Federal Government Economic Stimulus Update

STIMULUS UPDATE TAKE 3

Further to our previous two posts, government has announced further measures to help businesses and employees in need. Additional $130 Billion stimulus package will mean businesses will be paid up to $1,500 a fortnight for each employee, as part of a “Job Keeper payment”. Major Banks have also announced further measures to assist with deferral of loan repayments for loans up to $10 mil. Temporary moratorium on evictions was also announced.

JOB KEEPER PAYMENT

Under the Job Keeper Payment, businesses impacted by the Coronavirus will be able to access a subsidy from the Government to continue paying their employees. Affected employers will be able to claim a fortnightly payment of $1,500 per eligible employee from 30 March 2020, for a maximum period of 6 months. The idea behind this is that employers continue their relationship with their employees throughout the next 6-month period so they can restart the economy easier once we bridge the current situation impacting all of us.

Employers will be eligible for the subsidy if:

  • their business has a turnover of less than $1 billion and their turnover will be reduced by more than 30 per cent relative to a comparable period a year ago (of at least a month); or
  • their business has a turnover of $1 billion or more and their turnover will be reduced by more than 50 per cent relative to a comparable period a year ago (of at least a month); and
  • the business is not subject to the Major Bank Levy.

The employer must have been in an employment relationship with eligible employees as at 1 March 2020, and confirm that each eligible employee is currently engaged in order to receive Job Keeper Payments.
Not-for-profit entities (including charities) and self-employed individuals (businesses without employees) that meet the turnover tests that apply for businesses are eligible to apply for Job Keeper Payments.

Eligible employees are employees who:

  • are currently employed by the eligible employer (including those stood down or re-hired);
  • were employed by the employer at 1 March 2020;
  • are full-time, part-time, or long-term casuals (a casual employed on a regular basis for longer than 12 months as at 1 March 2020);
  • are at least 16 years of age;
  • are an Australian citizen, the holder of a permanent visa, a Protected Special Category Visa Holder, a non-protected Special Category Visa Holder who has been residing continually in Australia for 10 years or more, or a Special Category (Subclass 444) Visa Holder; and
  • are not in receipt of a Job Keeper Payment from another employer.

If your employees receive the Job Keeper Payment, this may affect their eligibility for payments from Services Australia as they must report their Job Keeper Payment as income.

Businesses without employees

Businesses without employees, such as the self-employed will also be eligible for the Job Keeper Payment if their income has been reduced by 30% or more

Accessing the Job Keeper Payment

  • Register an intention to apply on the ATO website https://www.ato.gov.au/general/gen/JobKeeper-payment/ and assess that you have or will experience the required turnover decline
  • Provide information to the ATO on eligible employees, if using STP some of this will be done automatically, in case of self employed nominate an individual to receive the payment and provide that individual’s Tax File Number
  • Ensure that each eligible employee receives at least $1,500 per fortnight (before tax). If the employee presently receives less, their income must be topped up to the full amount. Super is still payable on the original wage amount, the employer has the option if they want to pay superannuation on any additional wage paid because of the Job Keeper Payment
  • Notify all eligible employees that they are receiving the Job Keeper Payment.
  • Continue to provide eligibility information to the ATO on a monthly basis, including the number of eligible employees employed by the business.

MAJOR BANK FURTHER MEASURES ANNOUNCED

  • 6-month deferral of payments extended to business with lending up to $10mil
  • Lenders will be seeking commitment from commercial landlords to not evict tenants in the next 6 months as part of the deferral
  • Existing deferral for individuals impacted on home loans and investment loans is still available. Please exercise caution as the interest component on deferrals will be capitalised resulting in loan balance increase at the end of the deferral period
  • Many lenders are also offering reduced rates so we suggest to renegotiate the rates first

