The Tax Office has released further findings that reveal cash-only businesses could be missing out on a significant chunk of revenue simply by not offering customers the option of electronic payment.
An ‘inconvenience’ was the most popular word consumers surveyed in the study used to describe when a business does not provide the option to pay via card.
Cash-only may also be having a direct effect on the business’s reputation. The results determined that Australian customers are twice as likely to perceive ‘cash-only’ as negative rather than positive – with many respondents questioning whether the business is honest and paying less tax (regardless of whether this may be fact or fiction).
While change may be difficult, cash-only businesses might like to consider the benefits that exist with no longer operating in cash. For instance, electronic tap-and-go payments take less time and cost around 9 cents less than payments made in cash.
By providing electronic payment only, a business can find it easier to keep more accurate record-keeping as well as help them to meet their tax and super obligations.
Employers are being reminded by the Australian Tax Office (ATO) not to forget that along with permanent residents; temporary residents are also entitled to super guarantee (SG).
In most cases, an employer will be required to pay SG on top of their employee’s wages (temporary residents included) if they pay them $450.00 or more before tax in a calendar month.
Providing the temporary resident has met all the requirements, they can submit their claim for the super that their employer has paid as a ‘department Australian superannuation payment’ (DASP) once they have left Australia.
The ATO is encouraging employers to notify their temporary resident workers of the DASP application as it will be easier for these individuals to get the required supporting documents certified in Australia and then lodge once they have left the country.
The Tax Office has confirmed the rate for work-related car expenses will rise to 68 cents per kilometre for the income year beginning 1 July 2018.
The new rate will affect those eligible individuals who elect the cents per kilometre method when calculating the income tax deductions for their work-related car expenses for the 2018-19 income year. This rate also applies to the following income years until the Commissioner of Taxation deems it should be varied (these rates are reviewed each year).
Taxpayers working out their car expenses for the 2015-16 year, 2016-17 year and the 2017-18 year should remember that the previous rate of 66 cents per kilometre still applies to their calculations.
When selecting the cents per kilometre method, eligible individuals:
- are not required to supply the ATO with written evidence of how many kilometres they have travelled;
- may need to show how they worked out their business kilometres calculations;
- cannot claim more than 5,000 business kilometres per car;
- and cannot make a separate claim for depreciation of the car’s value.
It is also important to note that the amount will take into account all the vehicle running expenses.
Before purchasing funeral insurance, it is essential to check whether it is the right choice for you. Specifically, if it will be worth the expense, you will pay in premiums.
Take a look at these considerations.
Can help you save
It is a handy way to make sure you save enough funds to cover your funeral expenses.
Instantly covered (with exclusions)
You can be covered immediately.
Only accidental death is covered for the first two years in most policies. Should you die from another cause, you may find that you are not covered.
More than likely your premiums will increase over time. A policy that may seem initially like the best cost-effective solution could, in reality, be expensive in the long run.
Premiums can exceed the cost of your funeral
As Australians continue to live longer, you could end up paying more in premiums than the cost of your funeral.
Your beneficiaries must wait for payouts
Your family members may have to wait to receive an insurance payout to cover your funeral costs.
Should you cancel your policy or find you can no longer afford to pay the premiums, you generally can not receive a refund on the premiums you have already paid.
It is always important to check the terms and conditions of a policy before making your final decision.
The Government has introduced new measures to allow SMSF members to access their super for their first home or make contributions to their super from the sale of downsizing their home. SMSFs should be aware of the following:
From 1 July 2018, SMSF members who are 65 or over and exchange a contract of sale of their main residence may be eligible to make a down sizer contribution of up to $300,000 into their super without affecting their total super balance or contributions cap for the year.
This contribution will count towards the transfer balance cap and be taken into account for determining eligibility for the age pension.
SMSF members do not have to purchase another home to access this measure. However, the contribution can only be made once; it cannot be used for the sale of a second main residence.
The First Home Super Saver Scheme
SMSF members looking to get into the property market can now use some help from their SMSF under the First Home Super Saver Scheme.
As of 1 July 2018, SMSF members over 18 years of age can apply to release their voluntary concessional and non-concessional contributions made from 1 July 2017, along with associate earnings to purchase their first home.
Voluntary contributions made since 1 July 2017 of up to a maximum of $15,000 from any one financial year or a total of $30,000 across all years can be applied for.
The Tax Office has flagged work-related car expenses as a concern this tax time.
The ATO is targeting those who make mistakes or deliberately lodge false claims. Examples include:
- Claiming things they are not entitled to, i.e., private trips such as work to home travel
- Making claims for trips that did not occur
- Claiming expenses that their employer has already reimbursed them for.
Advancements in data-matching technology allow the ATO to match individuals with peers in similar occupations, earning similar amounts of income. Analytics is also used to identify claim patterns, i.e., over 800,000 people claimed exactly 5,000kilometres under the cents per kilometre method last year.
