Straight Numbers & Tax Talk – October 2015

So we have re-vamped our newsletter and have created the new format specifically with you, our business clients in mind.

Aside from important tax and regulatory information and the usual general, more light-hearted news items, we have included some additional information to give you food for thought in other business areas as well, such as marketing, online matters, human resources and project management, just to name a few.

We hope that you enjoy the new format and see value in reading the other news items that relate to general business practices.

Best regards from the Team at Straight Talk Accounting & Tax

 

Visit www.straighttalkat.com.au to read a multitude of recent articles of vital interest… some are genuinely irreverent but all are relevant.

Government moves to get Single Touch Payroll right

Under Single Touch Payroll, employers’ accounting software will automatically report payroll information to the ATO when employees are paid.

This will eliminate the need for employers to report employee-related Pay As You Go Withholding (PAYGW) in their activity statements throughout the year, and employee payment summaries at the end of the year.

However, the government has advised that it has become aware that a start date of July 2016 will not be achievable for many businesses.

It also recognises the cashflow implications for business of real time payments, and will therefore only be consulting further on real time reporting, with voluntary real time payments, as an option.

It has asked Treasury and the ATO to consult with business and the software industry on the scope and timing for the Single Touch Payroll initiative, with targeted pilots maybe starting from July 2016.

SuperStream date extended for medium to large employers

Although all large and medium-sized employers were meant to be ready for SuperStream by 30 June this year, the ATO has advised that, for those who are not yet ready, it will extend that date by four months until 31 October 2015.

SuperStream for small employers with 19 or fewer employers started from 1 July 2015.

Memorable Quotes…

“When you have mastered numbers, you will in fact no longer be reading numbers, any more than you read words when reading books. You will be reading meanings.”
—W.E.B. Du Bois

GIC and SIC rates

The ATO has published the 2015 September quarter rates for the General Interest Charge (GIC) and the Shortfall Interest Charge (SIC):

GIC annual rate	9.15%
GIC daily rate	0.02506849%
SIC annual rate	5.15%
SIC daily rate	0.01410959%

Three more tax changes for small business

The government has introduced legislation for the following three small business measures that, if passed, will apply from 1 July 2015:

• A tax offset to individuals who run small businesses (with an aggregate annual turnover of less than $2 million), or who have a share of a small business’ income included in their assessable income.
• The tax offset is available to individuals, partners, or beneficiaries of a trust that is a small business entity.
• The tax offset is 5% of the income tax payable on the portion of an individual’s income that is small business income, capped at $1,000 per annum.
• An immediate deduction for some business start-up expenses, such as legal advice and registration fees, including government fees and charges as well as costs associated with raising capital.
• An exemption from FBT where small businesses provide an employee with more than one work-related portable electronic device, even where the devices have substantially identical functions.

A little bit of Trivia…

Monopoly Facts

Monopoly has been a staple family board game since the 1930s, but there are a myriad of fascinating trivia facts about this popular game that many people will probably be completely unaware of.

Since 1935, six billion of the small green houses used in the game have been made. Two hundred and seventy five million sets have been sold, and ten million copies of the mobile version of the game have been downloaded.

The most expensive Monopoly game ever cost two million dollars to purchase and included dice studded with diamonds and a board made out of 23 karat gold. Another unusual version of the game was one made entirely out of chocolate in 1978 by Neiman Marcus, which cost $600.

The record longest game of Monopoly lasted for seven consecutive days. The board is available in forty-three different languages and currently features eight tokens, in the form of a dog, a car, a cat, a thimble, a shoe, a wheel barrow, a battleship, and a top hat.

Increase Your ‘tech’ IQ—Tips for Online Safety

Passwords are important for security on the Internet, but they can be double-edged swords, particularly if you use the same password for multiple accounts, which many people do due to the difficulty of trying to remember dozens of complex passwords.

The best advice is to focus on the accounts that really matter, such as online bank accounts, your email account(s), and shopping accounts that include your credit card details. Make sure you have completely original, non-repeated passwords for these accounts. Email accounts are very important because they serve as the gateway for having passwords reset on other services, including Amazon accounts, etc.

You may also want to prioritize your social media accounts and maybe even the accounts of Internet forums that you particularly value. Although this may not be as serious as an online bank account with large amounts of money involved, the stealing of a forum account of which you have been a member for a long time can be distressing and embarrassing.

Tax support service for drought affected communities

The government has announced a new service to help drought affected communities manage their tax affairs when times are tough, and has set up a dedicated hotline on 13 11 42.

The ATO will work with the Department of Agriculture to identify drought-affected taxpayers, and will provide personalised assistance and customised support plans for business owners and communities in these areas.

