A tip for all small business owners that super obligations for applicable employees wages for October 2013 - December 2013 is due by the 28th of January 2014. If you don't make your superannuation contributions by the cut off dates, you'll face penalties. Penalties can include the superannuation not being tax deductible, penalty interest and an administration fee.
With the 28th January 2014 fast approaching and the Australia Day public Holiday on the 27th January this means that super should be paid by Thursday (tomorrow) to make sure it has enough days to clear.
Its also a good starting point for small business owners to reflect on what systems you have in place to keep up with the never ending business deadlines for 2014. Are you still behind with previous years tax work? A proactive bookkeeper or accountant will be able to assist you with this. If your bookkeeper or accountant is still in holiday mode and has not given you adequate warning about the super deadline public holiday issues, I suggest you look for another bookkeeper or accountant.
Also - why did I refer to applicable employee wages in the first paragraph. I recently met with an employer who was paying the superannuation guarantee of 9.25% on all of the employee's wages, including their overtime. I also met with another business owner who was paying super on staff under the age of 18 and staff that earnt less than $450 a month. Both business owners were actually overpaying super by thousands each year. Superannuation is not payable on overtime, to employees under 18 and employees earning less than $450. The business owners were trying to save themselves money by doing the bookkeeping themselves or hiring someone who did not know what they were doing, but it ended up costing the business owners more than utilising the services of an affordable and experienced bookkeeper.
Author:
Miriam Clappis
Director of Flinders Accounting and Bookkeeping Plus
B.Laws (Honours) B.Commerce (Corp.Fin/Acc), B.Economics CPA, DFS(FinPlan.) Cert IV Fin.Services
Last week I was fortunate to be able to attend the CPA Congress in Adelaide. There were amazing presenters from across Australia which provided for inspiration and thought about the Australian economy and the future for small business.
There were two particular presentations that challenged me as a business owner and business advisor to many small businesses.
Carolyn Creswell
Carolyn is the owner of Carman's Fine Foods, winner of Telstra Australian Business Woman of The Year, TV personality with Network Ten's Recipe to Riches, and a mother of 4 young children. I was fortunate enough to speak with her after the event and thanked her for being a positive role model for female business owners and entrepreneurs.
Carolyn's passion for great customer service is inspiring. During her presentation, she made the particularly relevant comment that business owners should 'find what your clients needs are and help them solve their problems, not yours'. So often we hear that the key to starting a business is to find something you are passionate about and do what you love. Yes, this is important, but the fundamental issue is that a small business is not about the owner, its about the customer or client and providing solutions to customers needs. It's the principle that if you "help enough other people get what they want, you will get what you want".
Deloitte - Digital Disruption - Short fuse, big bang
Every industry is facing 'digital disruption' (digital, being the internet). Deloitte have studied this disruption (and when it will occur) and the scale the internet disruption is expected to impact the different business industries (the Big Bang). For a small business owner, they have the choice to either ignore the impact internet is having on their industry or create opportunity from it.
The presenter made the interesting comment that most small business owners are still operating the same way they did 10 years ago, yet customers are NOT acting the same way they did 10 years ago. Customers socialise, interact, engage and make decisions extremely differently to the way they did 10 years ago. The presenter highlighted that business owners need to catch up to this asap or they are headed for the big bang. Think about your own business. What have you changed over the last 10 years? If you have a website, are you utilising this effectively? Is being social part of your strategy? Are you using the same old accounting software that you were using 10 years ago? Are you being disrupted or are you the disruptor?
At Flinders Accounting we have embraced our Flinders Connect program which assists small businesses to connect to cloud technology including accounting, CRM, inventory, point of sale, e-commerce and payroll solutions. Flinders Connect has given our small businesses the competitive edge to prosper, succeed and create opportunity from the digital disruption.
