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 In this issue...


 
 
 
 
 
 
  Passing On The Family Business 
 
Transitioning a family business to the next generation can be an incredibly confronting process.

Stepping back from your business is a big move and can be quite difficult if there isn't a solid plan in place. Succession planning helps to ease the process. A strong succession plan reduces the risk of interfamily disputes and can ensure the strength of your business continues well into the future.

Consider the following when preparing your business' succession:

Well defined plan

A formal succession plan can help guide your business through a smooth transfer of control. Involve family members in business succession planning discussions and foster a collective family vision early on.

It is important to be realistic when choosing successors; don't expect family members to take over if they have no interest in the business. Think strategically about the skills, knowledge and experience required for the future success of the business and co-ordinate family members to roles appropriately.

Once you identify the successors, you will need to decide on levels of management, control and shares of ownership. If you have more than one successor, you will need to decide on whether ownership and management will be equal and if your management team will include non-family members and so forth.

Start early

Frequent and open communication is key for removing tension and promoting a healthy transition. Be sure to communicate your succession plans to your staff as well as successors. Potential successors need to be introduced to the business as early on as possible. Training successors years in advance helps to teach them key business skills and processes required to run the business. It also gives them an opportunity to form relationships with important clients and key stakeholders long before succession is implemented.

Financial and legal issues

A major part of succession planning is accounting for the financial and legal issues that arise with the handover of the business. Business owners need to evaluate their options, such as the decision to sell or gift the business to family members, whether a trust needs to be set up as part of the succession and so forth. They will also need to address the tax implications upon sale or transfer of ownership, and in circumstances such as death and divorce.


   
  Essential Qualities Of Successful Business Owners 
 
Owning a business is not going to guarantee you success or wealth. There are specific qualities required in order to be valued and respected as an employer, qualities that will allow your business to flourish.

Consider the following qualities essential for successful business owners.

Passionate

To be successful, you need to be passionate. Running a business takes a lot; a lot of time, energy and money. There will be sacrifices you have to make to succeed and if you aren't passionate about what you do, chances are your health will suffer.

Organised

Being organised will help you create a successful business. Being able to track elements such as finances, growth strategies, employee performance, etc. will assist you in owning a prosperous business.

Integrity

Being known as someone with integrity is extremely important for business owners. Being honest and trustworthy will hold you in good favour not just with clients and other businesses, but with your employees too. When people feel that you are a good person, you are more likely to have employees that want to work hard for you and customers who will seek you out and stay with you long term.

Resilient

Running a business won't always be smooth sailing. Things will go awry sometimes and there will be obstacles you will be faced with. People who are resilient will not be defeated by these challenges; they are flexible and fast thinking, and can adapt quickly.

Knowledgeable

Successful business owners will be knowledgeable, not just about their business but about their industry. They will understand what happens at each level of the business and they will know what their competitors are doing. They will have a strong business plan that they are constantly improving upon. And they will always be learning new things and new ways of developing their business.


   
  Harris Black's Digital Toolbox – 'Trip It' 
 
Digital technology provides great opportunities to amplify the impact of your business activities and practices.

Gone are the days where you need to do everything manually within your practice like ordering, logistics, payments and receipts, marketing, HR, motor vehicle log book and so many more.

Every month, Harris Black will showcase a digital tool that will surely improve awareness, knowledge management, communication, and productivity within your business practice.

In this month's issue, we give you TripIt.

Managing your travel arrangements isn't easy as 1, 2 and 3.

TripIt instantly organises all your travel plans in one place. By simply forwarding your bookings or travel confirmation to TripIt, the app will automatically create master itinerary for each of your trips. You can also opt to allow TripIt to auto import travel plans from your email account or Google Apps so you don't have to forward your bookings and travel confirmation.

The best thing is, you can access your travel plans on your smartphone, tablet, computer or any wearable device anytime, anywhere.

 
TripIt - Instantly organise Travel Plans
Source: TripIt Youtube
 
With TripIt, all your travel plans, in one place!


 
  Simpler BAS from 1 July 
   
As of 1 July 2017, the ATO has reduced the amount of information needed for the business activity statement (BAS).

Small businesses with a GST turnover of less than $10 million will use Simpler BAS as the default reporting method. These businesses will only need to report total sales, GST on sales and GST on purchases.

Simpler BAS will reduce time spent on form-filling and making changes that do not impact the final GST amount.

The ATO will automatically transition eligible small business' GST reporting methods to Simpler BAS from 1 July 2017. Small businesses can choose whether to change their GST bookkeeping software settings to reduce the number of GST tax classification codes.

There are no changes to reporting frequency or how other taxes are reported on your BAS. Business owners are still required to keep usual BAS records and income tax return lodgements.