The ATO has also undertaken to get in contact with businesses in drought-affected communities to make sure they are aware of the options available to help them meet their obligations.

Use Instagram for B2B

Instagram is way ahead of other channels in regards to engagement, with the photo-sharing platform delivering as much as 58 times more engagement than is the case with Facebook and a hundred times more than Twitter. The app is used by more than 300 million people, and many brands have jumped onto the bandwagon including a number of B2B companies. Instagram can be used to showcase your brand, share pictures taken at a company event, and nurture employee engagement.

Images are the way to go with Instagram, but captions are also a very good idea, and unlike Twitter, there is no character limit either, enabling you to get a lot of information and detail across in the process. Identifying and making use of trends can help you to keep your B2B Instagram feeling relevant, up to date, and reaching out to the right demographic.

Another good tip is to include photographs of your team. This helps you to celebrate the people and the culture of your business and creates a further feeling of engagement and familiarity for your audience.

Changes to the way taxpayers claim work-related car expense deductions

Currently, taxpayers have an option to use one of four methods to determine their work‑related car expense deductions.

The government is proposing to reduce the number of methods by removing the ‘12% of original value method’ and the ‘one-third of actual expenses method’.

These methods have been used by fewer than 2% of those who claim work-related car expenses.

The other two methods, the ‘cents per kilometre method’ and the ‘logbook method’ are being retained.

The ‘cents per kilometre method’ is also being changed by replacing the three current rates based on engine size with one rate set at 66 cents per kilometre, which applies to all motor vehicles.

The government says that these changes will enable tax payers who drive electric and hybrid vehicles to claim on a cents per kilometre basis, which is not currently an option for them.

The amendments apply to the 2015/16 income year and later income years.

Employee share scheme changes

The ATO has announced that, from 1 July 2015, there are new rules for the tax treatment of employee share schemes (ESSs), as well as tax concessions for start-up companies.

The ESS changes allow employees to now own up to 10% of shares in their employer company (up from 5%).

Under the new rules, if shares are acquired in a start-up company at a discount of up to 15% (relative to market value), then the discount is exempt from CGT and income tax.

Any subsequent capital gain is therefore calculated on the market value when the share was acquired.

Editor: If clients need more information on these changes please contact our office.

FREE Tax Blaster Session

There are a number of ways that individuals and small business operators can legally slash their tax. We find that many of our clients only begin to realise after a chat with one of our professional tax agents how much tax they could have saved if they had taken action earlier.

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Laughter is the best medicine

Calling in Sick

Salary negotiations between a union and a big organization weren’t going well. The main issue was that management believed workers were abusing the sick leave policy.

During one tense meeting, a manager hurled that morning’s newspaper onto the conference table.

“Look at this! This employee called in sick yesterday!”

The union negotiator looked and saw a picture of the employee holding up a trophy for winning second prize in a golf tournament.
“What do you say to that?” the manager demanded.

“Wow,” the union official said. “If he hadn’t been sick, he might have won!”

Telstra 2014 share buy-back

Clients who participated in the October 2014 Telstra off-market share buy-back will need to take that into account when lodging their 2014/15 income tax return.

Taxpayers received a payment of $4.60 per share that they sold, which consisted of: a fully franked dividend of $2.27 per share; and a capital component of $2.33* per share.

Note (*): For CGT purposes, participants in the buy-back are deemed to have received $2.77 as the capital component of the buy-back price.

Editor: Please contact our office if you would like to discuss.

Birds of a Feather

A crow living in a forest was absolutely satisfied in life. Then one day he saw a swan. “That swan is so white and beautiful,” he thought. “He must be the happiest bird in the world.”

He flew over to tell the swan what he thought. “Actually,” the swan replied, “I was the happiest bird around until I saw a parrot with many colors. Then I realized that the parrot must be the happiest bird in creation.”

Soon after, the crow spotted a parrot in a tree and flew up to share the swan’s words. The parrot said, “I was very happy until I saw a peacock in the zoo with beautiful wings and lots of colors. Everyone was admiring his bright plumage, and I thought he must be the happiest bird in the world.”

The crow found the zoo and saw hundreds of people peering at the peacock’s beautiful colors. From above the cage, the crow called to the peacock. “You are so beautiful! Every day thousands of people come to see you. When people see me, they immediately shoo me away. I think you are the happiest bird on the planet.”

The peacock looked up at the crow. “I always thought that I was the most beautiful and happy bird anywhere. But because of my beauty, I was captured and put in this zoo where I can’t fly, and people just stare at me all day. So now I think that I would be happier as a crow, so I could fly everywhere.”

