Articles on bookkeeping.

The 2018 Autumn edition of the Business Bulletin is prepared by the Australian Bookkeepers Network.

The full bulletin can be downloaded at the bottom of the page however highlights include:

Federal Budget

Instant Asset Write-Off

The $20,000 Small Business Instant Asset Write-Off has been extended for another 12 months. Businesses with an aggregated turnover of less than $10 million will be able to take advantage of the write-off until 30 June 2019 provided that the depreciating asset was acquired and installed ready for use in your business by this date. Before the Budget, this threshold amount was due to revert down to $1, 000 from 1 July 2018. The $20,000 write-off was originally introduced on 12 May 2015 and originally applied to small businesses with an annual aggregated turnover of less than $2 million. Since then the write-off was extended to businesses with an aggregated turnover of less than $10 million.

No Deduction for Non-Compliant Payments to Employees and Contractors

Under this measure, from 1 July 2019 businesses will no longer be able to claim tax deductions for payments to their employees where they have not withheld any amount of PAYG (where PAYG withholding is required).

Deductions Disallowed for Holding Vacant Land

From 1 July 2019, deductions will be disallowed for expenses associated with holding vacant land in circumstances where that land is not genuinely held for the purpose of earning assessable income. An example of a denied deduction is interest on money borrowed to acquire that land. This measure will apply to land held for residential or commercial purposes. However, the “carrying on a business” test will generally exclude land held for commercial development.

Resourcing the ATO

A strong theme to emerge from the Budget is the additional funding that is being allocated to the ATO to help enhance their compliance activities. The Government seems intent on properly resourcing the ATO.

Crackdown on Circular Distributions for Discretionary Trusts

From 1 July 2019, the anti-avoidance rules that currently apply to other closely-held trusts that engage in circular trust distributions will be extended to family trusts. This will prevent the currently available strategy where family trusts act as beneficiaries of each other in a “round-robin” style arrangement whereby a distribution can be returned to the original trustee in a way that avoids any tax being paid on that amount.

Strong Stance on Tax and Super Debts

More than $133 million will be provided to the ATO over four years for it to continue a raft of measures that will sustain and increase debt collections and the timeliness of those collections. This is forecast to reap an extra $1.6 billion in unpaid Superannuation and tax over the coming four years. With such large amounts of revenue set to be recouped, it is recommended that businesses with tax and superannuation debts owing, pay these debts if they are able to do so.

Reigning In The R&D Incentive

The calculation for companies claiming the R&D Tax Incentive will change commencing for financial years beginning on or after 1 July 2018. Also, a maximum cash refund for “smaller” R&D claimants will be capped at $4 million per financial year (a “smaller” R&D claimant is an entity with aggregated annual turnover below $20 million).

Limiting Partnerships Access to Small Business CGT Concessions

Partners in Partnership structures that alienate their income by creating, assigning or otherwise dealing in rights to the future income of a Partnership will from Budget Night no longer have access the Small Business CGT Concessions in relation to these rights.

Cash Payments Limit

In a measure recommended by the Government’s Black Economy (Cash Economy) Taskforce, the Government will introduce a limit of $10,000 for cash payments made to businesses for goods and services that they provide.

Broader Business Conditions

In good news for the business community, the Budget papers forecast that the economy will grow at 2.75% in 2017/2018 (current financial year); jumping to 3% in 2018/2019 and 2019/2020.

 

Open your copy of the Winter 2018 Business Bulletin here.

When you start your own business it’s easy to get your business and personal finances mixed together.

Growing a new business takes a lot of work and it’s easy to forget about where bills are being paid from or you might think that using your personal credit card won’t be a problem.

Having your business and personal transactions mixed together can be a real headache especially when calculating your BAS or EOFY return.

Whether you have an established business or just starting out with your brand new venture, it is essential for you to keep your business and personal finances separate before it gets too complicated or you get caught out by the ATO.

The trick is to carefully track all your business expenses separately from your personal. Although, they both may seem to you almost the same, specially if you are a sole trader. Keeping your business and personal finances separate can save you a lot of hassle and time when it comes to managing your money.

