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  Are You Ready To Expand Your Business? 
 
When a business is going well, many owners look to expand. Consider the following advice before doing so:

Regular customers

A sound indicator of whether or not your business is ready for expansion is to consider
 your customer base. To feel comfortable in expanding, you should have regular and loyal customers that return to your business. Regular customers that appreciate and value your business can be more helpful than you may realise; they can bring in additional customers by speaking positively about the business. When you begin thinking about expanding, it would be worthwhile to create a survey or questionnaire, asking what could be done to improve the service your business provides. Any feasible suggestions should be implemented before expanding.

Financially ready

There are a lot of expenses associated with expanding your business. Hiring and training new staff, paying for new hardware and software, and any other technology needed to facilitate growth all costs money. Additional rent on another office space and bills can add up to a sizeable figure. While you may be able to afford all of these expenses that come with expanding your business, consider whether the profit you will make from implementing all these changes will be fruitful and worthwhile for the business, or whether it will be a loss in the long-run.

Resources

Money is not the only resource you need to expand successfully. You will need adequate space. To gain more space consider whether you will open a second or third office or whether you will allow for more flexible working conditions, such as allowing staff to work remotely. Evaluate whether you have enough staff to handle a larger business; this includes answering phones, responding to emails, assisting customers in store, etc. If your business is one that makes deliveries, you will need to organise additional resources such as another delivery truck and potentially more delivery staff.

Develop a strategy

It is naive to assume that expanding will be a straightforward process. Regardless of how many loyal customers you have or how much money you have, without a sound business strategy, the likelihood of achieving success is slim. Plan how you will manage the expansion through completing a SWOT analysis. You should prepare a budget that will enable you to expand successfully; you will need to submit a financial application and analyse how current cash flow will enable or hinder the process. When you put your business plan into action and start expanding, regular and thorough reviews should be undertaken to stay on top of how well the process is going.

 
  New Ban On Excessive Payment Surcharges 
 
As of 1 September 2017, Australian businesses are banned from charging customers excessive surcharges for using EFTPOS, Visa, Mastercard and American Express cards to make payments.

The ban restricts businesses from charging customers surcharges that are higher than 'cost of acceptance.' Cost of acceptance is what it costs the business to process a payment, such as bank fees and terminal cost, but excludes internal costs such as wages and utilities.

This means businesses can only charge customers what it actually costs them to process card payments. For example, if a business's cost of acceptance for Visa credit is 1.5 per cent, customers can only be charged a surcharge of 1.5 percent on payments made using a Visa credit card.

For businesses that want to set a single surcharge across multiple payment methods, the level of the lowest cost method must be used, not an average. For example, if a business's cost of acceptance for Visa Debit is 1 per cent, 1.5 percent for Visa Credit, and American Express is 2.5 percent, the single surcharge would be 1 percent.

The Reserve Bank indicated as a guide that the costs to merchants of accepting payments by debit cards is in the order of 0.5 per cent, by credit card 1-1.5 per cent and for American Express cards around 2-3 percent.

Businesses are advised to contact their financial institutions if they are unsure about their cost of acceptance.

The ban does not include BPAY, PayPal, Diners Club cards, American Express cards issued directly by American Express, cash and cheques.

The ACCC is responsible for enforcing the ban and will investigate complaints relating to excessive payment surcharges. If the ACCC believes a business has breached the ban, an infringement notice will be issued or court action against the business will be taken.

 
  Harris Black's Digital Tool Box – 'MailChimp' 
 
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 issue, we give you MailChimp.

Email marketing is an important tool in today's marketing efforts. Businesses of all sizes can grow their revenue and expand their reach by targeting a vaster, more global audience which is made possible by email marketing.

MailChimp is a marketing automation platform and an email marketing service which give you the ability to create and manage email lists, newsletters, automated campaigns and more.

 
Meet MailChimp
Source: MailChimp Youtube

MailChimp is perfect for not just welcoming new clients or subscribers but for also providing your subscribers with a customised mailing whether that be a product or service suggestion related to a purchase, an annual mailing to a subscriber wishing him/her a happy birthday, thanking regular subscribers who are actively engaged and garnering important feedback to your business.

