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Fair Work introduces new app

The Fair Work Ombudsman has released a new app called “Record My Hours,” to help reduce the amount of disputes regarding underpayments between employees and employers.

The app assists employees in recording the hours they work and other information about their employment for circumstances where issues about their pay arises.

Employees can export the data via email and share it with their employer or the Fair Work Commission if they have a question about their entitlements.

“Record My Hours” enables the location services function on the user’s device to allow users to set their workplace location and automatically record when they commence and finish work, determined by their location.

The app also adds rosters to a calendar, allows the user to receive notifications about upcoming shifts, and take photos of information that belong to them, i.e. pay slips. It also has the ability to record information about piecework arrangements and backs up information collected to iCloud or Dropbox.

While most small business employers do the right thing, the app is designed to address underpayments of young and migrant workers and to act as a backup in the event of a discrepancy or dispute.

Posted on 12 April '17, under business. No Comments.

Consolidating your super

Chances are, if you have had more than one job, you will most likely have multiple super accounts.

Having multiple super accounts means more fees and less savings. Consolidating all your super accounts into one account can help you to keep track of your super, reduce unnecessary paperwork, and most importantly, save on costs.

The first step in consolidating your super is selecting a fund to move all of your super savings into. When comparing funds, consider funds with lower fees; suitable investment options; extra benefits; funds which have performed well over the last 5 years; and provide appropriate insurance cover for your needs.

Once you have selected a new super fund, you may need to open an account with the fund and provide your employer with the new details. You will then need to rollover super to your chosen fund either online through myGov or you can transfer your super by using a form and sending it to your chosen fund. Some funds have an online process too.

Before consolidating your super, be sure to check the impact on your retirement benefit if you are in a defined benefit fund. It is also good practice to check that you are not losing benefits, such as insurance, and look up the cost of exit fees of your old fund. If you are unsure if consolidating your super is right for you, seek professional advice.

Posted on 12 April '17, under super. No Comments.

New measure to combat franked distributions funded by capital raisings

The Government has announced a new measure in the 2016-17 Mid-Year Economic and Fiscal Outlook to prevent the distribution of franking credits where a distribution to shareholders is funded by particular capital raising activities.

This new measure is intended to address issues raised by the Tax Office’s Taxpayer Alert 2015/2 regarding arrangements used by companies for the purpose of, or for purposes which include, releasing franking credits or streaming dividends to shareholders.

The ATO have been reviewing arrangements with all or most of the following features:

The new measure is set to apply to distributions made after 12.00pm (AEDT) on 19 December 2016. The measure has not been enacted and is subject to the normal parliamentary process.

Posted on 12 April '17, under tax. No Comments.

What investors will look for when funding a startup company

Ultimately, every investor is different. However, when looking to invest in any startup company, there are a number of boxes you will need to check regardless of who decides to invest in you.

You need to know the market. How big is the market? How populated is the market? Is your product or idea doing the same as every other product on the market? How does your product stand out in the existing market? What sets it apart?

Having a strong business plan is essential. No one will want to back you if you do not have a solid plan for the future. Investors will want to hear numbers and forecasts. They do not want to hear you say that there are no risks involved, or hear you answer every question with certainty that no problems will arise because that is unrealistic. They will want to hear how you plan to tackle problems as they arise.

Investors will need to believe in you. You need to be sincere. Are you positive? Are you flexible? Are you realistic yet ambitious? Can you talk to people? Are you a good leader? A good listener? Do people respect you?

The team that you have on board will also be considered. Your team needs to live and breathe the product or idea just as much as you do. Do they listen to and respect you as their leader? As a collective, do they have sufficient skills and expertise?

Investors meet with numbers of founders and will get a gut feeling about you and your idea, but being able to address the above-mentioned areas should truly set you apart.

Posted on 4 April '17, under money. No Comments.

Crowdfunding business dreams

Crowdfunding can provide a platform for struggling start-ups to raise capital or businesses trying to get ahead with an injection of cash into a new project.

