Wolters Kluwer - Polaris Demo Site, Pre-designed Template

Our team members

Fri, 17 Apr 2026 05:12:20 GMT

Meet Our Team Members

Kristen is one of our helpful and highly skilled Chartered Accountants. She collaborates hand-in-hand with her clients to develop a supportive, long-term relationship that allows her to best meet their accounting and taxation needs.

After finishing top of her class in first-year Accounting during her Business degree at UTS, Kristen knew that she wanted to make a difference as an Accountant. Now, after completing a Graduate Diploma of Chartered Accounting and earning substantial experience working in both small and large accounting firms, she’s been with Key Tax Solutions since 2017, diligently supporting local businesses and not-for-profits.

Outside of her work, Kristen is a registered meditation teacher, hosting mindfulness and meditation classes in her spare time. She also has a deep passion for looking after the environment.

With her commitment to helping people and her dedication to learning and development, Kristen ensures that her clients always receive the support and service that they deserve.

Meet all our team members here.

More Than Numbers: Financial Wellbeing in Business

Tue, 24 Mar 2026 05:42:43 GMT

More Than Numbers: Financial Wellbeing in Business

From time to time, it's important to step back and reassess.

Click on the image and watch the video to learn more about the value that guides how we support you.

Fringe Benefits Tax - Exemptions for Electric Cars

Mon, 16 Mar 2026 23:00:11 GMT

Fringe Benefits Tax - Exemptions for Electric Cars.

Fringe Benefits Tax, exemptions for Electric Cars.

If you are thinking about buying a motor vehicle for your company, think about an electric car. Owning a motor vehicle in your company is ideal for income tax and GST savings, however it is subject to Fringe Benefits Tax (FBT).

There is an exemption to FBT for zero or low emissions vehicles. So what does this mean:

Battery electric vehicle
Hydrogen fuel cell electric vehicle
Designed to carry fewer than 9 passengers

Please note Plug-Hybrid cars are no longer exempt since 1 April 2025.

There are some cost limits, so a $300,000 Corvette E-ray is not exempt. When the car was purchased, when new, it must be below the Luxury Car Tax (LCT) threshold. Fuel-Efficient vehicles have a higher LCT limit than regular vehicles. The LCT limit for the 2025/26 financial year is $91,387.

To be eligible for an FBT exemption on an electric vehicle for 2025/26 FY your purchase needs to be below $91,387. This exemption could potentially save you $18,000 in FBT.

Please note these exemptions are not available for sole traders and partnerships. If you salary package an electric car with your employer, the Fringe Benefit (not the tax) you receive will still be reported on your annual income statement (PAYG payment summary). It’s called a Reportable Fringe Benefit (RFB).

What happens when you can’t find your accountant?

Mon, 09 Mar 2026 23:00:13 GMT

What happens when you can’t find your accountant?

Thank you, Neil, for your trust and loyalty over the past 12 years.

It has been a privilege to support you across both your business and personal tax matters. We are committed to providing clear advice, being accessible when questions arise and ensuring everything is handled efficiently.

Long term partnerships are built on reliability and trust. We appreciate your recommendation and the confidence you continue to place in our team.

If you are looking for a tax adviser who is responsive, strategic and invested in your success, feel free to reach out to our team.

Client Testimonial

Mon, 02 Mar 2026 23:00:06 GMT

Thank you to our lovely client Neil!

Thank you, Neil, for your trust and loyalty over the past 12 years.

Long term partnerships are built on reliability and trust. We appreciate your recommendation and the confidence you continue to place in our team.

If you are looking for a tax adviser who is responsive, strategic and invested in your success, feel free to reach out to our team.

Ever wanted to know how capital gains tax works in a Self Managed Superannuation Fund (SMSF)?

Mon, 23 Feb 2026 23:00:10 GMT

CGT Series: Buying your own business premises

Ever wondered how capital gains tax works inside a Self Managed Superannuation Fun?

Watch the video and find out.

What happens if you hate your Accountant?

Mon, 16 Feb 2026 23:00:04 GMT

What happens if you hate your Accountant?

Do you avoid communication with your accountant? Do you hate reaching out and trying to get answers to your questions? We had a client who absolutely hated their accountant. They actually didn’t want to see them or speak to them at all. They sent them their paperwork each year, had their accounts complete, and that was it. They did this for over 5 years.

The thought of making a change was overwhelming and seemed too hard!

Do you want to have a working relationship with your accountant, rather than just compliance each year? We want you to feel that you can pick up the phone anytime and speak to someone on our team to help.

You will also have a far better understanding of your business’s performance when you are regularly touching base with us, rather than just once a year.

If you are thinking of making a change, you won’t need to advise your current accountant. We take care of all of that for you.

Get in touch with us to discuss.

Looking at reducing your capital gains tax? Have you heard of the 6 year Absence Rule!

Mon, 09 Feb 2026 23:00:01 GMT

The 6 year absence rule

Looking at ways to reduce your capital gains tax.

There is a simple property rule many owners overlook.

The six year absence rule is one to be aware of.

Find out more in the video.

Have you wanted to set up your own self-managed superannuation fund?

Fri, 06 Feb 2026 10:08:17 GMT

Have you wanted to set up your own self-managed superannuation fund?

Firstly, you might want to consider meeting with a Financial Advisor to discuss your financial goals and whether or not having your own SMSF is for you. They aren’t for everyone!

However, if you know what you want to invest in and to control your investments, your accountant can assist with setting up your SMSF on your instructions. Your accountant can not provide any advice regarding whether it is a good or bad decision for you.

Once the legal documents are set up, you will need to open a bank account in the name of your SMSF. Again, again as an accountant, we cannot recommend any bank; it is your decision.

When the bank account is set up, you can roll over your superannuation from current retail funds, e.g., AustralianSuper. When the money is in your SMSF bank, you can use the money to invest in what you choose.

In terms of timing, I would usually allow up to 6 weeks. There are a few steps. The biggest hold-up can be the amount of time it takes for your current superannuation fund to release the money into your SMSF bank account. This is outside of your control; it can be done quicker, but being an accountant, we like to be cautious.

CGT Series: Buying your own business premises

Fri, 23 Jan 2026 03:39:38 GMT

CGT Series: Buying your own business premises

Thinking of buying an investment property?

Before you default to ‘ rent forever’ , here’s a plot twist: what about buying the property your business actually runs from?

Owning your business premises can open up very different tax outcomes compared to a standard investment property.

If you’re weighing up your options and want the numbers to work for you (not against you), that’s where we come in.

Reach out to Key Tax Solutions before you sign anything, future you will be very grateful.

Client Testimonial

Fri, 23 Jan 2026 03:34:13 GMT

A testimonial from our lovely client

We love hearing feedback like this. Thank you, Joshua, for trusting our team with your tax needs and for your kind words.

At Key Tax Solutions, professionalism and attention to detail are at the core of what we do. We take pride in making every client feel supported, informed, and confident in their financial decisions.

If you’re looking for a team that genuinely cares about helping you stay compliant and maximise your results, we’re here to help.

Is your Accountant keeping up to date?

Fri, 23 Jan 2026 03:28:36 GMT

Is your Accountant keeping up to date?

We recently took on a new client, Patrick, who had some reservations about his current accountant’s knowledge.

Patrick’s suspicions were true. There were some recent changes to tax legislation that his current accountant overlooked. Withing 5 mins over our first meeting with Patrick, we identified the error. The error was a $20,000 tax savings to Patrick.

At Key Tax Solutions: Our Vision is to be the most trusted and reliable accountancy firm, providing unparalleled knowledge, education, and guidance to our clients. We aspire to make a significant difference in the financial lives of our clients through consistent and professional service.

We value ongoing education with all our team to really encompass our vision. We don’t want any of our clients missing out on any benefits they are legally entitled to.

Happy New Year

Fri, 23 Jan 2026 03:27:00 GMT

Happy New Year!

A new year, a new set of numbers, and plenty to look forward to.

2025 was a big one, and we’re grateful for everyone who made it such a strong year. From our clients to our partners and the team behind the scenes, thank you.

We hope everyone’s enjoying some well-deserved rest at the beach before the year kicks into gear.

CGT Series: Holiday Homes

Mon, 29 Dec 2025 23:00:00 GMT

CGT Series: Holiday Homes

If you own a holiday house that’s never rented, you might not be claiming deductions along the way, but that doesn’t mean the costs are wasted. Many holding costs can be added to your cost base, reducing your capital gain when you sell.

The catch? Only if you’ve kept the records.

In this video, John breaks down how CGT works for holiday homes and why good paperwork can save you serious money later.

Worth a watch if a coastal getaway is part of your long-term plan.

Merry Christmas from the team at Key Tax Solutions

Mon, 22 Dec 2025 23:00:00 GMT

Merry Christmas from the team at Key Tax Solutions

Wishing all our clients and partners a Merry Christmas and a joyful holiday season.

From all of us at Key Tax Solutions, we hope you enjoy the festive season surrounded by good company, good food, and plenty of time to relax.

What happens when a family member dies?

Mon, 22 Dec 2025 02:22:41 GMT

What happens when a family member dies?

Have you planned for your death?

So two things you can’t avoid in life, Death & Taxes.

You have been paying taxes directly and indirectly your whole life. Planning your financial situation for your death will save your beneficiaries thousands (or hundreds of thousands) of dollars in tax. We can’t avoid tax but we can minimise it.

As a morbid topic this might be, there are lots of opportunities for tax planning for your death.

Being an accountant sometimes we lack the emotion you might be feeling, however your best interests are always in our heart.

Having your Will in place is paramount to ensure the proceeds are directed in your wishes and in the most tax effective matter, as you have planned for it.

Any good lawyer would recommend you get your power of attorney and enduring guardianship setup at the same time.

You should involve your accountant with this process to discuss the tax position of your wishes.

E.g: you own two properties, one is your owner occupier home and the other an investment. Both are worth the same, however the investment property has potential capital gains tax whilst the owner occupier doesn’t. The investment property is worth less to a beneficiary.

There is lots more to consider, now is the best time to plan.

Can you save Capital Gains Tax on a Property Sale?

Mon, 22 Dec 2025 02:20:24 GMT

Can you save capital gains tax on a property sale?

Recently, we had a retired couple, Jack & Dianne, sell their commercial property.

They sold this property for over 2 million dollars, a great result, certainly doing the best they can. Jack & Dianne bought this property more than 30 years ago for approximately $300k. The capital gain was more than $1.7 million. Potential capital gains tax of $400k.

Fortunately for them, we have known them for over 20 years. Originally, the property was bought and used in their business before they retired and started using it for passive income.

Using a commercial property to operate their business…. We researched the small business capital gains tax exemptions to see if they apply to Jack & Dianne.

We did the work, ensuring Jack & Dianne passed all steps. We prepared a detailed tax advice letter. The final result… was a capital gains tax amount of NIL. Yes, they owned the property for 30 years and paid no capital gains tax.

If you do run your own business and are thinking of investing in a rental property, think about buying a commercial property to operate your business from. The capital gains tax savings could be huge.

Christmas Gifting Tips

Mon, 22 Dec 2025 02:13:31 GMT

Christmas gifting tips

Thinking about treating your team this Christmas? There are many great ways to reward loyal staff, but before you buy gifts, it’s worth keeping tax considerations in mind.

When it comes to staff gifts, Fringe Benefits Tax (FBT) rules can make things a little tricky. To maximise your tax deductions, remember these two key points:

1️⃣ The gift must cost less than $300 (GST inclusive) per staff member.
2️⃣ It must be a non-entertainment gift.

If both apply, you can claim a full tax deduction and GST credits, with no FBT payable.

A few quick examples:
�� Non-entertainment gifts – flowers, hampers, gift vouchers, or even a nice bottle of wine.
��️ Entertainment gifts – event tickets, flights, or holiday accommodation.

Spend wisely and keep those numbers working in your favour this festive season.

Christmas Parties & Tax

Mon, 24 Nov 2025 23:00:01 GMT

Tax & your Christmas Party

Christmas parties are a great time to strengthen your connection with your staff, clients, and suppliers. Unfortunately, there’s no good news on the tax consequences of these events.

Christmas parties are treated as “Entertainment” and generally not tax-deductible. For Christmas parties held on premises, where only employees attend, all costs are not deductible, and no GST credits are available. However, the costs are exempt from FBT.

Where Christmas parties are held off-premises, if the spend per employee is under $300 per head, it is exempt from FBT (it is considered a minor benefit). However, it is not tax-deductible and you cannot claim GST credits.

Above $300 per head, it is subject to FBT, and you can claim a tax deduction and the GST credits. This scenario does sound favourable; however, the FBT applicable is approximately the same amount as the tax saved on the deduction and the GST credit you have claimed.

Any expenses related to your clients attending your Christmas party are not tax-deductible, nor can you claim GST credits. However, they are exempt from FBT.

The moral of the story? Have a fun Christmas party with staff and clients! Don’t focus on the tax consequences; just be aware of them.

What are you doing for your Christmas party?

Accountant Horror Story

Mon, 10 Nov 2025 23:00:01 GMT

A real-life accountant horror story!

In September 2025, a registered tax agent and solicitor from Richmond, NSW, was banned from providing financial services for 10 years. The ban prohibits him from offering financial advice or controlling any entity involved in financial services.

This accountant was found to have provided unlicensed financial product advice. He allegedly set up deeds of arrangement between clients and companies under his control and encouraged accounting clients to invest in those same businesses - these are clear breaches of professional and legal standards.

It's deeply concerning when a trusted accountant exploits their position for personal gain. Incidents like these highlight the importance of choosing ethical, qualified professionals.

At Key Tax Solutions, integrity, professionalism, and trust are the cornerstones of everything we do. We’re committed to being reliable, innovative partners. Your success is our success, and we take great pride in helping clients achieve their goals the right way.

Don’t ever suffer an “accountant horror story,” come and see our team at Key Tax Solutions.

How accurate are you when reporting to the ATO?

Mon, 20 Oct 2025 23:00:00 GMT

How accurate are you when reporting to the ATO?

Understanding How Many Small Business Owners Make Tax Errors in Australia

According to the ATO’s Small Business Random Enquiry Program (covering 2018–19 through 2020–21), out of a sample of 1,795 small business taxpayers:

61% reported correctly.
30% attempted to get it right but made mistakes—often due to poor record keeping, reconciliation errors, or misunderstandings of the tax law.
4% under‑reported income or exaggerated expenses, likely not intentionally.
5% were clearly operating in the shadow economy, deliberately avoiding tax. Importantly, that 5% accounted for about 55% of the total revenue shortfall identified.

https://www.ato.gov.au/about-ato/learn-about-tax-and-the-ato/tax-and-small-business/small-business-random-enquiry-program-findings

Have you checked your supplier's ABN?

Mon, 13 Oct 2025 23:00:01 GMT

Have you checked your supplier's ABN?

When a supplier sends you an invoice it’s up to you to ensure the ABN is correct and that they are registered for GST.

You can check this by going to abr.business.gov.au or type ABN lookup in Google. If your supplier is not registered for GST and they charge you GST, you cannot claim the GST credit even if you pay the supplier in full. The supplier has no obligation to pay this GST to the ATO, in reality they have just charged you more for the goods or services.

Hopefully, you have identified this before you pay your supplier. If they are not registered for GST, ask them to re-issue the invoice without GST.

 If you realise they are not registered after you pay, you can ask them to return the GST. If they won’t, it’s just an extra tax deduction for you.

Always check the ABN register before paying new suppliers.

Julia wants to buy a car

Wed, 08 Oct 2025 08:14:33 GMT

Julia wants to buy a car

Once upon a time, there was a small business owner named Julia. She wanted to buy a motor vehicle for her business, but her accountant left her completely confused with all the GST rules. After some careful note-taking, Julia came away with the following key points:

Buying a Motor Vehicle

If you are registered for GST, you can claim a GST credit on the purchase.
The seller must also be registered for GST. For second-hand cars, this makes a difference - you can only claim a credit if the seller is registered.
The maximum GST you can claim (2025/26) is $6,334. This is 1/11th of $69,674) which is the car cost limit for depreciation.
If you use a chattel mortgage, hire purchase, or loan, you can claim the full GST amount upfront.
If you lease, you can only claim the GST on the lease payments.

Selling a Motor Vehicle

If your business is registered for GST, the sale price of your vehicle automatically includes GST.
You must pay 1/11th of the final sale price to the ATO.
This also applies if you trade in a vehicle.
Even if the buyer is not registered for GST, the sale price still includes GST because you are registered.

With this knowledge, Julia finally understood how GST applies to motor vehicles. She was able to make a clear and informed decision.

Happy driving!

Introduction to Property Capital Gains

Tue, 30 Sep 2025 00:00:00 GMT

Introduction to Capital Gains Tax

Introduction to Capital Gains Tax - Click the image to watch Part One of our Capital Gains Tax series!

Where is your Company’s Registered Office?

Tue, 23 Sep 2025 00:00:00 GMT

Where is your Company’s Registered Office?

When starting a company ASIC advises that you will need to set up a registered office to be the company’s official legal address.

It must be a physical address, not a PO Box. It’s a great idea to use your accountant’s office address as they are experienced with dealing with paperwork and we always have your best interests at heart.

It is vital to keep your registered office current, here are some examples of clients that didn’t:

1. They used their home address as their registered office, moved house and didn’t advise ASIC. A few years later, they were advised by their bank their company had been deregistered for not paying the annual ASIC fee. The ATO had sent legal enforcement action letters to the company’s registered office.

2. They used their home address as their registered office and the ATO had sent a Director’s Penalty Notice to the registered office. The client ignored the importance of the letter and then incurred a personal debt with the ATO of almost $100k.

Keeping your address up to date with ASIC

Tue, 16 Sep 2025 00:00:09 GMT

Thank you to our valued client!

When you have a company there are a number of addresses that need to be current.

Registered Office (maybe your accountants office)

Business Address

Officeholders (Directors) Address

Members (Shareholders) Address

Any changes need to be updated with ASIC within 28 Days, otherwise there are potential late fines. We complete an ASIC Form 484 “Changes to company details” which we send out for digital signature and lodge. We like to avoid late fees, when ASIC is notified up to one month after the change, the company can be charged a late fee of $98. If more than one month, the late fee is an additional $411. (These late fees apply to paying your Annual Review fee late as well).

Having the incorrect address listed with ASIC can result in legal documents being sent to the wrong address and you may have a legal ruling made against you without your knowledge.

Thank you to our valued client

Sat, 06 Sep 2025 22:13:07 GMT

Thank you to our valued client!

Thank you, Michael, for your trust over the past 10 years.

It's been a pleasure supporting you, and we're glad the portal helps make things a little easier come tax time.

We’re here to keep things simple and stress-free.

If you’re looking for support that feels personal and reliable, we’re here to help.

What happens to your superannuation when you die?

Tue, 26 Aug 2025 00:00:00 GMT

What happens to your superannuation when you die?

Your executor should advise your superannuation fund of your passing. The super fund will now need to payout the superannuation balance. However, a super fund can only pay a benefit to a superannuation death beneficiary. They are:

Your spouse
Your children
Financial dependent (lives and share a close relationship, financial and domestic dependency)

If you don’t have any of these, your superannuation benefit is paid to your Legal Personal Representative, i.e. your estate.

Please note: Superannuation is not included in a deceased person's estate or will, unless there are no superannuation death beneficiaries. In that case, it will go to the estate. You can nominate who is the beneficiary of your superannuation, and your super fund is obliged to follow these wishes.

When the super fund is paying the benefit, tax can be deducted.

The amount of tax is dependent on two things:

Components of Superannuation: Tax-Free, Taxed element or Untaxed element
Beneficiary: Dependent or non-dependent

For example: If your spouse passed away, you are their superannuation death beneficiary and dependent, and they nominate you to receive the super entirely, and they only have the taxed element of superannuation, there is no tax payable. No tax will be deducted by the superannuation fund.

However, if it was your father, and you are over 18 and classified as a non-dependent, using the same details above, you could have tax deducted at 17% (capped). You will also need to include this benefit payment on your personal tax return.

If the deceased person was already receiving a superannuation pension , they could have nominated a person (superannuation death beneficiary) to continue receiving that pension on their passing. This is separate from the estate of the deceased person.

Executors checklist for a deceased person

Tue, 19 Aug 2025 00:00:00 GMT

Executors checklist for a deceased person

1. Pause correspondence
Get in touch with the ATO, banks, utilities to advise them your family member has passed away.

2. Determine who will manage the deceased's financial affairs
The Will should nominate someone as the executor, the executor is responsible to manage the financial affairs of the deceased.

3. Decide if you need a grant of probate or letters of administration
If the deceased does not have a Will you may need to apply for Letters of Administration. Probate will legally recognise the Will. The process can be overwhelming, seek assistance from a solicitor.

4. Let the ATO know who is managing the estate
Advise the ATO that you, the executor, have the authority to act on behalf of the deceased.

5. Manage any business tax obligations
If the deceased is running a business, you will need to get all BAS and income tax obligations up to date. If the deceased was a director of a company, ensure you have the authority to act as the director.

6. Lodge a final tax return for the deceased person
You will need to ensure all the outstanding tax returns for the deceased are lodged. Please note, any income earned after the date of death is not included on their final return.

7. Lodge tax returns for the deceased estate
If the deceased has significant assets, you may need to create a Deceased Estate Trust, your accountant will be able to guide you on this. For three years after death, the deceased estate trust is taxed as an individual.

8. Finalise tax affairs
Ensure all tax returns are lodged before distributing the funds from the estate. As the executor, you can be held personally liable for unpaid tax of the estate.

Have you planned for your death?

Sun, 17 Aug 2025 01:25:50 GMT

Have you planned for your death?

So two things you can’t avoid in life, Death & Taxes.

As a morbid topic this might be, there are lots of opportunities for tax planning for your death.

Being an accountant sometimes we lack the emotion you might be feeling, however your best interests are always in our heart.

Having your Will in place is paramount to ensure the proceeds are directed in your wishes and in the most tax effective matter, as you have planned for it.

Any good lawyer would recommend you get your power of attorney and enduring guardianship setup at the same time.

You should involve your accountant with this process to discuss the tax position of your wishes.

There is lots more to consider, now is the best time to plan.

Why I Still Love What I Do After 20 Years in Accounting & Tax

Mon, 04 Aug 2025 10:21:00 GMT

Why I Still Love What I Do After 20 Years in Accounting & Tax

Motor Vehicle Tax Deductions (Australia)

Two decades in, and people often ask me: “Do you still enjoy it?”
My answer? Absolutely — and here’s why:

Every client is unique
Behind every tax return or BAS is a person, a business, a story. Helping clients navigate financial challenges and achieve goals never gets old.

I get to solve puzzles daily
Tax law changes, business structures evolve — it keeps me sharp and constantly learning.

