised in this article, please contact your Harris Black team member today.
Overtime Meal Expenses Disallowed Because No allowance Received
A taxpayer has failed in claiming deductions for overtime meal expenses before the Administrative Appeals Tribunal (AAT). The AAT denied his appeal because he was not paid an allowance under an industrial agreement.
The AAT noted that whether overtime meal expenses are deductible according to the tax law depends on whether the taxpayer receives a food or drink allowance under an industrial instrument. The AAT agreed with the Commissioner of Taxation that the taxpayer had not received an allowance of this kind and, in fact, had not received any allowance at all.
Taxpayer Denied Deduction For Work Expenses of $60,000
The Administrative Appeals Tribunal (AAT) has confirmed that a mechanical engineer with a PhD qualification was not entitled to deductions for various work-related expenses totally approximately $60,000. The expense claims in question (for vehicle, self-education and other work expenses), were denied because the taxpayer was unable to establish the required connection between the outgoing amounts and the derivation of his assessable income as a mechanical engineer. Furthermore, in relation to a range of miscellaneous expenses (such as mobile phone and internet charges, professional membership fees, conference fees and depreciation), the AAT found that most of the deductions were not substantiated with sufficient (or any) evidence. The AAT did not exercise its discretion to allow these deductions on the basis of the "nature and quality" of any other evidence regarding the taxpayer's incurring the expenses.
TIP: This case clearly shows the importance of properly substantiating any claims you make for work-related expense deductions. Contact us to discuss what documentation you should keep to make tax time easier.
Depreciating Assets: Composite Items
Draft Taxation Ruling TR 2017/D1 sets out the Commissioner of Taxation's views on how to determine if an entire composite item is a depreciating asset or whether its component parts are separate depreciating assets. The draft ruling says that a "composite item" is an asset made up of a number of components that can exist separately. Whether one or more of the item's components can be considered separate depreciating assets is a question of fact and degree to be determined in the particular circumstances. For a component of a composite item to be considered a depreciating asset, the component must be separately identifiable as having commercial and economic value.
TIP: The draft ruling usefully lists the main principles to take into account when determining whether a composite item is a single depreciating asset or is made up of multiple depreciating assets. Contact us if you would like to know more.
ATO Warning: Research And Development Claims In Building And Construction Industry
The ATO and the Department of Industry, Innovation and Science have released Taxpayer Alert TA 2017/2 and TA 2017/3 as a warning to businesses that are not being careful enough in their claims or seeking to deliberately exploit the research and development (R&D) Tax Incentive program. The alerts relate to particular issues identified in the building and construction industry, where specifically excluded expenditure is being claimed as R&D expenses. The alerts provide clarification for a wide range of businesses who had been incorrectly claiming ordinary business activities against the R&D tax incentive.
Brentnalls Affiliation Conference – Appointment of New Chairperson
In March, the Directors and Managers of Harris Black attended our Brentnalls affiliation conference in Torquay, Victoria. The affiliation hold conferences twice a year allowing affiliates to come together for a frank exchange of ideas and peer review.
In more recent times the Autumn Conference has been designed to incorporate Managers and Associate of the Affiliates, whilst the Spring Conference includes Practice Administrators and has an agenda to match.
Each Affiliate hosts a conference on a roster system. The first conference with a handful of delegates was held in October 1996. The most recent, the Affiliations 40th Conference, has grown to have 40 delegates.
During the most recent conference, Paul Whimp was appointed Chairperson of the group and will lead the affiliates for the next two years.
Harris Black News
The Harris Black team would like to congratulate Kimberley Schluter and James Ward on their recent engagement. After trekking all the way to the top of Mt Warning, James went down on one knee and proposed….we're so glad you made it to the top Kim.
Many of our clients will know Kim as Brendan and Renee's extremely organised and efficient Personal Assistant. With Kim as the wedding planner we have no doubt the wedding will be perfect, down to the smallest detail.
We wish you only the best in what's to come! Enjoy wedding planning….
Important Tax Dates
28 April 2017
Lodge and pay quarterly activity statement for quarter 3, 2016–17 – paper lodgements.
Pay quarterly instalment notice (form R, S or T) for quarter 3, 2016–17. You only need to lodge if you are varying the instalment amount.
Employers must make super guarantee contributions for quarter 3, 2016–17 to the funds by this date.
30 April 2017
Lodge TFN report for closely held trusts for TFNs quoted to trustees by beneficiaries in quarter 3, 2016–17.
15 May 2017
2016 tax returns for all other entities that did not have to lodge earlier (including all remaining consolidated groups), and are not eligible for the 5 June 2017 concession.
21 May 2017
Lodge and pay April 2017 monthly activity statement.
Final date for appointing a tax agent for an FBT role.
This newsletter is for guidance only, any professional advice should be obtained before acting on any information contained herein. Neither the publisher nor the distributors can accept any responsibility for loss occasioned to any person as a result of action taken or refrained from in consequence of the contents of this newsletter. We recommend that you contact your Harris Black team member before making any decision to discuss your particular requirements or circumstances.
Since 1994, Harris Black has been providing accounting and advisory services to our valued clients to help them achieve their business and personal wealth goals.