MORATORIUM ON TENANT EVICTIONS

  • 6-month temporary moratorium on all tenant evictions was enacted by the PM on Sunday
  • While this may be good news for those struggling to make rent payments it’s also a worrying period for property investors relying on rent as income
  • No further detail was provided what happens at the end of the period with unpaid rent payments and if insurers will cover the loss
  • Advice for tenants in case of financial hardship is to talk to your landlords and come up with a solution that helps both of you
  • Advice for investors in case of tenant default is to understand the extent of tenant impact, explore deferring the loan repayments for 6 months, also speak to your insurer to see if they will cover the loss of rent
  • Commercial tenants and landlords are encouraged to negotiate best outcomes for all parties involved. Rent free periods or temporary reduction on rent are options that should be explored.
  • Further government announcements on this very issue are likely. We will update you on those as they happen

Our previous two announcements detailing the other components of stimulus for those who may have missed them are available for you to read on our website and Facebook page.

OUR COMMITMENT TO YOU
 
Many of you will need our help to navigate these announcements. We are here to help you whether it is assistance in

  • Interpreting the government stimulus packages,
  • Applying for payment relief from the ATO or lenders,
  • Working through strategies during this time of distress
  • Accessing the SME Guarantee Scheme, or
  • General cashflow assistance with the day to day operation of your businesses

Cash flow will be important to all our businesses over the coming months and therefore we are prepared to offer assistance via payment terms for our services if required. Please do not hesitate to discuss this with us.

Some of our staff will be working from home while others will be in the office. We are keeping our availability as flexible as possible and will remain contactable throughout this period.

Please rest assured that during this time, no phone call or email will go unanswered and we will continue to update you as more comes to hand.

Federal Government Economic Stimulus Update

WE ARE HERE TO SUPPORT YOU

We know many of you are doing it tough at the moment. We are here to support you with your financial needs the best way we can.

Further to our previous email second stage of economic stimulus has been announced on the weekend. Totalling $189 Billion stimulus package aims to support your businesses and employees. Major Banks have also announced measures to assist with deferral of loan repayments.

Supporting the Business cashflow

  • Up to a $100k reduction of PAYG withholding payments over 6 months for period between Jan – Jun 2020. With a further similar reduction likely in the Jul – Sept period. In addition, the minimum payment is being increased from $2,000 to $10,000 per quarter meaning that if your business is withholding less than $10k in PAYG per quarter you will be seeing the difference as a credit on your integrated account
  • SME Guarantee Scheme, the Government will provide a guarantee of 50% to SME lenders for new working capital loans up to $250,000 for small businesses from 1 April. Government is cutting red tape and streamlining the lending requirements making it easier for business to access the much-needed funds.
  • SME’s will have access to defer principal and interest repayments on a range of business loans for up to 6 months. Similar measures are available on personal home loans for impacted small business owners. Note as it stands all lenders are capitalising the interest component meaning your loan will grow slightly during the deferred period.
  • ATO is allowing deferral of payment dates for income taxes also allowing remission of interest and penalties incurred post 23 Jan 2020. ATO will also allow business to enter into low interest payment plans.
  • NSW state government is providing a 25% reduction on Payroll Tax with no payment required for the months of March, April or May 2020. The tax-free threshold will increase from $900,000 to $1 million from July 2020 providing further relief for next financial year
  • Sole traders with a reduction in turnover of 20% or more will have access to early release of superannuation up to $10,000 before 1 July 2020. A further $10,000 will be available from 1 July 2020 for approximately three months. This payment will be tax free

Supporting the individuals and sole traders

  • Temporary early release of superannuation up to $10,000 before 1 July 2020 for those impacted by redundancy, unemployment or reduction in employment greater than 20%. A further $10,000 will be available from 1 July 2020 for approximately three months. This payment will be tax free
  • Temporarily reducing superannuation minimum drawdown requirements for account-based pensions by 50% for 2019-20 and 2020-21. Benefiting retirees by reducing the need to sell investment assets at a loss to fund minimum drawdown requirements.
  • Two separate $750 payments to social security, veteran and other income support recipients
  • An additional $550 per fortnight Coronavirus supplement for jobseekers, youth allowance and parenting payment recipients