Trust matters
I’m honoured to be someone people rely on for honest advice, clarity, and peace of mind.

Small wins = big impact
Saving a client from an unexpected tax bill or helping a startup grow, it’s the little things that remind me why I do this.

The numbers are part of it, but for me, it’s really about the people.

Here’s to the next 20!

Motor Vehicle Deductions

Mon, 04 Aug 2025 10:19:06 GMT

Motor Vehicle Deductions

Motor Vehicle Tax Deductions (Australia)

If you use your car for work (not private travel), you may be able to claim deductions. Two main methods apply:

1. Cents per kilometre method

Claim 88c/km (from 1 July 2024), up to 5,000 km per car .
No logbook needed, but you must show how the kms were work-related. Eg Diary records.
Covers all car running costs (fuel, rego, servicing, depreciation).

2. Logbook method

Complete a log book to track your car use over 12 continuous weeks to establish % of work use. (This % can be used for 5 years, assume car usage does not change)
Claim actual costs based on that %:
Petrol,
Insurance,
Registration,
Repairs & servicing,
Loan interest or Leasing,
Depreciation
Must keep receipts and records.
Electric Cars, receipts from commercial charging stations. (They also have special rules for charging at home)

You can't claim:

Commuting from home to work (unless carrying tools or working at multiple sites).
Any private portion of use.

Head to our website today to find out how we can help you manage your motor vehicle deductions/

https://www.keytaxsolutions.com.au/

Work From Home Deductions

Mon, 04 Aug 2025 10:16:29 GMT

Work From Home Deductions

If you work from home, you may be eligible for tax deductions.

Two methods available:

Fixed rate method (70 cent per hour from 1 July 2024):
Covers electricity, internet, phone use, stationery, and computer consumables.
Actual cost method :
Claim the additional costs of working from home. E.g. The extra amount of electricity it costs to run your computers, etc..
Work related percentage of phone use, internet use, etc..

You can’t claim rent or mortgage unless your home is a place of business.

You must keep records :

Hours worked from home (e.g. timesheets or diary records). This needs to be exact and not just approximate days working from home.
Receipts and invoices for claimed expenses.

You need to apportion costs between work and personal use.

Choose the method that gives the best deduction.

Ensure you meet all ATO substantiation rules.

If you need help working out your work from home deductions, get in touch with Key Tax Solutions today.

ATO Scam Awareness

Mon, 04 Aug 2025 10:14:32 GMT

ATO Scam Awareness

As an employer, are you aware of the changes to superannuation for the 2026 financial year?

The big change for the 2026 financial year is the increase in the Superannuation Guarantee (SG) to 12%. This applies to all payroll paid from 1 July 2025.

We expect all payroll software providers should incorporate these changes.

The Concessional Contributions (before tax) limit will not change; it will remain at $30,000. Please note that if your superannuation balance is below $500,000 as of 30 June 2025, you can contribute more by using any unused concessional contributions from the previous 5 years, under the limit.

Please note, as an employer, superannuation expenses are not tax deductible until they are paid and the money is received by the complying superannuation fund. We encourage you to pay your June 2025 quarter superannuation contributions early and get a tax deduction in the 2025 financial year.

Superannuation Payment dates have not changed. However, as the superannuation rates are increasing, it would be advisable to pay your employees' superannuation at the same time you pay their wages. Superannuation is part of their remuneration.

Delaying your superannuation payment to the due date can potentially leave you short of cash at the wrong time. Making smaller payments as you go will have minimal impact on your cash flow.

What’s changing in Superannuation for 2025FY

john@keytaxsolutions.com.au (John Reilly) — Tue, 17 Jun 2025 00:00:00 GMT

What's changing in Superannuation for 2025FY

As an employer, are you aware of the changes to superannuation for the 2026 financial year?

The big change for the 2026 financial year is the increase in the Superannuation Guarantee (SG) to 12%. This applies to all payroll paid from 1 July 2025.

We expect all payroll software providers should incorporate these changes.

Delaying your superannuation payment to the due date can potentially leave you short of cash at the wrong time. Making smaller payments as you go will have minimal impact on your cash flow.

Our Top Tips for Using Xero

john@keytaxsolutions.com.au (John Reilly) — Tue, 10 Jun 2025 00:00:01 GMT

Our Top Tips for Using Xero

10 simple ways to get more out of Xero

Whether you're DIY-ing your finances or working with a bookkeeper, these tips will help you streamline your systems and stay on top of your numbers:

✅ Automate bank feeds – Link your bank accounts for real-time updates and skip the manual data entry.

✅ Set up bank rules – Automate recurring expenses (think: fuel, subscriptions) to speed up reconciliation.

✅ Use tracking categories – Break down income and expenses by job, location, or department for clearer reporting.

✅ Reconcile regularly – Weekly (or even daily) reconciliation helps avoid end-of-month chaos.

✅ Invoice smarter – Use custom templates, recurring invoices, and auto-reminders for overdue payments.

✅ Connect your apps – Plug in tools like Dext, Square, Shopify, or payroll systems to simplify workflows.

✅ Use the mobile app – Snap receipts, send invoices, and check cash flow while you’re on the move.

✅ Stay compliant – Make sure your GST is coded correctly and BAS reports are accurate and on time.

✅ Back up key documents – Store contracts and major receipts in Xero’s file library for easy access and audit readiness.

✅ Invite your bookkeeper or accountant – Collaborate easily with your advisor for quicker fixes and fewer emails.

Do you want to maximise your Superannuation Tax Deduction?

john@keytaxsolutions.com.au (John Reilly) — Tue, 03 Jun 2025 00:00:11 GMT

Want To Minimise Your Superannuation Tax Deduction

Superannuation is an expense to every employer who pays wages. However, Superannuation is not tax-deductible until it is paid and is received by your employee's superannuation fund.

For the June quarter superannuation, i.e., from 1 April to 30 June, this is due to be paid by 28 July. However, this means it is not tax-deductible until the next financial year. To claim a tax deduction in the current financial year, you will need to pay your employees' superannuation before 30 June. As the funds need to be received in your employee's fund, you will need to pay it a week or two before the end of the financial year.

You can also make a contribution personally to your superannuation fund. This is recommended for sole traders. When making the contribution, contact your superannuation provider to let them know you intend to claim a tax deduction for this contribution.

You don’t have to claim a tax deduction, but if you do, you have to let your superannuation provider know. Your superannuation provider should write to you to confirm your decision to claim a tax deduction. They will report your intention to claim a tax deduction to the ATO. Without this acknowledgment, you can not claim a tax deduction.

The key is to make sure all superannuation payments are made early enough before the end of the financial year, to ensure all payments are received by the superannuation funds before 30 June.

What Are The Most Common Business Budgeting Mistakes?

john@keytaxsolutions.com.au (John Reilly) — Mon, 26 May 2025 11:23:26 GMT

What Are The Most Common Business Budgeting Mistakes?

When preparing your business budget, there are a few common errors business owners often make.

First - don’t overthink it. Your budget is a guide; it’s not a blueprint for building a house.

The biggest mistake is not doing a budget at all. A close second is creating a budget simply because it’s what you think you’re “supposed” to do as a business owner. Going through the motions won’t guide your business. Your budget isn’t there to restrict you—it’s there to keep you on track so you can achieve the success you want.

Your budget should be achievable. That means around 50% is attainable. You don’t want it to be too easy to meet, but you also don’t want it to be so hard that it feels out of reach. The goal needs to be ambitious enough to keep you motivated.

You don’t need to account for every single expense—again, your budget is a guide. Look at last year’s expenses to get a rough idea of what to allow for. Don’t make it too rigid—you need some flexibility. What you expect to happen now might look very different in six months. (We all saw how COVID-19 affected budgets.)

The most important aspect of any budget is to review and update it as the year progresses.

Opportunities may present themselves throughout the year, and you need to be flexible enough to revise your budget to accommodate them.

Does Your Business Have A Budget For FY2025-26

john@keytaxsolutions.com.au (John Reilly) — Tue, 13 May 2025 00:00:13 GMT

Does Your Business Have A Budget For FY2025-26

Just like the Federal Government, every business should have a budget for the next financial year. Have you worked on preparing yours?

I hear people all the time expressing their distaste for budgets. Some see them as a restriction on their activity - when really, it’s the opposite. A budget should be the goal that drives your activity.

A budget is a plan. How long do you spend planning your next holiday? Probably many hours. A plan for your business should be what helps pay for that holiday.

A budget should be about 50% achievable. If it’s too easy, there won’t be enough pressure on yourself to perform. If it’s too hard, you’re likely to get discouraged, give up on the plan, and lose focus.

Don’t know where to start? If you’ve been in business for over a year, start by looking at your performance over the past 12 months. Review areas where you can improve. How much extra income can you generate with your current resources? What if you add resources - how much more could you earn?

It doesn’t have to be perfect. It just needs to be done.

It's Budget Time Again!

john@keytaxsolutions.com.au (John Reilly) — Tue, 06 May 2025 00:00:04 GMT

It's Budget Time Again!

We are coming to the end of the 2024 financial year - have you thought much about FY2025?

Now is a great time to start putting together your goals and plans for the 2025 financial year. Preparing a budget plan for the next 12 months is an essential step to ensure your business not only survives but succeeds.

This involves determining:

Income targets
New types of income
Product margins
Estimating ongoing expenses
Potential future expenses
Staff levels
Cash flow needs
Profit the business is going to make
The income you want personally

This plan will keep you accountable to yourself. You’ll be surprised how focusing on meeting your plan can drive the success of your business. Having a goal gives you an objective and, more importantly, a reason to do the things you need to do to meet those goals. It will guide your activity to align with the needs of your plan.

What is GST and how to Register?

john@keytaxsolutions.com.au (John Reilly) — Wed, 23 Apr 2025 10:03:52 GMT

Your obligations under GST

GST applies to almost every purchase you make. There are some exemptions for fresh food, health, education, and financial services. GST tax is not a business tax, if you are registered for GST, you will never actually pay GST. You are eligible for GST credits when a business buys goods and services.

However, the burden of collecting the GST for the government is endured by business owners. To register for GST, it is an additional step after you have applied for your Australian Business Number (ABN). You are not required to register for GST until your turnover is over $75,000. If you are working as an employee and as a sole trader, any income from your wage as an employee does not make up the $75,000.

Your obligations under GST?

john@keytaxsolutions.com.au (John Reilly) — Tue, 15 Apr 2025 00:00:00 GMT

Your obligations under GST

Once you are registered for GST you must lodge Business Activity Statements (BAS). This is additional administration work for small business, and if your turnover is under $75,000 (registration threshold) you will need to consider if the additional work is worth the potential savings.

BAS can be lodged on a monthly, quarterly or annual basis. The ATO has rules on how often you are required to lodge, it depends on your sales. However, you may lodge more frequently then required, this can help you manage your cash flow. E.g., you may want to have a small monthly GST payment as opposed one large one every quarter, hence you lodge monthly instead of quarterly.

Every sales invoice your business prepares is deemed to include GST, you need to ensure you charge the additional 10% to ensure you don’t short change yourself.

Have you checked your Supplier's ABN?

john@keytaxsolutions.com.au (John Reilly) — Tue, 08 Apr 2025 00:00:00 GMT

Have you checked your Supplier's ABN?

When a supplier sends you an invoice, it’s up to you to ensure the ABN is correct and that they are registered for GST.

Hopefully you have identified before you pay your supplier they are not registered for GST, ask them to re-issue the invoice without GST. If you realise they are not registered after you pay, you can ask them to return the GST. If they won’t, it’s just an extra tax deduction for you.

Always check the ABN register before paying new suppliers.

You can't always claim the GST you have paid!

john@keytaxsolutions.com.au (John Reilly) — Mon, 31 Mar 2025 23:00:00 GMT

You can't always claim all the GST you have paid?

Unfortunately this is true. Yes you have paid the GST on the goods, Yes are registered for GST and are entitled to claim a GST credit, but unfortunately you can not claim all the GST you have paid.

The most common example of this is when you are buying an expensive motor vehicle. Specifically above the depreciation cost limit. For the 2025 financial year the depreciation cost limit is $69,674. Which means the most GST you are eligible to claim is $6,333.

So when you buy that dream BMW or Mercedes for $150,000. Even if you pay almost $15,000 in GST, you can only claim $6,333 in GST credits on your next BAS.

Please note when you sell your motor vehicle, that is owned by your business and you are GST registered, the proceeds of sale are deemed to include GST. You will need to remit 1/11th of the sale price as GST on your next business activity statement

How do you calculate your Car’s Fringe Benefits Tax?

john@keytaxsolutions.com.au (John Reilly) — Mon, 24 Mar 2025 23:00:00 GMT

How do you calculate your Car's Fringe Benefits Tax?

The current FBT (Fringe Benefits Tax) year is finishing soon, on 31 March 2025.

I thought I would discuss the most common fringe benefits, motor vehicles.

There are two methods to calculating your Fringe Benefits Tax on motor vehicles.

They are: Statutory Formula and Operating Costs.

Statutory Formula is based on the value of the vehicle when it was purchased, including GST. The statutory rate is 20%. For example, if your business owns a BMW acquired for $90,000, your fringe benefit is $18,000. The FBT debt is calculated at $18,000.

Please be aware that you can only claim depreciation deductions for $69,674 on motor vehicles in the 2025FY.

The best way to reduce your FBT on your motor vehicles is by using the Operating Costs method for calculations. You will need to complete a log book to work out the business percentage use. You will calculate all running and ownership costs related to the motor vehicles. The private use percentage is the value of your fringe benefit and the value used to calculate your FBT debt.

Sometimes the FBT can be more than the deductions on luxury cars.

Electric & Hybrid Vehicle Exemptions

john@keytaxsolutions.com.au (John Reilly) — Mon, 17 Mar 2025 23:00:00 GMT

Electric & Hybrid Vehicle Exemptions

Thinking about switching to an electric or hybrid vehicle? Here’s some good news!

Did you know that electric and hybrid vehicles may qualify for special exemptions that could save you money?

From reduced registration fees to tax benefits, going green isn’t just good for the planet, it’s great for your wallet too!

Watch this video to learn more about the perks of driving an EV or hybrid.

Is your Motor Vehicle exempt from FBT?

john@keytaxsolutions.com.au (John Reilly) — Mon, 10 Mar 2025 23:00:00 GMT

Is your Motor Vehicle exempt from FBT?

All vehicles designed to carry a load of more than one tonne and fewer than nine passengers are eligible for FBT exemption. Below are some more specific examples of potential exempt vehicles:

Panel Van / Van: Solid rigid body without rear side windows and only has seating in the front for 2-3 passengers. Principally designed for a load, not passengers.

Single Cab Ute : Seating for 2-3 passengers in the cab, with a larger tray principally designed to carry a load.

Dual Cab Ute: This needs to be principally designed to carry a load and not passengers. The model’s tare weight for the load needs to be higher than the weight for passengers. Australian Design rules say a passenger weighs 68kgs - I don’t know many men who weigh this much?

4X4 Vehicles : Designed to carry more than one tonne or more than eight passengers.

Electric & Hybrid Vehicles: Tune in next week for more information about these exemptions.

Please note that for exemption to apply, these vehicles can only have minor and infrequent use by your employees. The ATO suggests that this means your employee travels no more than 1,000km per annum for private use.

Are you completing your Log Book correctly?

john@keytaxsolutions.com.au (John Reilly) — Tue, 04 Mar 2025 09:17:24 GMT

Are you completing your log book correctly?

Logbooks are used to record the business use of your motor vehicle as part of evidence to claim your motor vehicle expenses as a tax deduction and to reduce Fringe Benefit Tax.

To correctly complete your logbook, you need to:

Complete it for 12 weeks.
Enter the date of the journey.
Describe the journey, be specific.
Record the starting odometer reading.
Record the closing odometer reading.
Note the kilometers traveled.
Note if the journey is for business or private use.

Once this is complete you can use this logbook for the next 5 years. Even if you change cars, your business use of the new vehicle is the same.

Your logbook can be recorded in a pre-printed logbook - you can buy these from a stationery store. Otherwise, you can record it electronically, e.g. on a spreadsheet or an approved app.

Please note: It is very important to record the odometer reading at 31 March if your claim is for Fringe Benefits Tax (FBT) calculations or at 30 June if your claim is for a tax deduction.

When recording your logbook, please remember when your car is serviced, your mechanic will record the odometer reading on the car. Also, the ATO can access your toll records.

Getting money out of your company?

john@keytaxsolutions.com.au (John Reilly) — Mon, 24 Feb 2025 23:00:00 GMT

Getting money out of your company?

Even though you might be the sole Director and Shareholder of the company. The money in the company bank account is not yours to do what you want. There are tax consequences.

Getting money out of the company bank account with the least amount of tax payable is the challenge. Some of the options are:

Salary & Wages : You will need money to pay for your lifestyle. Work out how much you need and how much the company can afford and pay this amount to yourself consistently whether it be weekly, fortnightly, or monthly.
Dividends: This is a good option to pay yourself extra, ensuring the company has the available cash and you have paid company tax. You can use the company tax credits (Franking credits) to reduce your tax position.
Director Drawings: This has to be the worst option. If you use your company bank account to pay for personal expenses, you are using pre-tax dollars. These “pre-tax dollars” will be considered after-tax dollars when calculating potential tax liability.

Directors Loans: When you borrow money from the company you are required to have a loan agreement with the company. This is known as a Division 7A loan. The ATO has a deemed interest you are to charge. This interest is income to the company however not tax-deductible to the individual. This is not a good option.

How is your BAS different now you operate as a company compared to a sole trader?

john@keytaxsolutions.com.au (John Reilly) — Mon, 17 Feb 2025 23:00:01 GMT

How is your BAS different now that you operate as a company?

The company due date of your BAS is the same date as a sole trader.

Your company BAS will now have a few taxes paid simultaneously. This can include:

GST
PAYG Withholding (wages)
PAYG Instalment (company tax)
Fringe Benefits Tax

As you are now a company, the bank accounts need to be reconciled to ensure all transactions have been taken up to calculate your BAS.

Sometimes you will pay for business expenses using your money (not the company's). You need to ensure you provide this information to the person preparing your BAS. You have paid GST on these expenses, claiming the extra CGT will reduce your BAS payable.

The PAYG Withholding is the tax you have deducted to pay yourself a

wage.

PAYG Instalment is the rate or amount the ATO will calculate for you.

Although not paid on your BAS, it is due at the end of the quarter, you will pay your superannuation, using a superannuation clearing house. Most software systems (eg Xero) have a superannuation clearing house.

Paying company tax? What's different to being a sole trader?

john@keytaxsolutions.com.au (John Reilly) — Mon, 10 Feb 2025 23:00:00 GMT

Paying company tax? What's different to being a sole trader?

Being a Sole Trader you pay tax at your marginal bracket on the profit In your business.

The first point to note, any money you withdraw from the company bank account has tax consequences for you. Taking money out correctly, e.g. wages from the company bank account, will reduce potential tax shock in the future.

When you pay yourself a wage, you will withhold PAYG (i.e. wages tax). Most software packages (e.g. Xero) will work out how much is required.

As you are now an employee, you are now legally required to pay superannuation on your wage. The software package will work this out for you.

Any profit left in the company (after you have taken a wage) tax is calculated at 25% for small business (30% for large).

If you have a motor vehicle in the company, you might be liable for Fringe Benefits Tax (FBT).

All these tax (except super) are paid on your Business Activity Statement, usually quarterly.

Congratulations Danielle!

john@keytaxsolutions.com.au (John Reilly) — Mon, 27 Jan 2025 23:00:01 GMT

Congratulations Danielle!

We’re thrilled to announce that our long-term team member, �� , has been promoted to �� !

Danielle has consistently demonstrated a high level of quality service to our clients. With her proactive approach, keen attention to detail, and ability to learn quickly, she has become an integral part of the team at Key Tax Solutions.

With over 15 years of experience in Business Administration across the health sector, non-government organisations, and small businesses, Danielle brings a wealth of knowledge and expertise. She is committed to further developing her business administration skills and plans to undertake additional studies in accounting soon.

Outside of work, Danielle’s passion for helping others shines through. She co-founded a charity in Kenya that provides education and training to disadvantaged youth and children, where she also serves as voluntary CFO. When she’s not dedicating her time to her charity work, Danielle enjoys spending quality time with her husband and three beautiful daughters.

��, ��, �� -�� !

Pay your December quarter superannuation today!

john@keytaxsolutions.com.au (John Reilly) — Mon, 20 Jan 2025 23:00:01 GMT

Pay your December quarter superannuation, today!

��, ��’�� (�� ). �� , �� .

Further reading of the legislation states that the employee's superannuation fund must receive the payment by 28 January 2025. If, like most of my clients, you use the Xero Clearinghouse to pay superannuation, the transfer process can take almost a week to complete.

This is why you should �� —a full week before the due date.

If you do not pay superannuation by 28 January 2025, you must prepare and lodge a �� (��) �� .

��’�� :
▪️ Superannuation is no longer tax deductible.
▪️ You’ll be charged an additional 10% interest on the overdue amount, backdated to 1 October 2024.
▪️ A $20 administration fee per employee is applied.

The SGC statement is lodged with the ATO, and all superannuation payments for that quarter must then be made directly to the ATO. Even if you pay the superannuation after 28 January 2025, the ATO may require you to complete an SGC statement. This happened to one of my clients, so it’s important to avoid the hassle altogether.

Beyond the legalities, the right thing to do is to look after your employees. Superannuation is part of their remuneration, and paying it on time shows that you value them.

“�� , �� .”

Six month profit review

john@keytaxsolutions.com.au (John Reilly) — Mon, 06 Jan 2025 08:50:26 GMT

Six month profit review

What changes can you make to change your original forecast?

Employing your kids in your business

john@keytaxsolutions.com.au (John Reilly) — Mon, 06 Jan 2025 08:43:01 GMT

Employing your kids in your business

A lot of parents plan on their kids taking over their business. �� (proud parent moment here) and is employed one day a week in my office for work experience. However, I’ve clarified to her that once she completes her degree, she will need to seek full-time employment elsewhere.

I don’t want her to feel stuck living my life, I want her to choose her direction based on her own experiences. I want her to learn to face challenges and grow independently. �� ’�� .

Too often, I’ve seen clients hire their children into their business, and these kids have no accountability. They get away with things other employees never would, taking leave whenever they want, showing minimal effort, and delivering uninspiring performance (if any at all).

�� ’�� , �� , �� . One brave client I worked with made the tough decision to let their child go, and it was the best outcome for both the parent and the child.

Parents who aren’t tough enough on their kids often find themselves stuck working in the business long after they should have retired. Their kids rely on the business for a paycheck, and their lifestyle depends on it. These parents never took the time to hold their children accountable or properly prepare them to take over the business.