Check out Digital Disruption - Short fuse, big bang video below:
I have seen a huge amount of new clients over the last couple of months that, for some reason or another, have got behind in their taxes. While I do not encourage this and there are serious penalties imposed by the ATO, there are great benefits for sorting out your tax.
1. Peace of mind
A client of mine said that they drove past my tax signs every day to work and everytime they did so, they remembered they had to do their taxes. After seeing me they were amazed at how quick and easy the process was. They no longer had the niggling reminder every time they drove past my sign to lodge their taxes! I also had one client worried that they wouldn't let him leave the airport because he hadn't done his taxes. Whatever you might be worrying about in relation to your taxes, one of our friendly and understanding Accountants are here to help you and deal directly with the ATO on your behalf.
2. Tax Refunds
A lot of clients that I see receive tax refunds. Just in the last week I have helped clients receive thousands of dollars back in refunds for every year of tax outstanding. This was a complete surprise to some of them and they certainly won't be late with their tax returns in future! Its important to note that this isn't the case all the time and its best to contact us to discuss your situation.
3. Other factors
Not having up-to date taxes can affect other extremely important areas. Often Centrelink won't pay certain benefits, like the child care rebate or family tax benefits, if you and your partner have not lodged your tax returns each year. Also, its important when applying for loans that your taxes are up to date as the lender generally requires this information.
Flinders Accounting can help:
I've helped clients from all over Australia with their tax. Email me at miriam@flindersaccounting.com to discuss your situation. I can generally access most of your payment summaries, bank account interest and some other forms of income from previous years within minutes.
Flinders Accounting offer a special fixed fee price to clients with outstanding tax returns.
With only a day to go until the 31st October deadline to lodge your tax return I thought it was 'timely' to explain the Accountant extension. For anyone lodging their tax returns themselves, they have until the 31st October to lodge with the ATO. For anyone that is registered with a Tax Agent, they generally receive a later lodgement deadline until 15 May 2014! This is only available for people registered with a Tax Agent, that have no previous years tax outstanding and that have no other outstanding issues with the ATO.
If you do not think you will be able to lodge your tax return by the 31st October, than send us an email to admin@flindersaccounting.com and we can organise for you to be registered on our system and receive the later lodgement date.
Another important issue to note that is if you earnt less then the tax free threshold of $18,200 then you don't need to lodge a tax return if there was no tax withholding. However, you DO need to let the ATO know that you don't need to lodge a tax return. The Non-Lodgment Advice 2013 form can be found HERE.
If your earnt under $18,200 and your payment summary shows an amount in the tax withholding section, then its best to lodge a tax return as you will receive all this tax back. I offer a special $59 tax return fee for anyone that has income under the tax free threshold, so please feel free to book in an appointment if you are unsure what your tax obligations are.
How does HELP/HECS work? A person accumulates a Higher Education Loan Program (HELP) (previously referred to as HECS) loan when they undertake study and have not paid for the fees upfront. The Government expects this loan to be repaid when the taxpayer's Help Repayment Income (HRI) reaches over a threshold. The repayment rate depends on the income of the taxpayer for that Financial Year.
When a taxpayer with a HELP debt gains employment they are required to tick a box on the TFN Declaration Form, which means that the employer will withhold extra money to meet the HELP repayment. The money withheld by the employer is paid to the ATO. When the taxpayer lodges their tax return, their HELP repayment amount is finalised as the repayment amount is based on the income declared on the tax return.
Whilst no real interest is charged, the HECS-HELP loans are indexed each year to the Consumer Price Index (CPI). (CPI is about 2-3%, so this is what is charged each year on the loan).
HELP debt TIPS:
If you have a HELP loan than make sure you tick the box on your TFN declaration form. I saw a taxpayer last year who had a large tax bill when they earned over the income threshold, but did not tick the box. The employer had withheld enough tax, but not the extra amount required to repay the HELP.
