Straight Numbers & Tax Talk for Business – April 2018

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In this Issue:

You’ll find important news here on the Single Touch Payroll initiative  which is about to come into effect. Another big ticket item for business owners to understand is the Notifiable Data Breaches scheme. Read more about what’s happening in these areas in this newsletter.

Starting with this edition, we’ll be sharing with you the latest Business Productivity tips to help you stay in control of your business development and growth trajectory — see Tip #1 on page 3.

BONUS: This month we have a special invitation for business owners who want to sky-rocket their profits. Come and join Tim and Robert at the free training Advanced Marketing & Tax Strategies to Double Your Business Profits. Get more details on the last page.

If you have any questions about the items published in this newsletter, please don’t hesitate to give us a call on 07 3399 8844… or stop by at our office for a coffee. We’re never too busy to sit down and talk to you.

Best regards from Robert and the Team

What you need to know about the Notifiable Data Breaches scheme

Business owners need to know if they are going to be affected by the Notifiable Data Breaches (NDB) scheme, which was legislated in 2017 and came into effect on 22 February 2018.

The NDB scheme introduced an obligation to notify individuals whose personal information is involved in a data breach that is likely to result in serious harm. This notification must include recommendations about the steps individuals should take in response to the breach. The Australian Information
Commissioner (Commissioner) must also be notified of eligible data breaches.

Any organisation or business that previously had obligations under the Privacy Act 1988 will be required to comply with this new scheme, including:

  • Australian Government agencies
  • All Businesses and not-for-profit organisation with an annual turnover of $3 million or more
  • Some small business operators, including:
    • All private sector health service providers
    • Those that trade in personal information
    • TFN recipients (if annual turnover is below $3 million, the NDB Scheme will apply only in relation to TFN information
    • Those that hold personal information in relation to certain activities, for example; providing services to the Commonwealth under a contract.

A small business operator (SBO) is an individual (including a sole trader), body corporate, partnership, unincorporated association, or trust that has NOT had an annual turnover of more than $3 million in any financial year since 2001.

Generally, SBOs do not have obligations under the APPs unless an exception applies.
Make sure you visit the website of the Australian Information Commissioner for more details. This is a complex area and this summary doesn’t include all the specifics.

Here is the direct link to find it fast.

Guide to the new Small Business Super Clearing House

The Small Business Superannuation Clearing House (SBSCH) joined the ATO’s online services on 26 February 2018.

This is intended to streamline how businesses use the SBSCH, and will also include extra functionality, such as the ability to sort employee listings and payment by credit card.

Editor: The SBSCH is a free service that businesses with 19 or fewer employees (or which are SBEs) can use to comply with their super obligations.

New small business benchmarks are available

The ATO has updated its small business benchmarks with the latest data from the 2015/16 financial year.

In addition to helping businesses to see if they are performing within their industry average, the benchmarks are one of the tools the ATO uses to identify businesses that may be a higher risk.

Editor: That is, they use the benchmarks to pick their audit targets, so please contact us if you would like us to check whether your data is inside or outside the average benchmark range for your industry.

Memorable Quotes…

“Things turn out best for people who make the best out of the way things turn out”

—John Wooden, American basketball coach (1910—2010)

FREE Tax Blaster Session

There are a number of ways that individuals and small business operators can legally slash their tax. We find that many of our clients only begin to realise after a chat with one of our professional tax agents how much tax they could have saved if they had taken action earlier.

Don’t delay it any longer and book in for your FREE 20-minute Tax Blaster session. We’ve got limited spaces available for people who want to increase their earnings, save on taxes and put more money into their retirement fund.

Find out NOW how you could be making more money for your retirement and facing less financial stress now and in future.

Call our Team on 07 3399 8844 to book your FREE meeting NOW.

Single Touch Payroll update

The Single Touch Payroll (STP) scheme introduction is picking up pace and due to come into effect on 1 July 2018. We’ve covered aspects of this topic in several articles of our past newsletter editions, but now the rubber starts to hit the road.

Here are the key details of the scheme in brief:

Employers with 20 or more employees need to start reporting to the ATO through STP from 1 July 2018 if your payroll software is ready. The first year will be a transition period and penalties may not apply.
Some payroll software providers have asked for more time to update their products – check if your product has a deferred start date. If your software will be ready by 1 July 2018 but you won’t be ready, you will need to apply for your own deferred start date.

Editor: Please call us on 07 3399 8844 to find out if the payroll software you are using is already compli-ant or if you need help with applying for a deferred start date.

You will need to report to the ATO each time you pay your employees. Your pay cycle does not need to change. You can continue to pay your employees weekly, fortnightly or monthly.