 
    Changes To Workplace Laws 
   
The start of the new financial year has seen some important changes to Australi
a's employment laws.

Not only do employers need to remain up to date and aware of amendments but they must also ensure they continue to meet their obligations to remain compliant. Employers must check their payroll systems and staff are implementing changes, and that pay slips and records are updated appropriately.


Below are some of the changes that took effect from 1 July 2017:

Penalty rates

Changes to the penalty rates in some awards for the hospitality, restaurant and retail industries started from 1 July 2017. The changes to public holiday penalty rates commenced in full from 1 July 2017. In the Restaurant and Fast Food Awards, changes to the evening work and after midnight penalties also started on 1 July 2017.

The changes to Sunday penalty rates are being phased in over three or four years from 1 July 2017, depending on the award and the employment type. Sunday rates in the Restaurant Award will remain unaffected by the changes.

Increase to the National Minimum Wage

The Fair Work Commission (FWC) announced a 3.3 per cent increase to minimum wages, raising the National Minimum Wage to $694.60 per week or $18.29 per hour. The 3.3 per cent increase applies to employees that get their pay rates from the national minimum wage and a modern award. The increase only applies to some registered agreements.

Employers must ensure the new minimum wages are applied from the first full pay period on or after 1 July 2017. So if your business pay week is Thursday to Wednesday, then you will need to pay your employees the new rates for all the hours they work from Thursday 6 July.

High-income threshold for unfair dismissals

From 1 July 2017, the high income threshold increased from $138,900 to $142,000 per annum. The high income threshold refers to the maximum earnings an employee can be paid and still be allowed to make an unfair dismissal claim (unless they are covered by an award or enterprise agreement).

The Fair Work Act 2009 deems an employee's annual rate of earnings as employee wages, any amounts applied or dealt with on the employee's behalf, such as salary sacrificing, and the agreed value of any non-monetary benefits, i.e., a car, mobile phone, laptop, etc. The high-income threshold excludes reimbursements such as meal allowances or living away from home allowances, statutory super contributions, commissions, overtime (unless it is guaranteed) or incentive-based payments and bonuses.

The maximum financial compensation limit is now $71,000. Employers should exercise caution when calculating whether their employees are earning above or below the high income threshold and whether a modern award or enterprise agreement applies to an employee.


    
    ATO Targeting Fringe Benefits Tax  
   
The ATO has fringe benefits tax (FBT) in its sights this tax time with a crackdown on employers that are deliberately avoiding or minimising their tax payable.

The specific areas of focus include:

Motor vehicles

Situations where an employer-provided motor vehicle is used, or available, for private travel of employees. This constitutes a fringe benefit and needs to be declared in the fringe benefits tax return (if lodgement is required). There are circumstances where this may be exempt, i.e., where the entity was tax exempt or the private use of the vehicle was exempt. Some employers fail to identify or report these fringe benefits or incorrectly apply exemption provisions.

Employee contributions

The Tax Office is focusing on situations where employee contributions that have been paid by an employee to an employer are declared in both the fringe benefits tax return (if lodgement is required) and the employer's income tax return. Focusing on this issue helps to ensure that the employer does not fail to report these contributions as income in their income tax return and that the employer does not incorrectly overstate employee contributions in their fringe benefits tax return to reduce the taxable value of benefits provided.

Non-lodgement

Employers who provide fringe benefits must lodge a fringe benefits tax return unless the taxable value of all benefits has been reduced to nil. Common errors include failure to identify fringe benefits provided and incorrect calculation of benefit values or reduction amounts.

Employer rebate

The ATO is cracking down on employers that apply for a fringe benefits tax rebate when they are not eligible. Rebatable employers are certain non-government, non-profit organisations.

Car parking valuation

The validity of valuations provided in relation to car parking fringe benefits is also under ATO scrutiny. Errors that attract the Tax Office's attention include:

  • market valuations that are significantly less than the fees charged for parking within a one kilometre radius of the premises on which the car is parked
  • the use of rates paid where the parking facility is not readily identifiable as a commercial parking station
  • rates charged for monthly parking on properties purchased for future development that do not have any car park infrastructure
  • insufficient evidence to support the rates as the lowest fee charged for all day parking by a commercial parking station

 
    Higher Education HELP Changes Announced 
   
The Government has announced a package of reforms to higher education – the Higher Education Reform Package – to take effect generally from 1 January 2018. Under the package the maximum student contribution will increase from 1 January 2018, but there will be no up-front fees and no deregulation of fees.

