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Business Tax Tips – Reducing Red tape in Australia

Business Tax Tips – Reducing Red Tape In Australia

Reducing Red Tape In Australia

Did you know there is a current 4 year plan where the ATO is working hard at reducing red tape in Australia for tax payers?

The ATO says at Reducing red tape Reforms to the Australian Taxation Office

In the 2015–16 Budget, the Government announced it will provide funding over four years to deliver an improved experience for clients in their dealings with the Australian Taxation Office (ATO).

Red tape will be reduced and future administrative savings delivered through investment in three foundational initiatives: a digital by default service for provision of information and making payments, improvements to data and analytics infrastructure and enhancing streamlined income tax returns through the my Tax system for taxpayers with more complex tax affairs.

The package of service improvements supports the Government’s commitment to reduce red tape and forms part of the Government’s digital transformation agenda.

This measure delivers on the Government’s election commitment.

Click for links with information on the legislation

A detailed website on tracking the initiative is  – It says –

The Government has committed to reducing the cost of unnecessary or inefficient regulation imposed on individuals, business and community organisations by at least $1 billion a year. An important part of this commitment is the development of a Framework to review the performance of Commonwealth regulators.

This Framework isn’t just for regulators. It will benefit business and the community, including individuals. Find out more.

What are YOUR thoughts and experiences? Comment below! Call for FREE 30min advice / strategy session today!

Call 0407 361 596 Aust and also get FREE “Avoid these GST mistakes” – There’s 18 that the Tax Office see regularly – Get them right!


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Business Tax Tips – Taxable Payments Annual Report – Building Industry

Business Tax Tips – Taxable Payments Annual Report – Building Industry

Taxable Payments Annual Report – Building Industry

Are you a business in the building and construction industry? You will probably need to report the total payments you make to each contractor for building and construction services each year.

If you’re a business that is primarily in the building and construction industry, you need to report payments you make to contractors if both of the following apply:

  • you make payments to contractors for building and construction services
  • you have an Australian Business Number (ABN).

Contractors can be sole traders (individuals), companies, partnerships or trusts.

You need to report these payments to us on the Taxable Payments Annual Report by 28 August each year.

Activities and services that are considered to be building and construction are broad. Some examples include architectural work (including drafting and design), certification, decorating (including painting), engineering, landscaping and construction, project management and surveying.

Payments you need to report

Report only payments you make to contractors for building and constructions services.

Contractors can be sole traders (individuals), companies, partnerships or trusts.

If invoices you receive include both labour and materials, whether itemised or combined, you report the whole amount of the payment, unless the labour component is only incidental.

The definition of building and construction services is broad – it includes any of the activities listed below if they are performed on, or in relation to, any part of a building, structure, works, surface or sub-surface:

  • alteration
  • assembly
  • construction
  • demolition
  • design
  • destruction
  • dismantling
  • erection
  • excavation
  • finishing
  • improvement
  • installation
  • maintenance (excluding the maintenance, service or repairs of equipment and tools)
  • management of building and construction services
  • modification
  • organisation of building and construction services
  • removal
  • repair (excluding the service or repairs of equipment and tools)
  • site preparation.

Get more details from the ATO website HERE             

Need help? Not sure? Call for FREE 30min advice / strategy session today!

Call 0407 361 596 Aust and also get FREE “Avoid these GST mistakes” – There’s 18 that the Tax Office see regularly – Get them right!

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Need help? Not sure? Call for FREE 30min advice / strategy session today!

Email or call 0407 361 596 Australia

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Business Tax Tip – Hobbies – How much can you sell before you need to declare the income like a proper business?


Hobby or Business?

Hobbies – How much can you sell before you need to declare the income like a proper business?

The ATO (Australian Tax Office) has guidance about how much can you sell before you need to declare the income like a proper business, that is whether an activity is a hobby or not. It is not simply based on turnover, but on the intention to make profit and indicators of formal set-up such as having a business plan etc.

From the ATO website – at “Am I in Business?” a series of questions are posed to help work out if the activity a business.

Quoted from the ATO site –

  1. Does your activity have a significant commercial purpose or character?
  2. Do you have more than just an intention to engage in business?
  3. Do you have a purpose of profit as well as a prospect of profit?
  4. Is there repetition and regularity to your activity?
  5. Is your activity carried on in a similar manner to other businesses in your industry?
  6. Is your activity planned, organised and carried on in a business-like manner?
  7. Does your activity have characteristics of size, scale and permanency?
  8. Would it be true to say your activity is really better described as a business, rather than a hobby, recreation or sporting activity?

Each time you answered yes to the questions above, it increases the probability that you are in business though no one indicator is decisive, they must be considered in combination and as a whole.

Why does it matter whether your activity is a business?

