What employment type is best for your business?

By October 9, 2019 Business

An employment contract establishes the terms and expectations of an employee before they start work. It outlines everything the employee has to know about working for you, including employee rights, working hours and performance expectations in the role. Each employment type has different entitlements and obligations that must be met by both the employer and employee. Before hiring a new worker, take the time to look at what each employment type would mean for you and your business.

Full-time employees:
A full-time employee will work an average of 38 hours a week and is a permanent employee. The specific working hours in a week are agreed upon in the employee contract. Under the National Employment Standards (NES), there are 10 minimum entitlements that need to be provided to employees;

  • Maximum weekly hours.
  • Requests for flexible working arrangements.
  • Parental leave and related entitlements.
  • Annual leave – 4 weeks of annual leave are given every year based on ordinary hours of work. Leave that is left over at the end of each year carries over to the next year.
  • Personal/carer’s leave, compassionate leave and unpaid family and domestic violence leave. Employees receive 10 days of this leave every year.
  • Community service leave.
  • Long service leave.
  • Public holidays.
  • Notice of termination and redundancy pay.
  • Fair Work Information Statement.

Part-time employees:
Part-time employees work on average less than 38 hours a week, usually at regular times, and are permanent employees. Part-time employees have the same rights as full-time workers on a proportional basis.

Casual employees:
A casual employee does not have a definitive commitment from an employer about how long they will be employed for or the days/hours they will work. A casual employee doesn’t get paid sick or annual leave, can end employment without notice, has a higher pay rate than equivalent full-time or part-time employees due to ‘casual loading’, two days unpaid carer’s leave and two days unpaid compassionate leave per occasion, five days unpaid family and domestic violence leave in a 12-month period and unpaid community service leave.

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Treasury Law Amendment for super measures moves forward

By October 9, 2019 Super

The Treasury Laws Amendment (2018 Superannuation Measures No.1) Bill 2019 has passed both Houses of Parliament and reached royal assent on 2 October 2019. First announced in the 2018-19 Budget, the Bill allows eligible individuals, whose income exceeds $263,157 and have multiple employers, to nominate wages from certain employers to not be subject to the superannuation guarantee (SG).

Individuals with more than one employer, who expect that their compulsory super contributions will exceed the annual concessional contributions cap for a financial year, will be able to apply for an exemption certificate to release some of their employers from their SG obligations. Individuals will still need to receive SG payments from at least one employer.

From 16 October 2019, eligible individuals will be able to download an application form from the ATO. The application will need to be submitted at least 60 days before the start of the quarter in which you wish to receive the exemption. The lodgment period for the quarter commencing 1 January 2020 has been extended. Applications lodged on or before 18 November 2019 will be accepted.

The application form provides the Commissioner of Taxation with the information required to make an assessment. This includes which employers the exemption certificate will apply to and the quarter in the financial year for which the exemption is sought. Exemption certificates may be issued for multiple quarters within a financial year but cannot cover more than one financial year.

With an exemption certificate, an employer will not need to make SG contributions to avoid liability for the SG charge, however, it does not actively prevent the employer from making super contributions on behalf of the employee. The certificate does not change the employer’s obligations under a workplace agreement or an employer’s agreement with their super fund.

Employees will need to talk to their employers before making an application as this arrangement and any changes to payments will need to be negotiated.

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Breaking down business industry codes

By October 9, 2019 Tax

A business industry code (BIC) is a five-digit code you include on relevant tax returns and schedules that describes your main business activity. BICs come from the Australian and New Zealand Standard Industrial Classification (ANZSIC) codes and are added to by the Australian Tax Office (ATO) for tax return reporting purposes.

Employers must use the correct business industry code on their tax returns to ensure their return is lodged in the right category. Using the correct code for your business helps to reduce the risk of being incorrectly targeted for compliance activities, avoids processing delays and ensures employers receive services and information relevant to their business type.