Cutting the red tape

  • Temporary exemption from responsible lending obligations for lenders providing credit to existing small business customers
  • Temporary relief to directors’ personal liability for trading while insolvent
  • Temporary increase in thresholds for statutory demands on debt and bankruptcy

OUR COMMITMENT TO YOU

Many of you will need our help to navigate these announcements. We are here to help you whether it is assistance in

  • Interpreting the government stimulus packages,
  • Applying for payment relief from the ATO or lenders,
  • Working through strategies during this time of distress
  • Accessing the SME Guarantee Scheme, or
  • General cashflow assistance with the day to day operation of your businesses

Cash flow will be important to all our businesses over the coming months and therefore we are prepared to offer assistance via payment terms for our services if required. Please do not hesitate to discuss this with us.

Some of our staff will be working from home while others will be in the office. We are keeping our availability as flexible as possible and will remain contactable throughout this period.

Please rest assured that during this time, no phone call or email will go unanswered and we will continue to update you as more comes to hand.

Our thoughts go out to you. Stay strong.

Please contact us if you need to discuss this further.

Federal Government’s economic response to the Coronavirus

Federal Government’s economic response to the Coronavirus

In response to the Coronavirus crisis, the Federal Government has outlined new measures in a stimulus package worth nearly $18 billion. SMEs, pensioners and selected sectors such as tourism will be the biggest beneficiaries in an effort to boost the economy and save jobs. Below is a summary of the measures outlined in the plan.

1. SUPPORT FOR BUSINESS INVESTMENT

The following measures are designed to assist Australian businesses and economic growth in the short term:

INCREASING THE INSTANT ASSET WRITE-OFF

  • Threshold increased from $30,000 to $150,000
  • Applies to businesses with aggregated turnover of less than $500 million (up from $50 million)
  • Applies from the announcement to 30 June 2020
  • The $150,000 threshold applies on a per asset basis so eligible businesses can immediately write-off multiple assets
  • Applies for new or second-hand assets first used or installed ready for use by 30 June 2020.

INVESTMENT INCENTIVE

  • A deduction of 50 per cent of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost
  • Applies to businesses with aggregated turnover below $500 million
  • Eligible assets are new assets that can be depreciated under Division 40 of the ITAA97 (i.e. plant, equipment and specified intangible assets) acquired after the announcement and first used or installed by 30 June 2021 (NOTE: This measure does not apply to second-hand Division 40 assets or capital works subject to Division 43).

2. CASHFLOW ASSISTANCE FOR BUSINESS

TAX-FREE PAYMENTS UP TO $25,000 FOR EMPLOYERS

  • Tax-free cash flow support between $2,000 and $25,000 will be available to eligible businesses with a turnover of less than $50 million that employ staff between 1 January 2020 and 30 June 2020.
  • This is not a direct cash payment but a credit equal to 50% of the PAYG amounts withheld from salary and wages paid to employees. The employer will need to lodge an activity statement to trigger the entitlement. If the credit puts the business in a refund position the excess amount will be refunded by the ATO within 14 days.
  • If a business pays salary and wages to employees but is not required to withhold any tax then a minimum payment of $2,000 will still be made.
  • Businesses that lodge activity statements on a quarterly basis will be eligible to receive the credit for the quarters ending March 2020 and June 2020. Business that lodge on a monthly basis will be eligible for the credit for the March 2020, April 2020, May 2020 and June 2020 lodgments. The minimum $2,000 payment will be applied to the first lodgement.
  • Eligibility for the measure will be based on prior year turnover. We will have to wait for the legislation to be released to get more details on how this will be implemented.

SUPPORTING APPRENTICES AND TRAINEES

  • Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage paid during the 9 months from 1 January 2020 to 30 September 2020 (and this subsidy will be available to a new employer where the business is unable to retain an apprentice)
  • Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee (i.e. $7,000 per quarter)
  • Eligible small businesses are those employing fewer than 20 full-time employees who retain  an apprentice or trainee (with the apprentice or trainee being in training with a small business as at 1 March 2020)
  • Employers will be able to access the subsidy after an eligibility assessment is undertaken by an Australian Apprenticeship Support Network provider.