�� ’�� , �� . They must perform, be held accountable, and meet clear expectations. Without these boundaries, it won’t work, for your business or them.

𝟐𝟎 𝐘𝐞𝐚𝐫𝐬 𝐨𝐟 𝐊𝐞𝐲 𝐓𝐚𝐱 𝐒𝐨𝐥𝐮𝐭𝐢𝐨𝐧𝐬

john@keytaxsolutions.com.au (John Reilly) — Mon, 16 Dec 2024 23:00:02 GMT

20 Years of Key Tax Solutions

We achieved a huge milestone this year, 20 years in business. Key Tax Solutions was created back in 2004. At the time I had one child who was just over 12 months old. Our business is older than our daughter. I guess it is our middle child.

I refer to Key Tax Solutions as our business, with my wife Ana. We both started the business together and have worked in the business together for 20 years. I’ve had many people over the years ask me, how do you work with your wife? I have plenty of funny comments, the best being “I go to work to get away from my wife”. To me, it’s the key to our success.

We originally started operating from home. In 2006, we moved into our first office at East Hills. We took on our first employee in 2007. It was back in 2007 that we first started attending networking events, and the business growth accelerated from there.

The changes in software over the last 20 years have been incredible. Everything is online now, with minimal paper. I think our office is much smaller, as we don’t need the paper storage we did 20 years ago.

The most important aspect of being self-employed is to have the willingness to learn and know when to pivot. Things constantly change, you need to keep up and know when to take on new challenges, recreate yourself or innovate. It’s all part of the experience of being self-employed. I always want to get better. I still do after 20 years.

𝐂𝐡𝐫𝐢𝐬𝐭𝐦𝐚𝐬 𝐏𝐚𝐫𝐭𝐲 𝐆𝐫𝐢𝐧𝐜𝐡

john@keytaxsolutions.com.au (John Reilly) — Mon, 09 Dec 2024 23:00:00 GMT

Christmas Party Grinch

Christmas parties are a great time to strengthen your connection with your staff, clients and suppliers. Unfortunately, there is no good news on the tax consequences of these events.

Christmas parties are treated as “Entertainment” and generally not tax-deductible. For Christmas parties held on premises where only employees attend, all costs are not deductible and no GST credits are available. However, the costs are exempt from FBT.

Where Christmas parties are held off-premises; if the spend per employee is under $300 per head, it is exempt from FBT as it is considered a minor benefit. However, it is not tax-deductible and you can not claim GST credits. Above $300 per head, it is subject to FBT and you can now claim a tax deduction and the GST credits. This scenario does sound favourable, however, the FBT applicable is approximately the same amount as the tax saved on the deduction and the GST credit you have claimed.

All expenditures on your clients attending your Christmas Party are not tax-deductible. Nor can you claim GST credits. However, it is exempt from FBT.

Christmas parties are more about strengthening relationships. Don’t focus on the tax consequences, just be aware of them.

What are you doing for your Christmas party?

𝐑𝐞𝐰𝐚𝐫𝐝 𝐲𝐨𝐮𝐫 𝐭𝐞𝐚𝐦 - 𝐂𝐡𝐫𝐢𝐬𝐭𝐦𝐚𝐬 𝐁𝐨𝐧𝐮𝐬

john@keytaxsolutions.com.au (John Reilly) — Mon, 02 Dec 2024 23:00:00 GMT

Reward Your Team - Christmas bonus

You might not be organised enough to find the right gift for your team and the best way to reward would be with a cash bonus. The Christmas bonus is given at the discretion of the employer. They are not usually performance-based or part of a salary package. However, be mindful that it is treated in the employees' hands as part of the normal salary and wage income.

Your staff will have to pay tax on this bonus, so remember to deduct PAYG Withholding and pay your team the net amount in cash. You might even want to consider deducting PAYG Withholding at their marginal tax bracket. This might help them avoid a tax debt when they complete their next tax return.

Christmas bonuses are considered Ordinary Time Earnings (OTE) for superannuation. Please remember you have to pay 11.5% superannuation on the gross amount of the Christmas Bonus.

The best approach is to offer a bonus inclusive of superannuation and tax. This way your expenses are capped and then you can make the appropriate payments as required. I once remember receiving a $1,000 bonus, back in the days when I still had a HELP debt. Once superannuation and tax (including HELP) were deducted, I received about $475.

𝐂𝐡𝐫𝐢𝐬𝐭𝐦𝐚𝐬 𝐆𝐢𝐟𝐭𝐬 𝐟𝐨𝐫 𝐲𝐨𝐮𝐫 𝐒𝐭𝐚𝐟𝐟

john@keytaxsolutions.com.au (John Reilly) — Mon, 25 Nov 2024 23:00:00 GMT

Christmas Gifts for your Staff

There are many ways to reward your loyal staff, at Christmas time you might be thinking about a gift. The tax consideration for buying a staff gift is more complicated, as it involves Fringe Benefits Tax.

The two most important aspects to consider to maximise your tax deductions are:

1) the cost of the gift needs to be less than $300 GST Inclusive for each staff member and:

2) the gift should be a “Non-Entertainment” gift. If you meet these two parameters, you will get a full tax deduction for the expense, and claim the GST credits and it has no FBT consequences.

If you spend above $300 on a “Non-Entertainment” gift, FBT will be applicable.

If you buy an “Entertainment” gift under $300, there is no tax deduction and no GST credit.

If you buy an “Entertainment” gift over $300, FBT will be applicable

Some examples of “Entertainment” gifts are: Theatre tickets, movie tickets, sporting events tickets, hired entertainers, flights and holiday accommodation, etc

Some examples of “Non-Entertainment” gifts are: Flowers, electrical goods; e.g. TV, bottled spirits and beer, Christmas hampers, gift vouchers, etc

𝐂𝐡𝐫𝐢𝐬𝐭𝐦𝐚𝐬 𝐆𝐢𝐟𝐭𝐬 𝐟𝐨𝐫 𝐂𝐥𝐢𝐞𝐧𝐭𝐬 & 𝐒𝐮𝐩𝐩𝐥𝐢𝐞𝐫𝐬

john@keytaxsolutions.com.au (John Reilly) — Mon, 18 Nov 2024 23:00:01 GMT

Christmas Gifts for Clients & Suppliers

As we are now approaching the end of the 2024 calendar year, you might be thinking about rewarding some of your key contacts outside your business who helped you during the year.

To maximise your tax deductions, you need to identify what is an “Entertainment” gift and what is a “Non-Entertainment” gift.

You want the gift to be “Non-Entertainment” as it’s a normal tax deduction and you can claim the GST credits, just like any normal business expense.

However “Entertainment” gifts are not tax deductible and you have no entitlement to a GST credit.

Some examples of “Entertainment” gifts are: Theatre tickets, movie tickets, sporting events tickets, hired entertainers, flights and holiday accommodation, etc

Some examples of “Non-Entertainment” gifts are: Flowers, electrical goods; e.g. TV, bottled spirits and beer, Christmas hampers, gift vouchers, etc

To maximise your tax deductions, try to find “Non-Entertainment” gifts for your key contacts. If you are unsure about a particular item, please feel free to send a message.

𝟔 𝐰𝐞𝐞𝐤𝐬 𝐭𝐨 𝐂𝐡𝐫𝐢𝐬𝐭𝐦𝐚𝐬: 𝐓𝐢𝐦𝐞 𝐭𝐨 𝐌𝐚𝐧𝐚𝐠𝐞 𝐲𝐨𝐮𝐫 𝐂𝐚𝐬𝐡 𝐅𝐥𝐨𝐰

john@keytaxsolutions.com.au (John Reilly) — Mon, 11 Nov 2024 23:00:08 GMT

6 weeks to Christmas: Time to Manage your Cash Flow

It’s hard to believe it is only 6 weeks until Christmas.

How’s your job management going, have you planned all your work until Christmas or the last day you plan to work?

Christmas is a deadline we all seem to have, it’s also clients & customers' deadlines. It’s like life doesn’t continue after Christmas. Just be realistic in your expectations and don’t overpromise.

Most importantly, have you planned for your Christmas shutdown? We are planning on closing for two weeks from Friday 20th December until Monday 6th January.

That is two weeks without income, however, the bills keep on rolling. Have you planned your income in December to cover two weeks (shutdown period) of expenses?

Have you ever worked out your fixed weekly costs in your business? This will help answer the questions above.

The cash is what you need:

What direct debits do you have
Do you have time to pay your creditors (bills),
The next BAS is not due until 28 February,
December quarter superannuation is not due until 28 January.

Work out the bare minimum you can get by on. It’s only a short-term need, however, you need an answer on how much.

𝐇𝐨𝐰 𝐏𝐞𝐫𝐬𝐨𝐧𝐚𝐥 𝐖𝐢𝐭𝐡𝐝𝐫𝐚𝐰𝐚𝐥𝐬 𝐟𝐫𝐨𝐦 𝐘𝐨𝐮𝐫 𝐂𝐨𝐦𝐩𝐚𝐧𝐲 𝐂𝐚𝐧 𝐓𝐫𝐢𝐠𝐠𝐞𝐫 𝐓𝐚𝐱 𝐁𝐢𝐥𝐥𝐬

john@keytaxsolutions.com.au (John Reilly) — Mon, 04 Nov 2024 23:00:02 GMT

How Personal Withdrawals from Your Company Can Trigger Tax Bills

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𝐓𝐚𝐱 𝐀𝐝𝐯𝐚𝐧𝐭𝐚𝐠𝐞𝐬 𝐨𝐟 𝐎𝐰𝐧𝐢𝐧𝐠 𝐘𝐨𝐮𝐫 𝐁𝐮𝐬𝐢𝐧𝐞𝐬𝐬 𝐏𝐫𝐞𝐦𝐢𝐬𝐞𝐬

john@keytaxsolutions.com.au (John Reilly) — Mon, 28 Oct 2024 23:00:00 GMT

Tax Advantage of Owning Your Business Premises

When buying an investment property, you will need to consider the potential tax when the property is sold. The structure of the investment should be considered, this could save you thousands in tax when you sell the property.

Buying your own business premises potentially means the property, when sold, could be eligible for Small Business Capital Gains Exemptions. There are lots of rules to ensure you pass, so the structure is important.

When you sell your investment property, you are eligible for a 50% CGT discount on the sale (this excludes companies),

If you use your investment property in your business, and it is classified as an Active Asset, you are eligible for a further 50% discount (now a 75% discount).

If you are over 55 and retiring, the balance of the capital gain can be disregarded as you can claim the retirement exemption. Under 55 you can still claim the retirement exemption however you will need to pay the 25% remaining into your superannuation fund.

Spending a little more money at the start, i.e. purchase can save you thousands at the end, i.e. selling!

𝐀𝐫𝐞 𝐲𝐨𝐮 𝐜𝐡𝐚𝐫𝐠𝐢𝐧𝐠 𝐨𝐮𝐭𝐠𝐨𝐢𝐧𝐠𝐬 𝐨𝐧 𝐲𝐨𝐮𝐫 𝐜𝐨𝐦𝐦𝐞𝐫𝐜𝐢𝐚𝐥 𝐢𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐩𝐫𝐨𝐩𝐞𝐫𝐭𝐲?

john@keytaxsolutions.com.au (John Reilly) — Mon, 21 Oct 2024 23:00:00 GMT

Are You Charging Outgoings On Your Commercial Property?

Are you charging outgoings on your commercial investment property? In this video I explain why you should do it and hand out some helpful tips to maximise your profit.

𝐁𝐮𝐲𝐢𝐧𝐠 𝐲𝐨𝐮𝐫 𝐩𝐫𝐞𝐦𝐢𝐬𝐞𝐬 𝐰𝐢𝐭𝐡 𝐲𝐨𝐮𝐫 𝐛𝐮𝐬𝐢𝐧𝐞𝐬𝐬 𝐩𝐚𝐫𝐭𝐧𝐞𝐫

john@keytaxsolutions.com.au (John Reilly) — Mon, 14 Oct 2024 23:00:00 GMT

Buying Your Premises With Your Business Partner

Maybe the property you require is above your individual credit limits and using both incomes and other equity is needed.

Having two unrelated parties who trust each other does give you a lot more flexibility. Some of the structure options are:

Your own names as partners, you could even add spouses to the title.
Setup a trust, Fixed Unit Trust is best. Both partners will own the units in the trust, ie. this is their equity contribution. The trust can borrow the funds.
Setup an SMSF together and use the SMSF to buy the property
Using a Fixed Unit Trust, both partners set up their own SMSF and buy units in the trust. SMSF provide the equity, the trust borrows the funds.

I would not recommend buying the premises in your trading entity. This way your asset is protected from any potential liability or solvency issues in your trading entity.

There are a few more issues, feel free to reach out if you would like to learn more.

𝐑𝐞𝐠𝐢𝐬𝐭𝐞𝐫𝐢𝐧𝐠 𝐟𝐨𝐫 𝐆𝐒𝐓 𝐰𝐡𝐞𝐧 𝐛𝐮𝐲𝐢𝐧𝐠 𝐚𝐧𝐝 𝐬𝐞𝐥𝐥𝐢𝐧𝐠 𝐚 𝐜𝐨𝐦𝐦𝐞𝐫𝐜𝐢𝐚𝐥 𝐩𝐫𝐨𝐩𝐞𝐫𝐭𝐲

john@keytaxsolutions.com.au (John Reilly) — Mon, 07 Oct 2024 23:00:00 GMT

Registering For GST When Buying and Selling a Commercial Property

You may be aware that It is compulsory to register for GST when your sales are above $75,000. This does include the sale of a commercial property. One of the reasons for registering for GST is a one-off commercial transaction, which selling a commercial property is.

If you do not register for GST and you sell your commercial property, you can be held liable for 1/11th of the sale price as GST. This could potentially cost you tens of thousands of dollars.

Purchasers of commercial property should also register for GST. If the purchase is a creditable acquisition you will be able to claim the GST on purchase, i.e. getting a large GST refund. Another advantage is, that the banks are happy to fund the purchase GST-inclusive. Having this refund is great to fund any small repairs or improvements you would like to make to the property before moving in.

You might have heard of people not charging GST on these transactions. This can be the case if the Going Concern test is passed. However, both the seller and the buyer of the commercial property still need to be registered for GST.

There are a few more issues, feel free to reach out if you would like to learn more.

𝐔𝐬𝐢𝐧𝐠 𝐲𝐨𝐮𝐫 𝐒𝐌𝐒𝐅 𝐭𝐨 𝐛𝐮𝐲 𝐲𝐨𝐮𝐫 𝐛𝐮𝐬𝐢𝐧𝐞𝐬𝐬 𝐩𝐫𝐞𝐦𝐢𝐬𝐞𝐬

john@keytaxsolutions.com.au (John Reilly) — Tue, 01 Oct 2024 00:00:00 GMT

Using Your SMSF to Buy Your Business Premises

Are you fed up with the hassles with your commercial landlord? Have you considered purchasing a property to operate your business from? This option may give you the stability you have been searching for.

If you do not have the funds personally, you might consider using a self-managed superannuation fund (SMSF) to purchase the property. You can set up your own SMSF using the current funds available for a deposit and potentially borrowing the rest in your SMSF. This way any potential liability or solvency issues in the business will not affect your investment property. It also will not affect your personal borrowing capacity.

Also, you will probably have the best tenant you possibly can have, yourself!

Just note that the business needs to be able to afford the rent, i.e. loan repayments in the SMSF. It is a big step up, if you don’t need the entire space you could consider sub-letting some of the property.

There are many more details to consider with this structure, feel free to reach out if you would like to learn more.

Write it down: Jobs management & invoicing

john@keytaxsolutions.com.au (John Reilly) — Tue, 24 Sep 2024 00:00:00 GMT

Paying your Staff's PAYG Withholding

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𝐂𝐥𝐢𝐞𝐧𝐭 𝐒𝐮𝐜𝐜𝐞𝐬𝐬 𝐒𝐭𝐨𝐫𝐲 - 𝐓𝐫𝐚𝐝𝐞 𝐁𝐮𝐬𝐢𝐧𝐞𝐬𝐬

john@keytaxsolutions.com.au (John Reilly) — Mon, 16 Sep 2024 00:00:00 GMT

Client Success Story - Trade Business

We have a new tradie client who started business about 18 months ago. It is a father and son operation, with the unique situation of the son being the qualified tradesman and the father having years of trade experience.

As with many young tradesmen starting their own business, they are purely focused on getting the work done timely and correctly, without much thought of the rest of the issues of running a business.

Having the father with a vested interest has really made this business work. We have worked with the father on setting up the quoting and invoicing processes and discussed the costings used for materials, charge rates of labour and allowances for overs. We have also emphasised the need to stop work and get variations approved before continuing.

With the calmer head of the father, he has focused on all aspects of running the business properly, including paying all taxes and super in time, if not early. Cash flow management has been excellent.

Their success has meant they are now looking to buy a small factory to operate their business.

𝐖𝐡𝐚𝐭’𝐬 𝐧𝐞𝐰 𝐟𝐨𝐫 𝐭𝐡𝐞 𝟐𝟎𝟐𝟓 𝐟𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 𝐲𝐞𝐚𝐫

john@keytaxsolutions.com.au (John Reilly) — Wed, 11 Sep 2024 00:10:02 GMT

What's New For The 2025 Financial Year

In late June 2024, the Federal Government officially approved the extension of the $20,000 instant asset write-off for the 2024/25 financial year.

So what does this mean……

Any asset purchase for less than or equal to $20,000 can be a 100% tax deduction this year. It is not subject to depreciation rules (i.e. claim a portion each year over several years).

One thing to note, $20,000 is GST-exclusive. If you are registered for GST, the purchase price needs to be $22,000 or less to qualify.

You can purchase an asset using finance and still be eligible for the instant asset write-off. This test is on a per-asset basis, e.g. purchasing six vehicles for $100,000, the individual vehicle values are less than $20,000 each. You are eligible for a $100,000 tax deduction.

𝐇𝐢𝐫𝐢𝐧𝐠 𝐬𝐨𝐦𝐞𝐨𝐧𝐞 𝐰𝐢𝐭𝐡 𝐚𝐧 𝐀𝐁𝐍

john@keytaxsolutions.com.au (John Reilly) — Tue, 27 Aug 2024 00:00:01 GMT

Hiring Someone with an ABN

So you are thinking about hiring someone new for your business and someone suggested you just ask them to get an ABN and you can offer them contract work?

Is the person a contractor or an employee?

This is a topic the ATO and the courts have discussed for years. There is both case law and legislation discussing this arrangement. Some of the case law goes back to the 1960’s.

Much of the case law refers to the “Master” and “Servant” principle. The servant does what the Master commands. Similar to the Employer and Employee relationship. Who controls the relationship? You will find in most cases the person you believe is a contractor is really just an employee. This area is quite complex and each individual case would need to be judged on its own merits.

Please be aware, even if you are employing someone with an ABN you are still potentially liable to cover them for workers compensation insurance. You can also be liable for Superannuation, this year it is 11.5%. We would recommend that you make the contract payments to be inclusive of Superannuation and you withhold the superannuation and pay it directly to the contractors superannuation fund.

Make sure you get some expert advice before taking on a contractor with an ABN.

𝐏𝐚𝐲𝐢𝐧𝐠 𝐲𝐨𝐮𝐫 𝐬𝐭𝐚𝐟𝐟’𝐬 𝐏𝐀𝐘𝐆 𝐖𝐢𝐭𝐡𝐡𝐨𝐥𝐝𝐢𝐧𝐠

Tue, 20 Aug 2024 00:00:47 GMT

Paying your Staff's PAYG Withholding

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𝐇𝐨𝐰 𝐥𝐨𝐧𝐠 𝐝𝐨 𝐈 𝐩𝐚𝐲 𝐭𝐡𝐞𝐦 𝐭𝐨 𝐝𝐨 𝐧𝐨𝐭𝐡𝐢𝐧𝐠?

john@keytaxsolutions.com.au (John Reilly) — Tue, 06 Aug 2024 00:00:00 GMT

How Long Do I Pay Them To Do Nothing?

One of my favourite things to say to clients when they start employing staff:

“Do you know you pay them for 8 weeks a year to do nothing”

I do like a little shock therapy for my clients. Most are confused and unsure if I’m telling a bad joke. Unfortunately this bad joke is true. Yes you pay your staff 8 weeks a year to do nothing.

It always feels a little different when you are on the other side of this relationship. It’s great getting paid to do nothing. But it’s not paying people to do nothing.

However as an employer, you will pay your staff 4 weeks annual leave, the minimum employment standards providing for 10 days personal leave (sick leave). In NSW we have 9 public holidays. That is a total of 39 business days or one day short of 8 weeks. This is for full time employees only.

This does not include Long Service Leave, which is more paid time to do nothing for employees.

These are just the rules, as an employer you should be aware of them.

𝐄𝐯𝐞𝐫 𝐭𝐡𝐨𝐮𝐠𝐡𝐭 𝐚𝐛𝐨𝐮𝐭 𝐛𝐮𝐲𝐢𝐧𝐠 𝐚𝐧 𝐄𝐕 𝐜𝐚𝐫 𝐟𝐨𝐫 𝐲𝐨𝐮𝐫 𝐛𝐮𝐬𝐢𝐧𝐞𝐬𝐬?

john@keytaxsolutions.com.au (John Reilly) — Tue, 09 Jul 2024 00:00:00 GMT

Ever Thought About Buying an EV Car for Your Business?

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𝐂𝐚𝐧 𝐈 𝐛𝐮𝐲 𝐚 𝐜𝐚𝐫 𝐭𝐡𝐫𝐨𝐮𝐠𝐡 𝐦𝐲 𝐜𝐨𝐦𝐩𝐚𝐧𝐲 𝐨𝐫 𝐭𝐫𝐮𝐬𝐭?

john@keytaxsolutions.com.au (John Reilly) — Tue, 02 Jul 2024 00:00:00 GMT

Can I Buy a Car Through my Company or Trust?

Many people wonder if they can buy a car through their company or trust. My short answer is yes. However, there are several factors to consider:

What type of vehicle are you buying?
Does the vehicle attract Fringe Benefits Tax (FBT)?
What is the vehicle’s purchase price?
How much GST can you claim on the purchase?
What tax deductions apply?
Will you use cash or finance the purchase?

Vehicle Type and Fringe Benefits Tax (FBT):

Purchasing a work vehicle (ute, van, etc.) may be exempt from FBT. On the other hand, if you’re eyeing a new SUV, it will likely be subject to FBT.

For example, a common method for calculating FBT is 20% of the GST-inclusive purchase price. Take a Toyota Prado Kakadu with a listed price of $94,916. The FBT calculation would be:

Fringe Benefit Amount: $94,916 x 20% = $18,983.20
Grossed Up for Tax Calculation: $18,983.20 x 2.0802 = $39,488.85
Tax Amount: $39,488.85 x 47% = $18,559.76

Thus, the annual FBT for the Prado would be $18,559.76. This is the tax you pay each year for owning the vehicle through a company or trust. There are ways to reduce this.