ATO’s apps and other online tools

As a result of user feedback, the ATO has improved their ATO Small Business app and it continues to expand in functionality and usability.
The most useful features for small business include:

• ABN Lookup, which verifies business details.
• Tax withheld calculator, which shows how much tax to withhold.
• Key dates, which can set important tax and super reminders and alerts.
• Report a concern, which enables users to report suspected tax evasion.

The ATO has also released a new function for the app which includes a business performance check tool (which provides a snapshot of profitability, cash flow, working capital and debt serviceability).

It also compares a business’s performance against similar businesses in its industry using the benchmark database.

Learn How to Sell Your Ideas

Your best ideas will go nowhere unless you can communicate them to others. Whether you’re trying to explain to your boss, your employees, or potential investors, you must be able to make other people understand exactly what your idea is and what it can do for them. Try these tactics:

• Practice pitching. Start by explaining your idea to your family, friends, even strangers. Pick people who will be supportive and others who are likely to be negative so that you learn how to respond to both.
• Know your audience. One size does not fit all. Practice tailoring your basic message, so it can be understood by any audience, from shop-floor workers to patent attorneys.
• Check often for understanding. Ask, “Are you following me?” or, “Do you understand?” Ask listeners to paraphrase your thoughts so that you know they are catching your drift.
• Don’t go overboard. Pick the most important points to explain. Don’t overwhelm your listener with more information than he or she needs.

The ATO’s new approach to dispute resolution

According to the Commissioner of Taxation, Chris Jordan, the ATO has put in place a number of strategies to resolve disputes as early as possible, in a way that is “less painful, less costly and better for participation in the system in the long run.”

“We’ve also increased use of Alternative Dispute Resolution (ADR) . . . ADR is cheaper, faster and often a more successful path to sorting things out instead of drawn out legal disputes.”

In addition, in response to concerns about ATO officers from the same department reviewing each other’s decisions when challenged by taxpayers, their small business objections work has been moved out of the ATO’s Compliance group to their separate Review and Dispute Resolution area under a different Second Commissioner: “This is intended to give anyone in dispute with us, a fresh set of eyes to the issue.”

Editor: He also stated that the ATO is working with other government agencies to improve the experience for small businesses, such as working with Business Enterprise Centres, to help new businesses get off the ground, and leading ‘Small Business Fix-It squads’ across government to discuss the issues small business owners face and what they can do to fix them, such as redesigning the ASIC business name transfer process to reduce red tape.

ATO data matching program – visa holders

The ATO has advised that it has developed a Visa Holders Data Matching Program with the Department of Immigration and Border Protection to assist it to effectively detect and deal with compliance risks within the visa holding population.

The ATO intends to acquire visa information for visas granted between 1 July 2013 to 30 June 2015, and future periods between 1 July 2015 and 30 June 2017 (it is estimated that the total number of records that will be obtained is for more than one million individuals).

The purpose of this data matching program is to ensure that taxpayers are correctly meeting their taxation obligations, including registration, lodgement, reporting and payment responsibilities.

Information sought includes:

• address and contact history for visa applicants and sponsors and for migration agents (who assisted or facilitated the processing of the visa);
• information on all visa grants;
• all international travel movements undertaken by visa holders (arrivals and departures); and
• details on education providers (i.e., educational institutions where a student visa holder intends to undertake their study).

Editor: In terms of data matching, the government has also confirmed that the transaction types below that occur after 30 June 2016 will be reported by relevant third parties to the ATO:

• payments of grants and other financial benefits for services to government entities;
• transfers of securities; and
• business transactions made through electronic payment systems, such as credit and debit cards and online payment methods.

New guidance from ATO regarding GST for Uber (and similar) drivers

Editor: For those clients providing ‘ride-sourcing services’ (such as those offered via Uber), the ATO’s latest communication on this matter contained the following examples.

“If you provide ride-sourcing services to the public you are likely to be carrying on an enterprise.”

“If you are registered, or required to be registered, GST must be calculated on the full fare, not the net amount you receive after deducting any fees or commissions.”

“For example, if a passenger pays $55 and the facilitator pays you $44 (after deducting an $11 commission), the GST payable is $5 (not $4).”

“GST credits on your business purchases can be claimed, but must be apportioned between business and private use.”

“For example, if you use your car 10% for ride-sourcing and 90% for private purposes, and you:”

• buy a new car to use for your ride-sourcing activity for $33,000 (including $3,000 GST), you may claim a GST credit of $300;
• pay $110 for fuel (including $10 GST), you may claim a GST credit of $1; and
• pay $220 for a service (including $20 GST), you may claim a GST credit of $2.”

Registering an SMSF for an ABN

Editor: The ATO has provided the following advice regarding self-managed superannuation funds (SMSFs) applying for an ABN. The guidance is probably most relevant where a person aged over 65, who is not working, wishes to set up a new SMSF and roll over into that SMSF an amount from another fund. If you have any issues, please contact our office.

