In The Loop with Prime [December]
Another month buzzing with action. We’ve got it all from scams to retirement to the world of remote work. As we kick off our festive season, let us help you deck the halls and manage your holiday party Fringe Benefits Tax (FBT) with ease.
‘Tis the Season of Scams! Watch Out.
Scammers have been around for a long time, but they’re getting more sophisticated. The latest one targeting business owners is Business Email Compromise (BEC). They’ve gotten better with their writing and grammar, so scams are harder to detect. One telltale sign is unusual urgency or an alleged action that must be completed immediately.
When scams work, it hurts. BEC scams are hitting hard. The Australian Cyber Security Centre’s 2020-21 annual report suspects over $81 million in business losses over 12-months just for Australia. Global losses exceeded $2 billion.
So how do you protect your business?
- Monitor abnormal behaviour and activities. Surging remote work means higher use of cloud apps. Always set alerts for suspicious behaviour, like after-hours logins and access requests from unusual locations.
- Monitor email changes. Email migration often exposes vulnerabilities. Always request verification for any payment requests arriving via email.
- Check email addresses carefully. Put on your glasses and scrutinise email sender addresses. Look for weird spelling, extra words or unusual endings of email addresses.
- Enable Multi-Factor Authentication (MFA). With more than one point of security, you’re harder to hack. MFA means multiple identification points to usurp hackers on their first attempt.
- Set-up an internal payment confirmation system. Define how your company will process payment requests and make it the only option. One simple move to eliminate discrepancies and stop scammers in their tracks.
Read more to protect your business from scams.
Putting the Gold into Golden Years: SMSF Changes for 65-75
The retirement runway just got a bit longer. As of July, self-managed super fund trustees between ages 65-75 have been able to make voluntary fund contributions. Ready to contribute?
• Small business Capital Gains Tax (CGT) contributions
• Salary sacrifice contributions
• Personal injury contributions
Several new avenues are open, but it’s important to remember contributions caps – regardless of age or employment status. To contribute, the ATO will send you a determination explaining you can either:
- elect to withdraw the excess portion and pay tax on the deemed earnings at your marginal tax rate (including the Medicare levy)
- retain the excess amount in your fund and pay 47 per cent tax on the entire excess amount.
For the latest on changes to super contributions, read more here.
Remote Work: The Good, the Bad, and the Ugly
The way we work has changed dramatically since the pandemic. While some businesses have returned to an in-office work style, others are solely remote-first, with some remaining hybrid. The rise of remote work brings new challenges – like opting to shrink office spaces, organising work equipment for home, and the issue of ergonomics, just to name a few.
There are some serious savings on operational costs between leases, work equipment, and cleaning services alone, allowing businesses to reinvest funds elsewhere. And many businesses say they’ll continue to offer flexible working arrangements well into the future.
However, there’s a less-than-silver lining lurking in the shadows. Company culture has dropped a few levels. Interestingly, some employees hired during the pandemic say they have never even visited their employer’s office. Without the ability to spread that cultural Kool-Aid, how can workplace connections and culture be kept alive?
In response, some companies are suggesting eradicating WFH options, alongside common perks like development and wellbeing services. But when 50 per cent of the workforce would consider resigning if they were forced to return in-office, who can afford a mass exodus? A talent drain while the country is facing a talent shortage seems ludicrous.
Find out more about some of the shifting attitudes around working from home.
Parties, Gifts, and Taxes – Oh My!
Spread the cheer and share the merriment. Gifts and parties are in the air. But have you considered the official impact on the Fringe Benefits Tax (FBT)? Don’t worry if you haven’t! But here’s what you want to know. Think Friday night fun. Parties held on a usual business day, on-site, and with only staff are exempt. They can’t be claimed as a tax deduction, which makes them exempt from FBT.
Want to do something different? No problem. Parties and gifts under $300 are classed as minor benefits and therefore exempt. Assuming it’s not a regular thing. Here’s your Festive Holiday Cheat Sheet:
Christmas Parties – Employees: Staff holiday parties are non-tax deductible, which means there’s no FBT to worry about.
Christmas Parties – Clients: Christmas parties for clients are also not tax deductible and exempt from FBT. The sky’s the limit and you can spend over $300 per client with full exemption.
Christmas Gifts – Employees: Don’t blow the budget and take a tax break. Gifts under $300 are tax deductible with zero FBT payable. Bigger gifts hurt the pocketbooks and anything over $300 is tax deductible with an FBT of 47 per cent.
Christmas Gifts – Clients: Client gifts are tax deductible without FBT payable, regardless of cost. Time to splurge! But when it comes to entertainment gifts – like event tickets to musicals, concerts, sports or cool trips – are not tax deductible.