Accountants, Accounting, Tax, GST, FBT, Taxation, Audit, Business, Cashflow, Superannuation

Is the price right?

Tue, 24 Mar 2026 06:45:31 GMT

Setting the right price is one of the most critical and difficult decisions a business owner can make. Pricing doesn’t just determine profit margins; it shapes customer perception, positions your brand in the market, and ultimately influences long-term sustainability. Whether you’re launching a new product or revisiting your pricing strategy, there are several key factors every business owner should carefully consider.

Understand Your Costs

Before setting any price, you need a clear understanding of your costs. This includes both fixed costs (rent, full-time or part-time wages, utilities) and variable costs (materials, freight, transaction fees, fuel, casual wages). Many businesses make the mistake of setting pricing too low because they fail to account for all expenses.

A sustainable pricing strategy ensures that every sale contributes to covering costs and generating profit. Break-even analysis can also be useful as it helps you to identify the minimum price needed to avoid losses.

Know Your Market and Customers

You need to understand who your customers are, what they value, and how much they are willing to pay. Conducting market research can provide valuable insights.

For example, a price-sensitive market may require competitive pricing, while a niche or premium market may allow for higher margins. The key is aligning your pricing with your target audience’s expectations and purchasing behaviour.

Analyse Your Competitors

Competitor pricing provides a useful benchmark, but it should be used in isolation. Look at how similar businesses price their products or services and identify where you fit within that spectrum.

Ask yourself:

Are you offering more value?
Better quality?
Faster service?

If so, you may justify a higher price. Alternatively, if you’re entering a crowded market, a competitive pricing strategy might help you gain traction – but know your limit – understand how low you can go and still meet you cash flow requirements. The goal is not to undercut competitors blindly, but to position your offering strategically.

Define Your Value Proposition

Your pricing should reflect the value you deliver. If customers perceive your product or service as highly valuable, they are more likely to accept a higher price.

Value can come from various factors:

Quality
Convenience
Brand reputation
Customer service
Unique features

Clearly communicating this value is essential. If customers don’t understand why your product costs more, they are unlikely to pay the premium. Prepare and rehearse your value proposition (as uncomfortable as it may feel!) and communicate this to customers.

Choose the Right Pricing Strategy

There are several pricing strategies to consider, depending on your business model and goals:

Cost-plus pricing: Adding a markup to your costs.
Value-based pricing: Pricing based on perceived customer value.
Competitive pricing: Aligning with market rates.
Dynamic pricing: Adjusting prices based on demand or conditions.
Penetration pricing: Starting low to gain market share.

Each approach has benefits and limitation and most businesses use a combination of strategies. The key is selecting a strategy/strategies that align with your objectives, which might be business growth, profitability, or market positioning. Dynamic pricing is very important in the current economic climate, as fuel and supplier costs are changing at a rapid rate.

Consider Psychological Pricing

Small differences in price presentation can significantly impact customer behaviour. For example, pricing something at $9.99 instead of $10 can make it feel more affordable. Bundling products, offering tiered pricing, or highlighting “best value” options can also influence purchasing decisions. Understanding how customers perceive prices can help you design offers that feel more attractive without necessarily lowering your margins.

Factor in Profit Margins

Your pricing must support healthy profit margins. These margins allow you to reinvest in your business, handle unexpected expenses, and grow over time. Let’s face it – as a business owner profit makes all the blood, sweat and tears worth it!

Different industries have different margin expectations, so it’s important to benchmark appropriately. Regularly reviewing your margins ensures that your pricing remains viable as costs and market conditions change.

Review Regularly

Determining prices is not a set and forget exercise; it needs regular review. Markets evolve, costs fluctuate, and customer preferences shift. That’s why it’s important to treat pricing as an ongoing process.

Experiment with different price points, monitor sales performance, and gather customer feedback. Even if you are not trying a new pricing strategy, monitor your profits regularly and adjust prices accordingly. Being flexible and willing to adapt is key to long-term success.

Account for External Factors

Economic conditions, industry trends, and regulatory changes can all impact pricing decisions. Inflation or fuel/fuel related costs, for instance, may force you to increase prices, while new competitors might require a more aggressive strategy.

Staying informed about external factors helps you to adjust pricing proactively rather than reactively/delayed.

Communicate Price Changes Effectively

If you need to raise prices, be transparent and honest with your customer base. Explain the reasons behind the increase (e.g. rising costs, improved quality, or added value). Giving customers plenty of notice and reinforcing the benefits they receive, can reduce customer push back and help to retain your loyal customer base.

Pricing requires a balance of financial analysis, market understanding, and strategic thinking. Importantly, what might work for one business may not work for another.

Carefully considering your costs, customers, competitors, and value proposition, will enable you to develop a pricing strategy that supports your goals. Most importantly, remember that pricing is dynamic. Regular evaluation and adjustment will ensure your business remains competitive, profitable, and aligned with customer expectations.

If you need help determining your pricing strategy or would like to understand how different prices affect your cash flow, please contact our Business Services Advisor, Jenna van Nierop.

Cooperative Research Centre Projects (CRC-P) Grants

Tue, 24 Mar 2026 06:35:48 GMT

Provides industry-led collaborations with short-term (up to three years) matched funding to develop important new technologies, products and services.

The CRC Program supports industry-led collaborations between industry, researchers and the community. It’s a proven way to link researchers with industry. The focus is on research and development that will have commercial uses.

The program aims to:

Improve the competitiveness, productivity and sustainability of Australian industries, especially where Australia is competitive and in government priority areas
Use high quality research to solve industry-identified problems
Encourage and help SMEs to take part in collaborative research.

Projects must:

Develop a product, service or process that will solve problems for industry and deliver real outcomes
Benefit small to medium enterprises (SMEs).

You can use the funding to cover costs directly related to your project including:

New research
Proof of concept activities
Pre-commercialisation of research outcomes
Industry-focused education and training activities
Conferences, workshops, symposia related to the joint research
Information sharing and communications related to the research.

This is not a complete list, and other costs may also be eligible. To be eligible as a lead applicant, you must:

Be an SME
Have an Australian business number (ABN)
Be incorporated in Australia as a trading corporation.

Your trading activities must be either:

Enough to be called a trading corporation
A major, not minor, part of your overall activity.

Project partners must include:

Two Australian industry organisations
One Australian research organisation.

The five priorities focus on areas where research and innovation can help solve Australia’s greatest challenges:

Transitioning to a net-zero future
Supporting healthy and thriving communities
Elevating Aboriginal and Torres Strait Islander knowledge systems
Protecting and restoring Australia’s environment
Building a secure and resilient nation.

Click here to view full funding guidelines on the provider's website.

Smith Thornton subscribes to a grant search provider and can help you prepare your grant application. If you have any questions, our Business Services Advisor Jenna van Nierop will be happy to assist. You can email her at jennav@smiththornton.com.au or call her on 9842 5155.

Farm Forestry Assist Program

Thu, 19 Mar 2026 07:20:09 GMT

Provides one-off grants for farmers and other landowners to plant pine trees on their land.

Successful applicants located within the State’s South West are provided with high-quality radiata pine seedlings from the FPC at no cost to the successful applicant.

Farmers and landowners interested in establishing 10 to 50-hectare pine plantations on their properties are invited to apply.

The program aims:

Established plantings have the capacity to diversify income, complement farm operations, provide land care benefits and also support Western Australia’s vibrant softwood industry.

Click here to view full funding guidelines on the provider's website.

Supply Chain Capacity Program

Thu, 19 Mar 2026 07:13:11 GMT

Assists Western Australian sheep producers and supply chain businesses to adjust to the removal of live sheep exports by sea and moderate the impact of the change.

The program, administered by the Regional Business Development Corporation, aims to ensure the onshore processing supply chain in WA is better positioned to meet the demands of processing sheep following the phase out of live exports by sea.

It will incentivise investment in on-farm and processing infrastructure before the end of the trade to build confidence in the sheep industry and capture future opportunities.

By enhancing on-farm and processing capacity, the program seeks to position WA’s sheep industry to meet future processing demands and capture emerging opportunities.

In Round 2, $20 million will be available for eligible applicants under one of two streams. Funding is for capital projects, including:

Expanding capacity, efficiency and productivity of onshore sheep processing facilities (e.g., lairage, ramps, wastewater upgrades, improved heavy vehicle access and associated driver facilities)
Increasing cold storage capacity, efficiency and productivity for sheep meat products
Installing technological advancements, such as objective carcase measurement technology in processing plants, software upgrades, and processor training for producers
Increasing sheep feedlotting and on-farm finishing capacity, efficiency, and productivity.

In Round 2, funding is available in two streams:

Capital investments for producers: Grants from $50,000 to $2.0 million for on-farm finishing
Capital investments for processors: Grants from $50,000 to $5.0 million to enhance onshore processing supply chain capacity, efficiency and productivity.

To be eligible for Round 2, applicants must:

Operate or intend to operate in WA’s sheep supply chain
Be a private sector business (including incorporated trustees), a public company, a grower cooperative, a conglomerate, a formal/informal partnership or a similar organisation
Hold an Australian Business Number (ABN) and be registered for GST in Australia
Provide dollar-for-dollar matching co-contributions.
Have not received the full amount of funding available in their stream in Round 1.

Click here to view full funding guidelines on the provider's website.

Nuffield Australia Scholarships 2026

Thu, 26 Feb 2026 06:05:01 GMT

Offers scholarships for research and travel in the agricultural industry.

Eligibility

Typically between 28-45 years of age. Please note that exceptional candidates outside this age range will be considered
A citizen or permanent resident of Australia
Engaged in farming, horticulture, fishing or associated industries
Intending to remain involved in food and fibre industries in Australia.

Scholarship Benefits

15-weeks of purposeful learning and unique access to our approachable, global agricultural network
Connections with the global alumni – over 500 scholars in Australia and 2,000 worldwide
See leading and innovative businesses and identify new best practices
Select a research topic that will be of use to you, your business, community and industry.

Value

$40,000 bursary, subject to guidelines set out on this website to cover costs associated with the study and reporting
$3,000 of the bursary will be withheld as an assurance on the submission of an approved report.

In addition to the longstanding scholarship investors, the Future Drought Fund (FDF) are investing in at least five scholarships that are specifically available to study drought resilience and support innovation. These scholarships will support applicants to build drought resilience expertise, adapt innovative technology and practices from overseas and share these learnings to advance Australian agriculture.

Click here to view full funding guidelines on the provider's website.

Smith Thornton subscribes to a grant search provider and can help you prepare your grant application. If you have any questions, our Business Services Advisor Jenna van Nierop will be happy to assist. You can email her at jennav@smiththornton.com.au or call her on 9842 5155.

The HESTA Excellence Awards

Thu, 26 Feb 2026 06:00:07 GMT

Recognises exceptional achievements in a range of settings across aged care, allied health, community services and disability services.

Nominations are now open for the HESTA Excellence Awards, which recognise the dedicated professionals working in disability, allied health, aged care and community services.

Anyone involved in the delivery of exceptional care or service can nominate or be nominated for the Outstanding Organisation or Team Excellence categories.

These awards are open to organisations and providers working in:

Aged care
Allied health
Community services
Disability services

There are two categories:

1. Outstanding organisation

Recognising organisations that have excelled in delivering initiatives to enhance the health and wellbeing of individuals, families and/or communities.

2. Team Excellence

Recognising teams that have developed and/or improved a product, service, process or system to enhance the health and wellbeing of individuals, families and/or communities

Nominated organisations must be currently providing services in aged care, allied health, community services or disability services in Australia. Suitable nominees are those who go above and beyond the everyday demands of their services.

Nominees can nominate in more than one category.

Nominees may self-nominate, however self-nominations must be supported by a supervisor/manager/CEO/owner/employer.

Click here to view full funding guidelines on the provider's website.

Smith Thornton subscribes to a grant search provider and can help you prepare your grant application. If you have any questions, our Business Services Advisor Jenna van Nierop will be happy to assist. You can email her at jennav@smiththornton.com.au or call her on 9842 5155.

Rheem Apprentice Plumber Grants

Thu, 26 Feb 2026 05:54:06 GMT

Awards funding to apprentice plumbers and gas fitters around Australia.

Are you an apprentice plumber, or do you know of an apprentice plumber who deserves $3,000 to help kickstart their career?

Each grant includes $2,000 to go towards TAFE/RTO fees and textbooks, and a $1,000 tool voucher to help build your toolbox.

To be eligible, applicants must be enrolled in TAFE/RTO or participating in a school-based apprenticeship and employed by a licensed plumber.

The Rheem Apprentice Plumber Grants are open to apprentice plumbers of any age, whether young or mature age.

Click here to view full funding guidelines on the provider's website.

Remote Jobs and Economic Development Program

Thu, 26 Feb 2026 05:50:20 GMT

Seeks to fund 3,000 new jobs over three years to support remote job seekers.

