Small Business

July 2021 Newsletter

July 2021 Newsletter 4256 2832 Website Admin

In this issue:

  • The ATO has seen a lot of mistakes being made on business tax returns over the years, but has kept a record of these so we can all learn from other people’s errors. Laundry expenses can be a legitimate tax deduction, but claims need to follow certain rules, which we sketch out.
  • Every SMSF will come to the end of its functioning life at some stage, but the way in which a fund is wound up can leave members with differing retirement benefit outcomes. And if this tax time’s end result is a tax bill, not a refund, there may be a straightforward explanation.

Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.

Click here to download the latest newsletter

June 2021 Newsletter

June 2021 Newsletter 4256 2832 Website Admin

In this issue:

  • Cryptocurrencies, once again surging in popularity, have a unique tax treatment that every taxpayer dealing with cryptocurrency should be aware of.
  • The ATO has recently updated its guidance material on the operation of the personal services income (PSI) and personal service business (PSB) rules.
  • When you’re faced with a complex or high-risk question in tax or super, briefing a barrister can provide you with the expertise and perspective to help you move towards a solution with confidence.

Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.

Click here to download the latest newsletter

Federal Budget Update

2021-22 Federal Budget Update

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The Government has decided not to go down the austerity path, which will be a relief for many taxpayers and businesses.

Click here to download the Federal Budget update

Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.

May 2021 Newsletter

May 2021 Newsletter 4256 2832 Website Admin
  • It’s getting very close to the business end of the financial year, so we have gathered some tax planning tips that could set you up for a better tax outcome. And as that outcome can be ruined by having to deal with an excess super contribution charge, we look at how best to avoid it.
  • The ATO has tightened the evidence requirements for real property valuations for SMSFs, so we look at how to keep your fund compliant, and also bring some good news with the recently launched SME Recovery Loan Scheme, plus an expansion of the ATO’s independent review service.

Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.

Click here to download the latest newsletter

What Does The End Of Job Keeper Mean For Small Business?

What Does The End Of Job Keeper Mean For Small Business? Lanteri Partners

written by Michael Lanteri .

As much of the world continues to struggle with the impact of lingering second waves and third waves of the COVID-19 pandemic, there’s a few things we can be thankful for here in Australia. 

  1. Being an island has allowed us to remain largely isolated from the rest of the population, and aside from a few quarantine missteps, this has worked well. 
  2. Our government stepped in with various stimulus schemes designed to minimise the impact the pandemic would have on the large-scale economy. 
  3. These first two points has allowed consumer confidence to remain, and people have continued to spend money, thus keeping the liquidity essential for a functional economy to remain intact. 

The initial uncertainty that rolled through in March and April of 2020 as lockdowns came into force and revenue plummeted, stabilised somewhat, for the most part, under the support of the Job Keeper scheme. 

It is a fact that many companies did not qualify for the benefits post September, and some even prospered, opting to give the money back such was their revenue increase. 

Unfortunately, if you were in the retail, hospitality or travel industries, Job Keeper was most likely the respirator that did all the breathing for you. So, now that it’s gone what does this mean for business and the Australian economy? 

  1. 1Unfortunately, there will be casualties by way of insolvencies – estimated to be into the thousands – as companies cannot pay off their debts, or their staff or make any revenue because their industry has been decimated. 
  2. It is likely these insolvencies will become more and more evident in the next 3 months and beyond as the cash dries up. 
  3. The actual “insolvency” rate fell, as in decreased, by 37% in 2020 because of the government benefits. With these benefits gone, it is anticipated that the 2021 figures will be far higher. 
  4. Ultimately, it was predicted a year ago that up to 200,000 business’ could go under as a result of the COVID pandemic – those figures are now estimated to be between the 5,000-10,000 mark – not great, but a far cry from the worst-case scenario. 
  5. There’s no hiding from the knock-on effect of such an outcome. Unemployment. Estimates vary, but it has been cited that up to 150,000 people could find themselves out of work in the coming months as these floundering businesses topple over. 

