Changes your business need to know.

Changes your business need to know.

With the world operating at such a fast pace, laws and legislation are trying to keep up, and so do you and your business.

With the world operating at such a fast pace, laws and legislations are trying to keep up and the ATO is no different, with the introduction of many new features and improved functions being made to their online systems for reporting purposes. This is what you need to know to make sure you are ahead and planned for these changes.

  1. AUSkey to be made redundant

From 1 April 2020, the AUSkey system will be replaced as the reporting tool between businesses and the ATO. This new online services system will be through the use of myGovID and Relationship Authorisation Manager (RAM) instead.

Susan Franks, senior tax advocate at Chartered Accountants Australia and New Zealand (CA ANZ), says,  “the ATO says this new process will be a more secure, streamlined and flexible way to report information to the ATO.”

  1. E-Invoicing

With more than 1.2 billion invoices exchanged in Australia annually, and Australian small businesses collectively owed $26 billion in unpaid invoices at any given time, the ATO believes e-invoicing could be the answer.

The ATO believes with increased efficiency in invoicing, the economy would save an estimated $28 billion over ten years. This year the federal government will begin its e-invoicing framework, committing to pay electronically supplied invoices from small business suppliers within five days, to the value of $1 million, or interest will be applied.

But how does it work? E-invoicing us an automated process to submit and process an invoice in a digital format. E-invoices are received into the business’s financial systems, minimising the risk of fake or compromised invoices due to a direct exchange of invoices between a supplier and a buyer’s computer systems.

Although the ATO reports e-invoicing will not be compulsory for all businesses, it is definitely suggested with cost savings on invoicing processing up to 70% as well as increased cash-flow.

  1. Single Touch Payroll (STP)

The introduction of STP has been met with some resistance in it’s transparency and guarantee provided that employers are meeting their payroll obligations. However, as the transition to the digital reporting platform is being made penalties will soon start to apply for those who have not adopted the STP in their business.

Small businesses (less than 20 employees) were granted a three-month extension to 30 September 2019 to make the transition, and penalties will be waived until 30 June 2020. However, for larger employers (more than 20 employees), penalties already apply from the beginning of FY 2019-20.

To avoid penalties and make sure you are compliant with all the latest changes please get in touch with your Prime Accountant today, 9415 1511 or email reception@primeadvisory.com.au.

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Driving into a new stage of life.

Driving into a new stage of life.

For those who haven’t been to our office and seen the wall, each month we will be introducing you to our latest inductees. This month we present husband and wife team Peter and Jacki who have recently achieved their 20-year long dream.

This month we induct two very hardworking clients to the ‘OnTrack for Life Wall,’ husband and wife duo Peter and Jacki. They first became clients of PrimeAdvisory (utilising both the Accounting and Wealth divisions) over ten years ago on the recommendation from a friend. In moving back to Australia after over 25 years as ex-patriots Peter and Jacki were after someone to correctly structure and manage their finances.

When starting as clients of PrimeAdvisory, Peter was working offshore as a power station engineer advancing through many roles in his career. Jacki played a very influential part in the assistance of many charities, namely the AUS NZ Women’s Association and the community centre for ex-pats in Jakarta.

Since then, they have achieved several goals in their time working with Financial Advisors Ben Norval and Guy Wall, a major focus has been maximising their superannuation which is often missed by being offshore.  Also, a 20-year long dream for Jacki was to buy a Jaguar. In being ex-pats for over 30 years, both Peter and Jacki have required drivers, after being requested not to drive and have not had a car of their own. Their dream was always to purchase and drive nice cars upon their repatriation to Australia. Peter was also able to treat himself to a more beautiful car than he expected he could achieve financially in his latest purchase of an Aston Martin.

Attributed to much hard work and sacrifice, both Peter and Jacki now define success as being comfortable and established to afford luxuries without worrying and being able to assist their family. They have been able to look after their parents and financially assisted their eight nephews and nieces, some already securing property.

Peter and Jacki are very humble and gentle people who have contributed a lot to society, and we are honoured to induct them into the ‘OnTrack for Life Wall’ this month.

If this story inspired you or you have one similar you would like to share, please get in touch on 02 9415 1511 or email reception@primeadvisory.com.au.

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Merry Christmas from the ATO, with love Mum & Dad

Merry Christmas from the ATO, with love Mum & Dad

How you can easily help your offspring add an extra $500 to their super account from the government. Learn more about the superannuation government co-contribution. 

What is the co-contribution?

Are you or a loved one earning less than $53,564 in the 2019/20 financial year? Pending below eligibility criteria you could boost you/ your offspring’s retirement savings by up to $500 (You’re boosting by $1,500 (Add $1,000 + $500 from the Govt). The contribution is paid at the rate of 50 cents for every eligible dollar to a maximum of $500 as per the below indicative table.

Superannuation Co-contribution Payable
Total Income Personal Contribution
$1,000 $800 $500 $200
Potential Government Contribution
$38,564 or less $500 $400 $250 $100
$39,564 $467 $400 $250 $100
$44,564 $300 $300 $250 $100
$48,564 $167 $167 $167 $100
$51,564 $67 $67 $67 $67
$53,564 $0 $0 $0 $0

So, what’s the eligibility?