In February 2024, the Australian Government announced that it would invest $707 million to deliver a new Remote Jobs and Economic Development (RJED) program. The RJED program will provide people in remote communities with more jobs offering fair pay and conditions.

This grant opportunity is a part of the RJED Program in which, each grant will run for up to 3 years.

The RJED Program seeks to fund 3,000 new jobs over 3 years to support job seekers currently participating in or that are eligible for Remote Australia Employment Services (RAES), to move into employment.

For the purposes of the RJED program, a new job is:

A job which does not already exist within an organisation and does not displace an existing employee, or
A job created in a RAES Community Project.

The intended outcomes and objectives of RJED are:

3,000 jobs successfully taken up in RAES regions
Delivering more services in RAES regions
Creating more jobs offering fair pay and conditions
Improving employment and engagement outcomes for RJED employees and communities
Increasing socio-economic and wellbeing outcomes through the take up of more jobs offering fair pay and conditions for RJED employees, their families and communities
Increasing the number of formal employment relationships and flow-on effects of direct jobs in community and local business sectors, who will become ‘employers of choice’ for local job seekers
Contributing to the Closing the Gap Priority Reforms and targets, to the extent that the RJED program creates new jobs for First Nations people.

RJED Round 3 grant opportunity has two streams of funding available:

Job Creation – to fund the cost of wages and related entitlements to provide people in remote communities with more jobs with fair pay and conditions.
The Community Jobs and Business Fund (CJBF) – to provide funding for equipment, operational costs and infrastructure to directly support bringing jobs created under the Job Creation stream into existence.

To be an eligible organisation, you must:

Be operating or intend to operate in a RAES region(s)
Have an Australian Business Number (ABN) (exemptions may apply in special cases)
Where relevant, be registered for the purposes of GST.
Be a permanent resident of Australia
Have an account in your name that you control with an Australian financial institution.

And be one of the following entity types:

An Aboriginal and/or Torres Strait Islander Corporation registered under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (CATSI Act)
A company incorporated in Australia
An incorporated trustee on behalf of a trust
An incorporated association or an incorporated cooperative (incorporated under state/territory legislation, commonly have 'Association' or 'Incorporated' or 'Inc' in their legal name)
A joint (consortia) application with a lead organisation
A registered charity or not-for-profit organisation
An individual or sole trader seeking to employ another individual (i.e. you may not apply for a job for yourself)
An Australian local government body
An organisation established through a specific piece of Commonwealth or state/territory legislation, including public benevolent institutions, churches and universities.

Click here to view full funding guidelines on the provider's website.

Please note that the information provided is accurate at the time of entry; however, changes may be made by the funding provider. We recommend contacting the funding provider directly for the most current details or for further information about this grant.

Smith Thornton subscribes to a grant search provider and can help you prepare your grant application. If you have any questions, our Business Services Advisor Jenna van Nierop will be happy to assist. You can email her at jennav@smiththornton.com.au or call her on 9842 5155.

Key Superannuation Changes from 1 July 2026

Wed, 11 Feb 2026 06:30:59 GMT

The end of the financial year is fast approaching, and as usual, there are a number of changes being introduced effective 1 July 2026.

Superannuation Guarantee Rate

The Superannuation Guarantee Rate remains at 12%. This is the first year in quite a while that the rate has not increased, but there are two significant changes that businesses need to be aware of and planning for now.

ATO Small Business Clearing House Closure

Firstly, the ATO Small Business Clearing House (SBCH) is closing. If a business is using the SBCH to lodge their superannuation contributions, they will need to change to a new clearing house. Most payroll software will have an incorporated clearing house that can be used, and there are many super funds that offer this service, meaning there are plenty of options available to businesses.

Pay-Day Superannuation

The second significant change is Pay-Day Super. Legislation has passed through Parliament, making it mandatory for businesses to pay their superannuation contributions in line with their wages. If a business pays wages weekly, it will now also have to pay superannuation weekly. The onus is on the business to ensure that employees' superannuation is in their funds within seven days of their wages being paid, and the ATO intends to introduce hefty penalties if businesses are not compliant.

Plan for Pay-Day Super Now

This is a great time for businesses to conduct a mini audit of their payroll and superannuation to ensure they are meeting their obligations and to begin planning for the implementation of Pay-Day Super. In fact, businesses can begin paying super in line with their wages now.

If cash flow is a concern, it might be daunting to switch from quarterly lodgements to weekly or fortnightly (depending on your pay cycle). One possible solution is to begin paying monthly and then weekly in the lead up to 1 July 2026. For example:

Pay January superannuation in February.
Pay February superannuation in March.
Pay March superannuation in April.
Beginning 1 April, commence weekly or fortnightly superannuation payments (depending on the pay cycle)

This will provide business owners with a head start on Pay-Day super, and by 1 July 2026, hopefully, the business will be in a good position to make the regular super payments on time each pay cycle.

Transition Period – July 2026

July 2026 is going to be a transition period for Pay-Day Super, and that month may be a little confusing for those businesses that are not up to date with their super obligations.

From 1 July 2026 all super payments made will be allocated to the oldest outstanding super lodgement, which means that if the June quarter superannuation has not been paid (it is not due until 28 July 2026), and a wage is processed on 7 July and the super is paid, that super for the wage on 7 July will be allocated to the outstanding June quarter superannuation obligation. This will mean that the 7 July super obligation will be considered paid late.

If a business has more than one prior quarter of superannuation owing and begins their weekly contributions from the beginning of July 2026, the payments will be allocated to the longest outstanding debt.

The best way to overcome this potential problem is to check super obligations now, make sure the business is up to date with superannuation lodgements and payments. If there are any superannuation contributions outstanding that are past due, a Superannuation Guarantee Charge Statement should be completed and lodged with the ATO, and a payment plan can be implemented.

The contributions for the June quarter should be paid as soon as possible after the final pay is processed for June – this will alleviate the issue of the Pay-Day Super contributions being allocated to the wrong lodgement.

Late Superannuation Lodgements

If, for any reason, a superannuation contribution is paid late, the business can self-report the late lodgement and pay a nominal fee (which will be based on the amount outstanding). If the business takes the risk of making the payment late without self-reporting and the ATO discovers the discrepancy (even a few years later), the ATO will impose penalties. Penalties will date back from the discovery date to the date of the original contribution.

Smith Thornton Bookkeeping Team

The Bookkeeping Team at Smith Thornton Accountants has been preparing for Pay-Day Super for quite a while now and would be more than happy to assist businesses in transitioning to Pay-Day Super. They can help with overdue lodgements and completing Superannuation Guarantee Charge Statements, and can help the business to plan forward for up-and-coming obligations. The team also has a wealth of experience with different clearing houses, so if a business is still using the SBCH, they can help businesses move to a new superannuation solution. Get in contact here.

Company Director Duties

Fri, 23 Jan 2026 07:35:45 GMT

Whether you are an existing company director or are considering stepping into such a role, it is imperative that you are fully aware of your responsibilities and obligations as a company director.

Here are seven points that should guide your actions:

1: Act in Good Faith

A director is legally obligated to always act honestly and for proper purposes. They must act in the best interests of the company, putting the company’s interests before personal interests and avoiding conflicts of interest wherever possible.

2: Act with Care & Diligence

A director is legally obligated to exercise their powers with the same care a reasonable person would in those circumstances. This requires a director to stay informed and make enquiries regarding the company affairs and financial position in order to make informed, good-faith decisions.

3: Ensure Solvent Trading

A director is responsible for ensuring that a company can meet its debts as and when they fall due. A director is required to cease trading if the company becomes insolvent, and directors can expose themselves to personal liabilities for company debts incurred while trading insolvent.

4: Director Penalty Notice

Directors can be deemed personally liable for a company’s unpaid taxes, superannuation and ASIC fees. It pays to do your due diligence on outstanding debt before becoming a director of an existing company.

5: Keep Proper Financial and Company Records

It is a director’s responsibility to ensure that the company keeps proper financial records that correctly record and explain its transactions and financial position. Company registers, minutes of meetings and resolutions must also be documented and kept up to date at all times.

6: Director of Corporate Trustees

As a director of a corporate trustee, you hold dual responsibilities: you must satisfy your general statutory duties under the Corporations Act 2001 while ensuring the company complies with Trust Law and the specific requirements of the Trust Deed.

7: Director Identification Number (DIN)

All Directors need to first apply for a DIN before they can be appointed. The aim of this regime is to prevent fraudulent identities and combat illegal ‘phoenixing’, where companies are deliberately liquidated to avoid paying debts, only for another company with the same characteristics and participants to surface.

There is, of course, a lot to consider with the above information, and it can seem alarming, but be reassured that in 99% of cases, as a director, you are already doing all of this without realising it.

If any of these points are concerning you, Smith Thornton can be of assistance to discuss your concerns and make changes if and when necessary.

Innovate to Grow: Farm, Food Technology

Fri, 23 Jan 2026 07:19:51 GMT

Offers a free 8-week online, self-paced learning program for small to medium-sized enterprises (SMEs) working on innovative ideas in agriculture, food and related industries.

Since June 2020, the Innovate to Grow program has equipped over 750 small to medium-sized businesses (SMEs) with the knowledge, tools and support required to progress their research and development (R&D) opportunities.

This free 8-week online program provides SMEs access to expert facilitators, research guidance, a self-paced learning platform, guest speakers and networking opportunities. Participants can explore innovation ideas or challenges, assess their R&D plans and be supported as they navigate the R&D sector.

The course will help you make informed business decisions about whether the R&D project you've identified is right for you.

It will step you through how to:

Refine your innovation challenge question
Assess the viability of your innovation
Build your R&D business case
Prepare a strong R&D funding application.

As part of the course, you can expect:

Practical outcomes: We’ll step you through how to turn your idea into viable R&D.
Confidential feedback: All submissions will receive prompt expert feedback.
An R&D coach: You'll have a researcher who can answer general questions and find you an expert to talk to.
To build your network: Meet others working in your industry.

Who can get involved

SMEs
Researchers
Corporate sponsors and partners.

Click here to view full funding guidelines on the provider's website. Expressions of interest close 15 February 2026.

Building Better Aboriginal Business Supply Chain Voucher

Tue, 16 Dec 2025 01:28:32 GMT

Supports Aboriginal-owned businesses to build strong, sustainable practices and good governance so they can be competitive in Western Australia’s bush foods, bush products, seafood and beef industries.

As the value of Australian bushfoods, bush products, seafood and beef industries continues to grow, it provides an opportunity for Aboriginal businesses to:

Increase their representation and ownership across industries
Build sustainable businesses on Country through harvesting, developing and selling bushfood products
Highlight their unique knowledge, stories and connection to Country and food sources
Lead the way in the development, use and commercialisation of unique foods
Ensure bushfoods are developed, used, and commercialised in a culturally appropriate, respectful, and sustainable way
Ensure benefits are returned to Country so it is protected and nurtured.

Tailored support is required to empower both emerging and expanding Aboriginal businesses across WA working in bushfoods, bush products, seafood and beef industries.

The Supply Chain Voucher aims to:

Support Aboriginal business participation, leadership and ownership across bushfoods, bush products, seafood and beef industries
Strengthen sustainable on-Country enterprises through harvesting, developing and selling bushfood products
Provide opportunities to share unique knowledge, stories and cultural connection to Country
Encourage culturally appropriate, ethical and sustainable commercialisation of bushfoods
Ensure benefits and value return to Country, communities and culture
Help businesses meet growing demand for high-value products through strong governance and sustainable business practices.

The voucher provides targeted support to help emerging and expanding Aboriginal-owned businesses improve capability, competitiveness and supply-chain readiness.

The vouchers are available to Aboriginal-owned businesses to fund services and activities of up to $10,000 (excluding GST) per applicant business, paid directly to the nominated service provider(s).

Funding is available until program funds are exhausted.

Eligible activities may include (but are not limited to):

Accelerating business development and supply-chain participation
Workforce development and training
Business governance, coaching and mentoring
Sales and marketing support
Manufacturing, processing or value-adding capability.

To be eligible, applicants must:

Be an Aboriginal-owned business, registered with one or more of the below:

Supply Nation’s Indigenous Business Directory
Aboriginal Business Directory WA
Office of the Registrar of Indigenous Corporations.
Hold an active ABN
Be located in WA
Deliver goods or services in regional WA
Be emerging or expanding within bushfoods, bush products, seafood or beef industries
Demonstrate capability to continue operating and implementing the proposed activities.

Click here to view full funding guidelines on the provider's website.

Maintaining a Healthy Relationship with Business Debt

Tue, 16 Dec 2025 01:12:21 GMT

Business debt is a familiar concept for most business owners. Many businesses can’t grow or diversify without embracing debt, and many businesses operate with an overdraft due to seasonal or irregular cash flow. If managed correctly, business debt is just a stepping stone to building a stronger enterprise. However, if poorly managed, debt can quickly put businesses and proprietors under immense pressure.

The strategies below are provided to help business owners manage their existing debt and strengthen the financial health of their businesses.

