You may wonder how unpaid tax debts will impact you when you are planning to borrow money from a lender.
If you aren’t already engaged with the Australian Taxation Office (ATO) to manage your tax debts, you may want to read this article further as the disclosure of business tax debts measure took effect on 21 February 2020.
When will the ATO report business tax debts ?
The ATO may report a business tax debt if an entity meets the following criteria:
- has an Australian business number (ABN), and is not an excluded entity;
- has one or more tax debts, of which at least $100,000 is overdue by more than 90 days;
- is not engaging with the ATO to manage their tax debt; or
- doesn’t have an ongoing complaint about the proposed reporting of their entity’s tax debt information with the Inspector-General of Taxation Ombudsman.
An entity is excluded if it’s either, a:
- deductible gift recipient;
- complying superannuation fund;
- registered charity; or
- government entity.
What's the process ?
The ATO will send you a intent to disclose notice if they plan to disclose a business’ tax debt.
The notice will tell you what steps you can take to avoid your tax debt information being reported.
You will have 28 days from receiving the notice to take relevant action.
If you believe the ATO has made a mistake with your debt balance, or you disagree with the ATO’s decision to disclose your debt balance to credit reporting bureaus, contact us or the ATO immediately to discuss your situation.
What should I do if I receive an intent to disclose notice or meet the criteria mentioned above?
If you’re worried you won’t be able to pay on time, or you’ve already missed a due date, there are options available to support you.
If you are a small business, you also have access to Dispute Assist, a free service that helps unrepresented small businesses with the dispute process.
If you receive an intent to disclose notice , please contact us immediately. We are here to work with you to manage your tax obligations.
It takes guts to start a business. It also takes a strategic mindset to succeed.
Business owners are no strangers to weighing risk and navigating uncertainty, but the current climate has dialled everything up. Many business owners face the uncomfortable position of having to remap carefully thought-out succession plans and exit strategies and to consider selling their business before they’re ready and, possibly, for less than it’s worth.
Transition may be a better option
There are five different ways to sell:
- Close the business down and sell the assets
- Sell to a family member
- Sell to an employee
- Just a straight sale to an outside party
- Gradual buy-out – The Platform 1 model.
Preparing for sale - what’s important
- Get your house in order – Ensure you have systems and processes in place so the business isn’t reliant on you, but can run as a standalone entity.
- Maximise your profit – Make sure that you are not taking decisions to minimise your tax liability – because what you’re trying to do is create a profitable business.
- Find a manager to take the reins early on – figure out what kind of individual would be right to run the business; finding that person, and developing them. Create a plan where the new manager buys in gradually over 3 to 6 years. The objective is to get the owner out of the business physically as quickly as possible by transferring relationships and processes to the incoming person, so the owner becomes more of an investor rather than a manager.
Don’t put off your succession plan - even if you are not ready to sell
It’s a good idea to think about this long before you need to sell so that you maximise the value of the business and achieve a better outcome. It’s also worth remembering that retirement doesn’t need to be doing nothing. If your business can run as an asset without your involvement, you don’t have to sell it completely, so not selling down 100% of the business is a viable option.
If you don’t already have a succession plan in place, we can help so that you have options when you need them.
Conflict is common in most workplaces. While it may not seem too detrimental at low levels, research has found that serious conflict and toxic workplace culture can significantly impact productivity, confidence and motivation. It also leads to more absenteeism and higher rates of employee turnover.
Obviously, no business is going to thrive if the team is upset, distracted, or avoiding work due to conflict, but it’s not completely unexpected, given friction and discord do occur when people work together.
It’s wise then, to be realistic about workplace conflict, and take a proactive approach to effectively managing and resolving conflict, and equipping every employee with conflict-management skills.
Not only will it ensure you meet your obligations to ensure the health and safety of your workers, it will help turn conflict into a constructive, energising force that makes for a better business.
Let’s have a look on how to best deal with conflict in a busy workplace:
Embrace it
Instead of avoiding or shutting down conflict, good managers accept it as a natural part of human relations that can spark healthy debate, stimulate innovation, and increase engagement and trust.
Plan and get in early
Be ready for conflict so you can respond constructively to issues as they arise, resolve disagreements before they turn into full-blown disputes or tackle misconduct head-on.
Keep communication respectful
Ask for and consider everyone’s opinions and focus on the issues rather than the people. Compromise can be a lot easier if no one feels like they’ve lost or won.