Next week, I will talk about buying an electric vehicle in your business.

Stay tuned for next week. Same Bat-time, same Bat-channel.

𝐃𝐨 𝐖𝐚𝐧𝐭 𝐘𝐨𝐮𝐫 𝐎𝐰𝐧 𝐒𝐌𝐒𝐅? 𝐇𝐞𝐫𝐞'𝐬 𝐖𝐡𝐚𝐭 𝐲𝐨𝐮 𝐧𝐞𝐞𝐝 𝐭𝐨 𝐊𝐧𝐨𝐰

john@keytaxsolutions.com.au (John Reilly) — Tue, 25 Jun 2024 00:00:02 GMT

Do You Want Your Own SMSF? Here's What You Need to Know

S o what does that really mean?

It does give you the control you are wanting. However, it does come with a lot of responsibilities. You will have to open a new bank account, you will have to manage this bank account, to a level similar to a small business owner. You can never take money for yourself personally. It’s your money, but not yet.

You will have to record all the income generated and expenses paid by the superannuation fund. You will need to keep documentation on all expenses for the superannuation fund.

The paperwork in running your own superannuation fund can be overwhelming, especially if it’s not your forte. As a controlle, you are a Trustee, (individual or director of a corporate trustee). You are personally responsible for the funds operations. If you manage the superannuation fund adversely, the ATO can deem the fund is not complying. The fund can be taxed at the top marginally bracket (45%) of the fund's assets, yes almost have the value of the fund. Also as a trustee you can be fined.

Your self managed superannuation fund is required to be audited each year, in order for it to remain a complying superannuation fund.

It’s a big step to run your own superannuation fund, make sure you get some great advice before setting it up. Think about the help you may need on operating your fund as well.

𝐖𝐡𝐚𝐭’𝐬 𝐜𝐡𝐚𝐧𝐠𝐢𝐧𝐠 𝐢𝐧 𝐒𝐮𝐩𝐞𝐫𝐚𝐧𝐧𝐮𝐚𝐭𝐢𝐨𝐧 𝐟𝐨𝐫 𝟐𝟎𝟐𝟓𝐅𝐘

john@keytaxsolutions.com.au (John Reilly) — Tue, 18 Jun 2024 08:00:01 GMT

What's Changing in Superannuation for 2025FY

As an employer… are you aware of the changes to superannuation for the 2025 financial year?

The big change for the 2025 financial year is the increase in the Superannuation Guarantee (SG) to 11.5%. This applies to all payroll paid from 1 July 2024. (Please note this will continue to increase by 0.5% per year until the 2026 financial year)

We expect all payroll software providers should incorporate these changes.

Concessional Contributions (before tax) limit has increased to $30,000. Please note if your superannuation balance is below $500,000 as of 30 June 2024, you can contribute more by using any unused concessional contributions from the previous 5 years, under the limit.

Please note, as an employer, superannuation expenses are not tax deductible until they are paid and the money is received by the complying superannuation fund. We encourage you to pay your June 2024 quarter superannuation contributions early and get a tax deduction in the 2024 financial year.

Superannuation Payment dates have not changed. However, as the superannuation rates are increasing it would be advisable to pay your employee superannuation at the same time you pay their wages. Superannuation is part of their remuneration.

Delaying your superannuation payment to the due date can potentially leave you short of cash at the wrong time. Making smaller payments as you go will have minimal impact on your cash flow.

𝐖𝐨𝐮𝐥𝐝 𝐲𝐨𝐮 𝐥𝐢𝐤𝐞 𝐭𝐨 𝐨𝐰𝐧 𝐲𝐨𝐮𝐫 𝐛𝐮𝐬𝐢𝐧𝐞𝐬𝐬 𝐩𝐫𝐞𝐦𝐢𝐬𝐞𝐬?

john@keytaxsolutions.com.au (John Reilly) — Tue, 04 Jun 2024 00:00:00 GMT

Would you like to own your business premises?

Are you sick of your landlord? Would you like to own your business premises? It is no different to owning an investment property, however you have a much better tenant.

There are many ways for you to purchase your own business premises. Banks usually want larger deposits for commercial property, e.g. on average 35%. Which means generally you can only borrow 65%. You may not have that equity, however, if you have a business partner, maybe together you can come up with the deposit. You can borrow equity from your own homes to contribute to the deposit.

Have you considered using your superannuation? It’s quite common to create a Self Managed Superannuation Fund (SMSF) to buy your business premises as you have significant equity in superannuation. It can be complicated, however it is possible. If you still do not have enough for a deposit, a business partner can also use their SMSF as well to increase the deposit.

There are many options to buy your own premises, the stability of owning your own premises is great for any business. Everyone's situation is different, however, I would recommend speaking with a financial planner before setting up an SMSF.

𝐂𝐨𝐦𝐦𝐨𝐧 𝐦𝐢𝐬𝐭𝐚𝐤𝐞𝐬 𝐛𝐮𝐬𝐢𝐧𝐞𝐬𝐬 𝐨𝐰𝐧𝐞𝐫𝐬 𝐦𝐚𝐤𝐞 𝐰𝐡𝐞𝐧 𝐭𝐡𝐞𝐲 𝐛𝐮𝐝𝐠𝐞𝐭

john@keytaxsolutions.com.au (John Reilly) — Tue, 28 May 2024 00:00:00 GMT

Common Mistakes Business Owners Make When They Budget

When you are preparing your budget for your business, there are a few common errors business owners make. You want to avoid overthinking your budget. Your budget is a guide, they are not plans for a house.

The biggest mistake is not doing a budget. Followed closely by doing a budget because it’s what you’re supposed to do as a business owner. Going through the motions will not guide your business, your budget is not there to restrict you, it’s keeping you on track so can you achieve the success you want.

You want your budget to be achievable. Achievable means about 50% attainable. You don’t want it too easy to meet, but you don’t want it too hard to acquire. The goal needs to be ambitious enough to motivate you.

You don’t have to account for every expense item, again these are a guide. Have a look at last year’s expenses to get an idea of what to allow for. Don’t make it too rigid, you need to have some flexibility. What you expect to happen now, might not happen in six months. I think we all saw how Covid affected our budgets.

The most important aspect of any budget is to review and update as the year progresses.

There are opportunities that might present themselves during the year and you need to be flexible and revise your budget to accommodate them.

𝟐𝟎𝟐𝟒/𝟐𝟎𝟐𝟓 𝐁𝐮𝐬𝐢𝐧𝐞𝐬𝐬 𝐁𝐮𝐝𝐠𝐞𝐭

john@keytaxsolutions.com.au (John Reilly) — Tue, 21 May 2024 00:00:00 GMT

2024/25 Business Budget

Just like the Federal Government, every business should have a budget for the next financial year. Have you worked on preparing your budget? I hear people all the time expressing their distaste for budgets. Some people see it as some sort of restriction of their activity when really it’s the opposite. It should be the goal to drive your activity.

A budget is a plan. How long do you spend planning for your next holiday? Many hours. A plan for your business should be worked on to help pay for your next holiday. A budget should be about 50% achievable. If it’s too easy, you will not have enough pressure on yourself to achieve. If it’s too hard, you are likely to get discouraged and give up on your plan and lose focus.

Don’t know where to start? If you have been in business for over a year, have a look at your performance in the last 12 months. Review areas where you can improve. How much extra income can you earn with your current resources? What if you add resources, how much more can you earn? It doesn’t have to be perfect, it just needs to be done.

𝐈𝐭’𝐬 𝐭𝐢𝐦𝐞 𝐭𝐨 𝐁𝐮𝐝𝐠𝐞𝐭!

john@keytaxsolutions.com.au (John Reilly) — Tue, 14 May 2024 00:00:00 GMT

It's Time to Budget!

We are coming to the end of the 2024 financial year, have you thought much about 2025FY? Now is a great time to start putting together your goals and plans for the 2025FY. Preparing a budget plan for the next 12 months is an essential factor in ensuring your business not only survives but succeeds.

This involves determining:

income targets
New types of income
Product margins
estimating ongoing expenses
Potential future expenses
Staff levels
Cash Flow needs
Profit is the business going to make
the income you want personally.

This plan will keep you accountable to yourself. You will be surprised if focusing on meeting your plan drives the success of your business. Having a goal gives you an objective and more importantly, a reason to do the things you need to do to meet those goals. It will navigate your activity to meet the needs of your plan.

𝐇𝐨𝐰 𝐝𝐨 𝐲𝐨𝐮 𝐩𝐥𝐚𝐧 𝐭𝐨 𝐦𝐢𝐧𝐢𝐦𝐢𝐬𝐞 𝐲𝐨𝐮𝐫 𝐭𝐚𝐱𝐞𝐬 𝐟𝐨𝐫 𝟐𝟎𝟐𝟒?

john@keytaxsolutions.com.au (John Reilly) — Mon, 06 May 2024 22:00:00 GMT

How do You Plan to Minimise Your Taxes for 2024?

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𝐒𝐭𝐫𝐮𝐜𝐭𝐮𝐫𝐢𝐧𝐠 𝐲𝐨𝐮𝐫 𝐢𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐩𝐫𝐨𝐩𝐞𝐫𝐭𝐲 - 𝐋𝐚𝐧𝐝 𝐭𝐚𝐱

john@keytaxsolutions.com.au (John Reilly) — Tue, 30 Apr 2024 00:00:00 GMT

Structuring Your Investment Property - Land Tax

Land tax is state based tax and every state has their own rules. I’m located in NSW, so my comments will be based on the NSW rules.

If you buy a property with your spouse (or any other person or entity), one of the ownership structures in NSW is called Joint Tenants. This ownership structure treats you as one owner, regardless of how many joint tenants there are, for land tax. You will only get one land tax threshold exemption.

A workaround for this is to purchase the property as Tenants in Common. This ownership structure gives you a legal entitlement to a certain percentage of the property. For NSW land tax, the property now has multiple owners and therefore every owner gets their own land tax threshold exemption.

If you buy a property in NSW with a discretionary trust, you do not get a land tax exemption threshold. Currently (2024 $1,075,000).

Note: Land Tax is on the land value, not on the property value. Units and townhouses, etc, do not have a lot of land.

𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐋𝐨𝐚𝐧 - 𝐁𝐨𝐫𝐫𝐨𝐰𝐢𝐧𝐠 𝐂𝐨𝐬𝐭𝐬 𝐃𝐞𝐝𝐮𝐜𝐭𝐢𝐨𝐧𝐬

john@keytaxsolutions.com.au (John Reilly) — Tue, 23 Apr 2024 00:00:00 GMT

Investment Loan - Borrowing Costs Deductions

Most people borrow money to purchase an investment property. When borrowing money from the bank for your property, your bank most likely will charge you some fees for the privilege.

These fees, or tax purposes, are considered borrowing costs. Borrowing costs are:

Application Fees
Property Valuation Fees
Lenders Mortgage Insurance
Any other bank fee they like to charge

Borrowing costs deductibility has its own specific rules. They are not immediately deductible. You will need to add up all these costs, the deduction is claimed over 5 years or the length of the loan. Similar to depreciation, however, it's called amortisation.

As a rough estimate, consider 20% of the borrowing costs are deductible per year.

𝐅𝐢𝐧𝐚𝐧𝐜𝐞 & 𝐂𝐚𝐬𝐡 𝐟𝐥𝐨𝐰 - 𝐈𝐧𝐯𝐞𝐬𝐭𝐢𝐧𝐠 𝐢𝐧 𝐏𝐫𝐨𝐩𝐞𝐫𝐭𝐲

john@keytaxsolutions.com.au (John Reilly) — Tue, 16 Apr 2024 00:00:00 GMT

Finance & Cash Flow - Investing in Property

Cash flow is the most important issue when owning an investment property. Assuming you have borrowed money to purchase the property, this means you are gearing the property, i.e. using borrowed money. This gearing could be positive or negative.

Having a negatively geared property means you are making a loss on the ownership of the property. This could mean you are making a cash flow deficit.

A positive gearing property means you are making a profit on the ownership of the property. This could mean you are making a cash flow surplus.

Regardless of being negative or positively geared, the principal repayments of any loan need to be considered. The principal repayments are not tax-deductible, however they do have an impact on your cash flow

Do not focus on whether the property is making a tax loss or profit. What’s important is the ongoing cash flow. Can you afford to lose $100, $200 or more per week? The ongoing affordability of keeping your property is related to your ongoing cash flows.

𝐖𝐡𝐚𝐭 𝐝𝐨 𝐈 𝐧𝐞𝐞𝐝 𝐭𝐨 𝐤𝐧𝐨𝐰 𝐚𝐛𝐨𝐮𝐭 𝐛𝐮𝐲𝐢𝐧𝐠 𝐚𝐧 𝐢𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐩𝐫𝐨𝐩𝐞𝐫𝐭𝐲?

john@keytaxsolutions.com.au (John Reilly) — Tue, 09 Apr 2024 00:00:00 GMT

What do I Need to Know About Buying an Investment Property?

When you buy a property, you should get a Building Depreciation Report. This will increase your tax deductions.

𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐏𝐫𝐨𝐩𝐞𝐫𝐭𝐲 - 𝐖𝐡𝐚𝐭'𝐬 𝐭𝐚𝐱 𝐝𝐞𝐝𝐮𝐜𝐭𝐢𝐛𝐥𝐞 𝐚𝐧𝐝 𝐰𝐡𝐚𝐭'𝐬 𝐧𝐨𝐭?

john@keytaxsolutions.com.au (John Reilly) — Wed, 03 Apr 2024 23:00:00 GMT

Investment Property - What's Tax Deductible and What's Not?

When you buy your investment property you do incur a lot of costs, however a lot of these are not tax deductible. These initial costs are considered, capital costs, i.e. the cost of buying your property. For example:

Property Purchase Price
Property Transfer Stamp Duty
Legal Fees
Pest & Building Inspections
Strata Inspections
Buyers Agent Fees

When your property is available for rent you are allowed to claim tax deductions for its running property: For Example:

Bank Loan Interest (not repayments)
Council Rates
Water Rates
Strata Levies
Insurance
Real Estate Agents Commission
Legal Expenses
Pest Control
Garden Maintenance
Repairs
Cleaning
Depreciation (see post on 9 April)

Please note travelling to inspect your property is no longer deductible. Any significant purchases over $300 might be subject to depreciation.

𝐑𝐞𝐝𝐮𝐜𝐢𝐧𝐠 𝐃𝐞𝐛𝐭

john@keytaxsolutions.com.au (John Reilly) — Mon, 25 Mar 2024 23:00:03 GMT

Reducing Debt

Reducing business debt is crucial for financial health and sustainability. Here are a few strategies for businesses to help with cash flow:

Conduct a comprehensive review of your business's financial statements.
Communicate with suppliers and creditors to negotiate better payment terms.
Implement effective cash flow management to ensure timely invoicing and payment collections.
Explore debt consolidation options to combine multiple debts into a single, more manageable loan.
Conduct a thorough review of business expenses, and identify non-essential costs that can be cut without affecting operations.
Explore opportunities to diversify and increase revenue streams.
Seek advice from financial advisors and develop a debt reduction plan with professional guidance.
Evaluate the possibility of selling underutilised assets.
Review credit terms offered to customers.
Ensure optimal productivity from your workforce.
Cross-train employees to handle multiple roles, avoiding the need for additional hires.
Stay on top of your tax and compliance obligations and avoid penalties and interest charges.
Review business insurance policies to ensure adequate coverage.

How do you manage debt in your business?

𝐒𝐚𝐯𝐢𝐧𝐠 𝐦𝐨𝐧𝐞𝐲 𝐨𝐧 𝐞𝐱𝐩𝐞𝐧𝐬𝐞𝐬

john@keytaxsolutions.com.au (John Reilly) — Mon, 18 Mar 2024 23:00:00 GMT

Saving Money on Expenses

Financial management really should be a subject everyone learns in school. It’s vital to understand money in your personal life and in business. Here are a few tips on reducing expenses:

Budgeting: track income and expenses and find areas to cut back.
Negotiate with service providers for better rates on utilities, insurance, or subscriptions.
Use energy-efficient appliances and lighting to reduce electricity bills.
Bulk Purchases for items with a long shelf life to take advantage of discounts.
Periodically review your insurance policies and shop around for better rates.
DIY Approaches, learn to perform simple maintenance tasks and repairs.
Use public transportation instead of owning a car, especially in urban areas.
Meal planning to reduce food waste and avoid unnecessary restaurant expenses.
Review and cancel unnecessary subscriptions for streaming, magazines, or online services.
Consider buying used or refurbished equipment instead of brand new.
Pay off balances monthly on credit cards to avoid interest charges.
Financial Auditing: review your budgets to identify and address any unnecessary expenses.

What tips do you use to help with your financial management?

𝐁𝐨𝐨𝐤𝐤𝐞𝐞𝐩𝐞𝐫 𝐯𝐬 𝐀𝐜𝐜𝐨𝐮𝐧𝐭𝐚𝐧𝐭

john@keytaxsolutions.com.au (John Reilly) — Mon, 11 Mar 2024 23:00:01 GMT

Bookkeeper vs Accountant

Have you ever wondered what is the difference between a bookkeeper and an accountant? Here are some of the key differences:

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▪️ Bookkeeper:
Responsible for recording day-to-day financial transactions; such as invoicing, payroll, creditors and debtors. Accurate record keeping.
▪️ Accountant:
Comprehensive approach to financial management; analyses and interprets financial data. Prepares financial statements, tax returns, and other reports for compliance and decision-making.

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▪️ Bookkeeper:
Maintain compliance with financial regulations and standards in day-to-day transactions
.▪️ Accountant
Ensures overall compliance with complex tax laws, financial regulations, and accounting standards

�� :
▪️ Bookkeeper:
Does not engage in in-depth financial analysis. The focus is accurate data entry and recording.
▪️ Accountant:
Conducts financial analysis to identify trends, strengths, weaknesses, and opportunities. Prepares financial reports for management, stakeholders, and regulatory authorities.

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▪️ Bookkeeper:
Records financial transactions to assist accountants.
▪️ Accountant:
Specialises in tax planning and advisory services. Prepares and lodges tax returns, provides tax advice, and ensures compliance with tax laws.

�� :
▪️ Bookkeeper:
Usually not involved in strategic decision-making, assists with accurate data preparation.
▪️ Accountant:
Offers financial advice and strategic input to support decision-making. Assists in long-term financial planning and budgeting.

Accountants and bookkeepers work together. The collaboration between them ensures that financial records are accurately maintained and compliance requirements are met.

𝐀𝐫𝐞 𝐲𝐨𝐮 𝐧𝐞𝐰 𝐭𝐨 𝐫𝐮𝐧𝐧𝐢𝐧𝐠 𝐚 𝐛𝐮𝐬𝐢𝐧𝐞𝐬𝐬?

john@keytaxsolutions.com.au (John Reilly) — Mon, 04 Mar 2024 23:00:00 GMT

Are You New to Running a Business?

Starting a new business is an exciting venture, but staying organised is key to your success, especially when it comes to finances and tax obligations. Here are some essential tips to help you stay on top of things:

Clear Financial Records: From day one, maintain accurate records of all your income and expenses. This makes it easier to manage your cash flow and prepares you for tax time. You may also want to consider engaging a bookkeeper for assistance.
Understand Your Tax Responsibilities: you're responsible for your own tax obligations. Familiarise yourself with the ATO requirements, including GST and income tax.
Set Aside Money for Taxes: A good practice is to set aside a portion of your earnings regularly for tax. This helps avoid the stress of a large tax bill at the end of the financial year.
Opening a Separate Business Bank Account (Sole Traders): This isn't a legal requirement for sole traders, but it can simplify your finances by keeping a personal bank account and a business bank account separate.

Need more guidance or assistance? Feel free to reach out to us for tailored advice and support for your unique journey as a new business owner.

𝐖𝐡𝐲 𝐲𝐨𝐮 𝐬𝐡𝐨𝐮𝐥𝐝 𝐫𝐞𝐯𝐢𝐞𝐰 𝐲𝐨𝐮𝐫 𝐛𝐮𝐝𝐠𝐞𝐭

john@keytaxsolutions.com.au (John Reilly) — Mon, 26 Feb 2024 23:00:00 GMT

Why You Should Review Your Budget

New Paragraph

𝐁𝐮𝐝𝐠𝐞𝐭𝐞𝐝 𝐏𝐫𝐞𝐩𝐚𝐫𝐚𝐭𝐢𝐨𝐧 𝐢𝐧 𝐗𝐞𝐫𝐨

john@keytaxsolutions.com.au (John Reilly) — Mon, 19 Feb 2024 23:00:00 GMT

Budgeted Preparation In Xero

Using the Xero budget manager is easy, here is a quick demonstration.

𝐂𝐨𝐦𝐦𝐨𝐧 𝐦𝐢𝐬𝐭𝐚𝐤𝐞𝐬 𝐛𝐮𝐬𝐢𝐧𝐞𝐬𝐬 𝐨𝐰𝐧𝐞𝐫𝐬 𝐦𝐚𝐤𝐞 𝐰𝐡𝐞𝐧 𝐭𝐡𝐞𝐲 𝐛𝐮𝐝𝐠𝐞𝐭

john@keytaxsolutions.com.au (John Reilly) — Mon, 12 Feb 2024 23:00:00 GMT

Common Mistakes Business Owners Make When They Budget

When you are preparing your budget for your business there are a few common errors business owners make. You want to avoid overthinking your budget. Your budget is a guide, they are not plans for a house.

You don’t have to account for every expense item, again these are a guide. Have a look at last year's expenses to get an idea of what to allow for. Don’t make it too rigid, you need to have some flexibility. What you expect to happen now, might not happen in six months. I think we all saw how COVID-19 affected our budgets.

The most important aspect of any budget is to review and update as the year progresses. There are opportunities that might present themselves during the year and you need to be flexible and revise your budget to accommodate them.

Not sure where to start when preparing your budget? Get in touch with your accountant, they should get you on the right path.

𝐖𝐡𝐲 𝐛𝐮𝐝𝐠𝐞𝐭 𝐩𝐥𝐚𝐧𝐧𝐢𝐧𝐠 𝐟𝐨𝐫 𝐲𝐨𝐮𝐫 𝐛𝐮𝐬𝐢𝐧𝐞𝐬𝐬 𝐢𝐬 𝐢𝐦𝐩𝐨𝐫𝐭𝐚𝐧𝐭

john@keytaxsolutions.com.au (John Reilly) — Mon, 05 Feb 2024 23:00:00 GMT

Why Budget Planning For Your Business Is Important

Benjamin Franklin was quoted saying “If you fail to plan, you are planning to fail”. If you want

your business to be successful you need to plan for your success.