If you have received reportable fringe benefits then you will be required to contribute a portion of this to your HELP debt if it takes your income over the threshold. Be careful with this as I recently saw a client who had $25,000 in reportable fringe benefits. As his gross income was over $50,000 he was required to contribute extra repayments towards his HELP which he had not accounted for.
The new HELP repayment thresholds and rates for 2013-14 are as follows:
HELP repayment income (HRI*)
Repayment rate
Below $51,309
Nil
$51,309 - $57,153
4.0%
$57,154 - $62,997
4.5%
$62,998 - $66,308
5.0%
$66,309 - $71,277
5.5%
$71,278 - $77,194
6.0%
$77,195 - $81,256
6.5%
$81,257 - $89,421
7.0%
$89,422 - $95,287
7.5%
$95,288 and above
8.0%
Help Repayment Income includes:
your taxable income;
your total net investment loss (which includes net rental losses);
your total reportable fringe benefits amounts;
your reportable super contributions; and
exempt foreign employment income.
If you are after the previous Financial Year HELP repayment thresholds and rates for 2013-13 click HERE.
This blog post contains a checklist for tax clients booked in to get their tax prepared by a CPA. If you don't have all of the documents, don't worry, we will be able to gather your relevant information from the ATO's database.
GENERAL
·Last Year’s Income Tax
Return
·Private Health
Insurance Details
·Spouse Income
·Children’s details
including D.O.B and Centrelink benefits
·Records of sales and
purchases of any shares, business or property
The ATO is currently offering free Tax Webinars for small business, rental property owners and self managed super fund trustees. The webinars are online, and you are able to participate over the internet, smart phone or tablet. Participants can also chat to the presenter and ask questions! Phone and tablet users can download a free app to join the ATO webinars (see the bottom of this email). Below are details of Webinars being held this week (17th June - 21st June) for small business: TB1 Tax basics for small business – an introduction
This webinar introduces you to the basic tax issues you need to consider if you are thinking about starting a business, such as business structures, tax registrations and record keeping.
Date
Time (AEST)
Webinar ID
Monday, 17 June 2013
Noon – 12.45pm
200956614
TB2 Tax basics for small business – income tax deductions
This webinar looks at the fundamental principles of income tax deductions that apply to all businesses. We will look at the tax treatment of different deductions, including depreciation of assets.
Date
Time (AEST)
Webinar ID
Monday, 17 June 2013
9.00am – 9.45am
281114086
TB3 Tax basics for small business – home-based business
This webinar provides you with information about claiming home-based expenses and understanding how capital gains tax may apply.
Date
Time (AEST)
Webinar ID
Tuesday, 18 June 2013
2.00pm – 2.45pm
374031622
TB4 Tax basics for small business – motor vehicle deductions
This webinar runs through the special rules when claiming deductions for motor vehicles, and provides practical examples of how to record and claim the expenses.
Date
Time (AEST)
Webinar ID
Tuesday, 18 June 2013
10.00am – 10.45am
672519326
Thursday, 20 June 2013
1.00pm – 1.45pm
444240854
TB5 Tax basics for small business – concessions for small business
This webinar will look at the concessions that are available for income tax, capital gains tax (CGT) and goods and services tax (GST).
Date
Time (AEST)
Webinar ID
Thursday, 20 June 2013
3.00pm – 3.45pm
465408526
How to register? For easy online registration follow these steps:
1)Go to the websitegotowebinar.com.au (copy this address into your web browser’s address bar)
2)Choose [Join a webinar] at the top of the web page
3)Copy the Webinar ID for your chosen webinar from the list above
4)Follow the registration steps
Webinar apps
To download the free app for your iPhone or iPad, Android phone or tablet:
·Click on “Mobile apps” – on the left hand side menu.
The ATO has a fantastic FREE educational webinar program which is available at ato.gov.au/seminars.They deliver webinars on a range of topics including a further eight Small business topics, Taxable payments reporting for people working in the construction industry, as well as webinars for Rental property owners and Trustees of SMSF.