Train for it
Employees who learn conflict-management skills are more comfortable and confident in handling differing views and concerns, more likely to positively resolve conflict, and experience less conflict overall.
Be compassionate
People want to be treated with respect and understanding, so look for mutually-acceptable outcomes. Working positively through problems can really bring the best out in your people.
If you’d like to chat to us about this further, please feel free to contact us 07 5620 1025.
The Federal Government is providing additional support to small and medium sized businesses (SMEs) who continue to deal with the economic impacts of the COVID‑19 crisis by expanding eligibility for the SME Recovery Loan Scheme.
In recognition of the continued economic impacts of COVID‑19, the Government will remove requirements for SMEs to have received JobKeeper during the March quarter of 2021 or to have been a flood affected business in order to be eligible under the SME Recovery Loan Scheme.
Eligible Businesses
The Scheme is currently open to SMEs with a turnover of up to $250 million that were recipients of the JobKeeper payment between 4 January 2021 and 28 March 2021 or were affected by the floods in eligible LGAs in March 2021. Both self‑employed individuals and non-profit businesses are eligible. Businesses that have accessed loans in Phase 1 and Phase 2 can also apply for loans under the scheme.
On 25 August 2021, the Government announced that the current requirements for SME’s to have received JobKeeper during the March quarter of 2021 or to have been a flood affected business will be removed. The Scheme Rules will be amended to reflect the updated eligibility and loans will be available through participating lenders once the changes become effective.
Key Features
Participating lenders are offering guaranteed loans on the following terms under the SME Recovery Loan Scheme:
- The Government guarantee will be 80% of the loan amount.
- Lenders are allowed to offer borrowers a repayment holiday of up to 24 months.
- Loans can be used for a broad range of business purposes, including to support investment. Loans may be used to refinance any pre-existing debt of an eligible borrower, including those from the SME Guarantee Scheme.
- Borrowers can access up to $5 million in total, in addition to the Phase 1 and Phase 2 loan limits.
- Loans are for terms of up to 10 years, with an optional repayment holiday period.
- Loans can be either unsecured or secured (excluding residential property).
- The interest rate on loans will be determined by lenders, but will be capped at around 7.5 per cent, with some flexibility for interest rates on variable rate loans to increase if market interest rates rise over time.
Eligible Loan & Products
Lenders can offer any product suitable to the borrower, with the exception of credit cards, charge cards, debit cards or business cards. Loans issued under the Scheme may take any other form of credit, provided the Scheme’s eligibility criteria are met.
Loans issued under the Scheme can be used to refinance existing loans or for a broad range of businesses purposes (including to support investment) but cannot be used to:
- purchase residential property;
- purchase financial products;
- lend to an associated entity; or
- lease, rent, hire or hire purchase existing assets that are more than half way into their effective life.
Loans may be used to refinance any pre-existing debt of an eligible borrower, including those from the SME Guarantee Scheme. There will be some restrictions on refinancing loans, such as not allowing loans that are more than 30 days in arrears to be refinanced; or borrowers who have entered external administration, or are insolvent, to refinance debts. Lenders can vary or restructure loans as long as they continue to meet eligibility criteria (including the maximum loan term) and do not increase the loan limit after approval.
Lenders must disclose the effective interest rate to the borrower at the loan agreement date. For variable rate loans, the lender must disclose the relevant margin and underlying base rate where applicable.
Loans can be used to purchase non-residential real property (such as commercial property) or for the acquisition of another business.
Lenders will be able to rely on a declaration from the borrower in regards to the purpose of the loan.
Application Period
Loans are available until 31 December 2021.
Should you have any questions or require assistance in putting a plan together, please don’t hesitate to contact our office on (07) 5620 1025 or hello@fiskl.com.au
The purpose of a business is to make money, and that means you have to know the difference between profit and cashflow.
Net profit is what you have left after you deduct all your business expenses from all your revenue. You change net profit only by changing the things that affect revenue and expenses.
- You renegotiate with your suppliers, you may get stock cheaper, or carry less inventory
- Your staff engage with customers better, you can learn more about what they do and don’t like – and get more business
- You can roster staff differently, you may be able to run your business more efficiently.
Cashflow comes from various sources. However, it also covers operating expenses, taxes, equipment purchases, repayments, distribution, and so on.
Note that a profitable business does not always have good cashflow. And a business with good cashflow is not always profitable. For example, you can have good cashflow, and loss-making expenses.
To work out how fast you can grow your business, you need to look at your projected cashflow. We can advise you on this.
Keeping cash crowned as King. Your business can’t survive without cash.