Truly, MailChimp will give you the marketing tools to find your audience, engage with customers and build your brand.

   
    Harris Black Top 10 – Fashion Saving Tips 
   
Spring is in full swing and so is the spring fashion rollout!
With Melbourne Cup fast approaching - retailers will be wooing you with the latest and stylish items for work and other functions.

In this month's 'Harris Black Top 10' we're providing you with some tips on how to score on fashion without breaking your budget.

1.  Buy simple, versatile pieces that work for the office and then can be pared down or dressed up for post-work function.   
2.  Shop around online or in-store for best prices before buying.
3.  Shopping end-of-season and flash sales can score you great deals for items you really want and need.  
4.  E-bay shopping!
5.  Spend money on clothes on a per-season basis, rather than by week or month.
6.  Buy better clothing and get more value (cost per wear)!
7.  Be creative with your current wardrobe. Mix and match your everyday style.  
8.  Use Promo Codes when shopping online.
9.  Save money by signing up for free rewards programs.
10.Do a closet purge and sell your unwanted clothes online. 


    Legislation Passed To Protect Vulnerable Workers 
   
Vulnerable workers are set to receive better protection after the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017.

The Bill contains measures such as an increase in the maximum penalties for employers who deliberately flaunt the minimum wage and other entitlements under the Fair Work Act 2009.

The new laws will apply from the day after the Bill receives royal assent, except for the new franchisor and holding company liability which will start six weeks later.

Franchisors and holding companies will be held responsible for underpayments by their franchisees where they know, or reasonably should have known, about the contraventions and failed to take reasonable steps to prevent them.

The new laws will:
  • Apply to franchisors that have a significant degree of influence or control over the franchisee's affairs.
  • Apply new, higher financial penalties to 'serious contraventions' which are 10 times the current maximum penalties. A court could impose these higher penalties where an employer knew they were breaching their obligations and this conduct is part of a systematic pattern of behaviour. Maximum penalties of $630,000 and $126,000 per contravention could apply to corporations and individuals respectively.
  • Double the maximum penalties for record-keeping and pay slip breaches, to $12,600 per contravention for individuals and $63,000 for companies, and triple existing penalties where employers give false or misleading pay slips to workers, or provide the Fair Work Ombudsman (FWO) with false information or documents.
Furthermore, where an employer has not met their record-keeping or pay slip obligations, the employer will have to disprove a wage claim put before a Court unless the employer has a reasonable excuse for not keeping records or issuing pay slips.

The Fair Work Ombudsman will be given new evidence gathering powers to require a person to provide information or documents to the FWO or to attend before senior FWO officials to answer questions on oath or affirmation relating to underpayment of workers.

Individuals will have stronger protections with the strengthening of the FWO's new evidence powers including rules preventing the evidence a person gives from being used against them personally, the right to have a lawyer present if they attend to answer questions, the right to claim reimbursement of reasonable expenses and supervision by the Administrative Appeals Tribunal and the Commonwealth Ombudsman.

While the FWO acknowledges most employers work with the FWO to address concerns about an employee's entitlements, those engaging in deliberate breaches of the law often do not cooperate. The new powers will help address serious cases of non-compliance and exploitation, especially in protecting the most vulnerable community members.

 
    Why Sole Company Directors And Shareholders Need A Will 
   
Dying intestate (without a Will) can pose many complications for the ordinary person. But when a sole director and shareholder of a company dies without a Will it can have an even more devastating impact.

Upon the death of a sole director and shareholder of a company who has no Will, there is no person properly authorised to immediately run the company or appoint a new director leaving many stakeholders scrambling for answers.

Generally, a near relative or other person of the deceased will apply for Letters of Administration to manage the estate; however, this process can be lengthy. If no one applies for Letters of Administration, a creditor of the deceased can apply - this can result in the winding up of the company.

Alternatively, the Public Trustee may step in and administer the estate, but this process is also long.