Although crowdfunding is still in its relatively early stages; it is rapidly gaining momentum. There has been a boost in crowdfunding due to the increase in the level of professionalism, ease of use and ability to access.

Crowdfunding describes the collective effort of individuals who network and pool their resources, usually via the internet, to support efforts initiated by other people or organisations. It allows an interested party to invest in an idea that they find inspiring.

Businesses also can offer perks in exchange for contributions, such as a discounted price of a product once it is developed. Crowdfunding has been used in support of a variety of efforts, including disaster relief, startup company funding and inventions and software development.

There are, however, terms and conditions of the projects listed on some crowdfunding websites. Kickstarter is an all-or-nothing platform, in that it only delivers the business the money if the project’s target is met. Sites such as Indiegogo will pay the business their money if targets are not met, though do charge higher fees.

To receive crowdfunding for a project businesses should consider:
– researching and learning from other successfully funded projects
– planning the project with a set of goals in mind
– having an active online presence, particularly on social networking sites, to spread the word of their project
– thanking all the supporters who contribute to the project

Posted on 4 April '17, under business. No Comments.

Reviewing your trust deed before 30 June

With changes to Australia’s superannuation rules coming into play on 1 July 2017, self-managed super fund (SMSF) trustees would do well to review their fund’s trust deed.

Despite the fact that maintaining an up-to-date trust deed is a vital aspect of managing a SMSF, many trustees fail to do so, usually due to the time and cost restraints associated. However, a SMSF trust deed can only ensure compliance and protect the trustee’s interests if it is regularly updated and reflects current superannuation rules.

As part of the super reforms announced in last year’s Federal Budget, tighter superannuation rules will apply from 1 July 2017, including a $1.6 million super balance cap for after-tax contributions; a maximum of up to $25,000 for concessional contributions; and the removal of the current “bring-forward” rule allowing $540,000 of contributions in one year.

According to some industry analysts, these changes are likely to result in many out-of- date trust deeds. But often changes to superannuation legislation provide the perfect opportunity for trustees to review and upgrade their deed.

One of the major changes to super which will affect traditional SMSF trust deeds is the $1.6 million limit on retirement balances, which the Government also wants to make retrospective. This means those who already have more than $1.6 million saved in their superannuation will need to adjust their strategy and trust deed accordingly to meet the new limit.

Updating a SMSF deed will particularly benefit those SMSF members with money locked in the old term-allocated pension and with a pension balance greater than $1.6 million in a mix of term-allocated pension and account-based pension balances. This is because the term-allocated pension can be converted back (in full or in part) to the accumulation phase to remove any excess over the $1.6 million cap.

Another major change to consider is the deed’s death benefit control mechanisms. The new super rules will allow certain death benefits to be rolled over, so it may be worthwhile reviewing whether the SMSF trust deed has sufficient options in the death benefit payment provisions.

SMSF trustees will also have to consider whether their current trust deed will allow for the terms of the trustee’s pension to change without needing to stop and restart the pension. Many of the upcoming super changes will dramatically affect the strategic landscape of SMSFs in Australia, and some of these changes will challenge old deeds, so, as with any other financial decision, seek professional advice if you are considering updating your trust deed.

Posted on 4 April '17, under super. No Comments.

Lump sum payments received by healthcare practitioners

The ATO has provided further guidance for healthcare practitioners dealing with lump sum payments from healthcare centre operators.

The Tax Office is concerned with some practitioners who have received lump sum payments and have incorrectly treated the payments as a capital gain. These practitioners have then applied the small business CGT concessions to reduce the capital gain, in many instances reducing it to nil.

The ATO has clarified that a lump sum payment from a healthcare centre operator is more likely to be ordinary income of the practitioner for providing services to their patients from the healthcare centre rather than a capital gain. Practitioners are required to include the full amount of the lump sum payment in their assessable income.

Healthcare practitioners who are considering any arrangements that relate to a lump sum payment for commencing or providing ongoing healthcare services should note that the ATO is looking closely at these arrangements to determine if they are compliant with income tax laws and whether the anti-avoidance provisions may apply.

