Now that the EOFY is creeping up on us quicker, it’s a great time to double check all your tax return facts.
One of the simple ones you may not know the distinction between is a business and a hobby.
These tax tips will help you with your tax planning.
LESSONS FROM AN ANT
I was listening to the radio the other day to an insect expert and how they had paralleled the psychological behaviours of humans with those of insects. Some interesting points were made in regards to ants, and grasshoppers, which led me to thinking how we could learn a thing or two regarding our own financial freedom, by looking to the ant world.
How you ask?
Before we delve into our “finance from an ant” advice let’s consider what scientists have already discovered about these busy, little, hardworking creatures.
So, you say what does this have to do with money and in particular savings? Let me show you:
EMBRACING DELAYED GRATIFICATION – You will never see an ant carrying their snack who stops to take a bite, or eat it all. Chances are she has bypassed a smaller meal for the one she is carrying. She has a purpose for that crumb and she is going to make sure she carries it until her destination.
In other words ants have embraced the concept of delayed gratification. Many of us have all lived the life of a grasshopper at some point and frittered away our savings on instant gratification and not considered saving our extra money. We have recklessly nibbled on our crumb, convincing ourselves we need that item today and many of us are now finding ourselves with little to no savings or in debt above our heads, because we couldn’t wait or we were living in the moment.
Work with what you have now. Starting with a small amount and invest into something that will grow your wealth in the future. By adding your small “crumbs” to your savings or your investments and delaying your gratification for a bigger picture in the future you are also contributing to your own financial freedom.
In the fable “The Ant And The Grasshopper” by Aesop, the care free grasshopper who didn’t think ahead, went looking to the clever ant who had planned for the winter. Do you have enough savings for a “cold” season? What if you lost your income today? How long could you survive?
YOU ARE THE BOSS OF YOUR MONEY – Despite not having a “boss”, ants do their work diligently. There is no getting around it, hard work, initiative and patience are all key to your own success. There is no napping on the anthill and there is no reward for putting things off to start saving later.
Your employer is not going to create wealth for you. To create your wealth you need to take responsibility for your decisions, the timing of your actions and the result of these combined. When you take responsibility it empowers you. Understand what you are investing in. Seek professional advice. Be educated. Don’t wait for something drastic to happen or someone to tell you. Be the boss of your own savings.
WORKING FOR SURVIVAL ONLY KEEPS YOU SURVIVING – An ant carries a load 3x its size and will build an anthill much bigger than itself.
How? Most people who have accomplished great things have not known the answer to how they were going to do it. They started with an idea and they took the steps in working towards achieving it.
Assess the risks with the goal in mind. Set a goal that you really want but fear you might not achieve. What are the benefits if you do succeed through hard work, determination and building your small ideas into bigger ones, compared to doing nothing because the idea seemed too big?
To be future-orientated and a good saver, a “maximizer”, requires planning and being in control of your savings. “Maximizers are forward thinking, conscientious, optimistic and satisfied”, says leading researcher Susan Zhu, choosing the path of the ant “can be harder or more time consuming in the moment, but it appears to have the best outcome in the long run, even if it isn’t always fun”, explains Zhu.
Perhaps the best m-ant-ra to live by is work hard, seek professional advice to put you on the right track and stay focused on your goals. Instant gratification, and living for the moment, is best left to the grasshoppers. Look to the ant for success. If you need any advice on how to work towards your goals financially, Bishop Collins Wealth Management Services can put you on the right path.
As part of many businesses’ operations, commercial type vehicles such as work Utes, Vans and Trucks are provided to employees to complete their duties. If your business provides this, it is likely your employee may use the vehicle for some private use, such as visiting the shops, or running the occasional errand on the weekend.
This private use has typically been categorised by many businesses as ‘minor, infrequent and irregular’ private travel, and would not attract any tax consequences when it came to reviewing the businesses’ Fringe Benefits each year.
Historically ‘minor, infrequent and irregular’ travel had not been defined, and most taxpayers were unclear as to what amount of private travel would tip them over this ‘minor, infrequent and irregular’ threshold and expose them to Fringe Benefits Tax on the vehicle.
To address this uncertainty, the ATO have released draft guidelines in PCG 2017/D14 outlining their position on a ‘safeharbour’ amount of ‘minor, infrequent and irregular’ private usage. That is, what amount of private travel does the ATO consider to be complying with the minor, infrequent and irregular’ exemption.
Further if a taxpayer complies with these ‘safeharbour’ guidelines, the ATO will not devote resources to reviewing the exemption, and the taxpayer will not need to keep records of the private usage.
The ATO’s ‘safeharbour’ conditions for private use of a commercial vehicle are summarised below:
It is important to note that this is the ATO’s view, and as such if the private use of the vehicle exceeds any of the above travel thresholds, it does not mean the vehicle is no longer an exempt benefit. Ultimately it will depend on the circumstances of each commercial vehicle provided.
In conclusion, if you are an employer providing commercial motor vehicles to employees, you will still need to monitor the private usage of each vehicle to ensure the private usage is ‘minor, infrequent and irregular’. If you are uncertain of the private use of vehicles provided to employees, maintain a logbook of the trips taken to demonstrate private usage does not exceed the ‘safeharbour’ amounts above.