The business industry code describes the main activity of the business. This can change over time if your business diversifies its products and services. The code is broken down into sections:

  • ANZSIC system is first divided into 19 divisions, described by one letter (A to S).
  • Divisions are broken down into subdivisions numbered with two digits. There are a total of 96 subdivisions.
  • Subdivisions are broken down into groups. Each group is numbered with three digits, with the first two digits derived from the subdivision to which it belongs.
  • Groups are broken down into classes. Each class is numbered with four digits, the first three digits derived from the group to which it belongs.
  • The ATO adds a fifth digit to this system to provide further specifics.

Employers who have changed their business’ products and services can use the ATO’s business industry code tool to check their code before lodging their tax return. If your code has changed, inform your accountant before lodging. Once you have the right code, you can also use small business benchmarks to see how well you are performing compared to competitors in your industry.

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What you should know about using cryptocurrencies

By September 30, 2019 Money

In an increasingly technologically dependent age, it can be useful to keep up with new forms of currencies in the digital space. Cryptocurrency is internet-based, digital money that is not controlled by any central authority. Currently, the most prominent cryptocurrency is Bitcoin, which has a market capitalization of over 155 billion U.S. dollars.

How do you buy cryptocurrencies?
There are a number of popular websites and apps that simplify the process of buying cryptocurrencies. In Australia, you can register for accounts to do so on exchange websites such as Swyftx, Coinbase, CoinSpot, or Independent Reserve where you can pick from various cryptocurrencies to purchase.

When choosing a form of cryptocurrency to start with, it is important to do research to ensure the currency is legitimate and trustworthy. Most of the time, it is a good idea to choose a popular one that is already widely used and trusted by other crypto users, such as Bitcoin, Ethereum, Ripple, or Litecoin. Once you have purchased cryptocurrencies, you can store them in a digital crypto wallet for security and easy accessibility.

Benefits:
Some may wonder if cryptocurrencies are just another pointless internet fad, however, there are a number of advantages to using cryptocurrencies.

  • Fast: Transaction speeds are usually fast, making things like paying bills and shopping online easier.
  • Low Fees: There are generally minimal to no transaction fees in crypto exchanges, so using cryptocurrencies can be a good way to avoid online banking fees and charges.
  • Anonymity: Making transactions online with traditional banking methods generally requires information such as your name, credit card number, phone number and address. However, cryptocurrencies allow you to be anonymous in these transactions by only showing your crypto ID or a nickname of your choosing.

Drawbacks:
Despite the benefits of using cryptocurrencies, it is also important to be aware of their disadvantages before diving too deep into crypto investments and purchases.

  • Security risks: While it is harder and more technical to steal digital money as opposed to physical cash, cryptocurrencies are still susceptible to skilled hackers and scams. Because cryptocurrencies are decentralised with no authoritative control, any loss of cryptocurrency due to theft or scams cannot be recovered.
  • Value instability: Cryptocurrencies tend to fluctuate in price and value, which can reduce their reliability as you can never be certain how much they will be worth the next day.
  • Lack of merchants: Many companies have not taken the step to adopt cryptocurrencies as a form of payment, so it can lack usefulness in everyday transactions.

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Budget-friendly ways to promote your small business 

By September 30, 2019 Business

Promoting your business can seem tricky to navigate and expensive, especially when there are budget and staff restrictions to think about. However, there are a number of ways to promote your business easily and cost-effectively.

Blog content:
Posting well-written and relevant blog content on your website can help boost website traffic while capturing the trust and engagement of potential customers. Regular content that aligns with the interests and needs of your audience will generally work best in gaining profile views.

Social Media:
While social media may seem like an obvious channel to keep running on as a background form of promotion, it can be worthwhile to invest more time and resources to get the most out of your business’s social media presence. Keeping the aesthetics and content of your social media pages regularly updated and relevant can be a great way to establish a brand image and gain attention from your target audience.