3. ASSISTANCE FOR SEVERELY AFFECTED REGIONS

Funds will be available to assist during the next few months and over the year ahead to ensure these communities are well placed to recover:

SUPPORT FOR CORONAVIRUS-AFFECTED REGIONS AND COMMUNITIES

  • An initial $1 billion allocation to support regions and communities disproportionately affected by the economic impacts of the Coronavirus (e.g. tourism, agriculture, education) that will be provided through existing or newly established Government programs
  • The Minister for Trade, Tourism and Investment will work with affected industries and communities to develop recovery plans and measures.

ATO ADMINISTRATIVE RELIEF

  • The ATO will provide administrative relief for certain tax obligations for taxpayers affected by the Coronavirus outbreak, on a case-by-case basis

4. STIMULUS PAYMENTS TO HOUSEHOLDS TO SUPPORT GROWTH

This measure will assist around 6.5 million lower income Australians, which will support confidence and domestic demand in the economy.

STIMULUS PAYMENT

  • The Government will provide a one-off $750 payment to social security, veteran and other income support recipients and eligible concession card holders. Around half of those that will benefit are pensioners.
  • There will be one payment per eligible recipient. For example, if a person qualifies for the one-off payment in multiple ways, they will only receive one payment.
  • The payment will be tax free and will not count as income for Social Security, Farm Household Allowance and Veteran payments.

 

Please contact us if you need to discuss this further.

Single touch payroll (STP) will your business be ready on 1 July 2018?

Many busy owners and managers of medium sized businesses have missed this important change to the way you MUST communicate with the ATO.

Single Touch Payroll is the next step in ATO payroll reporting. The way you report your employees’ payroll information to the ATO will change. From 1 July 2018 all employers with 20 or more employees will need to report payments such as salaries and wages, pay as you go (PAYG) withholding and super information to the ATO at the same time you pay your employees.

If you are a business with 19 or less employees then you will need to be ready by 1 July 2019, however you can choose to start earlier.

The reported information will be used by ATO to pre-fill business activity statements and remove the need for Payroll Summary Annual Reports. Additionally, the employers will no longer need to provide payment summaries to employees for certain payments reported through STP, as that information will be automatically provided by the ATO via MyGov.

Your existing payroll software (such as accounting software) will need to be updated to offer Single Touch Payroll reporting. Most payroll packages are still working with the ATO on publishing the required changes so please keep an eye out on your provider notifications in case you need to install the required updates to remain compliant.

 

How will this impact your business

  • There will be no change to your payroll cycle. This will continue as per normal
  • From 1 July each time you pay your employees you will also need to report your employees’ payroll and super information
  • PAYG and superannuation payment dates will not change although you will be able to pay them earlier
  • Payment summaries in most instances will become redundant and you may no longer need to provide them to employees as all information will be available on MyGov. This will be up to date information that employees will be able to view at any time via MyGov.
  • ATO have also committed to having Tax file number declaration, Super standard choice form and Withholding declaration online, you will be able to provide to your employees as a link rather than printing out manual forms. This may not be available right from the start though

 

How can we help your business with the new changes?

Any change in business can be stressful so we can help remove that stress by:

  • Helping you understand if your business will be impacted by these changes
  • Showing you how to perform the required count and what employees to include who to exclude (eg. Count your regular employees but exclude casual employees who did not work in March, independent contractors, labour hire, company directors)
  • Helping you choose the right payroll solution in case you don’t have one
  • Advising on what information to report on to reduce the need for additional reporting at the end of the year
  • Training your staff and implementing best practice payroll process to ensure error free processing and reporting
  • Reporting your payroll information STP to the ATO on your behalf

Investing in Property using Self-Managed Super Fund

Consider using your Self-Managed Super Fund (SMSF) for Investing in Property

We get approached by many clients looking to invest in property to grow their wealth for their retirement. In Australia, property is one of the safest investment assets and many people have established a nice retirement nest egg using just that.

The thing with investing in property is that it requires a large upfront capital outlay and not many of us have that much spare cash just laying around. So where does one find enough money to get started? One place to look is your superannuation balance. If you have sufficient balance in your superfund you could use that to buy property.