A new set of repayment thresholds will be introduced from 1 July 2018, affecting all current and future Higher Education Loan Program (HELP) debtors.
Maximum student contributions will also be increased, phasing in by 1.8% each year between 2018 and 2021 to cumulate in a 7.5% total increase.

TIP:
Already have a HELP debt, or thinking about undertaking more study? Talk to us to find out how these changes may affect you.


   
    Draft legislation: LRBA Integrity Measures For Pension Cap 
   
New exposure draft legislation contains integrity measures for limited recourse borrowing arrangements (LRBAs) as part of the Government's super reform legislation.

The exposure draft proposes to include LRBAs in fund members' total superannuation balance and the $1.6 million pension transfer balance cap. The changes seek to address concerns about SMSF members' ability to use LRBAs to circumvent contribution caps and effectively transfer accumulation growth to retirement phase that is not currently captured by the transfer balance cap regime. The amendments will only apply in relation to borrowings entered into on or after the Bill is enacted.

 
    Harris Black's 2017 Staff Day 
   
Friday 21 July 2017 saw the entire Harris Black Team attending their annual Staff Day! On this day we traditionally review the 12 months just past, reaffirm our firm values and develop our strategies further with the ongoing goal of creating great outcomes for our valued clients.

As always the day was packed with sessions aimed to develop skills and motivate the HB team... Included in the day were a number of group breakaway activities and sessions designed to get everyone brainstorming ideas relating to procedural, team and personal improvement plus a session with guest speaker, Tina Dolphin who gave us some key pointers on how to improve the quality of a client meeting with ''Better Questions''.

The underlying theme this year was to encourage everyone at HB to develop a Growth Mindset and to understand the disadvantages of having a Fixed Mindset… The premise being that those of us who actively work towards having a Growth Mindset, (one that embraces challenges and ultimately learning in a positive manner), will be in the best position to actively promote great outcomes for themselves, their organisation and their clients. Homework was set in advance, (the reading of Dr Carol S. Dweck's book "Mindset – Changing The Way You Think To Fulfil Your Potential'') and given the amount of para-phrasing going on around the office at present regarding whether someone is showing a ''Growth Mindset Attitude'' or not, I suspect we're all actively on board!

Evidence of how competitive some of us can be is always made clear over the course of the day with a few strategically placed fun activities… The Rubrics Cube Challenge saw a lot of us reaching for our smart phones… Some found also that if you get too frustrated with a Rubrics Cube it will actually disintegrate into quite a number of pieces giving you opportunity to put it back together again correctly!… Keziah Sedgwick completed this challenge in a ridiculously short amount of time (we're talking under a minute!)… Finally at the end of the day, the staff ''Wordle Challenge'' was taken out by one of our much loved Directors, Renee Bettenay, (matching 24 out of 26 personal ''Wordles'' to staff correctly!), so it seems she really does know us all quite well!

An entertaining and productive day rolled into a fun (but perhaps not so productive) evening as we headed out to celebrate the EOFY with firm drinks and nibblies at the Eleven Rooftop Bar. As is generally the case with a Harris Black Staff Event, an exceptional night was had by all!


 
    Harris Black News  
   
Renee's 20th Anniversary at Harris Black!
 
A ''Champagne Worthy Milestone'' was hit this past month by Director, Renee
Bettenay who, after commencing work with Harris Black as a19 year old undergraduate back in 1997 has now been with the firm for 20 years! Long hours, hard work and determination saw Renee effectively skip the positions of Manager and Associate... In 2006 at the age of 27 she became the firm's 2nd youngest to make Director and most proudly our first female Director! Always incredibly organised and efficient, Renee has been one of the major driving forces behind HB's well-constructed and successful work processes. When it comes to how jobs should be done, Renee is always a shining example to the team. Passionate about both her role at Harris Black and the clients she serves, Renee is a key force behind the culture and values of this great firm and we're so very proud to call her our own! Congratulations Renee!

Other News…

Other achievements and milestones hit by others in the team this month:

  • Lauren McKenzie – graduated 20th July from QUT with a Bachelor of Business Majoring in Accounting
  • Paul Whimp – 15th year anniversary with Harris Black
  • Gerald Simeon - celebrated his 5th year with the team
Congratulations to all!


  
    Important Tax Dates  
   
31 July 2017

Lodge TFN report for closely held trusts if any beneficiary quoted their TFN to a trustee in quarter 4, 2016–17.

14 August 2017

Lodge PAYG withholding payment summary annual report for:
  • large withholders whose annual withholding is greater than $1 million
  • payers who have no tax agent or BAS agent involved in preparing the report.

28 August 2017

Lodge and pay quarter 4, 2016–17 Superannuation guarantee charge statement – quarterly if the employer did not pay enough contributions on time.


  
     
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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. 

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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.

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