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  • 17Oct2017

    Be Uber careful with car expenses

    uber-car-expenses

    Tax issues associated with ride sourcing services such as Uber remain a hot topic of debate.

    How to claim car expenses related to these activities is one frequently asked question.

    In simple terms, the rules for ride sourcing vehicles are no different than that for any other taxpayer. Car claims need to be made using either the cents per km or log book methods.

    The cents per km method applies to vehicles doing up to 5000km for business per year. This will suit more part-time drivers. There is no need to keep any sort of specific records, but you may be asked to justify how the kilometres were calculated (diary records etc).

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  • 13Oct2017

    Use BAS as a Business Health Check

    As a small business owner, do you consider your quarterly BAS to be a necessary evil? Or do you see it as a chance to pause and check the financial temperature of your business?

    Each quarter almost every small business throughout Australia has to calculate and lodge a Business Activity Statement (or BAS).

    Many small business people object to being the government’s tax collector every quarter and get the BAS off their desk as quickly as possible. Others, while not enjoying the tax collection aspect, also recognise each BAS as an important opportunity to assess the some of the key numbers in their business.

    To produce and lodge each BAS requires an accurate set of quarterly financial accounts – often prepared, or at least checked, by a professional bookkeeper or accountant. It is these quarterly accounts that can reveal many things about the current performance of the business.

    For example, how is the turnover, gross margins, expenses and net profit tracking? How do they compare to the same quarter last year?

    If there are differences, the most important question is why?

    Why is the turnover down? Have we lost major customers? Are their new competitors undercutting prices?

    Are our gross margins (sales less cost of goods sold) holding up? If margins are being squeezed, why? Is our stock more expensive? Have delivery or storage costs increased?

    What about other business expenses? How are they tracking overall compared to last year? Are there any line items that have blown out? If so, why? Were they allowed for in the budget?

    Or are we doing better than this time last year? Is turnover and profit up? If so, then why? Is any particular area of the business responsible for the good outcomes? Are there any key staff members or marketing campaigns or new products? Is the improvement sustainable? And are the improved figures in one area masking poor performance in other areas of the business?

    And what about your balance sheet? Have you got enough money in the bank? What levels of stock are you carrying? Have your liabilities increased?

    The good news for business owners is that modern accounting packages makes this quarterly review of your business numbers an easy thing to organise.

    All good accounting software packages, like Xero, provide detailed and simple access to current and comparative reports on all areas or your business.

    Being the business bookkeeper is often not the most efficient or effective use of a business owner’s time. Better to focus on sales and business development and pay a professional to prepare the books.

    But it is important for each business owner to know how to access, or request, the key reports and numbers in their business accounting software. Taking time to study these reports can provide some powerful data to help you with both short and long term decision-making.

    This is where a good relationship and communication between a business owner and a professional accountant is important.

    If you are not large enough to have your own internal qualified accountant, then a good and proactive relationship with your external accountant can be a key to helping analyse the numbers.

    A brief meeting, phone call or email exchange with your accountant to discuss your quarterly numbers may be all that you need to check your business is on the right track.

    If a negative trend in your numbers is detected better it be investigated and corrected early, rather than running the risk of letting it continue to impact across all four quarters of the financial year.

    If you would like to discuss your numbers last quarter – or this quarter – contact us on 07 3359 5244, email  or chat to us on Messenger today.

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    Keep Your Medical Business Healthy
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  • 06Oct2017

    Important Decisions for Downsizers

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    Selling the family home is one of the major economic and personal decisions faced by Australians as they approach retirement.

    There are many potential advantages, but the trade-off can be the unintended or underestimated emotional and financial costs of the move.

    Motivations to move can be many. But so can the potential traps.

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  • 29Sep2017

    Xero – Be sure to update your automatic super registration

    xero

     

    Xero are improving automatic superannuation to make it easier for you to manage, track and pay your contributions.  As a result they are moving to a new superannuation payments clearing house.  To make sure you can process super payments without any worries, you’ll need to update your superannuation registration.

     

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  • 28Sep2017

    Advice Priorities in Turbulent Personal Times

    separation-divorceDivorce and separation is a traumatic time for anyone who needs to deal with this type of life challenge.

    Coming to grips with the emotional side of the event is significant, but, at the same time, there needs to be some clear thinking applied to the financial side of your life.

    The following is a list of some of the financial priorities that need to be clarified and dealt with as soon as it appears that a relationship split is a reality.