The following information must be reported on or be-fore the day you withhold from a payment (the pay day):

  • payment information, including salary or wages, allowances, deductions, etc.
  • withholding amounts
  • superannuation liability information or ordinary times earnings (OTE).

There are some advantages for early adopters of the Single Touch Payroll scheme, for example, employers who fully report all the information required through Single Touch Payroll will not have to comply with a number of other reporting obligations under the existing law. This includes providing certain payment summaries and the corresponding payment summary annual report (PSAR). They will need to provide a finalisation declaration with the ATO.

Single Touch Payroll will be expanded to include employers with 19 or less employees from 1 July 2019. This is subject to legislation being passed in parliament.

Editor: For more details on the STP scheme please call us on 07 3399 8844 to help you navigate the payroll reporting changes and associated impacts, as they relate to your particular business situation.

Smiling Elvis

Heard this one before?

Oh Murphy, you’ve done it again!

Murphy applied for a forklift job at a famous Irish firm based in Dublin. A Norwegian applied for the same job and since both applicants had similar qualifications, they were asked to take a test and left to a quiet room with no interruptions by the Manager. When the results were in, both men had scored 19 out of 20.

The Manager went to Murphy and said, “Thank you for coming to the interview, but we’ve decided to give the Norwegian the job.”

Murphy: “And why would you be doing that? We both got 19 questions correct. This being Ireland & me being Irish, surely I should get the job.”

Manager: “We have made our decision not on the correct answers, but on the question you got wrong.”

Murphy: And just how would one incorrect answer be better than another?”

Manager: “That’s simple; on question number 7 the Norwegian wrote down — I don’t know. You put down — Neither do I.”

Big changes proposed to eligibility for the CGT SBCs

The Treasurer has released draft legislation containing new “integrity improvements” to the CGT small business concessions (‘SBCs’) (i.e., including the 15-year exemption, the retirement exemption, the 50% active asset reduction and the small business roll-over).

Due to the government’s “continued support for genuine small business taxpayers”, it proposes making amendments so that the CGT SBCs can only be accessed in relation to assets used in a small business or ownership interests in a small business.

Predominantly, the amendments include additional basic conditions that must be satisfied for a tax-payer to apply the CGT SBCs to a capital gain arising in relation to a share in a company or an interest in a trust (i.e., a unit in a unit trust).

This integrity rule is designed to prevent taxpayers from accessing these concessions for assets which are unrelated to their small business, such as where taxpayers arrange their affairs so that their ownership interests in larger businesses do not count towards the tests for determining eligibility for the concessions.

Under the proposed amendments, the measure would be backdated to apply from 1 July 2017.

Editor: The proposed amendments, if enacted as currently drafted, will significantly restrict access to the CGT SBCs where taxpayers owning shares in a company, or units in a unit trust, seek to dispose of their interests in the entity.

This will particularly be the case where such interests are held in an asset-owning entity (i.e., which holds and/or leases business assets across to a separate, yet related, business entity).

It is to be hoped that the more draconian aspects of these measures may be scaled back, but due to the retrospective nature of the proposed amendments (i.e., from 1 July 2017), caution is warranted with respect to the SBCs in relation to the disposal of shares or units.

Business Performance Tip 1 – Keep an eye on your competition!

Do you know what your competitors are doing? You might have known who’s doing what in your neighbourhood at some point, but have you kept your finger on the pulse?

Just like your business evolves over time as you open up new markets with new products or services, so do other businesses that are in direct competition to yours.

To keep your business performance at an optimum level we recommend that you put a few measures in place that will help you to keep an eye out for what your competitors are up to.

  1. In the event that a prospect decided not to go ahead with a purchase from you, take the opportunity there and then to find out why. You could find out some valuable information. There could be a new kid on the block, or other competitors may have changed their pricing or product offers.
  2. Do some online stalking such as visiting your competitors’ website, or you might even want to join their Facebook community, if they are communicating big on social media. It is important that you also create a supporting process for this activity. You can create a simple spreadsheet to start with where you list all your competitors’ website addresses for each of your products they are competing against you. Set up a timetable for it, ie add a time column and review this info each quarter or twice a year. Delegate this task to one of your staff and schedule review meetings after their investigations.
  3. Create a policy or procedure for your staff where they can document information about any new competitors that they come across.

FREE Copy of Our Book

We hope that you’ve enjoyed this edition of the Straight Numbers & Tax Talk.

As a Thank You to our readers we’ll give away a FREE copy of our highly sought-after book titled ‘Straight Money Talk – A Straightforward Plan for Financial Independence” (worth $17.95), PLUS the accompanying workbook “5 Steps to Financial Independence”.

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Please Note: Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.