To claim a work-related deduction, you must have spent the money yourself and weren't reimbursed by your employer, it must directly relate to earning your income, and you must have a record to prove it. If the expense was for both work and private purposes, you can only claim a deduction for the work-related portion. Work expenses reimbursed to you by your employer are not deductible.
Put simply, speak with us! Whatever strategy is used to transfer business ownership is going to have tax and legal implications for both the current owner and the beneficiaries.
There will likely be Capital Gains Tax and Goods & Services Tax consequences and it can become complicated.
The ATO advises that to reduce the risk of incorrect tax treatment and consequent penalties, make sure your plans are documented and you seek advice from professional advisers where needed.
To ensure employees are receiving their correct wages and entitlements, under Commonwealth Workplace laws employers required to keep accurate and complete records for all of their employees (e.g. time worked and wages paid) and issue pay slips to each employee.
According to FairWork Australia employee records must:
Employee records are private and confidential. Generally, no one can access them other than the employee, their employer, and relevant payroll staff. However, Fair Work Inspectors and organisation officials (such as a trade union) may access employee records (including personal information) to determine if there has been a contravention of relevant Commonwealth workplace laws.
If you use your own car in performing your work-related duties (including a car you lease or hire), you may be able to claim a deduction for car expenses. If the travel was partly private, you can claim only the work-related portion.
There are two ways to calculate your motor vehicle expenses:
Cents per kilometre method
To get the most accurate picture on the worth of your business we encourage you to seek professional advice. The team at Hillier’s Advisors have extensive experience in undertaking business evaluations, so make an appointment today to meet with one of our trusted accountants.
If you decide to go ahead and value the business yourself, the Australian Government has developed a step-by-step guide that can assist you.
The most important thing is to gather all your relevant information including:
Employees are entitled to be paid a minimum wage, that is the lowest amount as determined by the Fair Work Commission for the type of work they are doing. For most employees, the minimum wage is set by an award that covers their industry or occupation.
You can view the full list of pay guides here.
Some industries or workplaces are covered by an enterprise agreement or a registered agreement. Generally, these agreements have been negotiated through a process known as enterprise bargaining, a process of negotiation generally between the employer, employees and their bargaining representatives with the goal of making an enterprise agreement.
The rules governing enterprise bargaining are set out under the Fair Work Act 2009, as explained here.
Xero is the leading global payroll service for small to medium businesses. It is a cloud-based accounting software which is easy to use and navigate. It has a range of features which makes paying your staff and balancing your finances simple! Hillier’s Advisors is a Xero Gold Partner and Certified Advisor.
You may be able to claim a deduction for expenses resulting from working at home. These can be additional running expenses such as electricity, the decline in value of equipment or furniture and phone and internet expenses. If you’re running your own business from home, different circumstances apply.
Employees generally can't claim occupancy expenses such as rent, mortgage interest, water and rates. You also can’t claim for general household items your employer may have provided you with at work, such as tea and coffee.
How to calculate your home office expenses is explained in detail here.
Tools, equipment and other items you need to do your job may be claimed as a deduction.
Examples given by the ATO include:
If you use items for both personal and work-related purposes you need to keep records to show the purpose of use of the item.
You may also be able to claim a deduction for a handbag, briefcase or satchel to carry items you are required to use and carry for your work, such as laptops, tablets, work papers or diaries.
If your work means you are exposed to the sun you may be able to claim for sunscreen, so long as the Therapeutic Goods Administration (TGA) deems the product is safe and effective.
A range of other deductions outside of work-related expenses can also be claimed, including:
Whether you’re a business owner or an individual, financial planning is crucial tofeeling safe and secure about your current situation, and your future. Having a plan is essential to helping meet your short-and-long-term financial goals. Equally important to creating a plan is monitoring in on an ongoing basis and making the necessary adjustments to keep you on the path to reach your goals.
Plan. It’s as simple as that. If you have a good succession plan in place, your transition out of your business will happen more easily.
Make sure your succession plan is realistic and achievable.
There are no set rules about what to include in a succession plan, however you may want to include details of:
The other key piece of advice is to speak with an expert. Our team has been helping business owners with exit strategies for over 30 years.
A self-managed super fund (SMSF) is a private super fund that you manage yourself. SMSFs are different to professionally managed funds like industry and retail funds.
When you manage your own super, you put themoney you would normally put in a professionally managed fund into your ownSMSF. You choose the investments and the insurance, and you run every aspect ofthe fund yourself.
According to moneysmart.gov.au on average, a SMSF will not perform as well as a professionally managed superfund, also known as an 'APRA-regulated fund' (APRA is the Australian Prudential Regulation Authority).
APRA-regulated funds use highly skilled professionals to manage their investments. You need to be confident that the investments you choose will perform better.
Our team of experienced accountants provide expert advice for establishing and managing your SMSF.
Hillier’s Advisors provides quality advice regarding investments and will help determine which is the right path for you. Investments can be one of the most valuable things in your life, but also one of the riskiest! Planning and researching are the two most important steps to complete before you choose to invest in something.
You need to speak to a professional about the creation of your estate plan. Our estate specialists are compassionate and sensitive to the varying complexities of planning wills and will work with you to determine the best options for your estate.
An estate plan can include documents such as:
It also covers how you want to be cared for — medically and financially — if you can no longer make your own decisions.
This part of your estate plan may include:
Estate planning is essential to ensure you have peace of mind that what you’ve achieved financially in your lifetime will be distributed as you wish and in the most tax-effective way.
No. Once an employer decides to participate in the JobKeeper scheme and their eligible employees have agreed to be nominated by the employer, the employer must ensure that all eligible employees are covered by their participation in the scheme. This includes all eligible employees who are undertaking work for the employer or have been stood down.The employer cannot select which eligible employees will participate in the scheme. This ‘one in, all in’ rule is a key feature of the scheme.
If you’re a sole trader who has received JobKeeper payments, you need to include the payments as business income in your individual tax return. If your business is a partnership, trust or company, and you received JobKeeper payments, you don’t need to include it as assessable income in your individual tax return – but you need to report it as part of your business income.
This is the most common question we get and also the biggest misconception. Once you have met the 30% decline in turnover test for one month you are eligible for the whole period. You DO NOT need to retest eligibility each month.
You are entitled to receive it until it ends. You can choose to withdraw if you like. We believe JobKeeper has multiple purposes. Whilst it is to help businesses struggling it is also to stimulate the economy. So, the idea is if you continue to receive it then have additional cash available to buy new equipment or something similar then it is still having its desired effect.
You are eligible to claim home officeexpenses if you are doing any work from home, even if it is just invoicing/bookkeeping of an evening. You should keep a diary of hours worked from your phone office to maximise your claim.
How to calculate your home office expensesis explained in detail here.
Due to COVID-19, the ATO previously announced that the work from home rate was increased from 52c per hour to 80c per hour from 1 March 2020 to 30 June 2020. It has now been announced that this has been extended to 30 September 2020.