Understand Your Debt

If you don’t already understand the debt facilities that your business already has, take some time to work through the following list. It is important for you to have a solid understanding of what your business owes – and what is owed to your business – whether that be credit cards, business loans, equipment finance, vendor financing or lines of credit.

For each debt facility, list the following:

Outstanding balance
Interest rate
Monthly repayment obligations
Term of the loan
Fees and charges
Collateral requirements (guarantees, security, etc.)

As confronting as this might be, it is important information to have at hand, as it will enable you to then prioritise your debt obligations and identify opportunities to reduce costs.

Understanding your interest rate is essential – if your finance papers don’t clearly state the interest rate, then enquire with your lender. Often, for equipment finance, the term of the loan and repayments are stated; however, the interest rate is not so clearly presented. Also, be sure to understand how shorter and longer loan terms impact the amount of interest paid over the life of the loan. Can you afford higher monthly repayments over a shorter term to reduce interest costs? For collateral, do you know what assets you have committed as collateral? Is it still appropriate for these assets to be used; does the bank still require the guarantee or security, or can another asset be used instead?

Prioritise Expensive Debt

Different types of debt attract different interest rates, depending on how risky the bank deems that debt to be. Debt that is unsecured will attract a higher interest rate (credit card, overdraft facilities, line of credit) and typically, debt used to purchase old second-hand equipment will have a high interest rate.

Ideally, pay down the high-interest debt first, as this is the most expensive debt. However, be aware that some loans attract fees if paid down early, so first ensure that you understand the terms of your debt facilities. If comparing personal debt and business debt, be sure to understand the concept of after-tax interest rates, as interest paid on business debt is typically tax-deductible (although there are some exceptions).

Negotiate Terms

Approach your bank and negotiate terms for your debt facilities. Although the process can be arduous at times, the benefits can be worth the effort. Likewise, if you are finding it difficult to meet repayments, approach your lender and ask them if there are ways to:

Reduce your interest rate.
Extend your repayment term.
Switch to interest only if you are going through a period of change in your business (or temporarily reduce payments).
Consolidate loans to reduce fees.

Banks will likely require financial statements and cash flow forecasts for this process. Although preparing a cash flow forecast can be stressful, this is a powerful tool to have as a business owner. To reduce the stress and create a dynamic forecast, ask your accountant to assist with this task.

Prepare a Cash Flow Forecast

The process that a business owner goes through to prepare a cash flow forecast can often be enlightening – it requires thought regarding cash flow management, income growth, income diversification, key business drivers and that dreaded question around “What do I actually spend my money on?” As confronting as this might be for some, it can create great goals and actions going forward to better manage business cash flow. So don’t view the cash flow forecast that the bank requires as another tick the box exercise, embrace it and use it in your business going forward.

Improve Cash Flow Management

Healthy cash flow is a key factor in effective debt management. Even profitable businesses can struggle with debt if cash flow is tight. Some tips to strengthen cash flow include:

Speed up receivables by offering early-payment discounts or digital billing.
Delay nonessential expenses without harming operations.
Improve inventory management to reduce money tied up in unsold products.
Review subscriptions and services to eliminate wasteful spending.
Discuss terms with suppliers to try to reduce costs.
Review sales/service opportunities and ways to increase income.

Small improvements in cash flow can make a significant difference in consistently meeting debt obligations.

Strengthen Income

As noted above, strengthening income is a key factor in improving cash flow and being able to meet debt repayments. Some ways to improve cash flow include:

Reviewing your pricing strategy. This might seem simple, but many business owners don’t do this regularly enough.
Introducing complementary services or products.
Teaching staff how to upsell or cross-sell with confidence.
Considering new platforms to sell your services and products from.
Reviewing your loyalty program – is it too generous?
Introducing KPIs that will incentivise staff to upsell or meet targets.

Managing business debt requires knowledge, clarity, discipline and strategic thinking. Good business owners will dedicate the time and effort required to this aspect of their business. If you need help understanding your business debt, preparing cash flow forecasts, improving business cash flow or creating a strategy for your business going forward, please contact us at Smith Thornton.

Cybersecurity – Safeguarding for Business Owners

Wed, 26 Nov 2025 07:24:15 GMT

Cybersecurity is fast becoming a critical business strategy - and if it’s not, it should be. Many businesses hold information that poses a significant risk to both businesses and their customers if the data they hold is not safeguarded from cybersecurity threats.

The Australian Signals Directorate’s latest Cyber Threat Report reported that:

There were 87,000 cybercrime cases across Australia last year.
For small businesses, the average cost of a cyber incident is now approximately $49,000.

It is therefore important that business owners think about cybersecurity and things that they can implement to reduce their risk as business owners and employers.

People: The Biggest Cyber Risk

But where does your cyber strategy start, and how do you know what the risks are? The biggest risk to Australian businesses is their people. More than 85% of all cybersecurity incidents are caused by human error. The top three incident types all rely on staff and business decisions to gain access to systems, meaning it is more important than ever to conduct regular staff training.

Business owners and their staff should be able to identify phishing attempts, understand what to look for in malicious emails and content, and know how to maintain healthy password practices.

Technology and Updates: Don’t Let Legacy Systems Create Weaknesses

Another considerable business risk is legacy hardware and software being used in the business environment. It might seem like a small frustration, turning your computer off for updates regularly, and using the latest versions of software, replacing hardware to align with required standards, but it works to close the gaps of security vulnerabilities.

Visibility and Monitoring: Detecting Threats Early

Realistically, you cannot defend what you cannot see. An important safeguard is event logging, reporting and alerting being setup in your business environment.

Setting up appropriate logging and alerts to ensure that you are notified when something risky, like logging in from Australia at 10am and Japan at 11am, is happening inside your environment. Understanding when unauthorised access to systems has occurred is critical in being able to then assess the potential scope of an incident, so it can then be managed.

The Importance of a Cyber Security Policy

A Cyber Security Policy might seem like another piece of paper, but it is critical in ensuring that business owners and their staff understand what needs to be done to protect the business’s devices and information. A good cybersecurity policy should outline:

Technology and assets that need to be protected.
Threats to those assets.
Rules and controls for protecting those assets and the business.
The type of information that employees can share.
Acceptable use of devices and online materials.
How to handle and store sensitive information.
How to detect and respond to cybersecurity incidents.

Business.gov.au provides useful information on preparing a Cyber Security Policy for a business: https://business.gov.au/online-and-digital/cyber-security/create-a-cyber-security-policy

The Australian Signal Directorate also provides useful guides and checklists for small business owners in cybersecurity: https://www.cyber.gov.au/business-government/small-business-cyber-security/small-business-hub

ATO Recommendations

The ATO recently published an article on Cybersecurity best practices and practical tips for business owners. For business owners to help protect their employees, the ATO recommends that business owners talk to staff about:

Setting up their myID - this is their digital armour when accessing ATO online services through myGov. Set it up to the highest identity strength; the higher the strength, the more protection.
Downloading the ATO app - this manages their tax and super easily while receiving real-time alerts when changes are made to their account. If something doesn’t look right, they can lock their account instantly and follow the prompts to secure it.

To help protect their business, business owners should adopt a cyber safe culture with these simple habits:

Keep devices updated - install software updates regularly to stay protected against the latest threats.
Use strong, unique passphrases - combine four or more random words like 'ocean lamp tiger cloud' and add special characters or numbers for extra strength (avoid quotes, personal details or predictable phrases).
Turn on multi-factor authentication (MFA) - this adds an extra layer of security to your accounts by requiring two or more forms of ID (like passphrases and biometrics).

BizGiver

Mon, 27 Oct 2025 06:21:14 GMT

Funds small businesses to help spark a new revenue stream or just make life a little easier.

BizGiver is BizCover's way of giving back to the small business community who fuel the economy. For too long, small businesses have been ignored, and now it's your turn to shine.

Every six months, BizCover will grant a $5,000 wish to one deserving business owner.

And this year, they are rewarding even more small business heroes. The top three finalists, winner included, will receive up to $250 off their next BizCover policy.

More than just a prize, it’s their way of recognising the dedication, sacrifice, and commitment that small business owners invest in their dreams. Since 2014, BizCover has awarded almost $100,000 in grants, including SEO packages, advertising, hardware, and training. If your wish can help your business grow and can be invoiced, it can become a reality. So, share that dream and let us help you bring it to life.

Eligibility:

Entry into the competition is open to registered Small Business entities in Australia who have a valid ABN
Small Business is defined as a business having less than 20 employees and a turnover of less than $2 million AUD per year
Entries can only be made in the business owner’s name, on behalf of their business only
Entrants must be over 18 years of age.

Click here to view full funding guidelines on the provider's website.

Smith Thornton subscribes to a grant search provider and can help you prepare your grant application. If you have any questions, our Business Services Advisor Jenna van Nierop will be happy to assist. You can email her at jennav@smiththornton.com.au or call her on 9842 5155.

Regional Economic Development (RED) Grants 2025

Mon, 27 Oct 2025 06:17:18 GMT

Invests in community-driven projects that support efforts to create long-term economic growth and job sustainability in WA's regions. Applications for round 8 are now open, closing 12 pm (AWST) 9 January 2026.

The Regional Economic Development (RED) Grants Program is a State Government initiative investing $55.85 million over ten years (2018-19 to 2026-27) in local projects to stimulate economic growth and development in regional Western Australia.

Delivered locally by your local Regional Development Commission (RDC), up to $250,000 is available for individual projects that promote sustainable jobs and workforce solutions, productivity, skills and capability building, as well as stimulating new investment and industry diversification across the region.

The grants boost investment in regional projects that contribute to economic growth initiatives and innovative pilots, and importantly, are driven by the community.

Applications for funding are assessed on a competitive basis, considering their alignment with the GEDC’s strategic regional priorities and clear demonstration of economic diversification and employment outcomes, including the following REDs objectives:

Sustainable jobs
Expanding or diversifying industry
Developing skills or capabilities
Attracting new investment in the region
Increasing productivity.

Click here to view full funding guidelines on the provider's website.

For applications from the Great Southern region, visit the Great Southern Regional Development Commission for more information.

Smith Thornton subscribes to a grant search provider and can help you prepare your grant application. If you have any questions, our Business Services Advisor Jenna van Nierop will be happy to assist. You can email her at jennav@smiththornton.com.au or call her on 9842 5155.

Important tax update: deductions for ATO interest charges scrapped

Mon, 27 Oct 2025 06:09:36 GMT

If you're carrying an Australian Taxation Office (ATO) debt there is a good chance that it will cost you even more from 1 July 2025 onwards. This is because from 1 July 2025 two types of interest charges imposed by the ATO are no longer deductible.

What are the interest charges?

There are two main types of interest that are charged by the ATO. These are:

General Interest Charge (GIC): This applies when you pay your tax liability late. The ATO applies GIC to encourage tax liabilities to be paid on time and ensure taxpayers who pay late don’t have an unfair advantage over taxpayers who pay on time. GIC is calculated on a daily compounding basis on the overdue amount. The GIC annual rate for the July – September 2025 quarter is 10.78%.
Shortfall Interest Charge (SIC): This is applied when there is a shortfall in tax paid because of an amendment or correction to your tax assessment. SIC is also calculated on a daily compounding basis. The SIC annual rate for the July – September 2025 quarter is 6.78%. The ATO applies SIC to the tax shortfall amount for the period between when it would have been due and when the assessment is corrected.

What’s changing?

Historically, both GIC and SIC amounts could be claimed as a deduction. This has meant that the net after-tax cost of the interest charges has been reduced for taxpayers who have a positive income tax liability for the relevant income year.

However, the Government has passed legislation to ensure that GIC and SIC amounts incurred on or after 1 July 2025 are no longer deductible, even if the interest relates to a tax debt that arose before this date.

As these interest charges are no longer deductible, this means that the after-tax impact of the charges is higher for many taxpayers. The impact becomes greater as your tax rate increases.

For example, let’s take a look at two individuals who have the same level of tax debt owed to the ATO and the same level of tax debt owed to the ATO and the same GIC liability of $1,000 for a particular income year:

Sally is a high income earner and subject to a 45% marginal tax rate (ignoring the Medicare levy). Under the old rules the net cost of the interest charge was only $550 because she could claim a deduction for the GIC amount and this reduced her income tax liability by $450. Under the new rules no deduction is available and the full cost to Sally will be $1,000.

Adam is subject to a 30% marginal tax rate (again, ignoring the Medicare levy). Under the old rules the net cost of the interest charge was $700 because he could reduce his income tax liability by $300 by claiming a deduction for the GIC amount. As with Sally, under the new rules no deduction is available for the GIC and the full cost to Adam is $1,000.

What can I do to minimise the impact of this change?

The simple answer is to pay down ATO debt as quickly as possible. As you can see, the GIC rate is relatively high and continues to accrue on a daily basis until the debt is paid off.

What’s the problem?

Many finfluencers make money by promoting financial products on behalf of companies, which means that they don’t necessarily have your best interests in mind when sharing information or insights. Finfluencers aren’t always qualified to provide advice on tax or financial products. You just can’t expect to receive solid, reliable or tailored guidance.