It matters because it may affect if:

  • Any money you receive from the activity is assessable income;
  • You are entitled to an Australian Business Number (ABN);
  • You can or must register for goods and services tax (GST).

How does the question of whether your activity is a business affect your tax?

There are numerous areas in which people carry out activities, often in a small way, which may constitute a business. These include, for example, gardeners, tradesmen, and couriers.

If you are carrying on a business:

  • Any money you earn from this activity is generally assessable for income tax;
  • You are generally entitled to claim tax deductions for any allowable expenses you incur in earning this income;
  • If your activity results in a loss, you may be entitled to offset this loss against other income or carry it forward to offset against future income, and therefore reduce the income tax you might have to pay in the future.

Common areas where people carry out activities which may be a hobby rather than a business include hobby farming, motor car/bike racing, and hobby ceramics.

If your activity constitutes a hobby or recreation:

  • Any money you earn from this activity is generally not assessable income;
  • You are not entitled to claim tax deductions for any expenses you incur in carrying out this activity;
  • If your activity results in a loss, you are not entitled to offset this loss against other income or carry the loss forward.

Do you need to apportion your expenses?

It may be necessary to consider whether your expenses were incurred solely for business purposes, or for a `dual purpose’ (for example, partly for business purposes and partly for private purposes).

Generally, if your expenses were not incurred purely for business purposes, it is necessary to apportion your expenses between the different purposes.

What evidence might you have to show that your activity is a business?

These are examples of questions that we may consider in determining if your activity constitutes a business:

  • Do you have a business plan?
  • Do you use specialised knowledge or skills?
  • Have you had prior experience in this area?
  • How much capital have you invested in the activity?
  • Have you done market research?
  • How much time do you spend on the activity?
  • Is the activity a part-time side-line or your main income earning activity?
  • Do you give quotes and supply invoices?
  • Do you advertise?

As well as guidance about how much can you sell before you need to declare the income like a proper business spend time and read other information about being in business – refer to Tax basics for small business and Starting a business essentials

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Better Business Decisions – Better to Pay Outright or Borrow for Stock/Equipment?


Better Business Decisions

Better Business Decisions

Last night at a local Meet-Up ( ) of South East Small Business, Business Development and Referral Networking, we had an interesting discussion about mistakes in business. For example: Whether to pay outright or borrow for stock/equipment?

The example one business gave, was paying outright for equipment that would be sign-written to advertise another business (he organised advertising for businesses). The issue was that spending $10,000 on the equipment took all the spare money the business owner had, while the payment for the advert was monthly over a multi-year contract.

Hindsight showed that it would have been better to get a loan for the equipment, then add his mark-up for the advert and service on top of the monthly re-payments, and he would still have his $10,000 to use for cashflow and marketing.

Have you had a similar experience?

What Better Business Decisions can you share?


Survey Shows Small Business are Using Social Media Less in the Last Few Months

social media
Small Business are Using Social Media Less

Nett Better Business Advice reports:

According to research released by accounting firm MYOB, there has been a decline in small-to-medium businesses (SMBs) using online tools.

MYOB’s July 2012 Business Monitor surveyed 1,004 SMB owners and found that online business activity such as online transactions, email marketing, and social media has fallen.

The study also discovered that the proportion of those surveyed with a business website increased slightly. It is now up to 38% of respondents, from 36% back in March 2012.

Furthermore, those SMB owners surveyed with a website were more likely to see a rise in revenue in the past 12 months than those without, 23% in comparison to 15%.

“Last year, those with a business website were 53% more likely to experience a revenue increase,” said Tim Reid, CEO of MYOB.

“They also said positive business changes were more likely a result of having a website than using other promotional media, or a result of utilising both.” Read More

And Business IT reports:

We’ve sat through enough presentations on social media to know that it has the potential to do wonders for your sales and/or brand if you are a small struggling business. On the other side of the coin, you can spend a lot of time on it, with little return, if you don’t use it effectively.

With this in mind, we weren’t shocked to discover that although more small businesses are running their own websites, the MYOB Business Monitor found that online activity was down in July compared to previous months.

MYOB CEO Tim Reed said, “The decline in popularity of online business activities was completely unexpected, particularly that of online marketing and social media. Many of these tools, such as a basic LinkedIn page, are free and can be used to raise the profile of a business and to communicate with customers”.

The challenge for small businesses is to find a balance between working on the business and working in the business. Given that we are still operating in uncertain economic times it’s not surprising to see that time on activities such as social media is falling. Read More

How are you using Social Media for business? Leave a comment!

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Loral’s 7 Step “Millionaire Makeover” System – FREE Event

Advice Business Tips Loral Milllionaire Maker Free Event

Free Event Australia

FREE event – Melb Syd Bris Perth Aust – Millionnaire Makeover Loral Langemeier

The best business education I have learnt is from Loral Langemeier. She has a way of simplifying  how to start and /or makeover your business by using what you have, getting the simplest business plan, focusing on fast cash to get moving, and creating the team you need to grow.