How to start investing in property using your Self-Managed Super Fund (SMSF)?

If you have your money in a retail or industry superfund, then you can use that money to buy property. Doing it this way you can only buy property to the value of the balance you have in your super. For example, if your balance is $200k you can buy property up to the value of $200k. If you want to buy a property for more than that, and let’s face it there is not much for that money in Sydney that’s for sure, you would need to borrow more money and you cannot really borrow in a retail or industry superfund. This is where self-managed super funds (SMSF) come in. SMSF is the only investment vehicle that will allow you to borrow to invest, hence you will need to setup your own SMSF and rollover your funds from the retail fund to get started. This also comes with some major benefits.

 

Key benefits of investing in property using my Self-Managed Super Fund (SMSF)

Major benefit of SMSF is the discounted tax rate in comparison to your individual tax rate. SMSFs have 15% tax rate which means any income it earns goes much longer than it would in your personal name. Any capital gains also come with a 33.33% discount hence you only pay a flat 10% tax rate when selling an asset. The best benefit of all comes in retirement as any assets up to the cap of $1.6mil can then be transferred into your pension account within your SMSF. Any assets in the pension account at that point become tax free. Any income those properties make, such as rent or any capital gains on that property you sell become tax free. Tax Free? So why isn’t everyone doing it you might ask? Well there are some considerations.

 

Key considerations when starting an SMSF

Key thing to consider is your current balance. Your balance should ideally be at or around $200k and the absolute minimum should definitely be no lower than $150k. Your current employer contributions need to be flowing into your superfund on a regular basis as they will dictate how much you can borrow. The fees of maintaining your fund should also be considered and based on ASIC research at $200k balance most SMSFs become more cost effective to run than retail funds. Although if you get the right SMSF accountant then you can achieve this effectiveness at lower amounts as well.

Other consideration is the responsibility. You need to make sure you invest your money once it is in SMSF. Quiet often people go ahead with their SMSF then just leave their money sitting there without taking the next step and investing it into property or whatever else they initially wanted to invest in. So only do this if you are intending on going all the way. This is also something you can outsource to a third party and your SMSF accountant can help you with that.

Similarly, there is also some paperwork that must be kept and this itself can be outsourced to your SMSF accountant so it becomes less daunting.

 

For more information or to talk to one of our expert, friendly advisers about your SMSF options, please contact us below or call us on 1800 979 888. We’re always happy to help.

 

Xero Accountants

Are you looking for XERO Accountants?

At Key Business Accountants all our accountants specialise in XERO accounting systems. As XERO accountants we can help set the system up to suit your business needs. XERO will allow you to perform most of your processes at a fraction of time they currently take allowing you to save time doing non value add work and focus more on running your day to day business. We’ll cover key benefits XERO can bring to your business:

Automation

Automated bank feeds, streamlined bank reconciliations, automated invoicing, automated reminders to help collections and improve cash flow, professional reporting and mobile app are some of the benefits your business can gain by switching to XERO. If setup properly it can save you days of labour trying to stay on top of your books. Why not spend that time running your business instead.

Cloud Accounting

Gone are the days when you had to run a terminal server to host all your software on there to service your business. You had to have a dedicated IT person to help set it all up. You had to do manual backups and heaven forbid you ever had to recover from a power surge. Now days we have the cloud allowing our software to run on enterprise grade servers with multi server backups that have uninterrupted power supplies to make sure they are always running. This is the stuff only multinational companies had access to in the past and now it is available to YOU, a small business owner, at a fraction of the cost. XERO software runs in the cloud and all those upgrades that used to take your business offline for days on end now happen automatically. All the backups now happen automatically without you having to ever lift a finger. And it uses the bank grade security to keep your data safe.

Collaboration

With the software in the cloud you can now have multiple users accessing it at the same time from multiple locations. This allows you to operate your business from multiple locations and also allows us, your XERO accountants, to be able to access your data whenever you need help or are not sure how to process a specific transaction. This is true collaboration. And how many thousands do I need to spend to get all this you ask? Well the entire a software package is available to you at a small monthly premium.