The Tax Office is aware that some practitioners are using a private ruling that was issued to another taxpayer, however, you can only rely on a private ruling if you applied for it.

Healthcare practitioners entering or planning to enter into an arrangement of this type are encouraged to seek independent professional advice, ask the ATO for a private ruling or make a voluntary disclosure to reduce any penalties. Please contact our office if you have any questions about these arrangements.

Posted on 4 April '17, under tax. No Comments.

Creating an office of problem solvers

One major key to success is the ability to problem solve. Knowing how to respond to and resolve issues that arise creates stronger, more effective businesses. Whilst employees ought be highly skilled in their given fields, one trait that is truly invaluable is that of problem solving. As an employer, there are tips you can follow to encourage and develop the problem-solving abilities of your staff:

Trust your employees
There is nothing more damaging than micromanaging when it comes to building efficient problem solvers. When employees feel trusted and valued, they are more likely to challenge themselves when seeking out new and effective ways to resolve an issue that has arisen. Set goals for your staff rather than giving them rigid instructions to follow; you will lesson your own workload and you will be amazed at what solutions they can come up with.

Always look for hidden opportunities
We often follow the mantra, ‘if it’s not broke don’t fix it’. A problem arising in one area is actually a great opportunity to refine and improve existing surrounding processes and strategies. By viewing a problem arising as an opportunity to develop and strengthen the business, solving the problem often become less about what was failing to work and more about how much more efficient the process can be made.

Facilitate creativity
When employees are inspired to be creative, they are more likely to think abstractly and laterally, which is ideal for problem solving. This can be achieved through simple changes to the workplace, such as incorporating plant life, art, colourful furnishings; and providing opportunities to break up the monotony of a long day in the office through fun and quick activities such as tic, tac, toe or connect four.

Encourage effective communication
Fostering a workplace where employees are encouraged to speak their mind openly and honestly rather than one where employees only say what they think you want to hear is critical for effective problem solving. An environment where peer brainstorming and peer reviewing is encouraged is one where employees learn to think critically and build resilience.

Posted on 29 March '17, under business. No Comments.

Who is a ‘related party’ in an SMSF?

Self-managed super funds (SMSFs) have a number of investment restrictions which apply to transactions conducted within the fund.

One such restriction applies to transactions involving ‘related parties’ of the fund and ‘relatives of members.’

No one associated with the SMSF should obtain a present-day benefit from the fund’s investments. The fund needs to meet the ‘sole purpose test’ of providing death or retirement benefits to the SMSF members or their dependents.

A breach to the investment restrictions may result in significant penalties, such as the disqualification of a trustee and even prosecution.

The Tax Office considers a ‘related party’ as:

           – relatives of each member

           – the business partners of each member

           – any spouse or child of those business partners

           – any company the member or their associates control or influence

           – any trust the member or their associates control

The ATO considers a ‘relative of a member’ as a parent, grandparent, brother, sister, uncle, aunt, nephew, niece, lineal descendant or adopted child of the member or their spouse; or a spouse of any individual specified previously.

Generally, SMSFs cannot borrow money and cannot buy assets from, or lend money to, fund members or other related parties (although there are exceptions to this rule).

Posted on 29 March '17, under super. No Comments.

ATO to report unpaid debts to credit agencies

The Mid-Year Economic and Fiscal Outlook 2016-17 (MYEFO) announced that from 1 July 2017, the ATO will disclose tax debt information of businesses who have not effectively engaged with the ATO to credit reporting bureaus.

The new measure is aimed at enhancing the integrity of the tax system and ensuring businesses who are not compliant do not gain an unfair competitive advantage over those businesses who are.

The ATO will initially pass on unpaid debts from businesses with an Australian Business Number and with a tax debt of more than $10,000 which is at least 90 days overdue.

In addition, the Government will provide $1.6 million to establish a Black Economy Taskforce to develop an innovative, whole-of-government policy response to this problem. Black economy activities disadvantage honest taxpayers, undermine the integrity of Australia’s tax and welfare systems and reduce the amount of revenue collected by governments.

Posted on 29 March '17, under tax. No Comments.

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