If you meet the following criteria you may be eligible for the superannuation co-contribution this financial year!

  • You make personal contributions (after-tax) to a complying superannuation fund
  • Your total income* is less than $53,564 (less than $38,564 to receive the maximum)
  • At least 10% of your total income is from eligible employment, carrying on a business, or a combination of the two
  • You do not hold an eligible temporary resident visa during the financial year
  • You lodge a tax return for the financial year
  • You do not exceed the non-concessional contribution cap for the financial year
  • You are under age 71 at the end of the financial year

And, how much co-contribution is payable? 

If your total income is less than $38,564 the Government may contribute 50 cents for every $1 you contribute, up to a maximum of $500.

FOR EXAMPLE: John & Jane have a 19-year-old son Harrison who works part-time whilst studying and earns around $20,000 per year. John and Jane could give Harrison $1,000 to add to his super fund, and the government will top this up with an additional $500.

I’m eligible, now what do I need to do?

Make your personal contribution, the tax office will do the rest. Assuming you lodge your tax return on time the co-contribution should arrive within several months after that. Further, you will receive a letter from the tax office to confirm the amount of the contribution and to which fund.

Did you enjoy reading this article and want more of this? Ensure you are signed up to our newsletter or contact PrimeAdvisory for more on 02 9415 1511 or email reception@primeadvisory.com.au.

 

* Total income is your assessable income plus reportable fringe benefits plus reportable employer superannuation contributions (essentially salary sacrificed contributions in excess of the superannuation guarantee). 

This strategy is not for everyone and has been provided as general information only and prepared without taking into account your financial position, objectives, and needs. You should consider its appropriateness and seek financial advice before making any financial decisions.

 

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The super guarantee charge (SGC).

The super guarantee charge (SGC).

All you need to know about the super guarantee charge and how to ensure compliance and avoid penalties.

What is the SGC? Super Guarantee Charge

To explain this simply the super guarantee is a compulsory amount that an employer must pay into their employee’s chosen super fund as part of their employment conditions. The employer has 28 days after the end of each quarter to make this payment.   If the employer fails to pay the employee’s super by the due date, then this is when the Super Guarantee Charge is applied.

The SGC is a charge incurred if you don’t pay the minimum amount for your employee into the correct fund by the due date. The charge is non tax-deductible and calculated to include the following;

  • Super guarantee (including any choice liability)
  • Interest on the above amounts (currently 10%)
  • An administration fee of $20 per employee, per quarter

You must report and rectify any missed payment and lodge an SGC statement by the due date and pay the SGC to the Australian Tax Office (ATO).

If you pay your super guarantee late, you may be able to use the late payment rules either to offset the SGC or to carry forward the amount as a pre-payment of a future contribution for the same employee. However, you must still lodge an SGC statement and pay the balance of the SGC to the ATO.

Please note the following dates;

Super Guarantee reporting and payment due dates;

Quarter Period SG Reporting & Payment Date to the Employee’s Super Fund
1 1 July – 30 September 28 October
2 1 October – 31 December 28 January
3 1 January – 31 March 28 April
4 1 April – 30 June 28 July

If you don’t pay the minimum amount by the above reporting and payment dates you will need to adhere to the SGC schedule lodgement and payment due dates as below;

Quarter Period SGC Payment & Lodgement with the ATO by the following dates
1 1 July – 30 September 28 November
2 1 October – 31 December 28 February
3 1 January – 31 March 28 May
4 1 April – 30 June 28 August

With the implementation of data matching, single touch payroll and generally the ATO being more active in this area noncompliance will be easier for the ATO to discover.

For more on the above please click here or get in touch with your PrimeAccountant on 02 9415 1511 or email reception@primeadvisory.com.au

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Don’t get caught out by the ATO.

Don’t get caught out by the ATO.

ATO’s data matching technology shining light on undeclared income. Here’s what you need to know.

The progression of technology has seen many changes, both good and bad. This progression in technology is now assisting the ATO to ensure that people and businesses comply with their tax and super obligations and is also assisting in detecting fraud.

Data is first collected from;

  • Your employers
  • Bank and financial institutions (including overseas banks)
  • Health insurance funds
  • BAS statements
  • Superannuation accounts
  • Property information from the state

Armed with this data, comparisons are made to the information provided in your tax return. The intention of this technology implementation is to identify taxpayers with any omission of income or fraudulent deductions.  The ATO can reassess previous year’s tax returns with the power to issue fines and penalties, even interest in some cases for non-compliance.

The technology is especially advantageous in ensuring all income from secondary jobs such as rent from Airbnb, Uber and Cryptocurrency are declared. As written about last month, the gig economy is taking on the economy.

Further, “Crypto transactions, in particular, will undergo greater scrutiny than ever before, with the ATO estimating that records relating to between 500,000 and 1 million individuals, who have or may be engaged in buying, selling or transferring cryptocurrency, will be analysed by the ATO this tax time.” Mark Chapman explains.

Similarly, tradespeople and sole traders who may have been working ‘off the books’ are now at risk with the ATO checking bank accounts and cross referencing to any ABNs.

Remember that data matching is here to stay and it’s not too late to rectify with the ATO offering “voluntary disclosures”.

For further information call your Prime Accountant today on 9415 1511 or email reception@primeadvisory.com.au.

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