Unfortunately, we’re seeing some influences share tax hacks that are either completely false or apply only in extremely limited situations.

The ATO and some of the accounting professional bodies have sounded the alarm on some recent false claims, including:

Claiming your pet as a work related guard dog
Writing off luxury handbags as laptop bags
Deducting fuel costs without any documentation
Trying to claim swimwear as a work uniform

These kinds of suggestions might sound plausible but following them could get you into serious trouble. The ATO uses sophisticated data matching tools to detect suspicious or inflated claims. If your deductions don’t meet the legal criteria, this could trigger an audit and if mistakes are found, the consequences can include:

An increased tax liability
Interest charges
Fines
A criminal record and, in the most serious cases, imprisonment

Here’s how to stay safe and tax smart:

If it sounds too good to be true, it probably is. Dodgy deduction tips on social media are best ignored, at least until they can be verified.
Stick to trusted sources. For official tax guidance, visit ato.gov.au.
Don’t risk your business or personal reputation for a quick deduction.

If you aren’t sure, please reach out to us , and we can help you stay compliant, no filters or hashtags!

Livestock Transport Industry Transition

Mon, 27 Oct 2025 05:59:39 GMT

Provides support for livestock transport businesses to transition to other transport-related activities.

The grant can be used for a range of planning, professional and technical advice, training and co-funded investment in asset modification and acquisition.

This program will provide support for livestock transport businesses, including those who have made investments in transportation of sheep and the delivery of essential export related goods such as feed, bedding, water systems, veterinary supplies and handling equipment specifically for the live sheep export by sea trade, to transition to other transport-related activities which may require further investment.

Grant funding of up to $40,000 per eligible applicant will be available to applicants to contribute to the future costs associated with the transition to other transport-related activities.

Co-funding of 1-1 is required for applications submitted under this program, and the applicant must match the dollar value of the grant funding approved. In-kind contributions will not be counted towards matched funding.

To be eligible, you must:

Have an Australian Business Number (ABN)
Be registered for the purposes of GST
Be a resident of Australia for operational and tax purposes
Have an account with an Australian financial institution
Be a legal entity with the capacity to enter into a legally binding agreement or contract with the Australian Government.

Also, you must be one of the following entity types:

Company
Cooperative
Incorporated Association
Indigenous Corporation
Person
Sole Trader.

Click here to view full funding guidelines on the provider's website.

Smith Thornton subscribes to a grant search provider and can help you prepare your grant application. If you have any questions, our Business Services Advisor Jenna van Nierop will be happy to assist. You can email her at jennav@smiththornton.com.au or call her on 9842 5155.

Farm Business Transition Program 2025

Mon, 27 Oct 2025 05:54:10 GMT

Aims to increase the uptake of alternative farming systems and practices.

The grant can be used for a range of planning, professional and technical advice, application of research and development innovations and extension activities, and investment in on-farm infrastructure and improvements to increase the uptake of alternative farming systems and practices.

Grant funding of up to $75,000 per eligible applicant will be available to applicants to contribute to the future costs associated with the transition.

To be eligible, you must:

Have an Australian Business Number (ABN)
Be registered for the purposes of GST
Be a resident of Australia for operational and tax purposes
Have an account with an Australian financial institution, and
Be a legal entity with the capacity to enter into a legally binding agreement or contract with the Australian Government.
Provide approved evidentiary documentation demonstrating you have actively participated in the live sheep exports by sea industry in at least 1 of the past 3 financial years.

Also, you must be one of the following entity types:

Company
Cooperative
Incorporated Association
Indigenous Corporation
Person
Sole Trader.

Click here to view full funding guidelines on the provider's website.

Smith Thornton subscribes to a grant search provider and can help you prepare your grant application. If you have any questions, our Business Services Advisor Jenna van Nierop will be happy to assist. You can email her at jennav@smiththornton.com.au or call her on 9842 5155.

Special Announcement from Knight: Important Update: Changes to Macquarie Bulk Payments

Mon, 29 Sep 2025 23:55:42 GMT

Macquarie has recently advised that Knight can no longer process general withdrawals using the Macquarie Bulk Function.

What this means for you:

All payments now need to be approved through your Macquarie Authenticator app.
Invoices such as accounting fees, ASIC and ATO payments (via BPAY) must be paid directly by you from your Macquarie account.
Knight are available to help. Our team can guide you through the process to ensure payments are made smoothly, but we are no longer able to make these payments on your behalf.

If you have any questions or need assistance, please don’t hesitate to contact the Knight Team . We’re happy to walk you through the new process.

Rental Properties in SMSFs: Key Do’s and Don’ts for Trustees

Thu, 25 Sep 2025 05:11:12 GMT

Holding a rental property within a self-managed super fund (SMSF) is quite common, with the ATO reporting that $161 billion of SMSF assets were held in Australian real property as of June 2025. However, property held within superannuation is subject to very strict legislation, primarily under the Superannuation Industry (Supervision) Act 1993 (SIS Act) and is enforced by the ATO. Trustees carry the responsibility for ensuring compliance. A breach may expose the fund to penalties, loss of concessional tax status, or even disqualification of the trustees.

Below are some do’s and don’ts that trustees of SMSFs should understand and apply.

✅ Do’s

Ensure the property meets the sole purpose test

The core requirement for all SMSF investments is that they must be maintained solely for providing retirement benefits to members (or death benefits to beneficiaries). This means that the residential rental property cannot be used, even temporarily, for private or related-party benefit. For example, a trustee cannot stay in the property during holiday periods, nor can a related party occupy it, even if market rent is paid. Commercial properties held within an SMSF can be rented to a related party, but strict rules apply to ensure that transactions are at arm’s length - meaning that rents must be paid at independently verified market rates.

Regularly review rent and valuations

SMSFs must always transact on a commercial basis. Rent must reflect current market values, lease terms must align with industry standards, and expenses should not be inflated or discounted. To substantiate compliance, trustees should obtain independent rental appraisals and review them regularly. They should also get the property valued regularly and ensure all maintenance work relating to the property is being carried out by qualified professionals and charged to the fund directly at market rates.

Using a real estate agent vs trustee self-management

When an SMSF holds a rental property, trustees must decide whether to manage it directly or engage a licensed real estate agent. Each approach has compliance and practical implications.

Using a real estate agent provides an extra layer of independence. Agents ensure leases, rental collection, and maintenance arrangements are handled on commercial terms, which helps demonstrate that the SMSF is meeting the arm’s length requirement as well as the sole purpose test. Property managers also provide documentation such as rent ledgers and inspection reports, which are valuable for audit purposes. While this comes at a cost, many auditors and advisers recommend professional management as it reduces the risk of inadvertent breaches.

Trustee self-management can be cost-effective, but it significantly increases compliance risk. Trustees must be able to prove that the rent charged is at market rates, that lease terms are consistent with industry standards, and that maintenance is carried out on commercial terms. Trustees also need to maintain accurate and complete records for auditors, which can be burdensome. Any failure to keep proper documentation, or any perception that dealings are not at arm’s length, could lead to compliance action from the ATO.

In practice, engaging a real estate agent strengthens the fund’s compliance position, while self-management requires trustees to be diligent, organised, and highly familiar with both superannuation and property laws. The choice ultimately depends on the fund’s resources and the trustees’ willingness to take on the additional obligations.

Document trustee decisions

Every significant decision regarding the property – from purchase to lease agreements and ongoing management – should be formally documented in trustee minutes. Records provide evidence of prudent decision-making and are critical during an ATO audit. Investment strategy reviews, valuation reports, and rental assessments should also be kept.

Regularly review the investment strategy

A rental property can present risks, including illiquidity, reliance on a single tenant, and lack of diversification. Trustees must assess whether the SMSF can cover expenses (such as property maintenance, tax liabilities, and insurance) and meet pension payment obligations if rental income is interrupted. Documenting these considerations in regular investment strategy reviews is essential.

Engage professionals where necessary

Trustees are expected to act in the best financial interests of members, which may require obtaining professional assistance. Independent valuations, property managers, legal advisors for lease agreements, and accountants familiar with SMSF compliance can help ensure obligations are met and risks reduced.

❌ Don’ts

Don’t rent to fund members or relatives for residential property

Residential properties owned by an SMSF cannot be leased to fund members, their relatives, or related entities, regardless of whether rent is at market value. This is one of the most common compliance breaches. The only exception is business real property, which can be leased to related parties if strict conditions are met and the arrangement is entirely commercial.

Don’t borrow without following the limited recourse borrowing rules

Borrowing within an SMSF is only permitted under a Limited Recourse Borrowing Arrangement (LRBA). This requires the property to be held in a separate bare trust, with the lender’s rights limited to that property alone. If the borrowing is not structured correctly, the entire investment may be deemed non-compliant. Trustees must also ensure loan repayments do not create liquidity pressures.

Don’t mix personal and SMSF finances

The SMSF must operate as a separate entity. All rent must be paid directly into the SMSF bank account, and all property-related expenses must be paid from that account. Using personal funds, even temporarily, creates compliance breaches. Likewise, SMSF funds cannot be used for personal property expenses.

Don’t forget to keep accurate and complete records

Trustees must keep accounting records, bank statements, invoices, receipts, rental income schedules, and expense documentation for at least 5 years. These records are essential for preparing annual accounts and the SMSF annual return.

In summary, although rental properties are commonly held within SMSFs throughout Australia, trustees need to be aware that they demand high standards of compliance. Trustees who apply strict arm’s length principles, maintain strong documentation, and regularly review their strategy will reduce risk and protect the fund’s concessional tax status.

Smith Thornton sends out comprehensive checklists when we perform your SMSF compliance work, but we are also just a phone call away for any SMSF compliance questions.

Don't hesitate to get in touch with us on 9842 5155 or email us here for any SMSF rental property queries that you might have. We will be happy to assist.

Supply Chain Capacity Program 2025

Tue, 23 Sep 2025 00:37:39 GMT

Assists Western Australian sheep producers and supply chain businesses to adjust to the removal of live sheep exports by sea and moderate the impact of the change.

It will incentivise investment in on-farm and processing infrastructure before the end of the trade to build confidence in the sheep industry and capture future opportunities.

By enhancing on-farm and processing capacity, the program seeks to position WA’s sheep industry to meet future processing demands and capture emerging opportunities.

In Round 1, $20 million will be available for eligible applicants under one of two streams. Funding is for capital projects, including:

Expanding capacity, efficiency and productivity of onshore sheep processing facilities (e.g., lairage, ramps, wastewater upgrades, improved heavy vehicle access and associated driver facilities)
Increasing cold storage capacity, efficiency and productivity for sheep meat products
Installing technological advancements, such as objective carcase measurement technology in processing plants, software upgrades, and processor training for producers
Increasing sheep feed lotting and on-farm finishing capacity, efficiency and productivity.

In Round 1, funding is available in two streams:

Capital investments for producers: Grants from $50,000 to $2.0 million for on-farm finishing
Capital investments for processors: Grants from $50,000 to $5.0 million to enhance onshore processing supply chain capacity, efficiency and productivity.

To be eligible for Round 1, applicants must:

Operate or intend to operate in WA’s sheep supply chain
Be a private sector business (including incorporated trustees), a public company, grower cooperative, conglomerate, formal/informal partnership or similar organisation
Hold an Australian Business Number (ABN) and be registered for GST in Australia
Provide dollar-for-dollar matching co-contributions.

Click here to view full funding guidelines on the provider's website.

Smith Thornton subscribes to a grant search provider and can help you prepare your grant application. If you have any questions, our Business Services Advisor Jenna van Nierop will be happy to assist. You can email her at jennav@smiththornton.com.au or call her on 9842 5155.

AgriFutures Rural Women’s Award 2025

Tue, 23 Sep 2025 00:31:57 GMT

Provides a platform to inspire and support Australian women to use and develop their skills to benefit their industries and communities.

*Note: Applications close at 7 November 2025 for residents of the Australian Capital Territory, New South Wales, Victoria, Queensland, Western Australia, South Australia, and Tasmania. Applications close on 30 January 2026 for Northern Territory residents.*

The AgriFutures Rural Women’s Award is Australia’s leading award empowering and celebrating the inclusive and courageous leadership of women involved in Australia’s rural and emerging industries, businesses, and communities, now and into the future.

Over the past 25 years, the Award has gained a significant profile and is recognised as a program of influence among parliamentarians, industry, media and Award alumni. Each State and Territory Winner receives a $15,000 Westpac grant for their project, business or program, access to professional development opportunities and alumni networks.

AgriFutures Australia is committed to the future growth and advancement of the Award as a means of identifying, celebrating and empowering women. The Rural Women’s Award is one of many AgriFutures Australia initiatives ensuring our rural industries prosper now and into the future.