If you want to know more call us on 1800 979 888. Key Business Accountants your trusted XERO Accountants.

Property Advice

We love property and have a wide range of clients in the property and real estate industry, from developers to real estate agents and everything in between.

We do a lot of work with a range of businesses servicing the property industry including:

  • Real Estate Agents
  • Developers (both small and large)
  • Buyers agents

We get approached by many clients looking to invest in property to grow their wealth for their retirement. In Australia, property is one of the safest investment assets and many people have established a nice retirement nest egg using just that.

We can help you with your next (or first!) property investment, including advising and assisting with buying property, reviewing your property portfolio, advising on correct structuring to minimise tax and protect your assets.

We have lots of experience in the Property Industry and while many Accountants struggle with some of the unique issues in the Industry Margin Schemes, Capital Gains Tax, Real Estate Trust Accounts and Asset Protection are all common areas for us and issues we deal with on a regular basis.

We also have extensive experience in building finance proposals for the banks and other lenders. If you are in the property industry please book an appointment today and experience the Key Business Accountants difference.

Contact us below or call the office now on 1800 979 888 for an appointment with one of our experienced Accountants.

Accountant For Dentists

We are specialist advisers to Dentists, particularly Dentists working as subcontractors and those wanting to establish their own business for the first time.

We have assisted Sub contract dentists cut thousands from their tax bill, set up record keeping systems that are simple and easy to use and deal with PSI problems. We have also helped many dentists make the move to owning and running their own practice either on their own or in partnership. We assist clients in a range of business areas and set up new businesses almost every day and can help you too.

Call the office on 1800 979 888 and ask for an appointment with one of our accountants.

Accountant for Import and Wholesale

We love import and wholesale businesses. Import duties, freight and logistics, pricing your stock accurately and sales/distribution channels are issues we deal with on a daily basis for clients.

We have a range of clients in this area, many import (to some degree) from one or multiple countries. Import duties, converting from foreign currencies and freight issues are all things we deal with on a regular basis. We can also assist with your pricing and logistics strategies, generally this is a business where your internal accounting systems must be very good to ensure you are tracking and pricing you stock accurately, we can assist with setting up an internal accounting and stock tracking system or review your existing system and our staff have worked across a broad range of systems.

Call the office for an appointment today.

Accountant for Consultants

Are you an IT consultant? Management Consultant? Most “consultants” or contractors face similar issues, PSI, keeping your records in as simple a method as possible, etc. We have a large number of clients who fall in the general classification of consultant and can help you. As we handle many clients in this area we are familiar with the issues you face including the area of PSI (personal services income). Other issues we find are common to this area are:

  • Record keeping, you want a system that is as simple as possible
  • Home office expenses, you want to maximise this area of deductions in many cases
  • Superannuation, if you are not paying yourself super then you are going to be at a disadvantage over someone who works as an employee
  • Business structuring, should you be operating as a sole trader or a company? (or some other structure)

Call the office today to discuss your needs in more detail.

Accountant for Vets

We are specialist Accountants and Advisers to the Veterinary Industry, our services go well beyond the normal once a year returns and meeting.

We can assist you in a wide range of areas from expanding your current operations, opening a second clinic or increasing your profit levels in your existing clinic.

We work in a much more hands on way going well beyond the normal annual Accounting work if required. We can assist you and your business in a range of areas such as:

  • Implementing change programs
  • Pricing and controlling stock,
  • Analysing you staffing levels
  • Setting your pricing. and pricing strategies
  • Buying your first Practice or expanding existing operations

We can also assist with financial strategies to ensure you are building your wealth as well as your business. For a confidential discussion of your needs please contact our office today.

Accountant for Tradies

At Key Business Accountant we have a range of services tailored specifically for tradespeople; we can take care of your books, do your BAS, your Invoicing or handle POs, COCs and other paperwork. Over half our clients are tradespeople ranging from developers with 10-20 staff right through to one man subcontractors, with our heavy focus on bookkeeping, record keeping systems installation and associated training we can offer end to end record keeping (invoicing, recording and paying bills, order management) through to the typical once a year tax and compliance work.