The best way to avoid making a mistake include:
- only making a car claim if you paid for the expense yourself and were not reimbursed;
- it was directly related to earning your income; and,
- you must have a record to support the claim.
An example of a legitimate car claim is travelling between work sites or between jobs as part of your job.
Before you submit a car claim, consider if your employer would agree you needed to undertake the trips as part of your job. Employers may be contacted if your claim raises a red flag.
Millennials are encompassing around a quarter of the workforce now and bringing along withthem diverse needs and challenges.
Employers must understand these needs and challenges to better attract more Millennials to work for them as their skills are in high demand.
Firstly, Millennials (born between 1980-2000) are the first generation to understand technology possibly more so than their senior coworkers. They also tend to value flexibility and diversity more than older generations.
Millennials are also likely to have a desire for rapid career progression within a company and are not afraid to switch companies if their needs are not being met. This means fewer Millennials are likely to stay loyal to only one company for their total working life.
Employers must consider these unique needs and adapt if they are looking to appeal to Millennials. The following tips can help your business become more attractive to Millennial talent:
Opportunities to progress
Millennials want opportunities for personal and career development, otherwise, they will look elsewhere. Ensure your business has training and development opportunities available and staff are encouraged to progress their careers within your business.
Along with competitive salaries, Millennials look for added perks such as flexible working conditions, bonuses, free insurance, greater vacation leave and so on. This is important to note as you might not be able to offer the highest salary for your industry but you can entice Millennials with other more budget-friendly incentives.
Meaningful work comes out on top for Millennials. Many want to give back and contribute to society in an ethical and sustainable manner. Millennials will take into consideration the reputation of your business, your business’ practices and your overall vision for the business. To appeal to this generation it is important to consider whether your business is operating in its best possible condition and if improvements need to be made.
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As of 1 July 2018, the Government will introduce a new measure that allows the contribution of up to $300,000 of proceeds from downsizing a home to be added to superannuation
The new measure will benefit those aged 65 years and over, provided they meet certain eligibility rules including:
- The amount you are contributing is from the proceeds of selling your home where the contract of sale was exchanged on or after 1 July 2018
- Your home was owned by you or your spouse for 10 years or more prior to the sale
- Your home is in Australia and is not a caravan, houseboat or other mobile home.
- The proceeds from the sale of the home (capital loss or gain) are exempt or partially exempt from CGT under the main residence exemption, or would be entitled to such exemption if the home was a CGT rather than pre-CGT asset.
- You have provided your super fund with the downsizer contribution form either before or at the time of making your downsizer contribution.
- You make your downsizer contribution within 90 days of receiving the proceeds from the sale (usually the date of settlement).
You have not previously made a downsizer contribution to your super from the sale of another home.
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The Australian Tax Office (ATO) is warning taxpayers to be aware of scammers impersonating the Tax Office and demanding cryptocurrency such as Bitcoin as payment for fake tax debts.
The ATO became aware of these fraudsters late last year with over $50,000 paid in Bitcoin to scammers claiming fake ATO debts.
Once scammers receive payment, it is virtually impossible to recover it as cryptocurrency operates in a digital world The ATO is also warning taxpayers to be wary of other tax scams such as those demanding direct deposits into third-party bank accounts, demanding payment via iTunes cards or with a prepaid Visa gift card Over 80,000 scams were reported to the ATO in 2017, accounting for almost $2.4 million lost to scammers impersonating the ATO.
Almost one-third of victims were targeted with iTunes gift card scams, resulting in over $900,000 lost to scammers. More than half of all losses (roughly $1.2 million) were from deposits or transfers made directly into third-party bank accounts.
Scammers are also targeting taxpayers’ personal information with many reports of scammers asking for an individual’s Tax File Number.
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Following up on customers that don’t pay their bills is a nuisance, but unfortunately, it is part of running a business.
There are ways you can protect your business and take action should a customer fail to pay you. Consider the following:
Clear terms and conditions
Outlining payment protocol on terms and conditions, and going over these conditions when signing up a new customer sets clear expectations about how you expect them to pay for your services. The terms and conditions should clearly state when a payment is due, penalties for late payments, and the various payments which will be accepted.
Make payments easy
One of the major reasons people put off making payments is because the process of doing so is tiresome. Make your procedure as easy as possible; offer a variety of ways to pay to ensure you are maximising your chances of receiving payments on time and even early. You may wish to offer your customers the following payment options:
- Online payments such as PayPal
- Direct debit
- Gift cards
- After purchase payment instalments
High interest on unpaid services
Including a high interest on overdue payments is a sure way to get customers to pay on time. If people know that their bill will be higher if they don’t pay by a certain date, they are more likely to pay before said date. If you choose to do this, ensure it is in writing and customers are aware of the high interest on late payments.
If you are still wondering how to make your slow customers pay, call Glance Consultants @03 9885 9793 for guidance!