RA Business Advisors

Small Business

ATO Reminds Businesses to Pay Before They Disclose Their Debts

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Businesses are being urged by the Australian Taxation Office (ATO) to comply with their tax and superannuation obligations in order to avoid having their debts disclosed to credit reporting agencies.

Since July 2023, the ATO have returned to regular debt collection procedures, and have issued Notices of intent to disclose business tax debts to over 22,000 businesses with a tax debt of at least $100,000 that are extended over a 90 day period.

This month, debts from over 9,000 businesses are anticipated to be disclosed.

According to ATO Assistant Commissioner Jillan Kitto, making payments with the ATO is the only solution in avoiding your businesses’ tax debt to become evident in credit rating checks.

Businesses in debt are to contact the ATO immediately, as Kitto stated, ‘We aim to collaborate with businesses to assist in managing their debts’. This enables a sufficient chance for businesses to reconnect with the ATO. Nevertheless, for those who persistently and continuously neglect their tax and superannuation responsibilities, their debts will be disclosed.

The ATO anticipates that over 50,000 notices of intent will be issued in the 2023-24 financial year.

Although during the pandemic, the ATO’s priorities were shifted from debt collection to providing stimulus payments and assisting with tax matters, it is essential to reestablish the practice of timely tax payments.

Businesses that currently meet the criteria for disclosure have accumulated debts exceeding $5 billion.

Therefore, if you have an outstanding tax debt, the ATO strongly urge you to pay it or reach out us so you can be provided with the right support.

For more information about these measures click here.

Applications Open for the Xero Beautiful Business Fund

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Introducing the Xero Beautiful Fund, an initiative providing over NZ $750,000 in funding to our valued Xero small business customers – clients of small businesses – in Australia. 

The Xero Beautiful Business Fund is now accepting applications from all Xero small business customers! Submissions close on October 6, 2023, and the winners of each category will be announced in November 2023.

About the Fund 

There are four categories, with no restriction on the number of entries that can be submitted. If you believe you meet the criteria, feel free to submit as many entries as you like.  

  • Innovating for sustainability  
  • Strengthening community connection  
  • Trailblazing with technology  
  • Upskilling for the future  

The application process for each category is very simple. All you need to do is craft a 90 second pitch video, upload it, and complete a brief online application form. 

Spread the word 

We are encouraged to share information about the Xero Beautiful Business Fund to contribute to a more promising future for small businesses.  

For more information about these measures please click here or reach out to the Xero team. 

How to minimise the risks of cyber crimes

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With recent high profile cyber crimes being committed it is no wonder that this is now a priority for both businesses and consumers. Recently the ACSC Annual Cyber Threat Report (July 2021 to June 2022) was released to provide advice for businesses and consumers to protect themselves. An article by Accountants Daily highlighted some of the key aspects of this report.

Since the beginning of the pandemic in 2020, cyber threats have grown excessively. In particular, phishing spam calls, spam text messages, video conference attacks and insider threats.

Russia’s invasion of Ukraine has contributed to the destructive malware and sophisticated cyber-attacks on European Networks.

Advanced cyber threats have drastically increased at a larger scale, due to extortion, espionage and fraud. The Australian Cyber Security (ACSC) have calculated a 13% increase in the last financial year with an approximate of over 76,000 cybercrimes having been reported.

The top security trends for ACSC are:

  1. Cyber space has become a battleground
  2. Australia’s prosperity is attractive to cyber criminals
  3. The most destructive cyber crime remains ransomware
  4. Worldwide, critical infrastructure networks are increasingly targeted
  5. The rapid exploitation of critical public vulnerabilities became the norm

The following are crucial lessons from the latest cyber crime data.

  1. Frequency of cybercrime reports

All businesses should be weary of the increase in cybercrime and cyber security incident. As an increase in cybercrime will require an increase in cyber defence and protection.

The rate at which a cybercrime has been reported was one every seven minutes, however the reporting rate for the previous year was one every eight minutes.

The states reporting the most cybercrimes were Queensland (29%) and Victoria (27%).  However, the Northern Territory reported the highest average of losses resulting over $40,000 and Western Australia resulting exceeding $29,000.