In order to apply for the Rural Women’s Award, applicants must:

Identify as female
Be over the age of 18
Be an Australian citizen or permanent resident
Have an existing project, business or program which is already live/up and running
Have a project, business or program that is creating impact, making a difference and/or contributing to enhancing the prosperity of rural and emerging industries, and rural, regional, and remote businesses and communities
Have an existing project, business or program that fits into at least one of the following categories: Community, Collaboration or Commercial
Have a project, business or program that aligns with a minimum of two of the Award’s values: Empathetic, Authentic, Cooperative, Confident, Courageous, Grit, Resourceful, Pragmatic, Clarity of Purpose, Inclusive, and Innovative.

The grant can be used for formal training in leadership and business management; overseas study tours; establishing business plans or pilot programs; developing educational or promotional campaigns; networking at forums and conferences to grow your knowledge of industries and markets; developing training programs; testing information technology initiatives; developing or testing a new business concept or innovation; and publishing books.

The National Winner will be awarded an additional $20,000 Westpac grant, and the National Runner Up, an additional $15,000.

Applicants need to be over 18 years old and identify as female.

Click here to view full funding guidelines on the provider's website.

Smith Thornton subscribes to a grant search provider and can help you prepare your grant application. If you have any questions, our Business Services Advisor Jenna van Nierop will be happy to assist. You can email her at jennav@smiththornton.com.au or call her on 9842 5155.

Wine Tourism and Cellar Door Grant 2025

Tue, 23 Sep 2025 00:24:48 GMT

The Wine Tourism and Cellar Door Grant program has been introduced to support producers who add value by encouraging visitors to wine regions. Wine producers will be able to access an annual grant reflective of their eligible physical cellar door sales. Applications are open until 31 October 2025.

To be eligible for the Wine Tourism and Cellar Door Grant, applicants must:

be a wine or cider producer.
be a legal entity registered for GST and with an active ABN.
have made at least $1,207,000 (GST exclusive) in sales of rebatable wine in the relevant financial year.
accrue rebatable domestic cellar door sales in excess of any such sales used to meet the $1,207,000 (GST exclusive) threshold in the relevant financial year.
have paid the WET on all eligible sales used as part of the application.
have owned or leased a physical cellar door in Australia in the relevant financial year, and/or their related entity/ies have owned or leased a physical cellar door in Australia in the relevant financial year..
have a liquor licence valid in the relevant financial year.

Grants up to $100,000 are available.

If applicants meet the eligibility criteria, they can apply for a grant payment for 29 per cent of the notional wholesale selling price of their rebatable domestic cellar door sales, provided that:

such sales are not already used to meet the eligibility threshold of $1,207,000 (GST exclusive) in rebatable wine sales
the transaction date for such sales were within the period for which the applicant (and/or their related entity(ies)) has owned or leased the physical cellar door
at least 50 per cent of the rebatable domestic cellar door sales used in the grant application consist of sales from the physical cellar door (see examples below)
none of their associated producers have already applied for the grant in the relevant financial year.

Wine Australia will record and track applications, including details of associated producers, as they are received. If, in a relevant financial year, more than one associated producer applies for the grant, the first application received and considered eligible will negate the rest of the applications.

For more information, please visit the Grant Connect website.

Smith Thornton subscribes to a grant search provider and can help you prepare your grant application. If you have any questions, our Business Services Advisor Jenna van Nierop will be happy to assist. You can email her at jennav@smiththornton.com.au or call her on 9842 5155.

Strategic Planning: Turning Vision into Action

Sat, 23 Aug 2025 03:35:09 GMT

Ever walked out of a Strategic Planning Day feeling inspired…only to see the plan disappear into a drawer and never be mentioned again? You’re not alone.

Over the past decade, Strategic Planning Days have become a popular way for businesses, organisations, and community groups to set direction. The idea is simple: get the right people in the room, align everyone’s focus, and map out the path to success.

In theory, the resulting plan becomes the roadmap for measuring progress and guiding big decisions. In reality? Too often, it’s filed away, never to be seen again.

Why Does This Happen?

From experience, a few common culprits keep plans from being used:

Planning too far ahead

A five-year plan sounds ambitious, but it’s often impractical. If a goal won’t be touched for four years, by the time you get there, your business will have changed direction. Focus on what you can act on in the next one to two years to keep momentum and relevance.

Unrealistic vision and mission statements

If your Vision and Mission Statements don’t truly reflect your beliefs and purpose, they’ll feel empty. A vision should inspire. A mission should clearly define your purpose. Both need to be authentic.

Lack of readiness for change

Not every organisation is ready for growth. Some are managing crises and have no spare resources for meaningful change. Strategic planning works best when you have the capacity to implement change.

What Successful Strategic Planning Looks Like

To create a plan that works, keep your focus on the next one to two years. This ensures every goal is relevant, urgent, and measurable.

A productive Strategic Planning session (often run over a full day) should include:

Setting or reviewing your vision: What do you want the business to become?
Clarifying your values or purpose: Why does your business exist, and what principles guide it?
Defining goals and strategies: What actions will move you from where you are now to where you want to be?

Understanding Where You Are Now

Before you set the destination, know your starting point:

External environment: Spot opportunities and threats from economic conditions, competitors, customer trends, or industry changes.
Internal environment: Identify strengths and weaknesses in areas like staffing, processes, systems, services, and financial stability.

Setting Goals That Drive Action

Most strategic goals tend to fall into five categories:

Risk
Finance
Services
People
IT

These categories keep your plan balanced and ensure you address both growth and stability.

From Vision to Action

When done well, strategic planning transforms vision into action. It connects big-picture thinking with practical steps, guiding decisions and keeping energy focused where it matters. The key is accountability: Assign clear ownership for every action, track progress against timelines, and understand the financial and resource implications before you start. Bringing in an external party to make you accountable to timelines is highly recommended.

A strategic plan is only as valuable as the action it inspires. Don’t let yours become another forgotten document - use it to drive momentum, create alignment, and make measurable progress toward your goals.

Do you need help turning strategy into results? Contact us to start building a plan that drives action.

Cheaper Home Batteries Program

Fri, 22 Aug 2025 08:15:00 GMT

Provides households, community organisations and small businesses with a discount on the upfront cost of installing a small-scale solar battery.

The $2.3 billion Cheaper Home Batteries Program is now available to help more people install batteries.

Australia is a world leader in rooftop solar with more than 4 million rooftop solar PV systems; however, only one in 40 households has installed batteries. The high upfront cost of batteries means installing batteries is out of reach for many households and businesses.

Australian households, businesses and community organisations can now get a discount of around 30% on the upfront cost of installing small-scale battery systems (5 kWh to 100 kWh).

The discount is:

Available for batteries connected to new or existing solar PV systems
Funded by the government to ensure no extra costs are passed on to consumers
Based on the battery’s usable capacity and the number of small-scale technology certificates, the battery is eligible for
Going to be reviewed at least annually and will gradually decrease until 2030, in line with reducing battery prices

The program is:

Helping participating households, businesses, and community organisations reduce electricity bills by making the most of cheap and clean solar power, by storing it for when it is needed
Lowering costs for everyone - not just those who install a battery – by reducing peak demand and creating a more stable electricity grid
Communicating responsibilities for retailers, installers and consumers to ensure batteries are bought and installed legally, safely and for permanent use.

Consumers do not need to apply for the discount

The discount is generally provided through accredited installers/retailers. The discount will be offered as an upfront reduction on the cost of the battery, unless you decide to register for STCs (small-scale technology certificates) yourself via the Clean Energy Regulator (CER).

An eligible battery system could include:

A single battery unit
A system of modular battery cells connected to serve as one battery unit

Additional capacity added to an existing battery system is eligible if:

The battery system has not previously received a discount under the program
The additional capacity is at least 5 kilowatt-hours (kWh), and the total upgraded capacity of the battery does not exceed 100 kWh in nominal capacity

An eligible battery system must be in the range of 5 kWh to 100 kWh in nominal capacity. Systems up to 100 kWh in total nominal capacity are only eligible for STCs for the first 50 kWh of the new or added usable capacity.

To be eligible under the Program, a battery cannot be a standalone battery and must be connected to a solar PV system installed at the same place.

Eligibility is open to property owners (homeowners, landlords, small businesses, community facilities) installing a new on-grid solar-battery system.

Click here to view full funding guidelines on the provider's website.

Smith Thornton subscribes to a grant search provider and can help you prepare your grant application. If you have any questions our Business Services Advisor Jenna van Nierop will be happy to assist. You can email her at jennav@smiththornton.com.au or call her on 9842 5155.

Rural Women’s Acceleration Grant

Fri, 22 Aug 2025 08:09:22 GMT

Fosters growth and development in women involved in Australia’s rural and emerging industries, businesses, and communities.

AgriFutures has introduced a new program called the AgriFutures Rural Women’s Acceleration Grant program. It will run separately; however, it will complement the Rural Women’s Award process, aiming to provide a leadership and development opportunity to women who are not quite ready to apply for the Award.

Seven Australian women per annum will be granted a learning and development bursary (not cash) of up to $7,000 for professional development to enable them to bring their idea, cause or vision to life.

The idea, cause or vision must align with a minimum of two of the values below:

Empathetic
Authentic
Cooperative
Confident
Courageous
Grit
Resourceful
Pragmatic
Clarity of Purpose
Inclusive
Innovative

Who can apply?

Applicants need to be over 18 years old and identify as female
Applicants must have an idea, cause or vision (not yet realised) which aligns with one or more of the three categories: Community, Collaboration, Commercial
Idea, cause or vision will have a positive impact on rural or emerging industries, businesses and/or communities
Applicants need to be Australian citizens or permanent residents.

Grants will be awarded on merit, not per state/territory. Successful applicants can apply for the AgriFutures Rural Women’s Award in the future.

Click here to view full funding guidelines on the provider's website.

Small Business Growth Grants

Tue, 12 Aug 2025 04:42:54 GMT

Helps WA small business owners access professional services that support the growth and development of their business.

The Small Business Growth Grants Program (the Program) is a WA Government business support initiative to help WA small and medium businesses to develop, grow and expand. The Program has been created to support eligible established small businesses operating in Western Australia who are seeking to grow their business to improve business performance, sustainability, and profitability.

Funding to a maximum of $10,000 per applicant in the form of a voucher will be provided to co-fund the costs of eligible services provided by a professional service provider. The applicant must provide funding equal to or greater than the value of an approved voucher.

What can the funding be used for?

Strategic business planning
Workforce development and planning
People management
Marketing and communication planning
Digital marketing
Market research
Financial planning and performance
Procurement
Organisational governance
Work Health and Safety
Business improvement and innovation
Supply chain management and planning
Records and document management
Information and Communication Technology management

To apply for a Small Business Growth Grant, applicants must meet all criteria listed below:

Held an Australian Business Number (ABN), without interruption, on or before 1 January 2024 and is located in Western Australia.
Has been registered for GST, without interruption, on or before 1 January 2024.
Has the principal place of business in Western Australia; and has been in continuous operation in Western Australia on or before 1 January 2024; and will continue to trade into the foreseeable future; and there are no plans, events and/or circumstances known to the applicant which would result in their business ceasing to trade.
Be a for-profit organisation or business (not for profits and charities are ineligible).
If a Regional WA small business: Has an annual turnover exceeding $100,000 for businesses trading and has been physically located in regional WA for at least 12 months.
If a Metropolitan WA small business: Has an annual turnover exceeding $200,000 for businesses trading and physically located in a WA metropolitan area.
Has an Australia-wide annual payroll of less than $4 million.
Have at least one full-time equivalent and no more than 20 full-time equivalent employees, including owners and directors.

There are also certain criteria that the nominated service provider will need to meet (e.g. cannot be the applicants’ existing accountant and must be suitably qualified). At Smith Thornton, we assist clients in various ways to help them to grow their business and improve profitability. Some services that we can provide to applicants include:

Forecasting, budgeting & cash flow modelling.
Financial performance monitoring and advice (KPIs).
Working capital management.
Debt funding analysis.
Succession planning (aimed at ensuring the business has the right staff capabilities and skills going forward).
Strategic planning.

If you’re interested in applying for this grant, it may be a valuable way to access professional services to help your business grow.

Please note: current Smith Thornton clients can’t engage us under this program. However, if you’re not already a client and would like to explore working with us as a service provider, please contact our Business Services Advisor, Jenna van Nierop, at jennav@smiththornton.com.au or 9842 5155.

Click here to view full funding guidelines on the provider's website.

LCF Grant Applications – Tips & Traps

Mon, 28 Jul 2025 08:53:48 GMT

The 2026 round of Local Government Fund (LCF) grants is now open, and many business owners throughout Western Australia will be eligible to apply. At Smith Thornton Accountants, we have a dedicated Business Services Advisor available to assist clients in preparing grant applications. However, for business owners who want to prepare their own LCF grant applications, the following are some key points to consider.