If you are tired of doing the books after a long day or driving the wife crazy getting her to do them we can help, give us some or all of your record keeping work and focus on what you do best! We are also well positioned to provide business coaching and expansion advice to these industries, having assisted multiple businesses, across all the trades, go from one man and a Ute to two three and four team businesses and beyond. Our current client list includes; Builders, Carpenters, plumbers, air conditioning mechanics, electricians, home maintenance and small jobs, civil contracting and earthmoving and many more.

We service most suburbs of Sydney so give us a call on 1800 979 888 today to discuss your needs in more detail.

Family Day Care Accountant

Family Day Care Advice from your friendly local Family Day Care Accountant

Family daycare business is as challenging as any other business. FDC makes it even harder when you are trying to look after kids and managing books for the business without professional assistance. As a leading firm in providing specialised accounting services to Family Day Care educators across Australia, we understand your accounting needs very well because we keep ourselves up to date with latest changes to government policies and taxation law.

We receive lots of queries about what educators can and can’t claim for their Family DayCare business. There is no straight forward answer to this as it totally depends on educators individual circumstances. As a specialised Family day care accountant, we can guide you through every step from setting up your business, how to keep good records and at the end of financial year lodging your tax returns. Following are some areas where most educators make mistake in their record keeping.

Home based business expenses: Make sure you are claiming the right percentage of your running expenses. If you are renting you may be entitled to claim part of your rent for the area you exclusively use for Family Day Care Business. If you running a business from your own home and that is your primary residence as well, be aware about future CGT implications if you claim Council rates, Mortgage interest and sewerage costs.

Motor vehicle: You can generally claim running expenses such as fuel, repair and registration. If you are using your car for business and privately, then you must apportion the business use and private use. We recommend you complete logbook for twelve continuous weeks so at the end of year we know how much you can claim. But if you use your motor vehicle exclusively for business you may be able to claim 100% (Substantiation required).

Repairs and Improvements: If you repaired some area of your house that was damaged exclusively related to family day care business then you are entitled to claim full amount. But if you have done major improvement ((e.g. adding room, huge renovation etc.) to your house then you may not be able to claim the full amount.

We at Key Business Accountants understand this industry very well. If you have any question please feel free to contact our Family DayCare Accountant on 1800 979 888 to make an obligation free appointment.

SMSF Parramatta

Self managed super funds give you better control over organising your retirement funds to yield maximum benefit. They are managed by you as the trustee allowing you to control where you invest your retirement funds.

Benefits of SMSF

  • The main advantage of owning a self-managed super fund or SMSF is the control to invest in a broad selection of assets such as direct shares, high yielding cash accounts and property investments. SMSFs can borrow money from a bank to make investments however there are specific rules that the fund needs to follow while borrowing. This sort of borrowing is also known as limited recourse borrowing, and with this type of loan you will be able to purchase an asset such as an investment property. It does mean however that you are buying an asset of much greater value than you have available in your fund getting capital growth at a much higher rate.

 

  • If you are a business owner, you can make use of SMSF’s to invest in purchasing business property and then rent back that property for commercial purposes to your business. Since SMSF can borrow, the limited recourse borrowing can be used to obtain a business property. In short this lets you own your business real property in the superannuation fund, supporting funding and cash flow in your own businesses.

 

  • Super funds in general present you with the advantage to cut down income tax on investment income and capital gains. All superannuation earnings are taxed at only 15% and all capital gains your fund makes are taxed at a flat 10%. In pension phase this tax goes down to 0%. That’s right no tax at all. Compare that with the tax you pay on your personal income and you see why investing through your SMSF makes sense.

 

  • SMSFs can have up to four members in the fund allowing pooling of more resources from others with similar financial objectives. This can allow you to reach your goals sooner than you otherwise would on your own.