  1. Trending cyber crimes

The three most frequently reported is online fraud (27%), online shopping (14%) and online banking (13%).

Fraud is the most prevalent, however ransomware is classified as the most destructive cybercrime, due its long-lasting impact, especially on data. Furthermore, organisations are also prone to fall victim to the indirect consequences of ransomware. This includes reputational damage and information being leaked and/or sold on the dark web.

The top-tier cybercrime syndicates target Australia’s big names, hence heightening the importance of large enterprises becoming more aware to this severe threat. LockBit was the top-rated weapon of choice against ransomware for 2022.

  1. Top industries targeted

The highest number of cyber security reports were within the healthcare and social assistance sector with a total 10%. The next leading cases were information media and telecommunications with 8% and education and training at 7%.

  1. Business Email Compromise

Business Email Compromise (BEC) is referred to as the scam that targets companies who have suppliers abroad and also conduct wire transfers. Cyber criminals are known to use BEC on the larger enterprises as they can hijack large sums without having to access the malicious payload URL.

Successful BEC attacks have risen significantly with the average loss to have increased over $64,000. According to ACSC Queensland was the most vulnerable with a total of 389 reports and a total of BEC attacks rising to 1,514.

  1. Cyber defence for organisations and individuals

Clare O’Neil, the Cyber Security Minister, had stated that due to Australia’s unique geostrategic position and information-rich environment we must build our cyber defences to ensure we have the tools necessary to protect ourselves against the impacts of cyber-attacks.

ACSC recommend following the essential eight maturity model which includes:

  1. Restricting administrative privileges
  2. Patching or updating operating systems
  3. Implementing multi-factor authentication
  4. Conducting regular back-ups
  5. Configuring your email security settings
  6. Initiating application controls on workstations and servers
  7. Denying corporate computers direct internet connectivity

It is encouraged to secure all devices and accounts, this means:

  • Turning on automatic updates to update applications, programs and smart devices
  • Activating multi-factor authentication across all of your accounts including emails, banking and social media.
  • Backing up your devices every three to six months.
  • Creating strong unique passwords for every account

First Line of Defence

To limit the risk of fraud and payment error, all accounts payable (AP) managers should conduct call-back controls to ensure the payee pays the correct invoices.

Some common challenges associated with AP teams conducting call-backs:

  • They don’t independently source supplier contact details
  • They rely on the return messages and incoming information
  • They don’t ask the correct questions
  • The people conducting them aren’t trained to detect fraud

Every time you onboard a new supplier or update your existing supplier, call-back controls are an essential. It is a simple, yet effective solution for your first line of defence.

The Bottom Line

As previously mentioned, cyber crime is an on-going issue and there are no signs of it slowing down in 2022. Therefore, being aware and understanding of how these threats are created, can minimise the chances of being at risk. For more information about this measure click here.

Working from home expenses

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If you are working from home, you are eligible to claim a deduction for the expenses you have incurred in relation to your work.

Eligibility to Claim

To claim this deduction, you must fulfill all employment duties whilst working at home, not just answering phone calls or checking emails. As a result of working from home, you must incur any other additional expenses too.

As a result of working from home, you can claim a deduction for the additional running expenses used within your home. This includes your phone expenses, electricity expenses, internet expenses and the devalue of office furniture and other items used to support your work, such as your laptop.

If your employer covers your working from home expenses, this must be included in your tax return.

If you’re the owner of the business and working from home, see deductions for home-based business expenses for more information.

In limited situations, you may also claim the occupancy expenses.

How to claim work from home expenses

You must choose one of the following methods that suits your circumstances to calculate your deduction:

Please refer to the Home office expenses calculator for further assistance in calculating your work-related expenses.

Expenses you cannot claim

If you’re an employee working from home, you cannot claim a deduction for the following expenses:

  • Coffee, tea, and milk – even if this is provided by your employer at work
  • Payments made towards your child/ren’s education for example, iPads, online learning subscriptions etc
  • Items provided by your employer whether it be a phone or a laptop
  • Items that have been reimbursed to you or paid for by your employer

Occupancy Expenses

Occupancy expenses are the expenses you pay to rent, own, or use your home. This includes land taxes, mortgage interest, rent, house insurance premiums as well as council and water rates.