The company may not be able to operate during the period where there is no director. Most banks and other financial institutions are unwilling to accept instructions for a company's trading account if there is not an authorised person to do so. Furthermore, major stakeholders such as employees and suppliers may not be able to get paid during this time.

To avoid the pitfalls associated with intestacy, it is important that sole directors and shareholders of a company create a valid Will and make provision for who is the beneficiary or beneficiaries of their shares.

Furthermore, consideration must be given to circumstances where the sole director and shareholder becomes incapacitated and therefore is unable to fulfil their duties as director and shareholder. To cover this circumstance a document called an Enduring Power of Attorney or a Company Power of Attorney may be appropriate.

As your financial structure becomes more complex (trusts, companies etc) there is more to consider when reviewing your estate planning. Your estate planner (lawyer) will need to understand your financial structure before drafting your Wills and Powers of Attorney. To ensure that you get the right help and the right information during your estate planning process please contact your Harris Black team member.

 
    CBA Cancels Personal Credit Card Bank Feeds – MYOB and Xero 
   
From 17 October 2017, automated bank feeds for CBA personal credit card transaction data will cease. CBA Business credit card bank feeds will continue.

These means that you won't be able to automatically code transactions for your personal Commonwealth Bank credit cards in either your Xero or MYOB files.

After 17 October, the only way to get your CBA personal credit card data into Xero will be via CSV upload. This can be time consuming and inefficient, and has caused many complaints from CBA customers.

The CBA's reasoning for the move is that customers shouldn't be using personal credit cards for business transactions. What CBA has failed to recognise is that there are a large number of customers who use accounting software (such as Xero and MYOB) to track private or household spending and budgets.

There is no details from CBA as to whether this is a policy that they will change at any time in the future.

As a result of this change, the only option is to switch your personal credit card to another bank (no other banks have cancelled bank feeds for personal credit cards at the time of publishing).

To know more about this, please contact your Harris Black team member today.

 
    Small Businesses 
   
Asset write-offs

Small businesses with a turnover of less than $10 million can get an immediate deduction for assets that cost up to $20,000 each in their 2016–2017 return. The $20,000 threshold now applies until 30 June 2018.

Assets that cost $20,000 or more can't be immediately deducted. They need to be deducted over time using a small business asset pool.

TIP: It's important to apply all of the simplified depreciation rules correctly so your business doesn't under-claim for its eligible assets. Talk to us today for more information.

Tax debts: setting up a payment plan

Does your small business have a tax debt? The ATO encourages you to get in touch to set up a payment plan. If the debt is $100,000 or less, you can use the ATO's self-help service to easily arrange paying by instalments.

If a business pays its tax debt late or by instalments, interest accrues on the unpaid debt. However, some businesses with activity statement debts may be eligible for interest-free payment plans.

To deal with a business tax debt of more than $100,000, you can phone the ATO on 13 11 42.

TIP: Your business still needs to lodge all of its ongoing activity statements and tax returns on time, even if you have a payment plan or can't pay by the due date. 


    Work-Related Expense Claims Under Scrutiny 
   
Will you claim work-related expenses on your tax return this year?

The ATO now uses real-time data to compare people's tax returns with others in similar occupations and income brackets. This year it's focused on identifying higher-than-expected claims for expenses related to work vehicles, travel, internet and mobile phones, and self-education, and may even check people's work deduction claims with their employers.

TIP:
Ever heard that you can make a standard claim of $300 for work-related expenses even if you don't have evidence? This isn't true! The ATO doesn't ask for receipts up front for claims up to $300, but you must have actually spent what you claim, and be able to show how you worked out your deductions if the ATO asks.

The ATO's also concerned about people's many incorrect claims for work-related clothing and laundry expenses. In 2014–2015, around 6.3 million people made claims against clothing expenses, but work-related deductions are in fact only available for specific uniforms and protective clothing items, not for everyday clothes you buy, launder and wear for work.