A lot of people spend more time planning a holiday than they do planning for their business,

which coincidentally pays for the holiday.

Preparing your budget will enable you to control the finances of your business. How much

income will you need to ensure you make a profit? Do you have any idea what the costs are to

run your business? Do you need working capital to set up your business? Have you considered

the taxes you need to pay? This includes GST, PAYG Withholding, FBT, etc. These are taxes

you pay before you make a profit.

Having budget targets can help keep yourself accountable. It’s hard being a business owner

when you are not accountable to anyone, a budget can help you stay on the right path for

Success.

Success in your business is no accident, the business owner who invests time and energy into

the budget plan are those who make the business look easy. It may appear their success comes

easy; however, you may find their budget plan is what helps them succeed.

𝐁𝐆𝐋 𝐒𝐢𝐦𝐩𝐥𝐞 𝐅𝐮𝐧𝐝 𝟑𝟔𝟎 & 𝐂𝐀𝐒𝟑𝟔𝟎

john@keytaxsolutions.com.au (John Reilly) — Mon, 29 Jan 2024 23:00:00 GMT

HBGL Simple Fund 360 & CAS360

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When BGL upgraded their desktop products to online web-based products, it was an easy decision for us to use them. CAS360, their corporate affairs or company secretary system, links seamlessly with our database on Xero Practice Manager. This allows us to only update client data once, and all systems are updated. A bonus is when we update Xero Practice Manager, in CAS360 an alert appears advising us that a potential ASIC form needs to be lodged to update the company information change with ASIC.

For our Self Managed Superannuation Funds, we use BGL ‘s product Simple Fund 360. This also links directly to Xero Practice Manager, which saves huge amounts of time avoiding double entry of information. It also has a feature where clients can be invited to access the system so they can review their current superannuation funds performance. It shows annual contributions and a check to ensure you don’t go over the thresholds. This system all has bank feeds, similar to Xero and QBO, it also has direct links to ASX to import dividend amounts and share pricing.

Both are great integrated systems and a key part of my business. What’s your experience?

𝐇𝐮𝐛𝐝𝐨𝐜 & 𝐃𝐞𝐱𝐭

john@keytaxsolutions.com.au (John Reilly) — Mon, 22 Jan 2024 23:00:01 GMT

Hubdoc & Dext

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How good are electronic receipts? Being able to quickly take a picture of your receipt at the coffee shop or at the petrol station, you have done your filing. It really changed the way I ran my business and I have been encouraging as many clients as possible to do the same.

The two systems we use are Dext and Hubdoc. Both allow you to take photos and upload them directly to the application. Once the data is imported, both systems use OCR to extract the data from the receipt and use this to pre-populate the fields needed for data entry and bookkeeping. It’s best to review the extracted information, as it’s not always perfect.

Both systems work with the major small business bookkeeping systems, ie Xero, Quickbooks Online and MYOB. Once you have reviewed the receipt in Dext or Hubdoc, you publish it to your bookkeeping system. In your bookkeeping system, you simply match the bank transaction to the receipt. As an accountant, I love having quick access to further information on clients' expenses.

Dext, I believe is a superior product. However, Xero acquired Hubdoc a couple of years ago and now offers Hubdoc as part of their normal subscription pricing. It’s hard to beat a free upgrade that Xero offers.

Do you have a preference?

𝐗𝐞𝐫𝐨 & 𝐗𝐞𝐫𝐨 𝐏𝐫𝐚𝐜𝐭𝐢𝐜𝐞 𝐌𝐚𝐧𝐚𝐠𝐞𝐫

john@keytaxsolutions.com.au (John Reilly) — Mon, 15 Jan 2024 23:00:00 GMT

Xero & Xero Practice Manager

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We changed our whole practice to the Xero environment a few years ago. It was the best decision we ever made. Our preferred program we like our clients working on is Xero, we have found our clients experience in keeping the books up to date using Xero is much less painless for them.

We converted the majority of our clients to Xero now, most were previously using MYOB. We managed the whole process for them and provided initial training to get them started and we are only a phone call away for additional support. All clients we have converted have been happy with the decision.

We find Xero works the best in the online add on apps. We now use Xero Tax and Xero Practice Manager and the online synchronisation with other online apps have saved us huge amounts of time in avoiding keeping multiple databases up to date.

I really love engaging with the latest technology and Xero has really met the mark for us. What’s your opinion of Xero?

𝐇𝐨𝐰 𝐝𝐨 𝐲𝐨𝐮 𝐟𝐢𝐧𝐝 𝐐𝐮𝐢𝐜𝐤𝐛𝐨𝐨𝐤𝐬 𝐎𝐧𝐥𝐢𝐧𝐞 (𝐐𝐁𝐎)?

john@keytaxsolutions.com.au (John Reilly) — Mon, 08 Jan 2024 23:00:00 GMT

How Do You Find Quickbooks Online (QBO)?

We were an early adopter of this bookkeeping system. We were not fans of the old Quicken which was licensed by Reckon in Australia. It is owned by the large software company Intuit in the USA. It is one of the oldest online accounting systems, having been initially introduced in 2001. Back in 2014, it had more than 3 times the subscribers of Xero worldwide.

We have found it to be most useful for sole traders. We insist anyone who is running a business has some online bookkeeping system and the initial price point is affordable at $25 per month. For $300 per year, you get a full invoicing system, with payroll. It has bank feeds and calculates your BAS. We do find it hard sometimes to convince clients of the convenience and time savings a software system can have. As part of our sales pitch (ie convincing our client to spend the money), we usually mention that you would spend more than $300 on a big night on the town. Just the Uber home can be more than $100 these days.

𝐇𝐚𝐩𝐩𝐲 𝐍𝐞𝐰 𝐘𝐞𝐚𝐫!

john@keytaxsolutions.com.au (John Reilly) — Mon, 01 Jan 2024 23:00:02 GMT

Happy New Year!

Hope you are enjoying time off and hopefully you are able to be with family and friends at this time. Try to not think about your business, it will be there for you when you return. So relax a little longer, you have until 28 February 2024 to lodge your December 2023 BAS. Every year you get an additional four weeks to lodge the December BAS.

Don’t forget about paying your staff superannuation for the December quarter by the 28th of January 2024. Your staff super fund needs to receive the funds by this date, we would recommend you actually pay it earlier, i.e. by the 21st of January.

Did you know if you lodge your 2023 tax return through a Registered Tax Agent, you can potentially delay lodging your return until 15 May 2024 without any penalties? Any payment you need to make when lodging your return does not need to be paid until this date as well. Sometimes when we prepare clients' tax returns earlier, we calculate them and if they have a large debt, we advise them that they can delay lodgement until May. Sometimes people need more time to pay. You can’t avoid the debt, however, we can help manage your cash flow by delaying payment where possible.

𝐖𝐡𝐲 𝐲𝐨𝐮𝐫 𝐚𝐜𝐜𝐨𝐮𝐧𝐭𝐚𝐧𝐭 𝐢𝐬 𝐢𝐦𝐩𝐨𝐫𝐭𝐚𝐧𝐭?

john@keytaxsolutions.com.au (John Reilly) — Mon, 11 Dec 2023 23:00:00 GMT

Why Your Accountant Is Important?

When talking about studying accounting with my daughter in year 12, I got nothing but an eye roll and a complete lack of interest. I get it, not many people really desire to be an “accountant” when they are in their teens. It’s not associated with excitement, being cool and far from sexy.

However, when you are a business owner you really need someone who’s not full of excitement and not worried about being cool. The sexy thing, well that’s your opinion.

Your accountant should be someone who is willing to be a running mate for you and your business. Sometimes l like to describe it as being a parent or mentor for your business. That person you can always contact for support and reassurance. When you’re second-guessing yourself, that person you can always feel comfortable with discussing the issues.

Your accountant should be a reliable and consistent person in your business. They are not always about the exciting things in life, they can be a killjoy to your thoughts and bring you back into reality. Your accountant should be about the little things that really build your business. Helping lay one brick at a time to build a solid foundation that will help you with your long-term success.

Never see your accountant as a cost, they are an investment in your business’s success.

𝐇𝐚𝐯𝐞 𝐘𝐨𝐮 𝐀𝐝𝐯𝐢𝐬𝐞𝐝 𝐖𝐡𝐞𝐧 𝐘𝐨𝐮 𝐀𝐫𝐞 𝐂𝐥𝐨𝐬𝐢𝐧𝐠 𝐅𝐨𝐫 𝐓𝐡𝐞 𝐂𝐡𝐫𝐢𝐬𝐭𝐦𝐚𝐬 𝐁𝐫𝐞𝐚𝐤

john@keytaxsolutions.com.au (John Reilly) — Mon, 04 Dec 2023 23:00:00 GMT

Have You Advised When You Are Closing For The Christmas Break?

As we are approaching Christmas and the end of year, have you advised your customers or clients when you are closing down for your end of year break.

It’s important for your clients or customers to be aware when your last day of trading is for 2023 and when your first day of trading is in 2024.

There are a few ways you can advise them,

I know we put it on our website
we post it to our facebook page
I’m saying it now on LinkedIn
We also include it on our email footer, so every email you receive from us will include the dates we are closed

All of us here at Key Tax Solutions would like to thank all our fantastic clients for their support during 2023 and know we really enjoy working with you. We also deal with some great business associates which really enhance our business operations and thank you for all your referrals.

Our last day for 2023 will be Wednesday 20th December, Our office will be closed for two weeks, our first day back for 2024 will be Wednesday 3rd January.

I’m feeling a little burnt out this year, I am so looking forward to the break.

𝐂𝐡𝐫𝐢𝐬𝐭𝐦𝐚𝐬 𝐆𝐢𝐟𝐭𝐬 𝐟𝐨𝐫 𝐲𝐨𝐮𝐫 𝐒𝐭𝐚𝐟𝐟

john@keytaxsolutions.com.au (John Reilly) — Mon, 27 Nov 2023 23:00:01 GMT

Christmas Gifts For Your Staff

There are many ways to reward your loyal staff. At Christmas time, you might be thinking about a gift. The tax consideration for buying a staff gift is more complicated, as it involves Fringe Benefits Tax.

The two most important aspects to consider to maximize your tax deductions are:

The cost of the gift needs to be less than $300 GST Inclusive for each staff member.
The gift should be a 'Non-Entertainment' gift. If you meet these two parameters, you will get a full tax deduction for the expense, claim the GST credits, and it has no FBT consequences.

If you spend above $300 on a 'Non-Entertainment' gift, FBT will be applicable.

If you buy an 'Entertainment' gift under $300, there is no tax deduction and no GST credit.

If you buy an 'Entertainment' gift over $300, FBT will be applicable.

Some examples of 'Entertainment' gifts are: Theatre tickets, movie tickets, sporting event tickets, hired entertainers, flights, and holiday accommodation, etc.

Some examples of 'Non-Entertainment' gifts are: Flowers, electrical goods (e.g., TV), bottled spirits and beer, Christmas hampers, gift vouchers, etc.

To maximize your tax deductions, try to find 'Non-Entertainment' gifts under $300 for your staff. If you are unsure about a particular item, please feel free to ask.

𝐓𝐚𝐱 𝐨𝐧 𝐲𝐨𝐮𝐫 𝐛𝐮𝐬𝐢𝐧𝐞𝐬𝐬𝐞𝐬 𝐂𝐡𝐫𝐢𝐬𝐭𝐦𝐚𝐬 𝐏𝐚𝐫𝐭𝐲

john@keytaxsolutions.com.au (John Reilly) — Mon, 20 Nov 2023 23:00:00 GMT

Tax On Your Business Christmas Party

Christmas parties are a great time to strengthen your connection with your staff, clients, and suppliers. Unfortunately, there is no good news on the tax consequences of these events.

Christmas parties are treated as “Entertainment” and are generally not tax-deductible. For Christmas parties held on premises where only employees attend, all costs are not deductible, and no GST credits are available. However, the costs are exempt from FBT.

Where Christmas parties are held off premises, if the spend per employee is under $300 per head, it is exempt from FBT as it is considered a minor benefit. However, it is not tax-deductible, and you cannot claim GST credits. Above $300 per head, it is subject to FBT, and you can now claim a tax deduction and the GST credits. This scenario does sound favorable; however, the FBT applicable is approximately the same amount as the tax saved on the deduction and the GST credits you have claimed.

For all expenditure on your clients attending your Christmas Party, it is not tax-deductible, and you cannot claim GST credits. However, it is exempt from FBT.

Christmas parties are more about strengthening relationships. Don’t focus on the tax consequences, just be aware of them.

What are you doing for your Christmas party?

𝐂𝐡𝐫𝐢𝐬𝐭𝐦𝐚𝐬 𝐆𝐢𝐟𝐭𝐬 𝐟𝐨𝐫 𝐂𝐥𝐢𝐞𝐧𝐭𝐬 & 𝐒𝐮𝐩𝐩𝐥𝐢𝐞𝐫𝐬.

john@keytaxsolutions.com.au (John Reilly) — Mon, 13 Nov 2023 23:00:00 GMT

Christmas Gifts for Clients & Suppliers

As we are now approaching the end of the 2023 calendar year, you might be thinking about rewarding some of your key contacts outside your business who helped you during the year.

To maximize your tax deductions, you need to identify what is an “Entertainment” gift and what is a “Non-Entertainment” gift.

You want the gift to be “Non-Entertainment” as it’s a normal tax deduction, and you can claim the GST credits, just like any normal business expense.

However, “Entertainment” gifts are not tax-deductible, and you have no entitlement to a GST credit.

Some examples of “Entertainment” gifts are: Theatre tickets, movie tickets, sporting event tickets, hired entertainers, flights, and holiday accommodation, etc.

Some examples of “Non-Entertainment” gifts are: Flowers, electrical goods; e.g., TV, bottled spirits and beer, Christmas hampers, gift vouchers, etc.

To maximize your tax deductions, try to find “Non-Entertainment” gifts for your key contacts. If you are unsure about a particular item, please feel free to send a message.

𝐓𝐡𝐞 𝐂𝐡𝐫𝐢𝐬𝐭𝐦𝐚𝐬 𝐁𝐨𝐧𝐮𝐬

john@keytaxsolutions.com.au (John Reilly) — Mon, 06 Nov 2023 23:00:00 GMT

The Christmas Bonus

You might not be organized enough to find the right gift for your team, and the best way to reward them would be with a cash bonus. Christmas bonuses are given at the discretion of the employer and are not usually performance-based or part of a salary package. However, please be mindful that these bonuses are considered part of the employees' regular salary and wage income.

Your staff will have to pay taxes on this bonus, so remember to deduct PAYG Withholding and pay your team the net amount in cash. You might even want to consider deducting PAYG Withholding at their marginal tax bracket to help them avoid a tax debt when they complete their next tax return.

Christmas bonuses are considered Ordinary Time Earnings (OTE) for superannuation. Please remember that you have to pay 11% superannuation on the gross amount of the Christmas Bonus.

The best approach is to offer a bonus inclusive of superannuation and tax. This way, your expenses are capped, and you can make the appropriate payments as required. I remember receiving a $1,000 bonus back in the days when I still had a HELP debt. Once superannuation and tax (including HELP) was deducted, I received about $475.

𝐘𝐨𝐮 𝐜𝐚𝐧’𝐭 𝐚𝐥𝐰𝐚𝐲𝐬 𝐜𝐥𝐚𝐢𝐦 𝐚𝐥𝐥 𝐭𝐡𝐞 𝐆𝐒𝐓 𝐲𝐨𝐮 𝐡𝐚𝐯𝐞 𝐩𝐚𝐢𝐝

john@keytaxsolutions.com.au (John Reilly) — Mon, 30 Oct 2023 23:00:00 GMT

You Can't Always Claim All The GST You Have Paid

Unfortunately this is true. Yes you have paid the GST on the goods, Yes are registered for GST and are entitled to claim a GST credit, but unfortunately you can not claim all the GST you have paid.

The most common example of this is when you are buying an expensive motor vehicle. Specifically above the depreciation cost limit. For the 2024 financial year the depreciation cost limit is $68,108. Which means the most GST you are eligible to claim is $6,191.

So when you buy that dream BMW or Mercedes for $150,000. Even if you pay almost $15,000 in GST, you can only claim $6,191 in GST credits on your next BAS.

𝐇𝐚𝐯𝐞 𝐲𝐨𝐮 𝐜𝐡𝐞𝐜𝐤𝐞𝐝 𝐲𝐨𝐮𝐫 𝐒𝐮𝐩𝐩𝐥𝐢𝐞𝐫𝐬 𝐀𝐁𝐍?

john@keytaxsolutions.com.au (John Reilly) — Mon, 23 Oct 2023 23:00:00 GMT

Have You Checked Your Suppliers ABN?

When a supplier sends you an invoice it’s up to you to ensure the ABN is correct and that they are registered for GST.

You can check this by going to abr.business.gov.au or type ABN lookup in google. If your supplier is not registered for GST and they charge you GST, you cannot claim the GST credit even if you pay the supplier in full. The supplier has no obligation to pay this GST to the ATO, in reality they have just charged you more for the goods or services.

Always check the ABN register before paying new suppliers.

𝐀𝐥𝐥 𝐲𝐨𝐮𝐫 𝐭𝐚𝐱 𝐪𝐮𝐞𝐬𝐭𝐢𝐨𝐧𝐬 𝐚𝐫𝐨𝐮𝐧𝐝 𝐂𝐡𝐫𝐢𝐬𝐭𝐦𝐚𝐬 𝐚𝐧𝐬𝐰𝐞𝐫𝐞𝐝!

john@keytaxsolutions.com.au (John Reilly) — Mon, 16 Oct 2023 23:00:00 GMT

All Your Tax Questions Around Christmas Answered!

BNI PRESENTATION

My local networking group is looking for you!

Book your ticket here ��

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𝐘𝐨𝐮𝐫 𝐨𝐛𝐥𝐢𝐠𝐚𝐭𝐢𝐨𝐧𝐬 𝐮𝐧𝐝𝐞𝐫 𝐆𝐒𝐓

Mon, 09 Oct 2023 23:00:00 GMT

Your Obligations under GST

Once you are registered for GST you have an obligation to lodge Business Activity Statements (BAS). This is additional administration work for small business and if your turnover is under $75,000 (registration threshold) you will need to consider if the additional work is worth the potential savings.

Every sales invoice your business prepares is deemed to include GST, you need to ensure you charge the additional 10% to ensure you don’t short change yourself.

𝐖𝐡𝐚𝐭 𝐢𝐬 𝐆𝐒𝐓 𝐚𝐧𝐝 𝐡𝐨𝐰 𝐭𝐨 𝐑𝐞𝐠𝐢𝐬𝐭𝐞𝐫?

john@keytaxsolutions.com.au (John Reilly) — Mon, 02 Oct 2023 23:00:00 GMT

What is GST and how to Register?

Goods and Services Tax (GST) is a tax we all pay when we are the end user buying a product or service. The end user is generally an individual and the purchase is non-business related. GST increases the costs for end users by 10%, i.e. the GST rate. GST applies to almost every purchase you make. There are some exemptions for fresh food, health, education and financial services.

GST tax is not a tax on business, if you are registered GST you will never actually pay GST. You are eligible for GST credits when a business buys goods and services. However, the burden of collecting the GST for the government is endured by business owners. To register for GST, it is an additional step after you have applied for your Australian Business Number (ABN).

You are not required to register for GST until your turnover is over $75,000. If you are working as an employee and as a sole trader, any income from your wage as an employee does not make up the $75,000.

𝐊𝐞𝐞𝐩𝐢𝐧𝐠 𝐘𝐨𝐮𝐫 𝐀𝐝𝐝𝐫𝐞𝐬𝐬 𝐔𝐩 𝐓𝐨 𝐃𝐚𝐭𝐞 𝐖𝐢𝐭𝐡 𝐀𝐒𝐈𝐂

Tue, 26 Sep 2023 08:00:00 GMT

Keeping Your Address Up To Date With ASIC

When you have a company there are a number of addresses that need to be current:

Registered Office (maybe your accountants office)
Business Address
Officeholders (Directors) Address
Members (Shareholders) Address

Having the incorrect address listed with ASIC can result in legal documents being sent to the wrong address and you may have a legal ruling made against you without your knowledge.

𝐘𝐨𝐮𝐫 𝐂𝐨𝐦𝐩𝐚𝐧𝐲’𝐬 𝐑𝐞𝐠𝐢𝐬𝐭𝐞𝐫𝐞𝐝 𝐎𝐟𝐟𝐢𝐜𝐞

Tue, 19 Sep 2023 08:00:00 GMT

Your Company's Registered Office

When starting a company ASIC advises that you will need to set up a registered office to be the company’s official legal address. It must be a physical address, not a PO Box.

It’s a great idea to use your accountant’s office address as they are experienced with dealing with paperwork. It is vital to keep your registered office current, here are some examples of clients that didn’t:

𝐓𝐚𝐱 𝐀𝐠𝐞𝐧𝐭 & 𝐀𝐒𝐈𝐂 𝐀𝐠𝐞𝐧𝐭

Tue, 12 Sep 2023 08:00:05 GMT

Tax Agent & ASIC Agent

Your accountant can be your Registered Tax Agent (authority to contact the ATO on your behalf), do you know if your accountant is also your Registered ASIC Agent?

We recommend having an ASIC Agent if you have a company.
If you have a Registered Business Name, an ASIC Agent will not have access to this.
An ASIC Agent will easily be able to update your details with ASIC.
An ASIC Agent should have online access to ASIC.
An ASIC Agent can receive ASIC documents on your behalf
ASIC Agent authority is provided by completing a ASIC Form 362

As a business owner your life is easier, having your accountant being your ASIC Agent.

𝐇𝐚𝐯𝐞 𝐘𝐨𝐮 𝐄𝐯𝐞𝐫 𝐁𝐞𝐞𝐧 𝐂𝐨𝐧𝐟𝐮𝐬𝐞𝐝 𝐀𝐛𝐨𝐮𝐭 𝐓𝐡𝐞 𝐃𝐢𝐟𝐟𝐞𝐫𝐞𝐧𝐜𝐞 𝐁𝐞𝐭𝐰𝐞𝐞𝐧 𝐚 𝐂𝐨𝐦𝐩𝐚𝐧𝐲 𝐍𝐚𝐦𝐞 𝐚𝐧𝐝 𝐚 𝐓𝐫𝐚𝐝𝐢𝐧𝐠 𝐍𝐚𝐦𝐞?

john@keytaxsolutions.com.au (John Reilly) — Wed, 06 Sep 2023 12:39:19 GMT

Have You Ever Been Confused About The Difference Between a Company Name and a Trading Name?