Facebook ads:
Facebook ads allow for targeted advertising through audience segmentation where businesses are able to customise their audience based on characteristics such as age, location, gender, and interests. Facebook ads are also inexpensive to run compared to other advertising options and can be helpful to target a particular audience.

Email Marketing:
Growing your mailing list can be a great way to establish customer loyalty and to encourage customers to remember your business and revisit your website. Websites like Mailchimp and Benchmark are free email marketing services that are easy to use with predesigned templates.

Radio advertising:
While radio advertising may seem outdated, it can be a good way to gain exposure for your business. Running an ad on a local radio station is usually inexpensive and can target proximate customers.

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Consequences of late SMSF annual returns

By September 30, 2019 Super

From 1 October 2019, if an SMSF is more than two weeks overdue on any annual return lodgment due date and hasn’t requested a lodgment deferral, the ATO will change their status on Super Fund Lookup (SFLU) to ‘Regulation details removed’.

The ATO is taking this approach as non-lodgment combined with disengagement indicates that the fund’s retirement savings could be at risk. This status will remain until any overdue lodgments have been brought up to date.

On the first business day of each month, the new process will update SFLU depending on the situation:

  • SMSF trustees who haven’t lodged their SMSF annual return on time and are more than two weeks overdue, the ATO will change their SMSF regulation status to ‘Regulation details removed’ on SFLU.
  • All overdue lodgments were received for an SMSF during the previous month, the ATO will update SFLU to reinstate the SMSF’s ‘complying’ status.

By having a status of ‘Regulation details removed’, APRA funds won’t roll over any member benefits to the SMSF and employers won’t make any super guarantee (SG) contribution payments for members of the SMSF. While the fund’s status is ‘Regulation details removed’, members should alert their employer to make any SG payments into the employer’s default super fund or a fund of the member’s choice.

SMSF trustees who don’t think they can meet lodgment requirements should call, before the due date, to seek a deferral to lodge.

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Claiming travel expenses relating to rental properties

By September 30, 2019 Tax

When making a claim in relation to your residential rental property, there are specific circumstances for when you can and cannot claim travel expenses. The law about claiming travel expenses for rental properties changed in July 2017. In the last year alone, the ATO received more than 70,000 incorrect claims for travel to and from residential rental properties.

A residential property is defined as land or a building that is either occupied as a residence or intended for and capable of being occupied as a residence.

Owning one or several rental properties is not usually considered to be in the business of letting rental properties, with receiving income from letting property to a tenant being considered a form of investment rather than a business. Unless you have an ownership interest in the rental property, you cannot claim travel expenses, even when travelling for the purposes of maintenance or inspections. You can only claim travel expenses if you are in the business of letting rental properties or are an excluded entity.

Entities that can claim travel expenses are:

  • Corporate tax entity.
  • Superannuation plan that is not a self-managed superannuation fund.
  • Public unit trust.
  • Managed investment trust.
  • Unit trust or a partnership.

For those who are eligible to claim travel expenses, claims can be made on the following:

  • Preparing the property for new tenants (except the first tenants).
  • Inspecting the property during or at the end of the tenancy.
  • Undertaking repairs, where those repairs are because of damage or wear and tear incurred while renting out the property.
  • Maintaining the property, such as cleaning and gardening, while it is rented or available for rent.
  • Collecting the rent.
  • Visiting an agent to discuss the rental property.

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Dealing with a bad day at work

By September 24, 2019 Business

Bad days can happen to the best of us, but that doesn’t stop work from needing to get done. Whilst working when you’re feeling down is the last thing you want to do, here are a few ways to pick yourself up and carry on with tasks you need to do.

Take a break:
Stepping away from the office to think can drastically improve your mood and help you look at the day more clearly. Going for a walk or sitting in the park on your lunch break can help you feel relaxed and better energised to go back to work. Even stepping out of the office for a moment to the bathroom can help remove yourself from a stressful situation. Don’t let yourself think about what has gotten you into a slump, think instead of what you can proactively do once you return to the office.