The unpredictability of spontaneous lockdowns, such as Melbourne’s five day valentines-day hibernation and the most recent events in Queensland are bound to occur, and we can do nothing but weather those storms as they roll in, but in terms of “coming” out of COVID, there’s a few things businesses can do to stay afloat. 

1. Get the correct financial advice! 

You might find that restructuring certain parts of the business is not only necessary to keep things running, but actually makes good business sense moving forward. 

2. Avoid Making Decisions Based on ‘Here Say’ 

Avoid making big decisions based on news articles, or from someone else’s “personal experience”. Even if they are in your industry, the circumstances are not the same and should not be treated as such. Make an informed decision based on your own circumstances and with trusted advisors that understand your situation. 

3. Build a War Chest 

Where you can, save. Save. And then save some more. It is easy to say, but hard to do, but ultimately, it is cash flow that is the life blood of any business. 

4. Know Your Numbers 

Again, a conversation to have with an accountant or financial planner that knows what they’re talking about. Numbers don’t lie. So, use them to navigate the choppy waters that may linger around for a while yet. 

5. Consider Acquisition(s) or Consolidating 

Again, talk to a trusted and experienced financial advisor, – about acquiring a business or selling / consolidating a business can be a sound strategy to ensure things remain on target. Provided the numbers stack-up. 

To state the obvious, no-one knows what’s coming up over the hill, whatever it is, some business’ will not survive, others will thrive, but whatever the case, which such levels of uncertainty, seeking out the correct financial guidance will put you in the best possible position to make the best decision for your situation. 

Small business news

Small business news Lanteri Partners

Here’s an overview of the some of the regulatory changes that could impact your business and some warnings from the Tax Office.

Rethink your business tax return strategy with the ‘debt levy’

The new ‘debt levy’ will directly hit many small businesses, particularly those that are unincorporated – which comprise up to 70% of small businesses – according to tax experts. The new tax kicks in at an annual income threshold of $180,000 but the impact of an increased tax for small businesses represents something of a double whammy for owners as many of them are unincorporated, not subject to the planned reduced company tax rate and still exposed to personal tax rates – and subsequently, the debt levy. Taxpayers Australia’s head of tax, Mark Chapman, advised small businesses to delay paying bills as long as possible and move as many tax deductions as possible into the new financial year in order to maximise relief at the new higher tax rates.

Businesses welcome Small Business Ombudsman

Businesses are applauding the transformation of the Australian Small Business Commissioner into a Small Business and Family Enterprise Ombudsman. The Ombudsman will mainly function as a:

  • mediator for small business dispute resolution
  • national advocate for small business and family enterprises
  • contributor to the development of small business-friendly laws and regulations, and
  • single entry-point agency through which national assistance and information regarding small business can be accessed.

Tax Office homes in on businesses in the cash and hidden economy

The Tax Office has warned errant businesses and individuals that its data-matching program is becoming increasingly sophisticated, as it collects information from banks, government agencies and industry suppliers on purchases of major items such as cars and real estate. “We compare this information with the income and expenditure that businesses and individuals have reported to us. These comparisons allow us to identify businesses that are potentially skimming some or all of their cash takings, running part of their business off the books, or in other ways are not reporting all their income,” the Tax Office said.

Common BAS errors revealed

The Tax Office said businesses could avoid some common errors on business activity statements (BAS) by:

  • reviewing activity statements before lodging
  • checking that all tax invoices are valid
  • checking that expenses and sales are for the current tax period, and
  • checking that invoices are only entered once.

ACCC takes action against businesses that made false carbon tax representations

The Australian Competition and Consumer Commission’s (ACCC) proceedings against Actrol Parts should serve as a cautionary tale to businesses overinflating the effect of the carbon tax on their prices. ACCC contended that the refrigerant gas wholesaler made false or misleading representations and engaged in misleading or deceptive conduct when it implemented significant increases in the price of certain types of hyrdofluorocarbon (HFC) refrigerant gas from July 1, 2012. ACCC chairman Rod Sims said he believes Actrol was simply amassing a stockpile of HFC refrigerant gas prior to the introduction of the carbon tax, and that the price increases were implemented to increase margins and achieve a significant one-off benefit to earnings.