Grant selection

There are various grants to choose from, including Aboriginal Business, Digital Transformation, Regional Suppliers, Standards Compliance and Supplying Key Projects. Read through each of the grant guidelines and choose the grant that your business can best qualify for, as this will give you the best chance at having a successful application. If your project fits within the Regional Suppliers grant as well as another grant, your best chance of success will typically be applying for the Regional Suppliers grant. Under this grant, you will only be competing with other businesses in your region.

Eligibility

Before you proceed and spend time on your application, check that your business meets the eligibility criteria of your chosen grant. In addition to all the general business eligibility criteria, take note that the project needs to commence after you have received confirmation of your successful application, and must be completed by 30 June 2026.

Meeting objectives

Read and get a good understanding of the objectives of the grant and how your project will meet these. For example, the Regional Suppliers grant objective is:

“This round of funding is specifically designed to support eligible regionally based Western Australian SMEs to improve their business capability, capacity and competitiveness to supply goods, services and works to export markets, Western Australian State or Local Government, the Australian Government, and the private business sector.”

To meet this objective, the business owner will need to show that their business:

It is regionally based (see the guidance on regional locations).
Has a project that will improve business capabilities (e.g. more goods/services, improved goods/services, new markets/customers), capacity (e.g. improvements that will enable the business to service more/different customers) and competitiveness (e.g. improved efficiencies, differentiated from other suppliers, improved customer service, more competitive pricing).
Makes supplies of goods or services to export markets, WA State or Local Government, the Australian Government, and the private business sector. A key point for this is that the business does not need to make supplies to all these markets.

Eligible Expenditure

Read and understand the types of activities and spending that will be eligible and ineligible before applying. These are found in the Appendices of the grant guidelines.

Review the Application Form

Download and read through the application form. There are questions that will require some thought and explanation. It is often useful to pre-prepare responses in a separate document to make the actual online application easier.

Plan

Once the application form has been reviewed, plan the application process so that the deadline can be easily met.

Supporting Documents

Compile all supporting documents so they are saved and at hand when you complete the online application. This might include quotes for activities being claimed, declarations (template usually provided online by grant provider), bank statements and financial reports.

SmartyGrant Login

LCF grant applications are made online via the SmartyGrants portal. Set up a profile and log in early to ensure that there are no login issues and that key documents can be accessed.

Understand Commitments

The grant guidelines outline the commitments that the business owner will need to make if successful in a grant application. This does involve some reporting once the project is completed, as well as signing a financial agreement with the grant provider. It is important that business owners read and understand these commitments.

Sufficient Funds

The LCF grants are typically on a reimbursement arrangement. This means that the business owner will need to fund 100% of the project spend and then submit proof of purchase to be reimbursed for the grant-funded component. Business owners need to ensure that they have access to sufficient funds to deal with this timing difference.

Start Application Early

Grant applications can take longer than anticipated, and it is always a good idea to have the application lodged early to avoid any last minute technology issues. SmartyGrants does not accept applications that are even seconds past the deadline, so it's best to get in early. It is also important to note that some of the LCF grants are on a “first-come, first-served” basis until funds are exhausted, so those business owners who apply earlier are more likely to be successful.

Seek Assistance

Smith Thornton can help with the whole grant application process or components, as well as ad-hoc queries. If there are certain sections of the application that business owners need some help with or would like feedback on, p lease reach out, and we will be happy to assist.

Local Capability Fund - Aboriginal Business Round

Mon, 28 Jul 2025 08:42:18 GMT

Helps local Aboriginal businesses enhance their capability, capacity and competitiveness when bidding for Government and private sector projects.

The Local Capability Fund (LCF) helps small and medium-sized enterprises in Western Australia to increase their capability, capacity and competitiveness as suppliers of products, services and works to the Western Australian Government, major projects and other important markets. Applications close 4 September 2025.

The fund can be used for expenses such as:

Making improvements to internal infrastructure, plant and equipment
Training
Meeting pre-qualification requirements for supply-chain entry
Buying and upgrading essential equipment
Engaging consultants to advise on matters including occupational health and safety, marketing, finance and cybersecurity
Planning improvements to internal infrastructure, plant and equipment and training

The Aboriginal Business Round provides funding support to Aboriginal Western Australian small to medium-sized enterprises (SMEs) to enhance their business capability and capacity to supply to major Western Australian State or Local Government agencies, the Australian Government and the private sector.

The level of funding support under the Aboriginal Business Round is 75% of eligible costs (excluding GST) up to a maximum funding level of $50,000 per successful applicant.

To be eligible for funding, applicants must:

Be an Aboriginal business (at least 50% owned by an Aboriginal interest)
Be registered with either the Aboriginal Business Directory Western Australia or the Supply Nation’s Indigenous Business Direct
Be operating in a trade-exposed industry (or an industry that faces competition from other national or international SMEs)
Be registered for GST for at least 12 months prior to application submission date
Have an Australian Business Number (ABN)
Be a for-profit organisation or business, or an incorporated not-for-profit Aboriginal Corporation operating as a commercial enterprise
Have its principal place of business in Western Australia
Have been operating for at least 12 months in Western Australia at the time of submitting an application for funding
Employ less than 200 people

Click here to view full funding guidelines on the provider's website.

Agrifood and Beverage Voucher Program

Mon, 28 Jul 2025 08:10:57 GMT

Supports small businesses across regional and metropolitan WA to access expert advice to build resilience and sustainability, competitiveness, scale and export preparedness into their operations. Applications close 26 August 2025.

Up to $20,000 per business, with 50:50 co-contribution, is available to access professional services with up to two vouchers under five categories;

Business Planning
Manufacturing for Business Growth (including transition to manufacturing for producers, HACCP, process engineering and automation)
Sales and Marketing (including e-commerce, marketing strategy, customer relationship management system design, export market development and re-branding)
Financial Health (including succession planning, pitch decks, and other investment planning)
Environmental Sustainability and Social Responsibility (including net zero planning, waste water management plans, sustainable packaging design, and ESG).

Vouchers will be provided to competitive WA businesses that meet the eligibility criteria and whose business development objectives are most closely aligned with the State Government’s objectives including:

Growing and diversifying the State’s economy
Future jobs and skills
Stronger, safer communities
Investing in climate action
Investing in the regions

Eligible small businesses will be required to:

Be a food or beverage manufacturer for all voucher categories, or a food producer intending to transition to food or beverage manufacturing
Have an annual sales turnover of between $100,000 and $50 million
Have products and markets with the potential for growth, or are facing a known sustainability issue
Provide evidence of a business plan (if no evidence can be provided, only the business planning category is available)
Provide a quote from your selected professional services provider, and have confirmed they are able to split the invoice between your business and the department for the quoted work
Have a current Australian Business Number, be located in WA, have operated for a minimum of 18 months and be incorporated in Australia with non tax-exempt status.

Click here to view full funding guidelines on the provider's website.

Local Capability Fund - Supplying Key Projects Round

Mon, 28 Jul 2025 07:58:13 GMT

Helps local businesses enhance their ability to supply products or services for key projects.

The fund can be used for expenses such as:

Making improvements to internal infrastructure, plant and equipment
Training
Meeting pre-qualification requirements for supply-chain entry
Buying and upgrading essential equipment
Engaging consultants to advise on matters including occupational health and safety, marketing, finance and cybersecurity
Planning improvements to internal infrastructure, plant and equipment and training.

The Supplying Key Projects Round provides funding support to Western Australian small to medium-sized enterprises (SMEs) to enhance their business capability and capacity to supply to major projects run by Western Australian State or Local Government agencies, the Australian Government and the private business sector.

The focus of this round will be on assisting SMEs supplying to projects in these priority sectors:

Energy (oil and gas renewables)
Mining
Civil construction
Defence
Marine

The level of funding support under the Supplying Key Projects Round is 50% of eligible costs (excluding GST) up to a maximum funding level of $50,000 per successful applicant.

To be eligible for funding, applicants must:

- Be operating in a trade-exposed industry (or an industry that faces competition from other national or international SMEs)

- Be registered for GST for at least 12 months prior to application submission date

- Have an Australian Business Number (ABN)

- Be a for-profit organisation or business, or an incorporated not-for-profit Aboriginal Corporation operating as a commercial enterprise

- Have its principal place of business in Western Australia

- Have been operating for at least 3 years in Western Australia at the time of submitting an application for funding

- Employ less than 200 people.

Click here to view full funding guidelines on the provider's website.

Local Capability Fund – Regional Supplier Round

Mon, 28 Jul 2025 07:51:08 GMT

Provides regionally located businesses with access to funding to improve capacity and competitiveness.

The LCF helps small and medium enterprises in Western Australia to increase their capability, capacity and competitiveness as suppliers of products, services and works to the Western Australian Government, major projects and other important markets. Applications close 4 September 2025.

The fund can be used for expenses such as:

Making improvements to internal infrastructure, plant and equipment
Training
Meeting pre-qualification requirements for supply-chain entry
Buying and upgrading essential equipment
Engaging consultants to advise on matters including occupational health and safety, marketing, finance and cybersecurity
Planning improvements to internal infrastructure, plant and equipment and training.

The objective of this round is to provide funding support to Western Australian businesses to enhance their capacity, capability and competitiveness to participate as suppliers of products, services and works to state or local government agencies, the Australian Government and the private sector.

The level of funding support under the Regional Supplier Rounds is 50 per cent of eligible costs (excluding GST) up to a maximum funding level of $20,000 per successful applicant.

This round is only open to businesses mainly located in one of the Local Government Areas (LGAs) listed in Schedule 1 on the Regional Development Commission Act 1993 (Gascoyne, Goldfields-Esperance, Great Southern, Kimberley, Peel, Pilbara, South West and Wheatbelt regions).

Click here to view full funding guidelines on the provider's website.

Local Capability Fund - Standards Compliance Round

Mon, 28 Jul 2025 07:43:38 GMT

Helps local businesses improve risk management, business performance and efficiency.

The Standards Compliance Round provides funding support to Western Australian small to medium-sized enterprises (SMEs) to engaging external expertise to carry out the implementation and third-party certification of the following national and international standards:

ISO 9001: Quality management standards to help work more efficiently and reduce product failures
ISO 14001 : Environmental management standard to help reduce environmental impacts, reduce waste and be more sustainable
ISO 45001 : Health and safety standards to help reduce accidents in the workplace
ISO 27001 : IT security standards to help keep sensitive information secure
ISO 50001: Energy management standards to help reduce energy consumption
AS/NZS 5131 : Steel industry compliance standards to help improve the integrity of structural steelwork
ISO 13485:2016 : Medical devices – Quality management systems – requirements for regulatory purposes.

The level of funding support under the Standard Compliance Round is 50% of eligible activity costs (excluding GST) up to a maximum funding level of $20,000 per successful applicant.

To be eligible for funding applicants must:

Be operating in a trade-exposed industry (or an industry that faces competition from other national or international SMEs)
Be registered for GST for at least 12 months prior to application submission date
Have an Australian Business Number (ABN)
Be a for-profit organisation or business, or an incorporated not-for-profit Aboriginal Corporation operating as a commercial enterprise
Have its principal place of business in Western Australia
Have been operating for at least 3 years in Western Australia at the time of submitting an application for funding
Employ less than 200 people.

Click here to view full funding guidelines on the provider's website.

Local Capability Fund - Digital Transformation Round

Mon, 28 Jul 2025 07:37:01 GMT

Provides support for eligible businesses to enhance their operations through digital and data technology.

The fund can be used for expenses such as:

Making improvements to internal infrastructure, plant and equipment
Training
Meeting pre-qualification requirements for supply-chain entry
Buying and upgrading essential equipment
Engaging consultants to advise on matters including occupational health and safety, marketing, finance and cybersecurity
Planning improvements to internal infrastructure, plant and equipment and training.

The Digital Transformation Round provides initial support for eligible businesses to adopt and use digital and data technology for the purpose of improving their productivity, competitiveness, resilience, safety and sustainability.

There are two streams of funding available under this round.

Stream 1 – Operational improvements:

$5,000 - $25,000 on a matched funding basis (i.e., total project cost would need to be at least $50,000 to receive the full $25,000 grant).

Stream 2 – Advanced technology purchase and integration:

$5,000 - $50,000 on a matched funding basis (i.e., total project cost would need to be at least $100,000 to receive the full $50,000 grant).

The focus of this round is supporting small to medium enterprises to use existing technologies and services and not for research or the commercialisation of new ideas.

To be eligible for funding applicants must:

Have an Australian Business Number (ABN)
Be registered for GST for at least 12 months prior to application submission
Have been operating in Western Australia for at least three years at the time of application submission
Be a for-profit organisation or business (not-for-profits and charities are ineligible)
Have their principal place of business in Western Australia
Have a turnover of more than $500,000 in at least one of the previous three financial years
Have at least one full-time equivalent (FTE) employee, in addition to the owner, but fewer than 200 FTE employees at the time of application submission.

Click here to view full funding guidelines on the provider's website.

Kickstarter Challenge

Mon, 30 Jun 2025 03:03:42 GMT

Invites female entrepreneurs with a business idea a chance to win a share of $60,000 in equity-free funding.