Generally, if you are an employee working from home, you are ineligible to claim occupancy expenses and there will be no capital gains tax (CGT) implications for your home.

You can claim occupancy expenses if you can show that your employer could not provide an alternative place for you to work besides your own home, ensuring that your home is exclusively used for work purposes and is incapable for any other uses.

If you only use that particular area of your home for work for parts of the year, you are required to apportion your expenses on a timely basis.

For more information about these measures click here. Or if you need assistance with preparing your tax return and claiming your working from home expenses, give us a call to discuss them further on 07 3367 0852.

Get ready for a minimum wage increase

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In reference to the Annual Wage Review, the Fair Work Commission (FWC) have made the following announcements:

  1. As of July 1, 2022, the National Minimum Wage will increase by 5.2%, which measures to an addition of $40 per week.
  2. The minimum awards wages will increase by 4.6%, which is subject to the awards classification of $40 per week and is applied to all full-time employees with a 38-hour week schedule.

Therefore, the minimum award wages:

  • Above $869.60 per week will receive an increase of 4.6% and
  • Below $869.60 per week, will receive a $40 increase

The new National Minimum wage will be $21.38 per hour and $812.60 per week. This will take effect on the first full pay period on July 1, 2022, and onwards. For example, if your pay period repeatedly occurs every Monday, the new rates will be applied from Monday July 4, 2022, and onwards.

Depending on whether you are covered by an award, this rate increase will occur in two stages. This new rate will be applied to most awards within the first full pay period either on or after July 1, 2022. However, for some awards in tourism industries, hospitality and aviation, this increase will begin October 1, 2022.

For more information about these measures click here.

Key Super Changes 2022

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Recently legalisation has been passed that aims to make it easier for senior Australian citizens to contribute to their superannuation.  

Head of Superannuation at TSA, Natasha Panagis said that this is welcome news for many older Australians wanting to top up their superannuation savings for retirement. 

The legislation will allow individuals aged 67 to 74 to use the three year bring-forward rules to make a non-concessional contribution to superannuation in the same way someone under the age of 67 can.  

The eligibility age for downsizer contributions has also been reduced from 65 to 60 from 1 July 2022. “The downsizer contribution rules have been a popular strategy for individuals who are 65 or over and this change will allow more people to downsize and contribute their sale proceeds to their superannuation earlier”. 

New legislation has also removed the $450 per month minimum superannuation guarantee (SG) from 1 July 2022. This change will mean many young and/or lower income and part time works will start receiving SG contributions from their employer, regardless of how much they earn per month.  

For more information about these measures, click here.  

Beyond Blue – New Access for Small Business Owners

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NewAccess is a free and confidential mental health coaching program for small business owners. This program was developed by Beyond Blue to give small business owners the support they need.  

The program uses Low-intensity Cognitive Behavioural Therapy that encourages participants to recognise the way they think, act and feel and break unhelpful thoughts.  

The program goes for 6 sessions, coaches with small business backgrounds will work with you to overcome difficult issues, providing you with practical skills to manage stress and get you back to feeling like yourself. 

Why try NewAccess?

  • It is a free and confidential mental health program, developed by Beyond Blue. 
  • It is designed to support small business owners like you, manage life pressures.
  • You will be working with a coach who will help you through tailored programs.  
  • Structured six session programs 
  • No doctor or medical certificate required 
  • It’s available via phone, video call from Monday to Friday 8am until 8pm.  

What to expect 

In your initial assessment you can expect: 

  1. Talk through your challenges 
  1. Develop a problem statement  
  1. Create a plan based on your needs 

In the remaining 5 sessions with your NewAccess Small Business Owners Coach you can expect to: 

  1. Walk through your plan  
  1. Learn practical skills 
  1. Review your progress 

About the Coaches  

All coaches of the NewAceess for small business owners’ program have a background in small businesses, giving them a relevant understanding of challenges small business owners may face.  

Coaches are trained by the CBT institute to help develop and guide participants through their tailored program.  

Coaches undertake twelve months of training, starting with a six-week intensive that moves to practical learning. 

 

You can register for the program here.

If you wish to find out more information on how the program might help you, click here. 