 
    Employee Travel Expense Deductions 
   
The ATO has also released new guidance on work-related travel deductions. To claim for 
transport or other employee travel expenses (like accommodation and meals) in your tax return, you must have incurred the expenses as part of gaining or producing your taxable income. Private and domestic travel expenses, including the costs of your ordinary home-to-work travel, aren't claimable.

Transport costs for work-related travel may be deductible, but the ATO will consider factors such as:
  • whether the travel is a necessary part of performing your work (you can't pretend your family holiday's a work trip);
  • whether your employer pays you to undertake the travel; and
  • whether you have to follow your employer's instructions during the travel period.
Accommodation, meal and other incidental expenses are deductible as work-related only if your work has "special demands" or "co-existing work locations" that mean you have to sleep away from home.

TIP:
We're here to help – contact us to find out more about getting your work-related tax deductions right.

 
    Working Holidaymakers And Tax Returns For 2017 
   
If your business employs working holidaymakers – or you've been one yourself this year! – you need to know about the "backpacker tax" changes that came into effect from 1 January 2017.

Employers needs to issue two payment summaries to each working holidaymaker for the 2016–2017 financial year:
  • one for income earned up until 31 December 2016; and
  • one for income earned after 1 January 2017 (using payments code H).
All employers need to include code H on payment summaries of backpacking workers' post-1 January income, even if the employer isn't registered with the ATO as employing working holidaymakers.

TIP
: If only one payment summary is issued, the income needs to be apportioned so the before and after 1 January amounts appear separately on the working holidaymaker's tax return.

 
    Brentnalls Conference – Queenstown, New Zealand 
   
Wednesday 18th October saw the Harris Black Directors, Office Manager (Kim Schluter) and Workflow Manager (Kathryn Healy) head over to Queenstown New Zealand for one of our bi-annual "Brentnalls Conferences". As many will be aware, Harris Black is a key member and participant in a network of nationally affiliated independent chartered accounting firms called the Brentnalls Group. Additional to Harris Black, the group now includes firms from Sydney, Melbourne, Adelaide, Hamilton SA, Perth and Auckland NZ.

All firms involved in the affiliation share a similar ethos of wanting to help clients build better businesses and grow wealth. Member firms exchange information and ideas, capabilities and resources which ultimately provides benefit not only to Harris Black but our clients also. The conferences play a crucial role in supporting and developing the Brentnalls Group network and generally run across three days packed with individual practice updates, member sharing and information sessions and of course… social events where we eat and drink just a little too much!...

Ultimately each conference maintains a collective core focus on how best we're able to improve our services and better provide positive outcomes to our clients. Creative thinking, strategic planning, challenges and goal setting are encouraged during the conference. After so many years of working towards common goals and sharing a professional passion, the camaraderie amongst members is naturally evident and as a result the sessions are as entertaining as they are informative!

Days start early often with a group walk and go late into the evenings. The Agenda includes member group sessions which are generally broken up with a few guest speakers and some team building activities.

Travelling to Walter Peak Station by boat across Lake Wakatipu on day two of the conference, we were all introduced to the challenge of Clay Pigeon Shooting at break time. Rest assured none of HB Team are much good with a gun!

Our base, Millbrook Resort, Arrowtown, was also quite exceptional in every way… both scenery and facilities were spectacular. Definitely an informative and enjoyable three days for us all!

 
    Important Tax Dates 
   
31 October 2017

  • Lodge tax returns for all entities if one or more prior year returns were outstanding as at 30 June 2017.
  • Lodge tax return for all entities prosecuted for non-lodgement of prior year returns and advised of a lodgement due date of 31 October 2017.
  • Lodge PAYG withholding annual report no ABN withholding.
  • Lodge PAYG withholding annual report – payments to foreign residents.
  • Lodge lost members report for the period 1 January – 30 June 2017.

21 November 2017

  • Lodge and pay October 2017 monthly activity statement.

25 November 2017
  • Lodge and pay quarter 1, 2017–18 activity statement if you lodge electronically.

28 November 2017
  • Lodge and pay quarter 1, 2017–18 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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National Affiliation

Harris Black is a key participant in a network of nationally affiliated independent chartered accounting firms called the Brentnalls Group.

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