The Kickstarter Challenge is a competition for female entrepreneurs with a business idea.

Are you the next aspiring female founder who will win? You are invited to submit your business idea across a range of categories. An expert panel of judges will then review the submissions, selecting 5 finalists who will have the incredible opportunity to pitch their ventures and compete for a share of $60,000 in equity-free funding and a suite of invaluable business support resources. It’s more than a competition – it’s a launchpad for your entrepreneurial dreams.

Submissions open from 1 July, 2025, at 9:00 am AEDT and close on 1 October, 2025, at 5:00 pm AEDT.

The categories are:

Health, Wellbeing and The Care Economy: How can we innovate to address the health and wellbeing challenges facing Australians?
Environment and Sustainability: What sustainable solutions can help protect our environment and climate?
Community Impact: What innovative idea will empower and provide value to the community?
Technology: What innovative idea will empower and provide value to the community?
Education: What solutions will promote successful teaching and learning or improve educational outcomes for Australians?

One finalist from each category will be flown to Canberra to attend the Kickstarter Challenge Grand Final where they will pitch their ideas to a panel of industry experts.

To be eligible to win, entrants must:

Be at least 18 years of age
Identify as female
Reside in Australia
Represent a female-founded startup, with majority ownership and leadership held by women
Have a registered business and maintain their primary place of business within Australia
Hold a current Australian Business Number (ABN), either as a sole trader or associated with the business idea/name entered
Have commenced trading on or after 1 January 2023, if trading has begun
Generate business revenue below $75,000 AUD in the last 12 months of trading from the date of application, inclusive of grants received
Maintain a business banking account in the name of the business idea submitted, established prior to entering the Promotion, or be willing to establish one if selected as a Finalist.

Click here to view full funding guidelines on the provider's website.

Innovate to Grow: Health Care Innovation

Tue, 24 Jun 2025 07:57:02 GMT

Offers a free eight-week program that connects SMEs with practical guidance and R&D expertise to turn their ideas into a viable health care solution.

Applications are now open for CSIRO's eight-week Innovate to Grow program, helping Australian small-to-medium enterprises (SMEs) transform health care innovation ideas into research and development (R&D) projects.

The free eight-week online course provides practical guidance and tools to help SMEs identify and refine R&D opportunities, build compelling R&D business cases, and navigate funding pathways. Applications close on Sunday 13 July 2025.

The program will assist you in:

Refining your innovation idea and learning how to transform it into an R&D opportunity
Accessing tools and information for a comprehensive understanding of R&D collaboration and key considerations at each step
Applying this knowledge to advance your technology or R&D concept
Gaining industry insights from experts, researchers and your mentor
Collaborating with like-minded SMEs and expanding your professional network.

Key program benefits:

Personalised support to refine your idea: We'll step you through the process of turning your idea into a viable research project
Confidential feedback: All submissions through the program portal will receive prompt expert feedback
Mentor: You will be provided with a R&D coach paired with a researcher from CSIRO or a university to answer your questions about working on R&D projects and to help find an expert in the sector to introduce you to
Build your network: You will build key contacts in your sector, including researchers and other SMEs.

This program is open to any SMEs based and operating in Australia who are working on health care innovation in any of these sub-sectors:

Biomedical devices
Multi-omics, biostatistics and bioinformatics
Medical imaging and genomics
Drug discovery, vaccines and therapeutics
Advanced cell models
Digital health
Public health and wellbeing
Other

Selection criteria (essential):

A business based and operating in Australia that is registered with an ABN
A business classified as a small to medium or startup (less than 200 employees)
A business currently, or in the early stages of, exploring R&D opportunities for their business and have a health care innovation idea to work on throughout the course.

Click here to view full funding guidelines on the provider's website.

Succession Planning 101

Tue, 24 Jun 2025 07:46:16 GMT

Succession planning is a crucial aspect of business strategy. Having a clear exit plan ensures that all parties are prepared for a smooth and successful transition. Trends show that succession planning is starting earlier than ever, and we’ve even seen clients begin mapping out their exit strategies during the establishment phase of their new ventures.

Key Considerations for Your Succession Plan

Engage Potential Successors Early

Include all potential successors in your planning process. Understanding their ambitions and expectations is essential for a well-aligned transition.

Clarify Financial Expectations

Determine whether your successor will be purchasing the business at full market value or at a discounted rate. This decision will affect both your retirement planning and the successor’s financing needs.

Plan for Retirement Funding

If your business’s current value won’t support your retirement goals, start working now on a business improvement strategy to increase its value prior to transition.

Assess Financial Needs Post-Succession

If you're accepting less than market value, carefully evaluate your post-exit financial requirements and adjust your plans accordingly.

Review Business Structure

Understand how your business’s assets and liabilities are structured. Will the existing structure be passed on, or is it more appropriate to establish a new one?

Consider Tax Implications

Investigate potential stamp duty and capital gains tax consequences when transferring assets or changing structures. Professional advice is highly recommended.

Develop a Transition Timeline

Map out a detailed succession timeline, outlining each step and milestone of the process. This helps ensure that nothing important is overlooked.

Transfer Knowledge and Skills

Allow enough time to pass on the operational knowledge required to run your business. Where knowledge gaps exist, consider additional training or mentoring for your successor.

Mentally Prepare for the Transition

Think about your post-succession life. What will you do with your time? Where will you live? What hobbies or pursuits will you take up?

Communicate and Document Your Plan

Be transparent. If you have an ideal succession plan, discuss it with the relevant people and document it clearly—even if it's years away. This can be critical if you're unexpectedly incapacitated.

Plan for Financing in Family Succession

For family businesses, consult your bank manager to ensure your successor can access the necessary finance when the time comes.

Update Your Will

Align your Will with your succession plan. This ensures the transition can still occur if you're not around to manage it. Make sure your executor is capable of running the business if needed.

Cut Financial Ties After Exit

Ensure you're no longer financially responsible for the business once succession has taken place. This protects your personal finances and provides a clean break.

At Smith Thornton, our business advisory team has had a busy year helping clients develop and document effective succession strategies. If you’d like to explore your options, we’d be happy to assist.

Preparing for End of Financial Year

Tue, 27 May 2025 08:06:34 GMT

Accountants across Australia are now busily preparing for the end of financial year - drinking lots of coffee, dreaming about tax planning, getting ready for 30 June celebrations and importantly, turning their minds to all the payroll and bookkeeping tasks that need to be tended to over the coming months. Getting organised and preparing for the end of the financial year removes a great deal of pressure when the time comes to finalise payroll and accounts. There are a few things that business owners and their bookkeepers should consider in preparing for and finalising the end of financial year accounts.

Important Dates:

1 July 2025:

Superannuation contribution rate increase to 12%

7 July 2025:

Payroll tax monthly lodgement due

14 July 2025:

STP finalisation declaration due

21 July 2025:

Monthly BAS Lodgement date

21 July 2025:

Payroll Tax annual lodgement due

28 July 2025:

Quarterly BAS Lodgement date

28 July 2025:

Previous quarter superannuation – must be in the fund

28 August 2025:

TPAR lodgement date

1 July 2026:

Pay Day Super begins

Important things to note:

Super Guarantee Contribution is 12% from 1 July 2025. Many software packages will automatically update the superannuation percentage, but it is always wise to check. Some software will allow an override on the Superannuation Guarantee Charge amount, and if that feature is in use, the software will not automatically update to the new rate. The new rate applies to all wages paid on or after 1 July 2025, even if some of the wages were earned prior to 30 June.

ATO penalties, GIC and SIC will no longer be tax deductible from 1 July 2025. If you have a debt with the ATO, you may want to discuss with your accountant the best way to now account for ATO interest and penalties.

Superannuation contributions must be in the employee’s superannuation fund by the due date, which is 28 July. Therefore, it is recommended that the payment be made earlier in the month (before 20 July) to allow time for the clearing house to distribute the funds. If it is discovered through an audit at a later date that the payment did not arrive in the fund on time, the employer will be liable for a Superannuation Guarantee Charge.

Single Touch Payroll lodgements must be done at the time of processing the payroll.

From 1 July 2026, there will be two important superannuation changes:

Payday super: Superannuation will need to be paid at the same time as an employee’s wages – preparations for this transition can begin now by changing the frequency of super payments from quarterly to monthly (or more frequently). This may help with budgeting so that when 1 July 2026 arrives, business owners are ready to begin making the payments without any burden on business cash flow.
The ATO Small Business Clearing House will close down. Business owners will need to choose another clearing house to use to lodge superannuation payments. Many accounting software packages include a superannuation clearing house with their payroll package, and most superannuation funds also have clearing houses. If help is required, please contact our Bookkeeping team and we will be happy to assist.

Before End of Financial Year (EOFY)

There are a number of steps that can be taken prior to the end of the financial year to help alleviate the pressure and make the EOFY a smooth process.

Ensure all accounts are reconciled on a regular basis and all accounts are reconciled (including clearing accounts and inter-entity loans) to the end of April.
Any of the steps in the checklist below can be commenced ahead of time, with reviews and reconciliations to be completed by the end of March, April, or May. The final checks can then be done as soon as possible after 30 June. Having completed much of the review process already, any discrepancies would have been identified and corrected.

Prepare for EOFY Payroll

An STP Finalisation declaration must be made by 14 July. This ensures that employees can access the necessary information to complete their income tax return. Some tasks can be completed prior to the end of the financial year (EOFY), and early preparations will assist in ensuring the finalisation is completed on time.

Early preparations can include reconciling wages, superannuation and PAYG. If these are all reconciled by the end of March or April, the final reconciliation will be a smaller and less stressful task. This will make lodging the final STP and annual Payroll Tax lodgement a much quicker process.

EOFY Checklist

Download our End of Financial Year Checklist here, is a comprehensive list of items to check and reconcile to prepare accounts for the accountant. By implementing a process that keeps accounts up to date and regularly checked, it will help identify possible discrepancies and problems. It will prompt business owners to inform their accountant of significant business changes that may impact their tax position. It will also provide a current overview of the business and alert business owners to any changes that may impact trading and cash flow. Some items on the checklist may not apply to all business owners, but checking everything that does apply will make EOFY a breeze.

Get in touch if you need our help getting your end of financial year in order.

Women’s Development Scholarships

Tue, 27 May 2025 04:44:37 GMT

Offers scholarships to help women in select industries participate in world-class leadership courses.

All women currently employed in Australia are invited to apply for a limited pool of scholarship funding that has been provisioned for participation in a range of leadership courses. The grants are allocated with the specific intent of providing powerful and effective development opportunities for women right across the country.

Women & Leadership Australia is administering a national initiative to support the development of female leaders throughout the country.

Scholarships are available for women at all levels. Applications close Friday 6th June 2025, unless allocated prior.

Scholarships are available for Leadership Courses Across Australia through the following courses:

Skills for Workplace Impact - $1,000 partial scholarship

A 10-week program for women at all levels, providing game-changing interpersonal and communication skills to improve your impact and confidence at work.

Early Career Managers - $1,000 partial scholarship

Delivered part-time over four months, Leading Edge is designed to enable the transition of aspiring and early career female managers into confident, capable and motivated leaders.

Mid-Level Managers - $3,000 partial scholarship

Delivered part-time over seven months, Executive Ready is designed to stretch mid-level leaders and propel them towards executive level performance, behaviours and mindsets.

Senior and Executive Leaders - $5,000 partial scholarship

Delivered part-time over nine months, the Advanced Leadership Program is a high-impact and challenging developmental course for senior and executive leaders.

Click here to view full funding guidelines on the provider's website.

Tax effective outcomes for SMSFs

Thu, 24 Apr 2025 08:29:47 GMT

For trustees running a Self-Managed Super Fund (SMSF), understanding how to maximise Exempt Current Pension Income (ECPI) can lead to more tax-effective outcomes. ECPI is the portion of income an SMSF earns from assets that support retirement-phase pensions — and that income may be tax-exempt, subject to meeting regulatory requirements.

While many factors can influence ECPI, the timing of contributions and the commencement of pensions are often the most impactful and practical levers trustees can evaluate. This article unpacks how these two timing-related elements can affect ECPI outcomes, with brief reference to other considerations that may also play a role.

Timing of Contributions

When and how contributions are made to an SMSF can significantly affect the calculation of ECPI. Generally, contributions enter the fund in the accumulation phase, where earnings are taxed at 15%.

If these contributions sit in accumulation phase for most of the year before being converted into a pension, they may reduce the proportion of fund income eligible for ECPI. Alternatively, converting contributions to pension phase earlier could result in a greater share of income being exempt from tax.

Points trustees may consider:

Contributions made just before year-end may have little or no impact on ECPI unless swiftly allocated to retirement phase as they do not have a great impact on accumulation percentage over the whole year. Once converted to pension they boost the ECPI percentage.
Early-year contributions may offer more flexibility for pension planning as well as increase the ECPI percentage if converted to pension immediately.