A SMSF cannot be registered if no assets are held. Therefore:

If a member expects to receive a rollover, transfer or contributions in the near future, an SMSF can be established with a nominal amount (for example, $10). Once an ABN is issued, a bank account can be opened and the $10 deposited. The $10 is regarded as a contribution and allocated to a member.

Where a member cannot contribute to the SMSF (for example, they are 65 or over and do not meet the work test), the ATO can apply an administrative discretion to allow this nominal contribution. In all cases, the nominal contribution must be allocated to the member solely for the purpose of registering the SMSF. The member must receive further money into the SMSF (such as a roll-over) before the end of the income year the fund was established.

Manage Projects Better with These Questions

Managing a project isn’t the same as supervising ongoing operations in your workplace. To ensure that the next project you’re responsible for goes smoothly, start by asking these questions:

What’s the purpose of the project? Find out exactly what’s wanted—the ultimate outcome. This includes the big picture as well as the fine details: What will the result look like? What will it do? What impact will it have?

Who stands to benefit? Your boss isn’t the only person you have to please. Find out who the “clients” are. These may be the people who buy your products or other employees of your organization. Get input so you’ll know what they expect.

How are you expected to proceed? Find out what methods your organization expects you to use. Will you hire outside contractors or bring people in from your workforce? What information resources are available? How will you monitor progress and test your results?

What’s the schedule? You’ll have deadlines. Establish a series of milestones, so you’ll know when you’re on track—or when unavoidable developments are throwing you behind. Discuss long-term and short-term requirements with your stakeholders, so you can adjust your efforts accordingly.

Reasonable Overtime Meal Allowance Amounts – 2015/16

The reasonable amount for overtime meal allowance expenses for 2015/16, where an allowance is paid under an award, order, determination, industrial agreement or a Commonwealth, State or Territory law, is as follows:

Description	Reasonable Amount in $
Per Meal	28.80

Keep the Air Flowing Throughout Your Workplace

Air quality is important in any workplace. Inadequate ventilation can cause headaches, dizziness, sinus problems, itchy or watery eyes, scratchy throats, and difficulty concentrating on one’s work. Take these steps to keep fresh air flowing (and avoid costly penalties):
Keep air vents clear. Don’t block vents with boxes, books, or anything else that might impede air flow.

Eliminate odors. Keep your lunch area clean. Avoid air fresheners that try to mask odors with other strong scents. Wipe down plants to remove dust and help them produce more oxygen.

Open windows and doors. Keep windows open as much as possible to bring in fresh air. Don’t close office doors unless privacy is needed.
Install fans. Fans in kitchens and bathrooms will clear out odors and mildew and will improve air quality around your workplace.

Clean regularly. Employees or a cleaning crew should take care of areas where odor-causing bacteria, mold, and other substances may build up.

Store chemicals properly. Make sure any potentially toxic cleaners or other chemical products are locked away where they can’t spread fumes throughout your workplace.

Follow Correct Procedures Whenever You Lift a Load

Lifting heavy items incorrectly can injure your back and other parts of your body. Whenever you have a heavy object to move, follow these basic rules for staying safe:

• Bend at the knees.
• Keep your head up.
• Keep your back straight.
• Lift with your legs, not your arms or back.
• Keep the object close to your body.
• Don’t twist your back as you walk.
• Maintain stable footing.
• Ask for help if the load is too heavy for you to move on your own.

Social Media – Proofreading Tips for Content Providers

Proofreading is a vital skill for anyone who wants to be successful writing content in the world of social media. Any of your marketing or writing efforts will be useless if this vital aspect of the process is skipped or incorrectly performed. The overall impression being made by your content can be completely ruined by sloppy spelling and punctuation, poor word usage, or bad grammar. Proofreading can be a very tedious process, and it can also be extremely difficult for writers to spot even simple mistakes in their own work simply because of how close they are to it.

One good tip that can make it easier for writers to spot errors in their social media content is to read it aloud. This can allow a writer to see their work from a different perspective and enable mistakes to stand out more. It is also a bad idea to rely too much on spell-checking software, as not only do they not spot all mistakes (sometimes a word can be spelled incorrectly but still be an actual word, in which case the spell-checker may not pick up on it), but in some cases their suggestions for corrections are actually wrong.

FREE Copy of Our Book

We hope that you’ve enjoyed this edition of the Straight Numbers & Tax Talk.

As a Thank You to our readers we’ll give away a FREE copy of our highly sought-after book titled “Straight Money Talk – A Straightforward Plan for Financial Independence” (worth $17.95), PLUS the accompanying workbook “5 Steps to Financial Independence”.

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Please Note: Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.