If you have any questions regarding to this information or FBT and your business please call our office and we will be happy to help.
The Notifiable Data Breach (NDB) scheme commenced on 22 February 2018. The scheme requires the reporting of eligible data breaches occurring on or after this date to the Office of the Australian Information Commissioner (OAIC).
Who does it apply to?
The NDB scheme applies to agencies and organisations where the Privacy Act requires you to take steps to secure personal information. These include Australian Government agencies, Businesses and not for profit organisations, with an annual turnover of $3 million or more.
What is a data breach?
A data breach occurs when personal information held by an organisation is lost or subjected to unauthorised access or disclosure.
What is a notifiable data breach?
A Notifiable Data Breach is a data breach that is likely to result in serious harm to any of the individuals to whom the information relates.
An eligible data breach arises when the following three criteria are satisfied:
Example of data breaches
A data breach may include:
If a data breach is suspected, deciding if it is eligible for reporting involves examining, from the perspective of a reasonable person, whether the data breach would be likely to result in serious harm to the individual whose personal information was part of the data breach.
A ‘reasonable person’ means a person in the entity’s position, who is properly informed, based on information immediately available or following reasonable inquiries or an assessment of the data breach. In the context of a data breach, serious harm to an individual may include:
Examples include:
Preventing “serious harm” with remedial action.
The NDB scheme provides entities with the opportunity to take positive steps to address a data breach in a timely manner, and avoid the need to notify. If an entity takes remedial action so that the data breach would not be likely to result in serious harm, then the breach is not an eligible data breach for that entity or for any other entity.
Who needs to be notified of a breach?
Once an entity experiences a data breach they are required to contain the breach as soon as possible and take remedial action. In short, there are three options for notifying individuals at risk of serious harm.
Option 1: Notify all individuals:
That is notify all individuals whose personal information was part of the eligible data breach, regardless of whether they will experience “Serious harm” from the breach.
Option 2: Notify only those individuals at risk of serious harm:
If an entity identifies that only a particular individual, or a specific subset of individuals, involved in an eligible data breach is at risk of serious harm, and can specifically identify those individuals, only those individuals need to be notified. This avoids distress to individuals who are not at risk.
Option 3: Publish Notification:
If neither option 1 or 2 above are practicable, for example, if the entity does not have up-to-date contact details for individuals, then the entity must:
Entities must take proactive steps to increase the likelihood that the eligible data breach will come to the attention of individuals at risk of “serious harm”.
My organisation does not turnover more than $3 million per annum. Am I off the hook? In short, no. Certain organisations are still required to comply. These include:
Ensuring your entity is secure before a data breach occurs is the best way to safeguard against causing serious harm and needing to notify the Commissioner. A public notification of an NDB is a process you will want to avoid at all costs. There are also significant financial and operational benefits to ensuring your risk of a data breach are minimised. These benefits equally apply to entities exempt from complying with the Notifiable Data Breach scheme.
Our Audit and Assurance team can help you review existing protocols, identify risk exposures and set up processes to ensure your risks of a Notifiable Data Breach are reduced.
Single Touch Payroll (STP) is a mandatory reporting change for employers.
From the 1st July 2018, the ATO will require all businesses with 20 or more employees to start reporting using Single Touch Payroll.
STP will become mandatory for all businesses, including those with 19 or less employees, from 1st July 2019.
This means STP reporting will affect your business and doing nothing is NOT an option.
WHAT IS STP?
STP will streamline your employee payroll reporting processes and obligations.
Each time you pay your employees, you will be reporting to the ATO. The information you send to the ATO will include:
WHAT WILL CHANGE WITH STP
All that will change with STP reporting is that each time you pay your employees, you will report the tax and super information to the ATO. Your pay cycle does not change.
Employees will now be able to view their payment info through their My Gov account. You will no longer need to supply your employees with payment summaries for the payments you report through STP.
However your payroll software MUST be STP compliant.
WHAT YOU NEED TO DO
Contact us urgently if you need assistance in transitioning to STP reporting and compliance.
The ATO has simplified what you need to know about single touch payroll in this short video.
For any further information please call us on (02) 4353 2333
As self-storage owners you work hard to maximise the value of your business. On a daily basis you’re selling to demanding and cost conscious customers and operating in a market which is becoming more competitive each day. You may be using the latest sales strategies to convert every enquiry into a sale and maximise the sale value to each of those customers.
All of this hard work may be undone if you hold your self-storage assets in an inappropriate structure which has poor asset protection and results in you paying more income tax than you should.
There is no one size fits all solution to the ownership of self-storage assets as the businesses themselves vary dramatically in size and nature. However, there is one basic rule you should consider when choosing your business structure.
Your operating business should be owned in a separate entity to your Freehold assets
An operating business has significant risks attached to it including employees, WHS, insolvency, tax related compliance, contractual risks, customer and various other possible litigants. Should the business be subject to any of these claims it is important creditors do not have access to your most valuable asset, being your freehold land and buildings.