Express emotions appropriately:
Expressing your emotions is ok and necessary to feel better. It can be very easy to rant to colleagues or friends when you are feeling rough but there is a line between venting and gossip. Strong emotions such as anger can see you act out instead of thinking a problem through. Try to observe the problem through an objective lens before discussing it with colleagues or management and keep it strictly professional. This can help you to communicate better and avoid getting caught up in office politics. If you feel the need to express what you are feeling, write down how you are feeling just for yourself and throw it away when you are done.

Practise gratitude:
Regardless of the reason behind your bad workday, there is always something you can be grateful for. Switching to a gratitude mindset helps you to focus less on the bad things that occurred and accept the situation for what is, one bad day at work. Try to leave your negative feelings at work, and spend your evening doing something you enjoy.

Learn from the day:
Problems or unforeseen circumstances are opportunities to learn and grow. After a particularly trying day, take a moment to reflect on what didn’t go so great and possible reasons why. Evaluating what went wrong can help you to better understand how to avoid doing the same thing in the future, teaching you to be proactive, rather than reactive.

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Returning to work after accessing your super

By September 24, 2019 Super

Retirement isn’t necessarily a permanent thing as even the best-laid plans can collapse when circumstances change. The Australian Bureau of Statistics (ABS) has found the most common reasons retirees return to employment are financial necessity and boredom. But what does this mean when you have already dipped into your superannuation funds?

Individuals are able to access their super once they have reached their preservation age and retired, ceased an employment arrangement after age 60, or turned 65. Depending on your circumstances, there are rules regarding how you can return to work after retirement.

For those who genuinely retired with no intention of ever returning to work but found that circumstances required them to, you can return provided that you work on a casual basis up to 10 hours per week. By meeting this requirement, you can still access your super whilst working, however, additional contributions made to your account after you met the definition of retirement will be preserved until you meet another condition of release.

In the event you access your super after an employment arrangement comes to an end once reaching age 60, you are able to work in a new position as soon as you like, provided the first arrangement ended. Subsequent contributions made after your employment arrangement came to an end will be inaccessible, however, you will have access to the benefits that became available as a result of your first employment arrangement coming to an end.

When you turn 65, you don’t have to be retired or satisfy any special conditions to get full access to your super savings. This means you can continue working or return to work if you have previously retired, provided you complete the work test requirements before going back. If you return to work and earn more than $450 a month, your employer will be required to make superannuation contributions at the current rate of 9.5% until you reach age 75 where you can still work but receive no further super contributions, either voluntary or from your employer.

As returning to work and continuing to receive super is circumstantial, individuals considering their options should consult their accountant or financial advisor for information specific to their situation.

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Are you meeting the Active Asset Test?

By September 24, 2019 Tax

To qualify for small business CGT concessions, an asset must meet the conditions of the Active Asset Test to apply. An asset is considered active when you own it and it is used or held ready for use in relation to a business. You can also have an intangible active asset if it is inherently connected with a business you carry on.

An active asset of yours has been held for a certain amount of time, based on how long you have owned the asset and the test period to meet the requirements of the Active Asset Test. The test period begins when you acquired the asset, and ends at the earlier of

  • the CGT event, or;
  • when the business ceased, if the business in question ceased in the 12 months before the CGT event.

Assets owned for over 15 years need to have been held for at least 7.5 years within the test period and assets owned for 15 years or less need to have been held for at least half of the test period to satisfy requirements.

When the assets are shares or trusts, passing this basic active asset test is not enough to qualify for CGT concessions. In addition, the asset will need to pass a further test, called the 90% test, to determine whether it is to be counted as an active asset or not. The test is satisfied if CGT concession stakeholders in the company or trust in which the shares or interest are held have a total small business percentage in the entity claiming the concession of at least 90%.

The periods in which the asset is active does not have to be continuous, however, they must total the minimum periods specified. An asset does not need to be active just before the CGT event.

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