One of the simplest things you can do to help keep your business and personal finances separate is to have a dedicated bank account for your business.  Using your personal account rather than a business account for your business expenses can create confusion at tax time, and will leave you wasting time at the end of the financial year trying to separate everything apart.

Calculate Business Bookkeeping

Four Reasons to Keep Your Business & Personal Transactions Separate

Maximise on your Tax Deductions

When your business expenses are clearly laid out, it becomes easier for you to do your BAS and end of year taxes. If you have your personal and business transactions all mixed up together you could spend hours going through your bank statements trying to classify each transaction. It is not only frustrating but also a complete waste of your valuable time. There is also a risk that you may miss items in your bank statements and lose out on your deductions.

Minimise Risk of Inappropriate Transactions

With the ATO using data matching on unexplained wealth of small business owners it’s important that non business transactions are not being inadvertently included in your activity statements or end of financial year figures. If you have your business and personal finances mixed up you may accidentally include something that you shouldn’t.

Makes You Appear More Professional and Your Business More Official

Even though you’re starting out with your business on your own, having a business account for payments and deposits, will help your business appear more professional to your clients and partners. It will also give you an opportunity to put your business out there and be taken seriously.

Improves Your Credit Card Rating and Enables You To Apply For Finance

When your business grows, you may need funds from investors or a loan from the bank. When you have a business account, your credit rating is visible and you can apply for finance if your credit rating is good. Additionally having a bank account will also help you to easily demonstrate to the bank your full financial records.

Hard at Work Bookkeeping

How to Keep Everything Organised

All of this is not to say that there aren’t legitimate scenarios where you would be transferring funds between your business and personal accounts or paying for business expenses with your personal credit card. Alexilum can show you how to juggle your business and personal funds while keeping everything above board and easy to manage.

Get in touch with us today to enquire about how we can help you keep your bookkeeping and payroll accurate and easy to manage.

Prepared by the Australian Bookkeepers Network the Autumn 2018 edition of Business Bulletin discusses:

Unpaid Superannuation

With the ATO cracking down on employers unpaid superannuation and the introduction of single touch payroll, business owners need to make sure they have a plan on how to catch up and become compliant with the superannuation guidelines.

Cyber Security

Worldwide data breaches have prompted the Government to introduce legislation requiring businesses that have had a data breach to report it to the Office of the Australian Information Commissioner – read about your obligations.

Automation

Ever evolving improvements with technologies enables us to automate repetitive tasks more and more, how could you benefit?

Cash Flow Forecast

It’s no secret that cash is king for any business, do you know how to forecast your cash flow to use as a decision making tool?

 

Open your copy of the Autumn 2018 Business Bulletin here.

Prepared by the Australian Bookkeepers Network the Summer 2018 edition of Business Bulletin discusses:

Working Capital Loans

Discussion on what working capital loans are, their advantages and disadvantages as well as a discussion on what types of businesses they are most suitable for.

Five Key Things When Starting Out In Business

Starting a new business is not a small decision. This article discusses key considerations to plan for before starting that next project.

Rental Property Deduction Crackdown

New laws change what deductions owners of rental properties can claim against their salary. Make sure you are well informed so you don’t inadvertently claim anything you shouldn’t when you next do your return.

 

Open your copy of the Summer 2018 Business Bulletin here.

Prepared by the Australian Bookkeepers Network the Spring 2017 edition of Business Bulletin discusses:

Shares as an income stream

Shares have always been a popular investment engine and with cash rates so low it is certainly more attractive than term deposits.

Estate Planning

Estate planning is about planning for the treatment of your personal and business assets in the event of your death. Not having an effective plan in place could mean legal or personal problems for family and friends if things have not been prepared thoughtfully.

Small Business Tax Concessions

Legislation has been passed changing the definition of what classifies as a small business. Small businesses benefit from a number of tax concessions and being aware of what is available can provide real savings.

National Employment Standards

Key information and links for the NES.

 

Open your copy of the Spring 2017 Business Bulletin here.