As noted above there is not a one size fits all solution but we have found the following structure has provided significant benefits to our self-storage clients.
The benefits of this structure include:
If you are looking to acquire a self-storage asset or are an existing owner and believe a restructure of your business would be of benefit to you please call Glenn Harris at our office.
We are regarded as industry experts in Self Storage. We have partnered with the SSAA to bring self storage owners a seminar on how to protect their business assets and convert to the cloud.
Do you know when you need to keep a logbook for fringe benefit tax purposes, and do you know what you need to record?
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It’s such an exciting time starting your own business. Whether you are buying an established business, creating your own or moving out of employment. Whatever your reason may be, there is just something different about being in control of your destiny.
Often people can get swept up in the excitement of creating their own business and skim over important details in the planning and preparation stages. Unfortunately this is all too common when establishing a small business. With cash flow being a major factor for most small businesses that fail within the first two years, it is vital to ensure the backbone of the business (often the boring bits for entrepreneurs) is properly planned and structured for success.
In the beginning we are fuelled with passion and belief in our product and often we set up with the idea that we can worry about budgets and planning AFTER we start making money. However, overlooking key components of your set up will end up causing pressure on not only you the business owner, but also the overall success of the new venture.
The following is just a number of key components that should be considered before starting a business:
An independent study of new business owners revealed that the best advice they received when setting up was “outsource what you’re not good at and focus on being the expert on what you are good at”. With cash flow issues attributing to 29% of failed new small businesses, we cant stress enough the benefit any new business will receive by seeking professional financial advice. With ongoing support and setting up your business properly with the help of an expert, your new business will be hitting more goals on target.
Being mindful of your future expenses, such as, hiring staff, investing in new equipment, insurances and business assets, at the beginning of your journey, will allow you the freedom of growing at a rate you can manage, without falling at the first statement of costs.
At Bishop Collins we have a wealth of experience and expertise in dealing with small business startups. Our professional and dedicated staff can assist and support you throughout the entire process so your energy and expertise can be spent working in the business.
Thinking of starting a new business? Then give us a call to book an appointment.
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AUTHOR: DAVID MC CLELLAND, DIRECTOR AUDIT AND ASSURANCE, BISHOP COLLINS.
KATHRYN GREINER INQUIRY INTO RETIREMENT VILLAGES ACT.
As part of the NSW Governments plan to improve retirement village living, Kathryn Greiner (AO) has lead the inquiry to review the protections offered to residents.
The aim of the inquiry is to ensure retirement village operators are complying with the law. Some of the matters inspectors have examined, in conjunction with industry stakeholders, including residents, are incoming, outgoing and recurrent fees, prescribed notices and audits.
Innovation and Better Regulation Minister, Matt Kean, believes more transparency in the industry will help safeguard residents.
“We need to make sure that retirement village residents are being treated fairly and with the respect and dignity they deserve” Mr Kean said.
It is believed the outcome of the Greiner inquiry will be presented to the Minister by the end of February 2018.
We believe this will have a big impact on residents and retirement village operators across the state.
For further inquiries or to find out how this will affect you contact Martin Le Marchant on 4353 2333
THE INQUIRY INTO RSL NSW BRANCH
Supreme Court Justice Patricia Bergin (SC) has concluded her inquiry into the RSL’s NSW Branch.
On 15 May 2017 the Minister for Innovation & Better Regulation, Matt Kean, appointed the Honourable Patricia Bergin to investigate matters in regards to tracking expenditure of public donations and disclosure of possible breaches of The Charitable Fundraising Act and RSL Lifecare.
It is believed the outcomes of her recommendations to the Minister Matt Kean, will be handed down to him on Thursday 1st February 2018.
The effects of this inquiry and the Ministers determinations are widely expected to have significant impact on the RSL movement down to sub-branch level.
Should any RSL sub-branch need assistance please contact David Mc Clelland on 4353 2333.
A good friend gave me a Google Mini as a Christmas present. Using voice commands, I can ask it to play music, stream media on my TV, answer questions and add grocery items to my shopping list! How cool is that!
I reflected on the advancements in technology over the past decade and how these have impacted on how we do business and even run our businesses.
It blows my mind that technology can now be harnessed to improve my own decision making skills and identifying where risks lie in my business!
It’s called ‘Data Analytics’ and although it doesn’t sound as radical as Google Mini or “Hey Siri”, it packs some powerful punch in regards to assisting in the success of your business. Data Analytics is the thorough analysis of large amounts of information to identify trends and assist you in drawing meaningful conclusions.
It sounds boring I know, but what it means is Data Analytics is like the “google Mini” for your business. Technology that analyses all the relevant fields of information to assist you in your business success. This information influences you to make better business decisions and identify the areas where there is potential risk. Now it’s more interesting isn’t it!
This detailed analysis will also encourage innovation, so your business can remain competitive and assist in developing measured strategies to mitigate risk.
Key areas Data Analytics has helped business includes:
Bishop Collins offers qualified professionals who can assist you in undertaking Data Analytics as well as a broad range of internal Audit and Assurance services, to improve your business outcomes and identify and address concerns you believe are most important to your short and long-term success.