Before you open up a self managed super fund, you need to get professional advice and you will have to carefully analyse the SMSF rules to find out if it is the right thing for you.

For more information or to talk to one of our expert, friendly advisers about your SMSF options, please call us on 1800 979 888.

New Business Advice Parramatta

Are you looking to start a new business?

Starting up a new business is no simple task. You have a lot on your plate to make sure that it does well. With your focus primarily on the products or services, you may not invest enough of yourself into the other vital aspects of a business. Accounting is one area that business startups have to look out for when getting everything set up. We at Key Business Accountants Parramatta can help you get everything figured out when it comes to small business accounting. Having specialists in this area will ensure that your business accounting is set up perfectly without worrying about taking time away from other important aspects of the business that require your attention. We specialise in new business advice in parramatta and surrounds.

Most likely, you want to start a business out of passion for what you do or because you know how to do it and feel it is the best decision for you. Regardless of why you decided to start a business of your own, you most likely will not have the ability or knowledge to manage everything on your own. Few people can, especially as there is growth. We can help structure your business and manage the business accounting and taxation aspects of it; so that you can focus on what you enjoy doing. Our business accountants will provide you with information, guidance, and assistance to ensure that your business gets off on the right path with new business advice parramatta.

At Business Accountant Parramatta, we have specialists in accounting that can help you get your business off the ground. We can fill in the missing holes that your business lacks. Our knowledge of structuring and accounting will aid you immensely as you start getting a budget figured out, as you build on products and services, and as you work out a game plan. Business startups will experience exceptional growth and will open themselves up to more possibilities by hiring our professionals rather than attempting to do the work solo.

While these benefits will show immediate results, the real advantages start coming with continued use of our business accounting advice and services. When you follow what we say, you can go further than most other business startups in the same field. This is because of the disciplined approach we instill in you right from the start. Your business will strengthen and have a better chance at success. Higher income, more customers, better handling of difficult situations, and a more stable business operation will all come by applying our advice.

Contact us for your new business advice – our office can be reached on Ph: 1800 979 888

Family Day Care Tax

Family Daycare Tax – what do you need to know?

Key Business Accountants is committed to working with Family Day Care Schemes and Family Day Care Educators to assist with building a sustainable, tax effective business. With hundreds of Educators and a growing number of both Government and private schemes as clients, we KNOW and UNDERSTAND Family Day Care Tax. Our office deals with both educators and schemes and is happy to offer free training sessions for professionals in this industry.

Whether it be business tax considerations, GST and BAS assistance, home loans, personal insurances, superannuation, or even family budgeting, we’re here to help you make the most of your business and improve your lifestyle.

5 Family Daycare tax tips are:

  1. Record keeping – Keeping excellent financial records of your business transactions is essential to ensure that we can ensure your family daycare tax return includes the tax deductions you are entitled to – this will also keep you out of trouble if you get audited by the ATO
  2. Budget 2015 – The May 2015 Budget announced that there will be a 5% tax reduction on income tax payable on the business income received from an unincorporated small business entity (i.e. sole trader)  up to a maximum of $1,000. Effective date is 1 July 2015 provided the eligibility criteria is met
  3. Separate bank accounts – To avoid unnecessary complications when doing your family daycare tax return you should have separate bank accounts to separate their your business transactions from your non-business (personal) transactions.
  4. GST Registration –Generally you must register for GST if your projected or actual annual gross business income is $75,000 or more. However consider GST Registration even if GST Registration isn’t mandatory as it provides an opportunity to reclaim GST paid on business expenses.
  5. Budget for expected income tax liabilities –You will typically need to pay income tax on income earned over $20,000. To avoid a nasty surprise when you get your family daycare tax return is prepared ensure you put aside sufficient money for any expected income tax liabilities at the end of the financial year

While not endorsed by Family Day Care Australia we try and work as closely as possible with Family Day Care Australia as well as the federal government and are committed to ensuring the Family Daycare industry is sustainable long term.

For further assistance in understanding family daycare tax please contact Key Business Accountants.  For an appointment, or a confidential discussion of your needs, please contact our  office on 1800 979 888.