The following six takeaways are essential for business success:
- Protect your cash position, by knowing what it is. Build a cashflow statement and always keep it up-to-date. If you foresee a shortfall, start at once to fix it.
- Create a cash buffer as an insurance against unexpected difficulties.
- Protect your cash position against revenue shocks, by maintaining a balance equivalent to at least two months of operating expenses.
- Be realistic with revenue expectations. Take action now if it looks like sales are not going to get you to breakeven.
- Credit checking up front will reduce the risk of customer non-payment. Make sure you follow up with clear payment terms agreed in writing. Communicate regularly with customers and automate where possible.
- Every dollar you spend reduces cash reserves. The best way to protect your cash is to create a budget for the spend you know you need, and stick to it.
Looking to improve cashflow? Make a time to talk to us. We are here to help.
Applications for the 2021 COVID-19 Business Support Grants have opened and will close on 16 November 2021.
Available funding
You may be eligible to receive a grant of between $10,000 and $30,000 (excluding GST) depending on the size of your business. This grant may be used for business expenses.
Under the joint Queensland and Australian Government support package, tiered payments based on payroll size for eligible businesses and not-for-profit organisations across Queensland are available.
These include:
- $10,000 grant to employing small businesses and not-for-profit organisations with an annual payroll in Queensland of less than $1.3 million
- $15,000 grant to employing medium sized businesses and not-for-profit organisations with an annual payroll in Queensland between $1.3 million and $10 million
- $30,000 grant to employing large sized tourism and hospitality focused businesses and not-for-profit organisations with an annual payroll in Queensland of greater than $10 million.
Who can apply
To be eligible, your business or not for profit organisation must:
- employ staff (employees does not include any business owners)
- have an Australian Business Number (ABN) continuously held from 30 June 2021
- be registered for GST
- have Queensland headquarters and have been trading in Queensland on 31 July 2021
- not be insolvent, or have owners or directors that are insolvent or an undischarged bankrupt
- have an annual payroll of not more than $10 million (except for large businesses and not for profit organisations operating in an identified tourism and hospitality sector) during any of the 2019, 2020 or 2021 financial years
- have an annual turnover of over $75,000 during any of the 2019, 2020 or 2021 financial years
- Note: Businesses that have recently started can provide financial records to show they will reasonably meet this turnover requirement in the 2022 financial year
- demonstrate the business or not for profit organisation was directly or indirectly impacted by a lockdown event
- demonstrate or declare a reduction in turnover of 30% or more during a nominated 7-day period
- this must include at least 1 full day of a lockdown event when comparing against turnover achieved during the same 7-day period in July or August 2019; or
- if the 2019 period does not indicate a typical weekly turnover (e.g. for a recently started small business or business that has experienced structural changes), include another comparable period (e.g. the same period in July/August 2020).
Large tourism and hospitality businesses and not for profit organisations must ensure they are undertaking business activities in any of the identified tourism and hospitality ANZSIC code industry areas and meet all eligibility criteria (an annual payroll can be greater than $10 million).
How to apply
Applications are now open and will close on 16 November 2021.
You will need to apply online with supporting evidence through the Queensland Rural and Industry Development Authority (QRIDA) portal.
a. Create a QRIDA profile
If you do not have a QRIDA profile login, complete the following steps:
- Visit the QRIDA portal to create your profile.
- If you have not registered with QRIDA before:
- click on the ‘Register’ tab and enter your details
- after registering, QRIDA will send an email to validate your account – allow time to receive this email (remember to check your junk email too)
- when you have validated your account, you will be ready to log into the QRIDA portal and submit when applications open.
b. Gather and prepare your supporting evidence to submit with your application.
Please click here to see a list of supporting documentation requirements and feel free to contact us if you like assistance.
d. Processing Time
Grants will be processed in the order that they are received. The Government has announced that all eligible businesses who apply for the grant during the 3-month application period will receive funding.
Each State is continuing to release details of their own support for businesses. If you have been affected by another state lockdown, please feel free to contact us for the further information.
Applications for the 2021 COVID-19 Business Support Grants will open at 12pm (midday), 16 August 2021.
All eligible businesses who apply for a grant during the 3-month application period will receive funding.
Available funding
You may be eligible to receive a grant of $5,000 (excluding GST). This grant may be used for business expenses.