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  • 22Sep2017

    15 Key Questions to ask when contemplating a business purchase

    As tax and accounting professionals, we are often amongst the first to know when a client is considering a business purchase.

    Generally there has been some research done, but “Where To From Here?” is the key question for most potential business owners.

    Helping people through a successful business purchase is one of the most satisfying parts of our role as accountants.

    There is a level of excitement about the opportunity, but also usually caution about not wanting to make a financial mistake. This can be particularly important for first-time business owners who have only ever worked as an employee.

    Sometimes, to the uninitiated, running a successful business looks easy from the outside looking in. The reality, however, can be very different.

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  • 14Sep2017

    Deductible work clothes guidelines refreshed

    work-uniforms

    Many workplaces opt to have a work uniform that is smart and appropriate for their industry.

     A work uniform is a way of reinforcing your corporate branding and is, in many cases, often popular with employees for its ease and tax benefits.

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  • 12Sep2017

    Employer obligations should be taken seriously

    As each new tax year ticks over, all small businesses should review that they are meeting their obligations as an employer.

    The ATO takes a dim view of employers who don't take seriously their obligations

    Getting employee entitlements wrong is one area where the ATO takes a very dim view of mistakes.

    The ATO recently estimated that there was $17 billion of super missing in taxpayer accounts over a six year period.

    Most of this was due to non-payment or under payment from employers.

    Those businesses who have been through a superannuation or PAYG audit will attest that the ATO puts them through a very thorough and exacting process.

    As with most things, an ounce of prevention is always better than implementing a cure after the event.

    Affinitas Accounting encourages that all small businesses take the time to review the following payroll information on a regular basis. The following steps should give you a good place to start.

    1. Have you applied the Annual Wage Increase handed down by the Fair Work Ombudsman (CPI)?

    This increase is generally handed down on July 1 each year. On July 1, 2018 the Annual Wage Increase was 3.5% for a new weekly minimum wage of $719.20 per week.

    2. Have you applied any wage increases for junior employees?

    3. Has there been any wage movement for employees under a traineeship or apprenticeship?

    4. Have you been keeping yourself up to date with any changes within your employees’ award?

    5. Is your employee record keeping up to date?

    6. Do you have a record of accrued annual leave/sick leave/long service leave? Are these being kept up to date?

    7. Have you been paying your superannuation guarantee (SG) on time?

    8. Do you have an employee agreement?

    Note: An employee agreement is not necessary but they generally are considered good practice.

    Audit insurance will protect a business from the fees involved in answering an ATO audit, which can run into many thousands of dollars even if you have no breaches.

    The insurance will not, however, save you from any fines or penalty interest. And if you are deemed to have deliberately ignored your superannuation obligations and SGC paperwork then audit insurance may refuse to cover you.

    If you require any guidance with reviewing your payroll matters, please contact us on 07 3359 5244, email , or reach us on Messenger below.

    Information on your obligations as an employer also can be found on the FairWorks Ombudsman website https://www.fairwork.gov.au.

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    The ATO takes a dim view of employers who don't take seriously their obligations
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  • 12Sep2017

    ATO re-issues warning on work related car expenses

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    The ATO has again highlighted to taxpayers that it is paying close attention to claims for work-related car expenses.
    Assistant Commissioner Kath Anderson said “standard” claims were a common error.

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  • 31Aug2017

    Forewarned is forearmed – the Tax Commissioner’s 2017 hit list

    Like all major government institutions, the Australian Taxation Office (ATO) is not afraid to strategically use the media to deliver key messages.
    Last month, in a speech to the National Press Club in Canberra, Tax Commissioner Chris Jordan delivered what has been described as a “shot across the bows” to Australian taxpayers, which included hit lists in a number of compliance areas.
    Mr Jordan stated the reason for this public outing was the ATO had identified a more than 6% gap between the amount of tax collected and the amount it thinks should be collected.

    “The risks of non-compliance highlighted by our gap research so far in this market are mainly around deductions, particularly work related expenses. The results of our random audits and risk-based audits are showing many errors and over-claiming for work related expenses – from legitimate mistakes and carelessness through to recklessness and fraud. In 2014-15, more than $22 billion was claimed for work-related expenses. While each of the individual amounts over-claimed is relatively small, the sum and overall revenue impact for the population involved could be significant,” the Commissioner stated during his Press Club address.

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