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𝐇𝐚𝐯𝐞 𝐲𝐨𝐮 𝐭𝐡𝐨𝐮𝐠𝐡𝐭 𝐚𝐛𝐨𝐮𝐭 𝐞𝐦𝐩𝐥𝐨𝐲𝐢𝐧𝐠 𝐬𝐨𝐦𝐞𝐨𝐧𝐞 𝐟𝐫𝐨𝐦 𝐨𝐯𝐞𝐫𝐬𝐞𝐚𝐬?

john@keytaxsolutions.com.au (John Reilly) — Tue, 29 Aug 2023 08:00:00 GMT

Have You Ever Thought About Employing Someone From Overseas?

You can employ anyone from overseas for any type of role. However, you must consider any licenses or registration required for an occupation in Australia. One of the new changes introduced recently is the requirement to pay a minimum salary of $70k plus superannuation.

There are quite a lot of costs you need to think about when employing someone from overseas. There are a few costs to pay, migration agent or lawyer fees. There are departmental fees and potentially ongoing costs for you as the employer.

Nicolas Miranda from Miranda Migration suggests a fee range, just for the visa to be $7-12k for a 482 Visa. The range does depend on a few factors, such as the size of the business, family members also being migrated, etc.

As the employer you are not legally required to cover all costs, but in Nicolas’s experience most employers pay half to two thirds of the costs.

If you are considering employing someone from overseas, get in touch with a Migration Agent first.

Here you can find Nicolas's details:

Nicolas Miranda

Registered Migration Agent MARN #1687254

Miranda Migration

M: (+61) 0431 876 987

E: nicolas@mirandamigration.com.au

mirandamigration.com.au

𝐓𝐚𝐱 O𝐛𝐥𝐢𝐠𝐚𝐭𝐢𝐨𝐧𝐬 𝐨𝐟 E𝐦𝐩𝐥𝐨𝐲𝐢𝐧𝐠 S𝐭𝐚𝐟𝐟

john@keytaxsolutions.com.au (John Reilly) — Tue, 22 Aug 2023 07:00:00 GMT

Tax Obligations of Employment Staff

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𝐖𝐡𝐚𝐭 𝐢𝐬 𝐀𝐧𝐧𝐮𝐚𝐥 𝐋𝐞𝐚𝐯𝐞, 𝐏𝐞𝐫𝐬𝐨𝐧𝐚𝐥 𝐋𝐞𝐚𝐯𝐞 & 𝐋𝐨𝐧𝐠 𝐒𝐞𝐫𝐯𝐢𝐜𝐞 𝐋𝐞𝐚𝐯𝐞

john@keytaxsolutions.com.au (John Reilly) — Tue, 15 Aug 2023 07:00:00 GMT

What is Annual Leave, Personal Leave & Long Service Leave

Annual leave, personal leave, and long service leave are different types of leave entitlements that employees may receive. They vary depending on the relevant Award and company policies.

Annual Leave: Time off that employees accrue over a year of employment. Typically a full time employee gets 4 weeks of annual leave per year.

Personal Leave: Also referred to as sick leave, is provided to employees for absences due to illness, injury, or medical appointments. This is generally 2 weeks per year.

Long Service Leave: is provided to employees who have worked for a specific period with the same employer, usually 10 years. Difference awards and different states have specific rules regarding Long Service Leave. Seek specialist advice for paying this entitlement.

𝐒𝐡𝐨𝐮𝐥𝐝 𝐈 𝐔𝐬𝐞 𝐚 𝐂𝐨𝐧𝐭𝐫𝐚𝐜𝐭𝐨𝐫?

john@keytaxsolutions.com.au (John Reilly) — Tue, 08 Aug 2023 07:00:00 GMT

Should I Use a contractor?

Employing contractors can provide your business with flexibility and specialised expertise without the long-term commitments associated with hiring full-time employees. Contractors are typically engaged for specific projects or services, allowing your business to adapt quickly to changing demands and budgets. Contractors are responsible for their own taxes, insurance, and equipment, reducing administrative burdens for employers.

Hiring contractors can be cost-effective as businesses avoid providing benefits and ongoing wages. However, it's crucial to properly classify contractors to avoid potential legal and tax issues. Contractors can bring fresh perspectives, skills, and innovative solutions, making them valuable assets for short-term or specialised assignments. Building a solid relationship with contractors can lead to productive partnerships and enhance a company's ability to thrive in a competitive market.

𝐄𝐦𝐩𝐥𝐨𝐲𝐢𝐧𝐠 𝐒𝐭𝐚𝐟𝐟 – 𝐅𝐮𝐥𝐥 𝐓𝐢𝐦𝐞, 𝐏𝐚𝐫𝐭 𝐓𝐢𝐦𝐞 & 𝐂𝐚𝐬𝐮𝐚𝐥 (𝐏𝐫𝐨𝐬 & 𝐂𝐨𝐧𝐬)

john@keytaxsolutions.com.au (John Reilly) — Tue, 01 Aug 2023 07:00:00 GMT

Employing Staff - Full Time, Part Time & Casual (Pros & Cons)

Employing a diverse workforce that includes casual, part-time, and full-time staff offers numerous advantages to businesses. Casual employees provide flexibility to handle fluctuating workloads and cover absences. Part-time staff are ideal for handling specific tasks or projects efficiently, without the costs of hiring full-time employees. They bring a fresh perspective and diverse skillset to the organisation.

Full-time employees contribute stability and continuity to the business, fostering long-term relationships with clients and suppliers. Offering various employment options also enhances workforce satisfaction, attracting skilled individuals seeking work-life balance. It allows companies to adapt to market demands quickly while managing overhead expenses effectively. By harnessing the strengths of casual, part-time, and full-time staff, businesses can optimise productivity and remain competitive in the job market.

Are You Sick Of Working For The Boss And Think You And A Friend Can Do It Better? Here Are A Few Tips For You Before You Get Started

john@keytaxsolutions.com.au (John Reilly) — Tue, 25 Jul 2023 00:00:00 GMT

Are you sick of working for the boss and think you and a friend can do it better? Here are a few tips for you before you get started.

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Do You Really Need to Operate Your Business Through a Trust to Trade?

john@keytaxsolutions.com.au (John Reilly) — Tue, 18 Jul 2023 00:00:00 GMT

Do You Really Need to Operate Your Business Through a Trust to Trade?

Setting up a trust is the most expensive structure. There are two parts, the “Trustee” and the Trust itself. Generally the Trustee is a company (it can be an individual), so this means setting up a company as well. There are many types of trusts, however for this article I will be referring to a Discretionary Trust.

It does give great asset protection and potential to save tax. The Trustee company has directors and shareholders. However the profits from the trust have to be paid out to the beneficiaries of the trust. The beneficiaries will have to include this income in their tax returns. Beneficiaries can be individuals or non-individuals.

However, trading your business through a discretionary trust is not ideal. When running your business, you have to reinvest back into the business to ensure it operates profitability in the future. Having to pay cash out to the beneficiaries can be a detriment to the business success.

There are many uses for trust, I don’t believe running your business through a discretionary trust is the best option. Make it the shareholder of your company..

Are You Thinking About Being Self-Employed, This is Why You Might Want to Use a Company Structure?

john@keytaxsolutions.com.au (John Reilly) — Tue, 11 Jul 2023 00:00:04 GMT

Are You Thinking About Being Self-Employed, This is Why You Might Want to Use a Company Structure?

A company can cost a little more to set up than a sole trader or partnership structure. However, the benefits gained long term are more than compensative for the initial investment.

You gain by having personal protection against your personal assets, you can save income tax and the business can be easily transferred and still appear to operate the same without you.
A company has directors, who are the managers or controllers. They also have shareholders who are the owners of the business. Directors are individual people, whilst shareholders can be non-individuals. For small businesses they are usually the same or a related party.
Before creating the company up you will need to check with ASIC to confirm the company name is available. The company will have its own TFN and ABN, register for GST (if needed) and for PAYG withholding to pay wages (as you will be an employee in the business).
You will open a new company bank account. When you take money out of the company bank account for personal expenditure, there will be tax consequences. It’s best to pay yourself a wage and use personal funds to pay for personal expenditure. Avoid directors' drawings if you would like to avoid a nasty income tax shock.

There are many more features to having a company, feel free to reach out if you have questions.

Have You Ever Thought of Being Self-Employed? Here Are a Few Things to Think About Before Starting…

john@keytaxsolutions.com.au (John Reilly) — Tue, 04 Jul 2023 00:00:09 GMT

Have You Ever Thought of Being Self-Employed? Here Are a Few Things to Think About Before Starting…

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Superannuation FAQ's

john@keytaxsolutions.com.au (John Reilly) — Tue, 27 Jun 2023 00:00:00 GMT

Superannuation FAQ's

What is new for Superannuation for the 2024 Financial Year?
I heard in the Budget something about paying superannuation on the same day as your wages. What’s that all about?

Who Should Be Your SMSF Trustee?

john@keytaxsolutions.com.au (John Reilly) — Tue, 20 Jun 2023 00:00:00 GMT

Who Should Be Your SMSF Trustee?

Who should be your SMSF Trustee ?

A Trustee of a Self Managed Superannuation Fund (SMSF) is the person responsible for the SMSF. Similar to a director of a company. An SMSF Trustee can be an individual person (i.e. Individual Trustee) or a company (i.e. Corporate Trustee).

A corporate trustee is usually recommended as it offers much more flexibility to add or remove members of the SMSF.

Individual trustees are cheaper to set up. However, you need to have a minimum of two individual trustees. All members of the fund have to be a trustee. The trustee names are recorded on all assets of the fund, e.g. bank account. When you add or remove a member of a fund, all fund assets need to be updated to show the changes. Single-member funds need a minimum of two individual trustees.

A corporate trustee is shown on all superannuation fund assets. When you change the members of the superannuation fund, you only need to prepare ASIC change of directors forms. The fund assets do not change. Single-member superannuation funds with a corporate trustee only need one director of the corporate trustee.

Spend a little more setting up, it will save you time and money in the long run.

Would You Like To Own Your Business Premises?

john@keytaxsolutions.com.au (John Reilly) — Tue, 13 Jun 2023 00:00:00 GMT

Would You Like To Own Your Business Premises?

Would You Like To Own Your Business Premises?

Are you sick of your landlord? Would you like to own your business premises? It is no different to owning an investment property, however, you have a much better tenant.

There are many ways for you to purchase your own business premises. Banks usually want larger deposits for commercial property, e.g. on average 35%. Which means generally you can only borrow 65%. You may not have that equity, however, if you have a business partner, maybe together you can come up with the deposit. You can borrow equity from your own homes to contribute to the deposit.

Have you considered using your superannuation? It’s quite common to create a Self-Managed Superannuation Fund (SMSF) to buy your business premises as you have significant equity in superannuation. It can be complicated, however, it is possible. If you still do not have enough for a deposit, a business partner can also use their SMSF as well to increase the deposit.

There are many options to buy your own premises, the stability of owning your own premises is great for any business. Everyone's situation is different, however, I would recommend speaking with a financial planner before setting up a SMSF.

So You Want To Have Your Own Self Managed Superannuation Fund..

john@keytaxsolutions.com.au (John Reilly) — Tue, 06 Jun 2023 00:00:00 GMT

So You Want To Have Your Own Self Managed Superannuation Found..

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So what does that really mean? It does give you the control you are wanting. However, it does come with a lot of responsibilities. You will have to open a new bank account, you will have to manage this bank account, to a level similar to a small business owner. You can never take money for yourself personally. It’s your money, but not yet.

You will have to record all the income generated and expenses paid by the superannuation fund. You will need to keep documentation on all expenses for the superannuation fund.

The paperwork in running your own superannuation fund can be overwhelming, especially if it’s not your forte. As a controller, you are a Trustee, (individual or director of a corporate trustee). You are personally responsible for the funds operations. If you manage the superannuation fund adversely, the ATO can deem the fund is not complying. The fund can be taxed at the top marginal bracket (45%) of the fund's assets. Also as a trustee, you can be fined.

Your self-managed superannuation fund is required to be audited each year, in order for it to remain a complying superannuation fund.

It’s a big step to run your own superannuation fund, make sure you get some great advice setting it up. Think about the help you may need on operating your fund as well.

Paying Your Superannuation Before Year End

Mon, 29 May 2023 23:00:00 GMT

Paying Your Superannuation Before Year End

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Common Mistakes Business Owners Make When They Budget

Mon, 22 May 2023 22:45:00 GMT

Common Mistakes Business Owners Make When They Budget

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When you are preparing your budget for your business there are a few common errors business
owners make. You want to avoid overthinking your budget. Your budget is a guide, they are
not plans for a house.

Biggest mistake is not doing a budget. Followed closely by doing a budget because it’s what
you’re supposed to do as a business owner. Going through the motions will not guide your
business, your budget is not there to restrict you, it’s keeping you on track so can you achieve
the success you want.

You want your budget to be achievable. Achievable means about 50% attainable. You don’t
want it too easy to meet, but you don’t want it too hard to acquire. The goal needs to be
ambitious enough to motivate you.

You don’t have to account for every expense item, again these are a guide. Have a look at last
year’s expenses to get an idea of what to allow for. Don’t make it too rigid, you need to have
some flexibility. What you expect to happen now, might not happen in six months. I think we all
saw how Covid affected our budgets.

The most important aspect of any budget is to review and update as the year progresses.
There are opportunities that might present themselves during the year and you need to be flexible
and revise your budget to accommodate them.

Not sure where to start when preparing your budget? Get in touch with your accountant, they
should get you on the right path.

2023/2024 Budget

Tue, 16 May 2023 01:30:00 GMT

2023 FY Tax Planning

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Just like the Federal Government every business should have a budget for the next financial year. Have you worked on preparing your budget?. I hear people all the time expressing their distaste for budgets. Some people see it as some sort of restriction of their activity when really it’s the opposite. It should be the goal to drive your activity.

A budget is a plan. How long do you spend planning for your next holiday? Many hours. A plan for your business should be worked on to help pay for your next holiday. A budget should be about 50% achievable. If it’s too easy you will not have enough pressure on yourself to achieve. If it’s too hard you are likely to get discouraged and give up on your plan and lose focus.

Don’t know where to start? If you have been in business for over a year, have a look at your performance in the last 12 months. Review on areas where you can improve. How much extra income can you earn with your current resources? What if you add resources, how much more can you earn. It doesn’t have to be perfect, it just needs to be done.

It's Time To Budget

Tue, 09 May 2023 03:30:00 GMT

2023 FY Tax Planning

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We are coming to the end of the 2023 financial year, have you thought much about 2024FY? Now is a great time to start putting together you goals and plans for the 2024FY. Preparing a budget plan for the next 12 months is an essential factor to ensure your business not only survives but it succeeds.

This involves determining:

✔️ Income targets

✔️ New types of income

✔️ Product margins

✔️ Estimating ongoing expenses

✔️ Potential future expenses

✔️ Staff levels

✔️ Cash Flow needs

Profit is the business going to make income you want personally.

This plan will keep you accountable to yourself. You will be surprised by focusing on meeting your plan drives the success of your business. Having the goal gives you the objective and more importantly a reason to do the things you need to do to meet those goals. It will navigate your activity to meet the needs of your plan.

2023 FY Tax Planning

john@keytaxsolutions.com.au (John Reilly) — Fri, 28 Apr 2023 06:05:54 GMT

2023 FY Tax Planning

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The first 10 months have passed for the financial year. If you are like most of my clients you paid no tax last year, thanks to a lot of the government Covid kickbacks. Tax-Free cash flow boost was real winner for all businesses and writing off your motor vehicles purchases 100% really increased your tax deductions.

In 2021 FY most of the JobKeeper benefits were received. Many businesses had a 2-4 blip in March & April 2020. However afterwards a lot returned to normal trading and some even increased business, i.e. trades, lots of home renovations last year. Some are having their business profit in years or ever.

Now is the time for tax planning for 2021. Review to see what potential tax deductions you can bring forward, purchase some assets you will need and look into extra super to name a few. Plan now, the tax savings are worth the investment. Everyone loves to minimise their tax! Why not you?

How Do You Calculate Your Car's Fringe Benefits Tax?

Mon, 24 Apr 2023 23:45:00 GMT

Are You Completing Your Log Book Correctly?

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The current FBT (Fringe Benefits Tax) year is finishing soon, 31 March 2023. I thought I would discuss the most common fringe benefits, motor vehicles.

There are two methods to calculating your Fringe Benefits Tax on motor vehicles. They are: Statutory Formula and Operating Costs.

�� is based on the value of the vehicle when it was purchased, including GST. The statutory rate is 20%. For example, if your business owns a BMW acquired for $90,000, your fringe benefit is $18,000. The FBT debt is calculated on $18,000.

Please be aware that you can only claim depreciation deductions for $64,741 (or instant asset write-off currently, Mar 2023) on motor vehicles.

The best way to reduce your FBT on your motor vehicles is by using the �� method for calculations. You will need to complete a log book to work out the business percentage use. You will calculate all running and ownership costs related to the motor vehicles. The private use percentage is the value of your fringe benefit and the value used to calculate your FBT debt.

Sometimes the FBT can be more than the deductions on luxury cars.

Are You Completing Your Log Book Correctly?

Tue, 18 Apr 2023 01:45:00 GMT

Are You Completing Your Log Book Correctly?

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Logbooks are used to record the business use of your motor vehicle as part of evidence to claim your motor vehicle expenses as a tax deduction and reduce FBT.

To correctly complete your logbook, you need to:

▪️ Complete it for 12 weeks

▪️ Enter the date of the journey

▪️ Provide a description of the journey, be specific

▪️ Record the starting odometer reading

▪️ Record the closing odometer reading

▪️ Note the kilometres travelled

▪️ Note if it's business or private use.

Once this is complete you can use this logbook for the next 5 years. Even if you change cars and your business use of the new vehicle is the same.

Your logbook can be recorded in a pre-printed logbook, you can buy these from a stationery store. You can else record it electronically, e.g. on spreadsheet or an approved app.

Please note: It is very important to record the odometer reading at 31 March if your claim is for Fringe Benefits Tax (FBT) calculations or 30 June if your claim is for a tax deduction.

When recording your logbook, please remember when your car is serviced, your mechanic will record the odometer reading on the car. Also, the ATO can access your toll records.

Is Your Motor Vehicle Exempt From FBT?

john@keytaxsolutions.com.au (John Reilly) — Tue, 11 Apr 2023 01:00:00 GMT

Is Your Motor Vehicle Exempt From FBT?

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In summary, all vehicles designed to carry a load of more than one tonne and fewer than nine passengers are eligible for FBT exemption. Below are some more specific examples of potential exempt vehicles:

Panel Van / Van: Solid rigid body without rear side windows and only has seating in the front for 2-3 passengers. Principally designed for a load not passengers.

�� : Seating for 2-3 passengers in the cab, with a larger tray principally designed to carry a load.

�� : Need to be principally designed to carry a load and not passengers. The model’s tare weight for the load needs to be higher than the weight for passengers. Australian Design rules say a passenger weighs 68kgs. (I don’t know many men who weigh this much?)

�� : Designed to carry more than one tonne or more than eight passengers.

Question When Buying A Motor Vehicle

john@keytaxsolutions.com.au (John Reilly) — Tue, 04 Apr 2023 02:00:00 GMT

Questions When Buying A Motor Vehicle

Do you have any questions on buying a motor vehicle for your business? Bianca from B Thriven is sharing hers today.

✅ Can I buy a motor vehicle in my company?
✅ Is there any sort of motor vehicle I should or shouldn't buy?
✅ What are some tax issues when I buy a motor vehicle

Your Checlist For A Deceased Person

john@keytaxsolutions.com.au (John Reilly) — Mon, 27 Mar 2023 18:30:00 GMT

Your Checklist For A Deceased Person

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��. Pause tax correspondence

Get in touch with the ATO to advise them your family member has passed away.

��. Determine who will manage the deceased's financial affairs

The Will should nominate someone as the executor, the executor is responsible to manage the financial affairs of the deceased.

��. Decide if you need a grant of probate or letters of administration

If the deceased does not have will you may need to apply for letter of administration. Probate will legally recognise the will. The process can be overwhelming, seek assistance from a solicitor.

��. Let the ATO know who is managing the estate

Advise the ATO that you, the executor, have the authority to act on behalf of the deceased.

��. Manage any business tax obligations

If the deceased is running a business, you will need to get all BAS and income tax obligations up to date. If the deceased was a director of a company, ensure you have the authority to act as the director.

��. Lodge a final tax return for the deceased person

You will need to ensure all the outstanding tax returns for the deceased are lodged. Please note, any income earned after the date of death is not included on their final return.

��. Lodge tax returns for the deceased estate

If the deceased has significant assets, you may need to create a Deceased Estate Trust, your accountant will be able to guide you on this. For three years after death, the deceased estate trust is taxed as an individual.

��. Finalise tax affairs

Ensure all tax returns are lodged before distributing the funds from the estate. As the executor, you can be held personally liable for unpaid tax of the estate.

What Are the Tax Obligations Of the Executor Of A Deceased Estate?

john@keytaxsolutions.com.au (John Reilly) — Mon, 20 Mar 2023 19:30:00 GMT

What Are The Taxation Obligations of the Executor Of A Deceased Estate?

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Your first taxation obligation as an Executor is to advise the Australian Taxation Office of their passing. You can do this by completing an online form on their website .

Part of your executor's responsibilities is getting the deceased’s personal individual taxation affairs up to date. This includes all outstanding obligations, we recently completed fifteen (15) years of outstanding returns for an executor!

It is far easier now that the ATO is notified electronically of income details. It can be difficult when investments are involved, especially determining the cost of acquiring investments. The best place to start will be the deceased person’s accountant, they should have historical information.

If the deceased person had significant assets, you might have to create a Deceased Estate Trust, which is a new entity. You will need to apply for a new tax file for the Deceased Estate. For the first three years after death, the Deceased Estate Trust is taxed as an individual.

In the financial year of the person’s death, you will potentially need to complete two tax returns. Their final personal return, for income up to their date of death. From their date of death until the end of the financial year, you will need to complete the Deceased Estate Trust tax return.

What Happens To Your Superannuation When You Die?

john@keytaxsolutions.com.au (John Reilly) — Mon, 13 Mar 2023 23:00:00 GMT

What Happens To Your Superannuation When You Die?

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Your executor should advise your superannuation fund of your passing. The super fund will now need to payout the superannuation balance. However, a super fund can only pay a benefit to a superannuation death beneficiary, they are:

▪️ Your spouse

▪️ Your children

▪️ Interdependent (lives and share a close relationship, financial and domestic dependency)

If you don’t have any of these, your superannuation benefit is paid to your Legal Personal Representative, i.e. your estate.

�� : superannuation is not included in a deceased person's estate or will unless there are no superannuation death beneficiaries and it will go to the estate. You can nominate who is the beneficiary of your superannuation and your super fund is obliged to follow these wishes.