 

Rewarding Staff for Covid-19 Vaccine

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It is important to understand your tax and super obligations as an employer, if you have provided rewards to employees for getting the COVID-19 vaccine.  

 

Examples of incentives and rewards include: 

  • Cash payment  
  • Paid leave  
  • Transport to and from the vaccinations
  • Vouchers and gift cards  

 

If you have provided employees with cash payment, you must: 

  • Withhold tax from the payment amount under pay as you go withholding 
  • Include the payment in your employee’s salary/ wages 
  • Include the amount in your employee’s ordinary time earnings (This is to help determine super contributions by employer) 

 

If you have provided paid leave, it will be treated like any other if the leave is granted to:  

  • Get a vaccination 
  • Recover from side effects  

The payments received while on leave are treated as salary/ wages.  

 

Non-cash benefits (vouchers or gift cards) may be reportable fringe benefits. These benefits will need to be included in your tax return. These may be used for: 

  • Determining your eligibility for certain government benefits and concessions, such as certain family assistance payments and tax offsets 
  • Determining your liabilities, such as Medicare levy

 

For any further information visit the Australian Taxation Offices website here.  

You may also like some of our other blogs. 

Notice of Intention (NOI) Due Dates  

New Stapled Superannuation Fund  

How to improve wellbeing in the workplace 

 

New Stapled Superannuation Fund Rules

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New stapled superannuation fund rules have been implemented from the 1st November 2020. Superannuation stapling is a new measure which was introduced to reform the superannuation system announced by the federal budget 2020/21. 

The imposed measures mean that an individual/ employees superannuation account is stapled to them when they change jobs.  This removes the need to create new superannuation accounts each time a person changes their employment.  

It is important to consider that the new rules require employers to use the “stapled super fund” details for new employees who do not choose a fund. These rules will only apply to new employees who commence after 1st November 2021.  

Typically, an employer must provide an employee with a superannuation standard choice form within 28 days of commencing work. Now, if a new employee does not choose a fund, the employer will be able to check if the employee has an existing stapled fund. As an employer you will be able to do this by logging into ATO online services an accessing the ’stapled superfund request service’.  

If the employee has a stapled fund, the employer will be required to contribute to that specific stapled fund. If an employer contributes funds into their default fund and not the employees stapled fund, they may be subject to the choice shortfall penalty.  

There is no need to request stapled super fund details from the ATO for any existing employees.  

Further information on employer obligations with regards to stapled super funds can be found here on the ATO’s website.  

For other important updates for small businesses, you can check out some of our other articles: 

 

Director ID Implementation

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As a part of the recently imposed director ID requirements, company directors are expected to verify their identity by applying for a 15-digit identification number.

This has been implemented by the Australian Business Registry Services (ABRS) to prevent the use of false or fraudulent director identities.

Why do you need a director ID?

Stakeholders are entitled to know the name and certain details of the directors of a company.

It is required by law that directors verify their identity with the Australian government before receiving a director ID. This helps to:

  • Identify and eliminate director involvement in illegal activity.
  • Prevent the use of false or fraudulent director identities.
  • Make it easier to trace directors’ relationships with company’s overtime.

 

How director ID works?

A director ID is a 15-digit identification number given to a director who has verified their identity with the ABRS.

Directors need to apply for their own director ID. It is free to apply.

Directors will only need to apply for one ID. This won’t change even if they change companies, change their name or stop being a director.

 

Who needs to apply for a director ID?

You will require a director ID if you are an eligible officer of a registered Australian body or a company under the Corporations Act 2001 (Corporations Act).

An eligible officer can be classified as a director or someone who conducts a similar role.

If you plan to become a director, you can apply before your appointment.

To be a director under the Corporations Act you must be at least 18 years old.

 

How to apply?

The easiest way to apply for a director ID is through the myGovID app.

Step 1 – Set up myGovID

It is required that you have a myGov ID with a standard or strong identity strength.

If you don’t have a myGovID, download the app here.

Step 2 – Submit documents

You will need information the ATO knows about you in order to apply for your ID. This can include:

  • Tax file number
  • Residential address
  • Bank account details
  • Dividend statement
  • Super account details

Step 3 – Complete application

Once you have completed the first two steps you can login and apply for your director ID.

The application process should not take any more than five minutes.