Super can to improve cashflow for SMEs
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Experienced SME owners can reduce their outgoing costs by restructuring their wage programs to include the Transition to Retirement Pension. The Income Tax Act allows for eligible SME owners to reduce wages and leave extra cashflow in the business through a mechanism called the Transition to Retirement Pension. This enables a portion of income to be earned from super,with considerable tax benefits. SME owners over 55 can receive a highly tax advantaged pension from their super fund. Once over 60, the pension becomes completely tax-free. This means that eligible owners can earn a portion of their income through their super fund while still working. One benefit will be the reduction of wage bills to the SME, without compromising their take home income. One of the major benefit of SME owners placing themselves on some form of pension in a super fund is that the income from the assets that support a pension becomes tax-free in the super fund it iself. For example, if a pension is supported by assets of $200,000 and the fund’s income on those assets is, say, $10,000, normally the tax on that income is $1,500 i.e.15 percent. By simply receiving the minimum pension amount allowable SME […]
Fuel tax credit rate
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Changes made to the Fuel Tax Credit system (FTC) on 1 July have to potential to significantly impact FTC entitlements for many SMEs. Businesses that have a fleet of more than one vehicle will need to familiarise themselves with the changes to avoid paying too much tax. The biggest change is that fuel used in off-road activities, such as forklifts will become entitled to the full credit rate. Before 1 July such vehicles only qualified for a half credit rate. The other major change involves the taxation of gaseous fuels (LNG, LPG and CNG). These fuels that are supplied for use in non-transport activities were previously not subjected to tax. The carbon tax now applies to these fuels. They will now only receive a partial exemption from tax on gaseous fuels. Users of non-transport gaseous fuels may be able to recover some of the carbon tax placed on the fuel if their business is classified within an industry or use that is exempt from the clean energy measures. The following table summarises the impact of the changes for the fuel tax credit update. Fuel type 2012/13 2013/14 2014/15 Petrol (cents per litre) 5.52 5.796 6.096 Diesel and other liquid fuels […]
Tax refunds
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The tax office reports that 5.5 million individuals had lodged their 2011-12 tax returns by early this month, and more than 4.2 million refunds totaling $9.76 billion had been paid. The attraction of a decent refund can be a powerful motivation for millions of taxpayers to file their returns as soon as possible. And, of course, many taxpayers simply want to get the task quickly out of the way. To date, the average refund is $2324 – enough to buy some decent electronic equipment or new summer fashions. Needless to say, struggling retailers would welcome the spending of your refund in their shops.
Running an effective home office Part 2
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Invest in a fast Internet connection if you’re working from home full-time. Once you get used to fast service and being constantly connected to the Internet, it makes email communication and finding information much easier. When you work from home, area you’ll quickly deal with is which expenses are deductible as business expenses and which are not. Most normal business expenses that you would incur whether or not you were working from home: postage, office supplies, advertising, wages are all treated the same way as any other business. You can deduct those expenses as part of your regular deductions for the cost of doing business. However, you have an additional tax savings option on your home office if you qualify, the home office deduction, enabling you to deduct a portion of the cost of your house or apartment used exclusively for business. Be careful! There are many things to consider before taking a home office deduction, including the fact that it is closely examined by the tax office.
Running an effective home office Part 1
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For those who have a home office, the flexibility and extra time spent with the family are the most rewarding aspect. It is also much more cost effective than renting or owning a business premises. There are a few potential issues that come with operating out of your house; here are key points to a few main ones. Now days much communication with customers is done electronically, but what about those times where a face to face meeting is necessary? If you cannot arrange a meeting at the customer’s place of business, you must arrange your space to look professional and efficient. Ideally, your office needs to be separately from your family surroundings. If possible, have a separate entrance or at least a path to your office that doesn’t go through the kids’ playroom or the kitchen. If this is unavoidable always make sure your home is as clean and tidy as possible, a dirty house is a real turn off for potential clients. If you need to, meet customers somewhere else, look for “neutral” locations, such as meeting them in a cafe. If you have an ongoing need, see if you can “sublet” or “rent” a meeting space or […]
Family business dividend rules
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A decision by the ATO to clam down on dividen access share arrangements is is adding to the pressure the ATO is currently putting on family businesses. The tax office has started paying more attention to family groups within the last couple of months, which means those SME’s have had to spend more time on paperwork. Although use of dividend access share arrangement is not widespread, it can be used by family business to distribute dividends where a particular ownership structure is impeding the flow. One solution to the problem of complex ownership structures could be some modification of some tax consolidation rules. These allow for a group of companies to be treated as one payee for tax purposes. If they have one share holding parent company, transactions within that group are ignored.
What Public Relations experts know
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1. Establish a company blog Having a corporate blog is a definite plus for companies of all sizes. A blog is an effective tool for small companies because it gives them a global stage from which to tell their brand story, add value and connect with customers and partners; large companies can benefit from a blog for the same reasons but more importantly because it can help an organisation to appear more ‘human’ with posts written by employees and, preferably, senior executives including the CEO. 2. Be open People appreciate openness and a sense of transparency from company leaders. Earlier this year PR firm Edelman * released its annual Trust Barometer, a global survey that gauges the public’s trust in government, business and the media. One damning statistic from the survey was that only 35 per cent of New Zealanders and Australians found CEOs credible as a company spokesperson. Being open and transparent at all times in your communications is one way to win back the trust of people – if you personally have made a mistake or the company has mis-stepped along the way, say so. Be open to your foibles as much as your strengths when the situation requires it […]
Lost super is lost money for young Australians
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A report has found a large amount of the younger generation have lost superannuation accounts. More than 60 per cent of Australians under the age of 40 may have lost or forgotten about money in super funds. This figure is much higher than for those aged between 40 and 59 who are more likely to keep track of their super. According to the report 54.5 per cent of those with lost super found the process to recover their money too difficult and/or time consuming. This could be due to an attitude of complacency amongst the young towards super. Figures released by the Government announced recently that overall Australians are getting the message about super. The figures show a 14 per cent fall to $17.4 billion from the previously reported total of $20.2 billion. Lost member accounts have also recently improved, from 5 million to 3.6 million – a reduction of 28 per cent. It is not just young people who are losing super accounts though, the report also found that 39.3 per cent of respondents under the age of 50 might not know if they had any unclaimed super. This same group had no plans to chase up their lost […]
SMSF must pay full interest amount
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In regards to related party loans, Self-managed super funds (SMSF) must pay the full interest amount, despite the rate charged or risk having the expense treated as a contribution. If the below market rates of interest could be charged on related party loans to SMSFs it’s just that the agreed rate of interest had to be paid. For example, the related party loan is at 6 per cent, the trustee must pay 6 per cent interest. In other superannuation news the Federal Government has enacted the regulation allowing certain excess contributions to be refunded to fund members. Under the new rules announced in the 2012 budget a breach of the concessional contributons caps of up to $10,000 may be refunded to eligible individuals.
Domestic market ripe for investment
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One benefit of global economic uncertainly is the impact on the local real estate market, which is now a much more attractive investment. The Australia property market is slowing down, especially in rural locations, which were seen as overly expensive twelve months ago. However the strength of the Australian dollar will keep many international investors away, so local investors can reap the benefits. Although there is no end to the current financial uncertainty, many real estate analysts believe the property market is only experiencing a temporary low.