Join with me to see Loral Langemeier and Special Guests as they tour Australia teaching and showing others how to “make over” their lives by building and starting businesses. Loral has created hundreds of Millionaires and shown thousands more the way to a better life through her equation on how to do less and make more. With the release of her 5th Best Seller, “Yes! Energy, The Equation To Do Less And Make More”, Loral has literally cracked the code to making money in ANY economy. This addition to her “Millionaire Maker” series explains how to apply the right mindset and energy to the already existing and proven strategies on generating new cash, thus creating an unstoppable formula for catapulting your business to the next level and tapping into the gold mine inside of you!

This Event Is For You If……

  • You Want Financial Freedom
  • You Want To Start A Business
  • You Already Have A Business      & Want To Get To The Next Level
  • You Know There Is More Out      There For You, But Aren’t Sure How To Tap Into It
  • You Have a Gift or Talent that      You are Giving Away For FREE

This is an exclusive preview to Loral Langemeier’s “3 Days To Cash,” where you will get a “Millionaire Makeover” and learn how to start changing your life by tapping into your very own “Cash Machine” and get on the path to prosperity NOW!Come see how the Experts made it to the top and more importantly, how they continue to stay on top! Learn how easy it is to be able to make more money and still have time to travel, enjoy family and friends, and live a fulfilled life. Register NOW (or click the Power of Yes!  banner to the right)

Here Is Just A Snapshot Of What You Will Learn……

  • Take the 7 Question Quiz to      Know if Your Life is Really ‘Set Up’ for Financial Wealth
  • The New Wealth Psychology that      Consistently Turns Everyday Folks into Millionaires
  • The 5 mistakes that Stop 99% of      People from Becoming Independently Wealthy
  • Loral’s 7 Step “Millionaire      Makeover” System
  • How to Turn Your Existing      Skills, Talents & Passions into Your Own Cash Machine – In as Little      as 2 Hours Per Week with Zero Money Out of Pocket
  • Discover Loral’s Simple Formula      to Double Your Income in One Simple Move
  • How to Attract New Clients with      ‘Magnetic Marketing’ Strategies
  • Why You Need a ‘Wealth Building      Team’ – And Who Should Be On It
  • Why the ‘Save Every Cent’      Mentality Will NEVER Get You Wealthy and How It Will Keep You in a      Recession Mindset
  • How Loral Landed a      Multi-Million Dollar Contract in Her Early 20’s by Simply Replacing One      Word in Her Vocabulary
  • Learn How to “Say Yes, Then      Figure Out How” From The Master Herself Say YES! To Your Dreams!

Say YES! To Making Money!

Say YES! To A Better Life!

Say YES! & Register NOW! – It’s FREE (or click the Power of Yes! banner to the right)

SPECIAL BONUS: Just for registering, you will get Loral’s “Path to Prosperity” an hour long video to help you prepare for the event. In this video, Loral focuses on how a few simple shifts to your psychology and daily action can make all the difference in your long term success. Completing the video will help you gain the mindset necessary to get the most out of the live event.

Will You Say YES! To Your Future? Register NOW – FREE tickets (or click the Power of Yes!  banner to the right)

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Beginner – Getting your Books Organized

Getting your Books Organized

Getting your Books Organized

When you start a business, you will often have several roles to juggle including production or service, marketing, operations, sales, dispatch, invoicing, and bookkeeping of the accounts. These must all be done!

Starting Your Accounts Right (or Re-organizing Your Current Accounts)

Most business owners don’t like doing the books! But if you want to be in business then accept that the books and finances are one of your responsibilities and JUST DO IT or PAY SOMEONE to do it.

To keep accounts organised, you need a set of systems to ensure:

  • ALL sales and expenses are recorded and transactions aren’t forgotten (eg Cash receipts);
  • To keep all documents required by law easy to find them and neat and tidy;
  • Good records of conversations with customers or suppliers; and
  • At year end – a good set of all required data and reports so your accountant can complete your tax return quickly and efficiently.

Bank and Credit Cards

  • First, use a dedicated business bank account and credit card. Processing your records is much easier if you have these separate bank and card accounts (even if only a personal credit card in your name to start) that you only use for business transactions.
  • Secondly, request that all statements, including bank, debit card, credit card, and petrol accounts, are sent on a monthly basis. That’s because the key aspect of processing your financial documents is reconciling them on a monthly basis.

If you follow these suggestions, nearly all of your income and expenses will be captured in statements from both your bank account and credit card account and account keeping is much easier.

These are 6 steps to get your accounts off to the right start (or improve current systems).

Coming up next week we will look at some templates that can help you get organized and keep you and your accountant happy!