When the super fund is paying the benefit, tax can be deducted. The amount of tax is dependent on two things.

�� : Tax-Free, Taxed element or Untaxed element.

��: dependent or non-dependent

For example, if your spouse passed away. You are their superannuation death beneficiary and dependent, if they nominate you to receive the super entirely, they only have the taxed element of superannuation, there is no tax payable, and no tax will be deducted by the superannuation fund.

However, if it was your father, you are over 18 and classified as non-dependent, using the same details above, you could have tax deducted at 17% (capped). You will also need to include this benefit payment on your personal tax return.

If the deceased person was already receiving a superannuation pension, they could have nominated a person (superannuation death beneficiary) to continue to receive that pension on their passing. This is separate to the estate of the deceased person.

It pays to plan for your death!

What Happens When A Family Member Dies?

Mon, 06 Mar 2023 23:00:00 GMT

What Happens When A Family Member Dies?

What happens when a family member dies?

Would you know what to do when a family member dies?

Do you understand your obligations and where to get help from?

My video will give you some clarity on this delicate topic.

Have You Planned For Your Death

john@keytaxsolutions.com.au (John Reilly) — Mon, 27 Feb 2023 21:30:00 GMT

Have You Planned For Your Death?

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So two things you can’t avoid in life, Death & Taxes. You have been paying taxes, directly and indirectly, your whole life. Planning your financial situation for your death will save your beneficiaries thousands (or hundreds of thousands) of dollars in tax. We can’t avoid tax but we can minimise it.

As a morbid topic this might be, there are lots of opportunities for tax planning for your death. Being an accountant sometimes we lack the emotion you might be feeling, however, your best interests are always in our heart.

Having your Will in place is paramount to ensure the proceeds are directed in your wishes and in the most tax-effective matter, as you have planned for it. Any good lawyer would recommend you get your power of attorney and enduring guardianship setup at the same time.

You should involve your accountant in this process to discuss the tax position of your wishes. E.g: you own two properties, one is your owner-occupier home and the other is an investment. Both are worth the same, however, the investment property has potential capital gains tax whilst the owner occupier doesn’t. The investment property is worth less to a beneficiary.

There is lots more to consider, now is the best time to plan.

Why Should You Review Your Budget?

Mon, 20 Feb 2023 19:30:00 GMT

Why Should You Review Your Budget?

Reviewing your budget can be seen as a hassle but is crucial to your business. Find out why should you review your budget.

Why Budget Planning Is Important For Your Business

Mon, 13 Feb 2023 19:15:00 GMT

Why Budget Planning Is Important For Your Business

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Benjamin Franklin was quoted saying “If you fail to plan, you are planning to fail”. If you want your business to be successful you need to plan for your success.

A lot of people spend more time planning a holiday than they do planning for their business, which coincidentally pays for the holiday.

Preparing your budget will enable you to control the finances of your business. How much income will you need to ensure you make a profit? Do you have any idea what the costs are to run your business? Do you need working capital to set up your business? Have you considered the taxes you need to pay? This includes GST, PAYG Withholding, FBT, etc. these are taxes you pay before you make a profit.

Having budget targets can help keep yourself accountable. It’s hard being a business owner when you are not accountable to anyone, a budget can help you stay on the right path to success.

Success in your business is no accident, the business owner who invests time and energy into the budget plan are those who make a business look easy. It may appear their success comes easy; however, you may find their budget plan is what helps them succeed.

Common Mistakes Business Owners Make When Budgeting

john@keytaxsolutions.com.au (John Reilly) — Mon, 06 Feb 2023 23:15:00 GMT

Common Mistakes Business Owners Make When Budgeting

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Biggest mistake is not doing a budget. Followed closely by doing a budget because it’s what you’re supposed to do as a business owner. Going through the motions will not guide your business, your budget is not there to restrict you, it’s keeping you on track so can you achieve the success you want.

Not sure where to start when preparing your budget? Get in touch with your accountant, they should get you on the right path.

Can You Lease A Company Car For Your Business

Mon, 30 Jan 2023 21:00:00 GMT

Can You Lease A Company Car For Your Business?

Can you lease a company car for your business?

Have you heard of a novated lease?

When most people think about a car for their business, they think of leasing. Leasing still involves applying for finance like any other loan. The motor vehicle is used as security for the leasing finance. The part I don’t like is the requirement to have a residual (balloon payment) at the end of the leasing period. In my experience, a lot of people do not have the money to pay the balloon payment and end up extending their finance, usually two years, to payout the balloon payment.

You may have heard of Novated Leasing. This is a scenario where an employee leases a motor vehicle and whilst they are employed with their employer, their employer will make the lease payments. Under a salary packaging arrangement. The advantage for the employee will always be their car. The advantage for the employer is no obligation to the debt if the employee leaves.

The tax deduction for leasing is the lease payment. GST claims are 1/11th of the lease payments. If the value of your car is above the depreciation limit, the tax deductions are a lot more complicated, and you will no longer be your accountant’s favourite client.

Financing Your Car For Your Business

Mon, 23 Jan 2023 20:30:01 GMT

Financing Your Car For Your Business

Looking at financing your car for your business?

Have you thought about a Chattel Mortgage?

There are a few options to finance your car, a chattel mortgage is the most common type. It works similarly to a personal loan, except the motor vehicle is the “chattel” (tangible goods), i.e. the security for the loan. The mortgage reference is the loan.

If you think of it in terms of your home loan, your house is the security the bank has for providing you with a home loan. However, for a chattel mortgage, your interest rate will be fixed for the term of the finance.

I personally prefer using a chattel mortgage for a couple of reasons.

�� is the entitlement to claim the full amount of GST (limited to $5,885) on your next BAS.

�� is, currently in the 2023 financial year you are entitled to claim your motor vehicle purchase in full (up to $64,741). Next year, it will revert to traditional depreciation rules.

There are two types of tax deductions when you utilise a chattel mortgage are; interest on the finance and depreciation on the motor vehicle. Using the normal depreciation rules, the tax deductions (interest + depreciation) in the first couple of years of the finance term are more than the actual finance repayments.

For most of my clients, I usually recommend a 4-year term with no residual (balloon payment). Pay the car off in 4 years, it is about the useful life of a car in a business.

Want To Buy A Car In Your Business? Cont'd

Mon, 16 Jan 2023 20:30:00 GMT

Want To Buy A Car In Your Business? Cont'd

Want to buy a car in your business? Cont’d

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Generally buying a motor vehicle, the tax deductions on the purchase price are limited to depreciation. However currently, until 30 June 2023, you can write off the motor vehicle instantly with the Temporary Full expensing rules.

Please note your depreciation deductions and full expensing is limited to the motor vehicle depreciation limit, for the 2022-23 FY it is $64,741. All costs above $64,741 are not deductible.

Referring to last week's post and Fringe Benefit Tax (FBT), you pay FBT on the whole purchase price, e.g. $94,916 on the Toyota Prado, however your tax deductions are limited to $64,741.

There is also a cap to the amount of GST you can claim on a motor vehicle. It is capped at 1/11th of the depreciation limit. The maximum GST is $5,885 on the depreciation limit of $64,741

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Sometimes it's best to finance the vehicle purchase than pay cash for it. A car will usually provide you with a benefit over a number of years, I would recommend paying for it over a number of years as well. Taking a large lump sum of cash out of your business can have a detrimental effect on your cash flow. You may have trouble paying suppliers, paying your staff, and keeping on top of your tax payments.

Each finance option has different tax and GST implications. I will discuss the finance options and tax implications for the next couple of weeks.

Want To Buy A Car In Your Business?

Mon, 09 Jan 2023 21:00:00 GMT

Want To Buy A Car In Your Business?

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A lot of people ask if they can buy a car using their company (or trust). My simple answer is always…. Yes!!,

However…… there are a few things to consider.

What sort of vehicle you are buying?
Is there Fringe Benefits Tax on the vehicle?
What is the purchase price of the vehicle?
How much GST can be claimed on the purchase?
What are the tax deductions associated?
Do you use cash or finance the purchase?

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Buying a workhorse vehicle (ute, van, etc..) can potentially be exempt from FBT. If you are more interested in buying the latest SUV, this is subject to FBT. So how much is FBT? The most common method of Fringe Benefit calculation for a car is 20% of the GST-inclusive purchase price.

For example, the current listed price of a Toyota Prado Kakadu is $94,916. The FBT calculation is

Fringe Benefit Amount is calculated:$94,916 x 20% = $18,983.20

Gross up for tax calculation :$18,983.20 x 2.0802 = $39,488.85

Tax amount is: $39,488.85 x 47% = 18,559.76

Your annual Fringe Benefits Tax amount on the Prado is $18,559.76. Every year you own the vehicle, this is the tax you pay for owning it in a company (or trust). There are ways to reduce this.

Next week I will discuss the remaining questions.

Happy New Year

Mon, 02 Jan 2023 22:00:00 GMT

Happy New Year

Happy New Year from Key Tax Solutions!

Whilst we are starting relaxed into the #NewYear, here are some reminders of what to watch out for at the beginning of the year.

Closing For Christmas

Mon, 12 Dec 2022 21:45:01 GMT

Closing For Christmas

Have you advised your clients & customers when you are closing?

Christmas Gifts For Clients & Suppliers

Mon, 28 Nov 2022 19:45:00 GMT

Christmas Gifts For Clients & Suppliers

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Find out how to maximise your tax deductions when rewarding key contacts in this video.

Christmas Gifts For Your Staff

Mon, 21 Nov 2022 23:15:00 GMT

Christmas Gifts For Your Staff

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The two most important aspects to consider to maximise your tax deductions are:

��) The cost of the gift needs to be less than $300 GST inclusive for each staff member and:

��) The gift should be a “Non-Entertainment” gift. If you meet these two parameters, you will get a full tax deduction for the expense, and claim the GST credits and it has no FBT consequences.

If you spend above $300 on a “Non-Entertainment” gift, FBT will be applicable.

If you buy an “Entertainment” gift under $300, there is no tax deduction and no GST credit.

If you buy an “Entertainment” gift over $300, FBT will be applicable

�� “��” �� :

Theatre tickets, movie tickets, sporting events tickets, hired entertainers, flights and holiday accommodation, etc

�� “��-��” �� :

Flowers, electrical goods; e.g. TV, bottled spirits and beer, Christmas hampers, gift vouchers,etc

To maximise your tax deductions, try to find “Non-Entertainment” gifts under $300 for your staff. If you are unsure about a particular item, please feel free to ask.

Tax Your Businesses Christmas Party

Mon, 14 Nov 2022 23:00:00 GMT

Tax Your Businesses Christmas Party

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Christmas parties are a great time to strengthen your connection with your staff, clients and suppliers. Unfortunately, there is no good news on the tax consequences of these events.

Christmas parties are treated as “Entertainment” and generally not tax deductible. For Christmas parties held on premises where only employees attend, all costs are not deductible and no GST credits are available. However, the costs are exempt from FBT.

Where Christmas parties are held off-premises; if the spend per employee is under $300 per head, it is exempt from FBT. As it is considered a minor benefit. However, it is not tax deductible and you can not claim GST credits. Above $300 per head, it is subject to FBT and you can now claim a tax deduction and the GST credits. This scenario does sound favourable, however the FBT applicable is approximately the same amount as the tax saved on the deduction and the GST credit you have claimed.

For all expenditure on your clients attending your Christmas Party is not tax deductible. Nor can you claim GST credits. However, it is exempt from FBT.

Christmas parties are more about strengthening relationships. Don’t focus on the tax consequences, just be aware of them.

What are you doing for your Christmas party?

How Do You Ensure Your Work Is Done And Invoiced?

Mon, 07 Nov 2022 23:00:00 GMT

How Do You Ensure Your Work is Done And Invoiced?

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You spend so many hours trying to win work, it’s just as important to manage the jobs you have won. You need to ensure that all jobs are done within a timely manner, and communicate this to your customers.

Do you still manage this using a notebook or a diary, I still see it quite a lot. You know the personal computer (PC) was invented in the 1970s, so it's far from new technology. The basics could be using any of the Microsoft products, e.g. Excel or Word. The advantage is the ability to back up your list and easily modify it.

By using Excel, you can insert numbers into your joblist and this will help you understand how much you can earn in the next few weeks or months.

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I know myself, we would usually have about 120-180 jobs on the go at any point in time. We use a job management system as this allows constant changes. I would spend at least 2 hours per week reviewing this list and updating it, adding new work and discussing priorities with staff.

Managing the jobs is such a priority, this ensures the work is done in a timely manner and our clients are invoiced quickly which ensures we can get paid quicker.

We use Xero for our bookkeeper. Xero has a lot of add-on apps that can help with your job management process. There is a fee to use this system, however, your experience and more importantly, your customer's experience can be a lot more positive if this process is managed well.

What are your processes?

Have You Billed Every Job?

Mon, 31 Oct 2022 22:30:00 GMT

Have You Billed Every Job?

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We have a lot of trade-based businesses as clients. The most important topic I discuss with them all is ensuring they invoice for every job they complete.

If you’re a tradie and you have a call-out fee of $100, how do you know you have charged for every call out? It can be only one hour a week that you are missing. However, that is over $5,000 per year. You miss charging one customer per week, that is $5,000 per year. That’s a good family holiday, or a couple of cartons of beer a week.

Now imagine if that was 2 jobs per week!

▪️ What is your process to ensure you record every job you have booked?

▪️ How do you schedule every job you need to complete?

▪️ How do you record when every job is complete?

▪️ How do you note when every job is invoiced?

The hardest part of running your business is getting the work, doing the sales, preparing the quotes, and explaining the quotes. You won the work. Now, what is your process to ensure you get the work done and you get paid?

Customers don’t always pay. Don’t make it easier for them by not even invoicing them.

What is your process?

Various Taxes & Registration Numbers Explained

Mon, 24 Oct 2022 23:15:00 GMT

Various Taxes & Registration Numbers Explained

Have you ever been confused about what various taxes are and maybe registration numbers with the ATO. I have answered a couple questions I get asked frequently.

If you have any other questions, please let me know.

GST And Your Motor Vehicle

Mon, 17 Oct 2022 23:00:00 GMT

GST And Your Motor Vehicle

Story Time: “GST and your Motor Vehicle”….

Once upon a time…… there was a small business owner, Johnny, who was looking at buying a motor vehicle for his business. His accountant confused the hell out of him with the complications of GST. Below are Johnny’s summary points he made after visiting his accountant:

�� : If you are registered for GST you can claim a GST credit on your motor vehicle purchase, however:

▪️ The person selling the motor vehicle must also be registered for GST. When buying a second-hand car, having that person/business registered for GST reduces the cost of your motor vehicle to your business. You get to claim a GST credit.

▪️ The maximum GST you can claim (in 2022/23) is $5,885. Which is 1/11TH of $64,471, i.e. the cost limit for depreciation.

▪️ If you finance your car using a chattel mortgage, hire purchase or loan. You can claim the whole amount of the GST upfront.

▪️ If you finance your car using a lease, you can only claim the GST on the lease payments.

�� : If you are registered for GST the final selling price of your Motor Vehicle is deemed to include GST.

▪️ Selling a Motor Vehicle in your business is a normal sale, which includes GST. You need to pay 1/11TH of the final sale price as GST.

▪️ Selling includes trading in your motor vehicle.

▪️ Even if you sold it to a person who is not registered for GST, the price is still deemed to include GST, as you, the business is registered for GST.

Now small business owner Johnny understands the complexities of GST and motor vehicles, he made an informed decision when making his purchase. Happy Driving!

Your Obligations Under GST?

Mon, 10 Oct 2022 23:30:00 GMT

Your Obligations Under GST?

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Once you are registered for GST you have an obligation to lodge Business Activity Statements (BAS). This is additional administration work for small businesses and if your turnover is under $75,000 (registration threshold) you will need to consider if the additional work is worth the potential savings.

BAS can be lodged on a monthly, quarterly or annual basis. The ATO has rules on how often you are required to lodge, it depends on your income. However, you may lodge more frequent than required, this can help you manage your cash flow. E.g., you may want to have small monthly GST payments as opposed to one large one every quarter, hence you lodge monthly instead of quarterly.

Every sales invoice your business prepares is deemed to include GST, you need to ensure you charge the additional 10% to ensure you don’t shortchange yourself.

When a supplier sends you an invoice it’s up to you to ensure the ABN is correct and that they are registered for GST. You can check this by going to abr.business.gov.au . If your supplier is not registered for GST and they charge you GST, you cannot claim the GST credit if you pay the supplier in full.

What Is GST And How To Register?

Mon, 03 Oct 2022 23:30:00 GMT

What Is GST And How To Register?

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GST tax is not a tax on business, if you are registered GST you will never actually pay GST. You are eligible for GST credits when a business (registered for GST) buys goods and services. However, the burden of collecting the GST for the government is endured by business owners.

To register for GST, it is an additional step after you have applied for your Australian Business Number (ABN). You are not required to register for GST until your turnover is over $75,000 ($150,000 for a not-for-profit). If you are working as an employee and as a sole trader, any income from your wage as an employee does not make up the $75,000.

Trading Name vs Company Name

Mon, 26 Sep 2022 21:15:00 GMT

Trading Name Vs Company Name

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Have you ever been confused what is the difference between a Company Name and a Trading Name?

Keeping You Address Up To Date With ASIC

Mon, 19 Sep 2022 21:00:03 GMT

Keeping Your Address Up To Date With ASIC

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When you have a company there are a number of addresses that need to be current. Any changes need to be updated with ASIC within 28 Days. Otherwise, there are potential late fines. These addresses can be:

- Registered Office

- Principal Place of Business

- Directors (Officeholders)

- Shareholders (Members)

The easiest way to update these addresses is to engage your accountant to be your ASIC Agent as well. I always encourage my clients to engage us as their ASIC Agent.

For our clients, we just ask them to email us their new address details. We complete a simple form with ASIC, called a Form 484 “Changes to company details”. We send it out for digital signature and when signed and returned we lodge the form.

We like to avoid late fees for our clients. When ASIC is notified after 28 days of the change the company can be fined $87. However, if you advise ASIC one month after the 28 days period, the company can be fined $362.

Having the wrong address listed with ASIC can result in legal documents being sent to the wrong address. A person taking legal action will send documents to your registered office. If that address is wrong you may have a legal ruling made against you without your knowledge.

Your Company's Registered Office

Mon, 12 Sep 2022 23:30:01 GMT

Your Company's Registered Office

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When you start your company, ASIC advises that you will need to set up a registered office and this will be the company’s official legal address. It must be a physical address and not a PO Box. This can be different to your principal place of business, this is where the company operates the business.

It’s a great idea to use your accountant's office address as your registered office. Your accountant is experienced in dealing with lots of paperwork. When ASIC and any other legal documents are sent to your accountant they are more likely to action it quickly and prioritise when necessary.

Here are a couple of stories from my clients who didn’t use our address as their registered office:

1. A client who used their home address as their registered office - They moved a couple of years ago and never advised ASIC they had moved. A few years later, they were advised by their bank their company had been deregistered for not paying the annual ASIC fee.

2. The ATO sent legal enforcement action letters to the company’s registered office. A client had their home address as their registered office. The ATO has sent a Director’s Penalty Notice to the registered office. The client ignored the importance of the letter. Now that client has a personal debt with the ATO of almost $100k. This was their company’s debt and the situation could have been avoided.

It’s very important to keep your registered office current.

Director Identification Number

Mon, 05 Sep 2022 20:30:00 GMT

Director Identification Number

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If you are a company director, you’re now required to obtain a director identification number (director ID). You could just be a director of the trustee company for your self-managed superannuation fund or a director of your corporate trustee for family trust. By definition, you are a director and these new rules apply to you.

This is a unique identifier that you keep forever. You only need to apply once and there is no cost.

If you are a company director appointed before 1 November 2021, you must have your director ID by 30 November 2022. There are significant fines applicable if you don’t have one after this date. See this link to how much - Director ID Fines .

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Unfortunately, you must apply for a director ID yourself. Your accountant or any other professional can not do it for you. It’s linked to your personal identity.

The easiest way to apply for your Director ID is to go to this web page .

▪️ You will need to have a MyGov account, which will enable you to have a myGovID account.

▪️ You will need both to apply for your Director ID.

▪️ Once you have your director ID you can let your accountant or tax agent know and they will keep in on file for you.

There are other non-online ways to apply, see the ARBS website for more information.

Hiring Your First Staff Member

Tue, 30 Aug 2022 00:30:00 GMT

Hiring Your First Staff Member

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Today we discuss with Trevor Weeding from Development Pathways some of the steps you should take when hiring your first employee.

Get in touch with Trevor via the link below.

https://developmentpathways.com.au/contact-us/

Rewarding Your Most Valuable Asset - Your Staff?

Wed, 24 Aug 2022 00:56:59 GMT

Rewarding Your Most Valuable Asset - Your Staff?

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When you are thinking about priorities of paying down some debt in your business, make sure the ATO is high on your list. The unpaid PAYG Withholding for your staff has the potential to become your personal debt if you are a director.

Even if the company has been liquidated by a registered liquidator, the ATO can reinstate the unpaid PAYG Withholding and make it the directors’ personal debt. The only way to avoid that is for the director to be bankrupt, which is not ideal and has long-lasting ramifications.

The best way to avoid having your staff’s PAYG Withholding becoming your personal debt is to ensure you lodge all activity statements on time. Even if you can’t pay them in full or at all, lodging the activity statement form on time will give you a chance to avoid having this unpaid debt becoming your personal debt (for directors). It will also reduce late lodgement penalties.

Just a quick reminder, monthly activity statements are due 21 days after the end of the month.

Quarterly activity statements are due 28 days after the end of the quarter: except December, you have until 28 February. Also, if you are using a registered agent, you have a further 28 days to lodge.

Paying Your Staff's PAYG Withholding

Tue, 16 Aug 2022 00:45:00 GMT

Paying Your Staff's PAYG Withholding

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Just a quick reminder, monthly activity statements are due 21 days after the end of the month.

Hiring someone with an ABN

Tue, 09 Aug 2022 00:00:00 GMT

Hiring Someone With An ABN

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So you are thinking about hiring someone new for your business and someone suggested you just ask them to get an ABN and you can offer them contract work?

Is the person a contractor or an employee?

This is a topic the ATO and the courts have discussed for years. There is both case law and legislation discussing this arrangement. Some of the case law goes back to the 1960s.

Much of the case law refers to the “Master” and “Servant” principles. The servant does what the Master commands. Similar to the Employer and Employee relationship. Who controls the relationship? You will find in most cases the person you believe is a contractor is really just an employee. This area is quite complex and each individual case would need to be judged on its own merits.