Who can apply
a. SME businesses and not for profit organisations
To be eligible, you:
- must employ staff
- have a QLD headquarters
- must have an annual turnover of more than $75,000
- must have an annual payroll in Queensland of not more than $10 million
- must show or declare a reduction in turnover of 30% or more for a 1-week period that includes at least 1 full day of the:
- South East Queensland lockdown commencing 31 July 2021;
- the Cairns and Yarrabah lockdown commencing 8 August 2021; or
- any other lockdown in Queensland in August 2021.
b. Large tourism and hospitality businesses and not for profit organisations
To be eligible, you:
- must employ staff
- have a QLD headquarters
- must operate in the tourism and hospitality sector
- must have an annual turnover of more than $75,000
- must have an annual payroll in Queensland of more than $10 million
- must show or declare a reduction in turnover of 30% or more for a 1-week period that includes at least 1 full day of the:
- South East Queensland lockdown commencing 31 July 2021;
- Cairns and Yarrabah lockdown commencing 8 August 2021; or
- any other lockdown in Queensland in August 2021.
How to apply
Applications will open 12pm (midday), 16 August 2021.
You will need to apply online with supporting evidence through the Queensland Rural and Industry Development Authority (QRIDA) portal.
What can you do now?
a. Create a QRIDA profile
To get ready, create a QRIDA profile so you can submit as soon as applications open.
If you do not have a QRIDA profile login, complete the following steps:
- Visit the QRIDA portal to create your profile.
- If you have not registered with QRIDA before:
- click on the ‘Register’ tab and enter your details
- after registering, QRIDA will send an email to validate your account – allow time to receive this email (remember to check your junk email too)
- when you have validated your account, you will be ready to log into the QRIDA portal and submit when applications open.
b. Check your QRIDA profile
If you already have a QRIDA portal login (i.e. to apply for a grant or loan previously), you should:
- Login to the QRIDA portal to test your password (Note: You may need to reset your password before the grant opens).
- Confirm all your details are correct.
c. Preparing supporting evidence
- Reduction in turnover of 30% or more – you must demonstrate or declare you have experienced a reduction in turnover of 30% or more over a nominated 7-day period (including at least 1 full day of a lockdown event) compared against the same 7-day period in July/August 2019 (Pre-COVID comparison). If the 2019 period doesn’t indicate a typical weekly turnover, include another nominated 7-day period (e.g. the same period in July/August 2020). Provide the following evidence to demonstrate:
- direct impact: – complete a declaration in your application
- indirect impact:
- submit sales turnover information from your business records for the relevant period; or
- rely on a dated letter on letterhead issued by a qualified accountant.
- Employ staff – you must demonstrate you employ staff (in addition to the business owners and be employed on the business’s payroll). Evidence may include:
- business financial statements, business payroll records, payroll tax return information; or
- a dated letter on letterhead issued by a qualified accountant.
- Annual payroll up to $10 million – you must demonstrate an annual payroll up to $10 million during any of the 2019, 2020 or 2021 financial years (except for large tourism and hospitality businesses and not for profit organisations operating in an identified tourism and hospitality sector). Evidence may include:
- business payroll records, payroll tax return information; or
- a dated letter on letterhead issued by a qualified accountant.
- Annual turnover of over $75,000 – you must demonstrate annual turnover of over $75,000 during any of the 2019, 2020 or 2021 financial years. Evidence may include:
- BAS statements or Australian Taxation Office records; or
- a dated accountant letter on letterhead from a qualified accountant.
- Trading location – to verify your trading location, you may provide:
- publicly available web information to identify your business operations (e.g. website or social media pages); or
- utility bills for the business location.
If you’re not sure where to start, speak to Fiskl Advisory today.
Depreciation is what happens when business assets lose value over time.
It’s an often-forgotten cost of doing business – but it shouldn’t be. Here’s why depreciation is so important
It costs you money
Depreciation accounting involves working out how much value your assets lose each year, so it can be listed as a loss and subtracted from your revenue.
It can reduce your tax bill
Because depreciation is a business cost, it can lower your tax bill – so it’s important to know how much value you’re losing each year.
It affects the value of your business
If major business assets lose value, the overall value of your business is reduced. Inaccurate tracking could lead to overestimating your business value, which makes it harder to secure finance.
The ins and outs of depreciation
Usually, only long-term or fixed assets can be depreciated, while consumable products aren’t included.
You also need to estimate the item’s lifespan and choose a method to calculate how its value declines over time.
Common methods include
Straight line depreciation
The asset depreciates by the same amount each year, eventually reaching zero value.
Diminishing value depreciation
The value declines by a higher percentage in the first few years, then the rate of depreciation slows.