Please be aware, that even if you are employing someone with an ABN you are still potentially liable to cover them for workers' compensation insurance. You can also be liable for Superannuation, this year it is 10.5%. We would recommend that you make the contract payments to be inclusive of Superannuation and you withhold the superannuation and pay it directly to the contractor's superannuation fund.

Make sure you get some expert advice before taking on a contractor with an ABN.

How long do I pay them to do nothing?

Tue, 02 Aug 2022 06:30:00 GMT

How Long Do I Pay Them To Do Nothing?

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One of my favourite things to say to clients when they start employing staff:

“Do you know you pay them for 8 weeks a year to do nothing”?

I do like a little shock therapy for my clients. Most are confused and unsure if I’m telling a bad joke. Unfortunately, this bad joke is true. Yes, you pay your staff 8 weeks a year to do nothing.

It always feels a little different when you are on the other side of this relationship. It’s great getting paid to do nothing. But it’s not paying people to do nothing.

However, as an employer, you will pay your staff 4 weeks of annual leave, the minimum employment standards providing for 10 days personal leave (sick leave). In NSW we have 9 public holidays. That is a total of 39 business days or one day short of 8 weeks. This is for full-time employees only.

This does not include Long Service Leave, which is more paid time to do nothing for employees.

These are just the rules, as an employer, you should be aware of them.

Getting Your Eligible Work-Related Deductions Right?

Mon, 18 Jul 2022 22:15:00 GMT

G etting Your Eligible Work-Related Deductiosn Right?

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Before you can claim a work-related deduction, you must pass these three tests:

You have spent the money and have not been reimbursed by your employer
The expense directly relates to you earning your income
You must have a record to prove it!

For expense claims under $300, you do not need to keep written evidence. However, you will need to keep details on how you calculated this claim.

All expense claims above $300 (in total) will require written evidence, that being a receipt or something similar. Your records can be paper or electronic. For the ATO to accept your receipt it will need to show:

Name of the supplier
Amount of the expense
Description of goods or services
Date on the receipt, i.e. date paid.

If you use your mobile phone or your home internet incidentally for work. You can claim for the incidental usage.

You will need to demonstrate how you calculate your work usage. The ATO has said to represent your work-related usage, you will need to document your usage for a minimum of 4 weeks. Calculate this business percentage and you can apply this usage percentage to the entire financial year.

Your written evidence needs to be kept for 5 years from the date you lodge your tax return.

Have you forgotten about this tax-deductible expenditure?

Mon, 11 Jul 2022 23:45:00 GMT

Have You Forgotten About This Tax-Deductible Expenditure?

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�� - The cost of engaging a tax agent to complete your tax return is tax-deductible, this includes travelling to see your tax agent (probably not this year though). Your tax agent fee to complete the 2022 tax return (now) will be deductible when you complete your 2023 tax return (next year).

�� - Being part of a professional body can be a requirement for you to complete your job. As it’s essential to earning your income, it is tax-deductible for you. For myself, I’m a member of CPA Australia. For a builder, it could be the Master Builders Association, Australian Institute of Building, etc.

�� - These could be books, newsletters, email newsletters, magazines, webinars, etc. As long as they are directly related to your occupation which provides you income these can be tax-deductible. For example, if you work in TV production, claiming a portion of your Foxtel subscription may be deductible. A person who works in IT and subscribes to a computer magazine, this may be deductible.

�� - If your job requires you to work outside, you can claim expenses incurred in protecting yourself from the sun. This can be the costs of hats, sunglasses, sunscreen etc...

Have you worked from home during 2021/22 financial year?

Tue, 05 Jul 2022 00:30:00 GMT

Have You Worked From Home During 2021/22 Financial Year?

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Unless you were on the tools you certainly did from July to about September 2021.

There are two methods of calculating working from home.

1. Traditionally the ATO fixed rate is $0.52 per hour. This includes cost of electricity, depreciation of furniture, and repairs to your home office. You will need to have a dedicated work area to claim this method and a 4-week diary record showing your usual pattern of working from home. This method allows you to claim the actual costs of associated expenses, e.g. internet, phone, consumables, depreciation of computer equipment, etc.

2. During the COVID 19 pandemic the ATO allowed a shortcut rate of $0.80 per hour. This is for the entire 2021/22 financial year. Your record-keeping for shortcut rate requires your timesheets, roster, diary or similar document showing the hours you worked. You do not need a dedicated work area. However, this shortcut rate includes everything in the fixed-rate, plus all associated expenses, e.g. internet costs. If you claim the $0.80 per hour method, all actual expenses cannot be claimed separately.

You can choose which one is better, however, you need to use the rate for the entire financial year. We have found clients who have a dedicated work area, the fixed rate of $0.52 plus actual costs usually works out better.

It's the end of the 2022 financial year!

Mon, 27 Jun 2022 21:30:00 GMT

It's The End Of The 2022 Financial Year!

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The end of the financial year is this week. I like to refer to this as Groundhog Day (referring to a Bill Murray movie from the early 90s). As a tax accountant, the end of the financial year is a new beginning and all the work completed over the last 12 months has to be completed again.

An important action for employers at the end of the financial year is to reconcile the salary and wages paid to your staff. You will need to complete the end-of-year STP Finalisation and prepare income statements for your staff. Income Statements are commonly known as PAYG Payment Summaries, if you are a bit older… group certificates.

You have until 14 July 2022 to have these reports prepared and available for your staff. As in the last couple of years, there is no paperwork to provide your staff. The information will be available online, via the MyGov portal or your tax agent can access the reports through the Tax Agent Portal.

When reconciling your wages, you have three figures to match. The salary & wages figures on the profit & loss report. The salary & wages report on the STP Finalisation and the wages & salary are reported on the activity statements. All three need to match.

EOFY - Pay Your Super

Mon, 20 Jun 2022 23:32:44 GMT

EOFY - Pay Your Super

The end of financial year is fast approaching...

Here is a quick run-through of all the things that need to in terms of super before we head into the new financial year.

Do you want to maximise your Superannuation Tax Deduction?

Tue, 14 Jun 2022 00:15:00 GMT

Do You Want to Maximise Your Superannuation Tax Deduction?

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Superannuation is an expense to every employer who pays wages. However, Superannuation is not tax-deductible until it is paid and it is received by your employee's superannuation fund.

For the June quarter superannuation, i.e. from 1 April to 30 June, this is due to be paid by 28 July. However, this means it is not tax-deductible until the next financial year. To claim a tax deduction in the current financial year, you will need to pay your employee's superannuation before 30 June. As the funds need to be received in your employee's fund, you will need to pay it a week or two before the end of the financial year.

The key is to make sure all superannuation payments are made early enough before the end of the financial year, to ensure all payments are received by the superannuation funds before 30 June.

What's new for Supperannuation in 2023FY?

Tue, 07 Jun 2022 01:45:00 GMT

What's New For Superannuation in 2023FY?

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As an employer are you aware of the changes to superannuation for the 2023 financial year?

The big change for the 2023 financial year is the increase in the Superannuation Guarantee (SG) to 10.5%. This applies to all payroll paid from 1 July 2022. (Please note this will continue to increase 0.5% per year until the 2026 financial year)

Historically unless your employee earned more than $450 per month, you had no superannuation to pay. From 1 July 2022, this is no longer the case. For all persons aged 18 years or older, every dollar you pay them in wages accrues the 10.5% Superannuation Guarantee.

Please note you only need to pay Superannuation Guarantee to a person under 18 years of age when they work 30 hours or more in one week.

We expect all payroll software providers should incorporate these changes.

Superannuation Payment dates have not changed. However, as the superannuation rates are increasing it would be advisable to pay your employees superannuation at the same time you pay their wages. Superannuation is part of their remuneration.

Delaying your superannuation payment to the due date can potentially leave you short of cash at the wrong time. Making smaller payments as you go will have minimal impact on your cash flow.

Have you sold your investment property?

Mon, 30 May 2022 22:15:00 GMT

Have You Sold Your Investment Property?

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Your accountant will want this information from you:

�� : the front page of the contract at least, but with PDF documents the whole contract would be great. A signed copy, showing the price and the date of the contract.

�� : assuming you used the services of a real estate agent to sell, their costs and any marketing & advertising levy they charge you will reduce your capital gain.

�� : if you sold via an auction, all costs associated will reduce your capital gain.

�� : when selling the property there are always adjustments for council & water rates paid and maybe strata as well. This document will list all the adjustments and show the completeness of the sale.

�� : your solicitors fees will reduce your capital gain on the property sale.

�� : if you styled your property to maximise the sale, these costs will reduce your capital gain.

�� : hopefully your accountant already has this report, as they have prepared prior years tax returns. There are adjustments for building depreciation and other depreciation items which will affect your capital gain.

The capital gain is taxable to the owners. For multiple owners, their ownership percentage share will be assessed to them separately.

Have you bought an investment property?

Mon, 23 May 2022 22:30:00 GMT

Have You Bought An Investment Property?

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Your accountant will want this information from you:

�� : The front page of the contract at least, but with PDF documents the whole contract would be great. A signed copy, showing the price, the owners and the date of the contract.

�� : When buying a property there are always adjustments for council & water rates paid and maybe strata as well. This document will list all the adjustments and show the completeness of the purchase.

�� : Your solicitors fees become part of the capital cost of the property.

�� : Usually your solicitor would advise you of this payment amount.

�� : These are fees paid for pest & building inspection, strata reports and inspection fees.

�� : If you used the services of a buyers advocate, their fees become part of the capital cost of the property.

�� : Information regarding the fees and charges in gaining finance for the property. These will become part of your borrowing costs.

�� : This is a quantity surveyors report which will show you additional deductions you can claim against your rental income. We use the services of Duo Tax and Washington Brown.

Before you buy your investment property, you might want to have a chat with your accountant to discuss the best ownership structure for your situation.

20222/2023 Budget

Mon, 16 May 2022 22:30:03 GMT

2022/2023 Budget

Just like the Federal Government, every business should have a budget for the next financial year.

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I hear people all the time expressing their distaste for budgets. Some people see it as some sort of restriction of their activity when really it’s the opposite. It should be the goal to drive your activity.

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A plan for your business should be worked on to help pay for your next holiday. A budget should be about 50% achievable. If it’s too easy you will not have enough pressure on yourself to achieve. If it’s too hard you are likely to get discouraged and give up on your plan and lose focus.

Don’t know where to start?

If you have been in business for over a year, have a look at your performance in the last 12 months. Review on areas where you can improve. How much extra income can you earn with your current resources? What if you add resources, how much more can you earn.

It doesn’t have to be perfect, it just needs to be done.

End Of Financial Year - Save Tax

Mon, 09 May 2022 07:52:33 GMT

Have you planned your death?

Planning to minimise your tax?

No one likes paying tax, however, there are ways to minimise it!

Have you planned your death?

Tue, 03 May 2022 04:00:03 GMT

Have you planned your death?

Having your will in place is paramount to ensure the proceeds are directed in your wishes and in the most tax effective matter, as you have planned for it. Any good lawyer would recommend you get your power of attorney and enduring guardianship setup at the same time.

You should involve your accountant with this process to discuss the tax position of your wishes. E.g: you own two properties, one is your owner occupier home and the other an investment. Both are worth the same, however the investment property has potential capital gains tax whilst the owner occupier doesn’t. The investment property is worth less to a beneficiary.

There is lots more to consider, now is the best time to plan.

Do you really need a Trust to trade?

Mon, 25 Apr 2022 22:30:03 GMT

Do you really need a Trust to trade?

Setting up a trust is the most expensive structure. There are two parts, the “Trustee” and the Trust itself. Generally, the Trustee is a company (it can be an individual), so this means setting up a company as well. There are many types of trusts, however, for this article, I will be referring to a Discretionary Trust.

It does give great asset protection and the potential to save tax. The Trustee Company has directors and shareholders. However, the profits from the trust have to be paid out to the beneficiaries of the trust. The beneficiaries will have to include this income in their tax returns. Beneficiaries can be individuals or non-individuals.

However, trading your business through a discretionary trust is not ideal. When running your business, you have to reinvest back into the business to ensure it operates profitability in the future. Having to pay cash out to the beneficiaries can be a detriment to the business success.

There are many uses for trust, I don’t believe running your business through a discretionary trust is the best option. Make it the shareholder of your company...

Why use a company structure?

Sun, 10 Apr 2022 22:05:54 GMT

Why use a company structure?

A company can cost a little more to set up than a sole trader or partnership structure. However, the benefits gained long term are more than compensative for the initial investment.

You gain by having personal protection against your personal assets, you can save income tax and the business can be easily transferred and still appear to operate the same without you.

A company has directors, who are the managers or controllers. They also have shareholders who are the owners of the business. Directors are individual people, whilst shareholders can be non-individuals. For small businesses they are usually the same or a related party.

Before creating the company up you will need to check with ASIC to confirm the company name is available. The company will have its own TFN and ABN, register for GST (if needed) and for PAYG withholding to pay wages (as you will be an employee in the business).

You will open a new company bank account. When you take money out of the company bank account for personal expenditure, there will be tax consequences. It’s best to pay yourself a wage and use personal funds to pay for personal expenditure. Avoid directors' drawings if you would like to avoid a nasty income tax shock.

There are many more features to having a company, feel free to reach out if you have questions.

Starting a business with a Partner

Sun, 10 Apr 2022 21:53:48 GMT

Starting a business with a Partner

Going into business with a friend, the simplest structure is a partnership.

Using your two individuals names, all you need to do is register through the Australian Business Register( www.abr.gov.au ) and apply for a:

Australian Business Number
Tax File Number
Goods and Services Tax, if needed (sales are over $75k per annum)

If you would like to use a business name you will need to register the name with ASIC (www.asic.gov.au)

Please note the partnership does not pay income tax. The individual partners pay the tax on their share of the partnership profit. Make sure you put some money aside for your income tax, now you are self employed you don't have an employer withholding PAYG for you. It can be quite a shock having a large tax bill at the end of the year and no money saved up to pay for it.

Being a partner in a partnership, there is no legal requirement to pay superannuation for yourself. Make sure you try to put some profit aside for your super.

The best part of having a business partner is someone else has a vested interest in your success. The worst part can be having a business partner who acts in their own best interest and not the partnership's success.

Before starting a partnership, create an agreement with each other. This agreement should list the individual business partners responsibilities and your expectations of each other. It will also have a plan on how to end the partnership.

There are pros and cons, but the essential element to a successful business partnership is open communication.

Sole Trader Business Structure Explained

Sun, 03 Apr 2022 20:56:13 GMT

Sole Trader Business Structure Explained

So, you are sick of working for other people and think you can do it better yourself?

Here is what you have to watch out for if you become a sole trader.

Are you spending money on Entertainment?

Mon, 28 Mar 2022 06:55:09 GMT

Are you spending money on Entertainment?

Make sure you are aware of the tax consequences on entertainment expenditure…

FBT Exempt Employers

Tue, 22 Mar 2022 23:30:38 GMT

FBT Exempt Employers

There are few categories of exempt employers for FBT. There are none entirely exempt, there are relevant caps applicable.

The most common employers are defined as a Public Benevolent Institution (PBI). A PBI is defined as per the Australian Charities and Not-for-Profit Commission (ACNC). The employer will also need to apply with the ATO for FBT Exempt status. The capping threshold for PBI employers is $30,000. This is the grossed up reporting amount. Essentially this means the first $14,422 - $15,900 (depending on the benefit provided) can be salary sacrificed by employees without any tax consequences. Any an example of a PBI is a religious institution, i.e. Catholic School.

The other common employers are Public and Not-for-Profit hospitals (inc Ambulance). The capping threshold for these employers is $17,000. Again this is the grossed up reporting amount. Employees can receive benefits of $8,173 - $9,010 (depending on the benefit provided) without any tax consequences.

This is a basic summary please get in touch if you require further information.

Are you completing your Log Book correctly?

Mon, 14 Mar 2022 21:02:19 GMT

Are you completing your logbook correctly?

Logbooks are used to record the business use of your motor vehicle as part of evidence to claim your motor vehicle expenses as a tax deduction and reduce FBT.

To correctly complete your logbook, you need to:

Complete it for a 12 weeks
Enter the date of the journey
Provide a description of the journey, be specific
Record the starting odometer reading
Record the closing odometer reading
Note the kilometres travelled
Note if it's business or private use

Once this is complete you can use this logbook for the next 5 years. Even if you change cars and your business use of the new vehicle is the same.

Your logbook can be recorded in a pre-printed logbook, you can buy these from a stationery store. You can else record it electronically, e.g. on spreadsheet or an approved app.

Please note: It is very important to record the odometer reading at 31 March if your claim is for Fringe Benefits Tax (FBT) calculations or 30 June if your claim is for a tax deduction.

When recording your logbook, please remember when your car is service, your mechanic will record the odometer reading on the car. Also the ATO can access your toll records.

Is your Motor Vehicle exempt from FBT?

Mon, 14 Mar 2022 20:47:59 GMT

Is your Motor Vehicle exempt from FBT?

In summary all vehicles designed to carry a load of more than one tonne and fewer than nine passengers are eligible for FBT exemption. Below are some more specific examples of potential exempt vehicles:

Panel Van / Van: Solid rigid body without rear side windows and only has seating in the front for 2-3 passengers. Principally designed for a load not passengers.

Single Cab Ute: Seating for 2-3 passengers in the cab, with a larger tray principally designed to carry a load.

Dual Cab Ute: Need to be principally designed to carry a load and not passengers. The model’s tare weight for the load needs to be higher than the weight for passengers. Australian Design rules say a passenger weighs 68kgs. (I don’t know many men who weigh this much?)

4X4 Vehicles: Designed to carry more than one tonne, or more than eight passengers.

Please note that for exemption to apply, these vehicles can only have minor and infrequent use by your employees. The ATO suggests that this means your employee travelS no more than 1,000km per annum for private use.

FBT - Car Fringe Benefits

Mon, 14 Mar 2022 20:43:30 GMT

FBT - Car Fringe Benefits

The current FBT (Fringe Benefits Tax) year is finishing soon, 31 March 2022. I thought I would discuss the most common fringe benefits, motor vehicles.

There are two methods to calculating your Fringe Benefits Tax on motor vehicles.

They are: Statutory Formula and Operating Costs. Statutory Formula is based on the value of the vehicle when it was purchased, including GST. The statutory rate is 20%. For example if your business owns an BMW acquired for $90,000, your fringe benefit is $18,000. The FBT debt is calculated on $18,000.

Please be aware that you can only claim depreciation deductions for $60,733 (or instant asset write off currently, Mar 2022) on motor vehicles.

The best way to reduce your FBT on your motor vehicles is by using the Operating Costs method for calculations. You will need to complete a log book to work out the business percentage use. You will calculate all running and ownership costs related to the motor vehicles.. The private use percentage is the value of your fringe benefit and the value used to calculate your FBT debt.

Sometimes the FBT can be more than the deductions on luxury cars.

What are the Taxation obligations of the Executor of a Deceased Estate?

Sun, 20 Feb 2022 22:53:39 GMT

Your first taxation obligation as an Executor is to advise the Australian Taxation Office of their passing. You can do this by completing an online form on their website .

Part of your executor responsibilities is getting the deceased's personal individual taxation affairs up to date. This includes all outstanding obligations, we recently completed fifteen (15) years of outstanding returns for an executor!

It is far easier now that the ATO is notified electronically of income details. It can be difficult when investments are involved, especially determining the cost of acquiring investments. The best place to start will be the deceased person's accountant, they should have historical information.

In the financial year of the person's death, you will potentially need to complete two tax returns. Their final personal return, for income up to their date of death. From their date of death until the end of the financial year, you will need to complete the Deceased Estate Trust tax return.

How to minimise your tax

Tue, 11 May 2021 00:04:25 GMT

The first 10 months have passed for the financial year. If you are like most of my clients; you paid no tax last year, thanks to a lot of the government Covid kickbacks. Tax-Free cash flow boost was a real winner for all businesses and writing off your motor vehicles purchases 100% really increased your tax deductions.

In 2021FY most of the JobKeeper benefits were received. Many businesses had a 2-4 week blip in March & April 2020. However afterwards a lot returned to normal trading and some even increased business , i.e. trades, lots of home renovations last year. Some are having their business profit in years or ever.

Now is the time for tax planning for 2021. Review to see what potential tax deductions you can bring forward, purchase some assets you will need and look into extra super to name a few. Plan now, the tax savings are worth the investment . Everyone loves to minimise their tax! Why not you?

Do you really need a Trust to trade

Tue, 04 May 2021 00:07:44 GMT

Setting up a trust is the most expensive structure . There are two parts, the "Trustee" and the Trust itself. Generally, the Trustee is a company (it can be an individual), so this means setting up a company as well. There are many types of trusts, however, for this post I will be referring to a Discretionary Trust.
It does give great asset protection and potential to save tax.
The Trustee company has directors and shareholders.

The profits from the trust have to be paid out to the beneficiaries of the trust.

The beneficiaries will have to include this in their tax returns. Beneficiaries can be individuals or non-individuals.

However, trading your business through a discretionary trust is not ideal. When running your business, you have to reinvest back into the business to ensure it operates profitability in the future. Having to pay cash out to the beneficiaries can be a detriment to the business success.

There are many uses for trust, I don't believe running your business through a discretionary trust the best option. Make it the shareholder of your company...

Why use a company structure?

Mon, 19 Apr 2021 00:14:10 GMT

A company can cost a little more to set up than a sole trader or partnership structure. However, the benefits gained long term more than compensate for the inital investment.

You gain by having personal protection against your personal assets, you can save income tax and the business can be easily transferred and still appear to operate the same without you.

Before creating the company up you will need to check with ASIC to confirm the company name is available. The company will have it's own TFN and ABN, register for GST and for PAYG withholding to pay wages (as you will be an employee in the business).

You'll open a new company bank account. When you take money out of the company bank account for personal expenditure, there will be tax consequences.

It's best to have a plan!

There are many more features to having a company, feel free to reach out if you have questions.

Living the dream (or nightmare)?

Mon, 12 Apr 2021 00:21:42 GMT

You have finally taken the leap and you are going to be self-employed. The most basic business structure you can trade as is a Sole Trader. Being a Sole Trader, you are the business. All you really need to get started is:

To apply for an ABN
Registering for GST is only compulsory if your income (not profit) is above $75k annually
If you would like to have a Business Name, you will need to register this business name with the ASIC.

One of the biggest challenges for new Sole Trader is putting money aside to pay their tax. As a rule of thumb, I advise most clients to put aside 30% of what they earn for tax, i.e. savings. You can use these extra savings for super contributions, as you no longer have an employer paying these for you.

Sole Traders no longer are covered by workers compensation insurance, I would recommend getting some sort of sickness and accident insurance which is similar.

These are some challenges before you start dealing with customers...

Starting a business with a friend..

Mon, 12 Apr 2021 00:19:14 GMT

Are you sick of working for the boss and think you and a friend can do it better?