Units of production depreciation
The lifespan is calculated by the value delivered, not the time spent using the asset. For example, a business vehicle’s depreciation might be measured in kilometres travelled rather than age.
Accounting for depreciation in your business
When you’re just starting out, calculating depreciation can seem overwhelmingly complex. But, because it can lower your costs and help you track your business value, it’s worth making the effort.
If you’re not sure where to start, get help from our expert accounting team now.
Your business may be eligible for financial support through the 2021 COVID-19 Business Support Grants. $5,000 grants will be made available to small and medium businesses across Queensland affected by the COVID-19 lockdown that commenced on Saturday 31 July 2021 and lockdowns in other states.
The Queensland Government recognises the short interval between lockdowns in South East Queensland, and the unique circumstances faced by regional economies who are impacted by multiple border closures. These $5,000 grants will provide cash flow support for businesses to help them adapt to evolving circumstances.
Available funding
You may be eligible to receive a grant of $5,000 (excluding GST). This grant may be used for business expenses.
Eligibility criteria
The grant provides support to employing small and medium businesses across Queensland impacted by the South East Queensland lockdown that commenced on 31 July 2021. Your business doesn’t have to be located in South East Queensland, but you must have experienced at least a 30% reduction in turnover as a result of the lockdown.
Grants are also available for large businesses in the hospitality and tourism sector operating in the 11 local government areas in the lockdown, subject to meeting eligibility criteria.
Small and medium businesses are defined as having:
- a turnover of more than $75,000 per annum
- an annual payroll in Queensland of up to $10 million.
Local government areas subject to lockdown restrictions are:
- Brisbane City Council
- Gold Coast City Council
- Ipswich City Council
- Lockyer Valley Regional Council
- Logan City Council
- Moreton Bay Regional Council
- Noosa Shire Council
- Redland City Council
- Scenic Rim Regional Council
- Somerset Regional Council
- Sunshine Coast Regional Council.
How to apply
You will need to apply online with supporting evidence. Grants will be processed in the order we receive them.
You will be paid the grant funds within 2 weeks of being notified that your application has been approved.
More information on how to apply and eligibility criteria will be available in the coming days.
Getting pay or payroll wrong is a major financial and legal risk. Business owners and management are ultimately responsible for any pay mistakes and their consequences, which could be a hefty fine from a Fair Work Ombudsman Inspector, or the Australian Taxation Office, as well as any interest and legal fees.
Mishandling pay can also harm employees’ trust and confidence in the business, which can end up sapping morale and damaging your reputation.Unfortunately, pay errors aren’t rare. A 2018 study estimated 2.4 million Australian employees could be affected by payroll underpayments, at a cost of $3.6 billion.
The combination of good payroll and HR systems will help reduce mistakes and non-compliance, and will make it quicker to identify and resolve any issues.
Here are some common pay errors to watch out for:
Underpayment
It isn’t always easy to ensure employees receive all their entitlements, as payments for base salary, overtime, penalties, allowances, and superannuation can be complex and confusing. Employers can make incorrect deductions without knowing it, so don’t just accept that your payroll system is automatically accurate and payments meet current legislation and awards. Take time to review what payments are being included and excluded, and make sure the amounts are right.
Overpayment
Overpaying your workers can be just as costly and harmful to your business as underpaying. Nearly 70% of audits by the Australian Payroll Association in 2020 revealed overpayments, and some errors cost employers millions of dollars. Overpayments are also hard on employees who are unaware and not in a position to repay the money. In certain circumstances, the business might not be able to recover the money and the employee (or ex-employee) keeps it.
Minimum wage compliance
The national minimum wage is the lowest that a worker can be paid. You and your employees can agree to any wage rate above the minimum, but every employee must be paid at least the minimum for every hour they work. Making a serious failure to pay the minimum wage could lead to significant penalties. The Fair Work Commission reviews the minimum wage each year, so you need to make sure you’re up-to-date with the latest rates.
Unlawful deductions
Legally, you can’t deduct money from your employee’s wages unless it’s for a lawful purpose, is reasonable, and the employee has agreed to the deduction in writing.The law makes no distinction between not knowing what deductions are legal and deliberately breaching the Fair Work Act, so employers need to ensure any deduction is lawful and has been discussed with the person. If you are unsure, get legal advice before proceeding.
Working with an accountant can help you avoid costly payroll mistakes and provide you with opportunities to improve your systems and process. Contact us to find out more today.