When considering the timing of contributions, trustees should also look beyond ECPI considerations and consider the return on investment inside versus outside of the fund. This often means that if funds are available, contributing them early in the year can lead to a better investment outcome with a lower tax rate, regardless of ECPI (depending on the tax rate of the individual outside of the fund, as well as the return on investment within the fund).

Timing of Pension Commencements

The date a pension begins directly affects when the SMSF starts generating ECPI. Only from the commencement date does the pension phase apply, which means delayed pension commencements could result in missed tax exemptions for income earned earlier in the year.

Potential considerations:

Starting a pension earlier in the year may increase the ECPI proportion.
A mid-year pension commencement could split the year into separate ECPI calculation periods, depending on whether the fund is using the segregated or proportionate method for calculating ECPI. At Smith Thornton, we will always use the appropriate method to ensure the best tax outcome for our clients’ funds.
Documenting the pension commencement correctly is essential to support any claim for ECPI.

Other ECPI Issues

While timing is often the most tangible variable trustees can manage, it is important to be aware of other factors that can impact ECPI:

Asset Allocation
Strategic asset allocation, while staying within compliance and risk tolerance, can influence the overall tax efficiency of a fund’s income in retirement phase. Since ECPI is based on income generated by assets supporting retirement-phase income streams, the mix of assets (such as shares, property, or cash) affects the amount of exempt income. For funds using the proportionate method, higher income-generating assets in the retirement-phase portion can increase the tax-exempt benefit. Conversely, if lower-yield assets support pension interests, the ECPI benefit may be reduced.

Record-Keeping
Strong documentation supports compliance, audit readiness, and accurate ECPI claims. Smith Thornton will always ensure that all records are kept correctly and are available if our clients have any questions about the appropriate record keeping requirements. Likewise, it is also very important for the trustee to maintain good record keeping.

ECPI Calculation Methods
The choice between the segregated and proportionate methods, as mentioned above, can impact the final exempt amount.

Each of these aspects plays a supporting role, and understanding how they interact with timing decisions assists with effective SMSF management.

In Summary

This article highlights the importance of forward planning and strategy for SMSFs. Smith Thornton encourages our clients to contact us early if considering changes to their SMSF so that the appropriate planning and timing can be implemented.

We note that these are general insights only and should not be considered personal financial advice. Clients should always seek our guidance before implementing changes, particularly when tax outcomes and member balances are involved. If required, we can introduce clients to our partners, Knights Financial Advisors, who are licenced financial advisors and can provide financial advice.

Keep the Sheep

Thu, 24 Apr 2025 08:17:29 GMT

This article provides a firsthand explanation of how the live sheep export ban impacts sheep farmers and the wider community. Chrissie Smith and her husband are sheep farmers based in Kojonup and we share this opinion piece that she prepared with her permission.

Yesterday, during a discussion over a Facebook post, I was asked by a friend of a friend if I could clarify the thought process around the live sheep export ban from a sheep farmer's perspective, and if farmers were over dramatising the situation. A very honest question, and one I was very happy to answer.

These are mine and my husband's words and sentiments....

There is a lot to explain, and it isn't as simple as just numbers. Maybe make yourself a cup of tea.

Western Australia's "sheepbelt" has a very different climate from that of our Eastern State counterparts. They also have much better slaughter facilities and can process a much higher number of sheep than we can here in the West.

Our sheep production year runs from November to November. We start preparing our ewes for mating in November, rams go into the mob in February, we drop our lambs late June & July, and we grow out the lambs through those other months, ready for the market in November. Our green feed season generally runs from May to November. Outside of those months, we rely on dry feed and supplementary feeding. We (my husband and I) opt to sell our lambs straight from mum, where possible, as it is the most profitable.

Due to WA having long dry summers, we do not get the same green feed window that they do in the Eastern States. A lot of farms over there have irrigation and lucerne and perennial based pastures, which WA is not suited to. They also receive a lot more summer rain. Therefore, it is way more difficult for us to grow out our lambs in a shorter period of time. Hence, we get an influx of sheep ready to be slaughtered all at a similar time. We don't have the facilities to handle large numbers, and if we don't get the kill space with the abattoirs, we risk being stuck with stock that is ready for slaughter but no market. For example, in the springtime flush, NSW, VIC & SA will kill approximately 510,000, and WA kills 93,000 per week.

You have to understand that the WA processing companies are desperate to get rid of live sheep export. The reason being, is that if Live Export disappears, they have no competition, because there are more sheep than can be processed, which causes a massive over supply, and therefore a direct price reduction for the farmer. This happened in the spring of 2023 when Live Export came to a standstill on the government's announcement. The WA sheep farmer was receiving as little as $35 p/h for mutton and $110 p/h for lambs.

This is where the live sheep export comes into play. This offers us another market to sell our sheep, and they will offer us a good price for what we call our stores. These are lambs and older sheep and wethers (mutton) who haven't grown out as well as we would like, often due to our seasonal conditions, and for farmers who don't have the capabilities to hold on to the sheep for a longer period of time, mainly due to how much it costs to feed them, and the issue of soil erosion because of being overstocked in the dry conditions.

In the last few years, we have been getting between $5.20 and $7.10 per kg dressed (which means after they have been slaughtered). So for our 365 days of work put in to produce a lamb, we receive $5.20 to $7.10 per kg, we also have to pay to get our sheep delivered to the abattoirs They process the lamb in one day and then deliver to the grocery store, who packs and sells to their customer for $45 per kg. Does this seem fair to the farmer?

If we need to hold on to our sheep for a longer period, it will cost us between $50 - $60 per sheep to continue to feed, and there is no guaranteed price at the end of that, so with a falling market, the farmer can lose a lot of money. So, with no additional market for the extra sheep (removing live exports), it becomes a very big risk to the sheep farmer, and their business starts to become unviable.

This is where the snowball effect starts to take place. The sheep farmer loses faith. They've lost their only other market to sell their sheep through, they reduce the number of sheep they are producing, which is what is already happening in preparation for the ban. Many farmers opted not to put their rams out with the ewes this season, for fear of being stuck with sheep they can not sell in the future. Now I won't lie, for us, this has helped the lamb per kg price recover. At $5.20 per kg, there is no money in producing a lamb, so for every price rise above that is a huge bonus for us.

However, because of the reduction in numbers, there is no need for shearing contractors, no need for transport companies to move our sheep from farm to abattoirs or the port, people leave the farming communities, our schools suffer, our medical facilities suffer, and our small businesses suffer. For the regional communities, it becomes death by association.

I saw recently that Wagin two years ago had eight shearing teams; they are now down to three teams. That is approximately 50 employees, plus their partners and their children who have left the Wagin community in the past 12 months. Another example is three local contractors around our area marked 100,000 less lambs in 2024 compared to 2023. Again, it's about economics; they take a massive hit in revenue, their business profit is reduced, they can't afford employees, and again, more people leave our communities.

The Labor government, Albo and his constituents, made this decision without any consultation. They chose to take the side of Sydney Green Representatives and members of PETA to buy their votes in the last election. If they can ban an industry in the blink of an eye, which industry is next? If Beef goes, Northern WA and the NT are stuffed. Then it will be pork, chicken, eggs...

My question to everyone is...go to your fridge, and pull out everything in there that is produced by a farmer, and let me know what you have left. Then, rethink how important farmers are for our country. Farmers are caring and nurturing people, but imagine if they coordinated together to stop providing all produce for 14 days, with nothing leaving the farm gate - what would happen? Lamb, beef, pork, chicken, eggs, milk, butter, yoghurt, ice cream, cheese, cereals, rice, sugar, fruit, vegetables, beer, wine, your cup of tea you just made...and the list goes on.

The impact on farmers and our rural communities is not being over dramatised. I could go on forever about this, and to be honest, if you have read this far, I really appreciate it. Hopefully, this gives you some insight. I really do thank you for asking a very honest question, and hopefully, you can see this as a very honest answer.

Having a Plan for Attracting and Retaining Staff

Mon, 24 Mar 2025 06:10:54 GMT

Being an employer of choice as a small business owner is a key component of long-term success. Small businesses are presented with unique challenges when it comes to competing with larger organisations for top talent, but with a strategic approach, challenges can become opportunities. By including employee attraction and retention strategies in a strategic plan, small businesses can build a loyal, motivated workforce and position themselves for sustainable growth.

What is Strategic Planning for Small Businesses?

Strategic planning is the process of defining the key goals and direction of a business and the actions required for success. This will involve setting long-term and short-term goals, identifying potential risks/issues that need to be resolved, and mapping out measurable actions and responsibilities.

A key pillar of a small business strategic plan should focus on people because attracting and keeping the right staff is critical for business success and growth. Some other key benefits of linking employee-related goals to the strategic plan include:

It will ensure that talent management remains a focus, which is essential when employees are one of the most important assets of a business.
Decisions regarding employing new staff and managing existing staff will become intentional and structured and form a cohesive approach to building the best team.
With good planning and communication, employees can work towards achieving business goals and become aligned with the mission and vision of the business.
Employee retention is more cost-effective than constantly recruiting and training new hires. A strong employer brand that’s incorporated into your strategic plan helps ensure long-term stability, minimising turnover costs and creating a loyal, experienced workforce.

Planning to become an Employer of Choice

Below are some examples of how business owners can use actionable steps to attract and retain talent. It is also interesting to see how some of these examples also promote business growth.

Training and development

Investing in staff development can align with nurturing employees’ own personal growth and ambition, as well as helping business owners achieve long-term success. Actions might include:

Identify areas where the team needs development to help the business grow. (e.g. leadership skills, cross-functional skills, technical skills, professional certifications, soft skills).
Create a staff development and training calendar that aligns with those needs.
Create a mentorship program which will not only encourage knowledge sharing but will also build relationships.
Develop a clear career pathway for each role within the business. This motivates and gives employees a long-term focus.

Workplace culture

Employees place great importance on feeling happy and supported at work. Creating a workplace culture that promotes this is a key factor in retaining staff. Actionable steps aimed at improving workplace culture might include:

Develop and promote a brand that reflects the values and culture of the business. This will naturally help attract the right staff as job applicants tend to research the business prior to applying to determine whether the business is a good fit for them.
Identify and engage in training and staff development options aimed at improving workplace culture.
Create and enact a plan on how to monitor staff engagement and satisfaction.

Recruitment

Small businesses often have limited resources, but allocating some of those resources to talent management can have a lasting impact on a business’s ability to grow. Create a recruitment plan that budgets for:

Attractive compensation packages - ensure pay is aligned with industry standards based on location and sector. Offering flexible benefits or non-monetary rewards (such as extra leave or remote work options) can make a huge difference.
Employee referral programs - encourage current employees to refer friends or colleagues by offering incentives. Employee referrals are often a more cost-effective recruitment strategy for small businesses, and they tend to bring in candidates who are a good cultural fit.
Sufficient human resources involvement – high-quality human resources assistance throughout both the recruitment process and day-to-day operations is essential. It helps with talent management and guiding behaviours that promote a good workplace culture.

Work-life balance

Incorporating work-life balance into the business strategy is crucial for small businesses looking to become an employer of choice. Having a focus on work-life balance is an investment in employee well-being, which directly impacts retention and productivity. Some actions that are aimed at achieving a good work-life balance include:

Reviewing and updating business procedures and infrastructure to enable an offering of remote work options, flexible hours, or a hybrid model to employees.
Establish guidelines promoting healthy work habits, such as encouraging employees to take their vacation days and limiting work outside regular hours.
Identify and implement communication tools that will promote regular conversation between management and staff. Early identification of burnout or work overload is key (e.g. employee surveys, one-on-one check-ins, and team meetings).

How to Stay on Track

As with any business strategy, it’s essential to measure the effectiveness of employer of choice initiatives and make adjustments as needed. This can be done via surveys, focus groups and performance reviews. It is also essential that the overall strategic plan of the business be reviewed regularly to ensure that actions are being addressed and also that the plan remains relevant as the business grows.

If you need help developing the strategic plan for your business, please contact us at Smith Thornton.

Agristart HARVEST Program

Tue, 18 Mar 2025 04:43:39 GMT

Aims to accelerate the growth of your agtech innovative startup by giving you expert guidance, deep industry insights, critical tools, and strategic connections.

Are you an agtech startup? A farmer who has developed new technology? A researcher looking to commercialise your innovation? Or a business looking to apply your technology in the agricultural sector?

Now in its ninth year, HARVEST has supported over 80 businesses.

The program is valued at over $10,000 and is FREE for successful applicants.

What stage should my business be to apply?

- From early stage startups, to small to medium enterprises.

Applications close 5 May 2025.

Click here to view full funding guidelines on the provider's website.

Tax Planning – Strategies before 30 June 2025

Tue, 25 Feb 2025 05:15:07 GMT

With another financial year end approaching, we are turning our attention to tax planning season. We have listed below some things that may have changed from prior years, as well as some general strategies to consider.

Tax cuts from 1 July 2024

With tax cuts applying from 1 July 2024 this may present an opportunity to review and plan for upcoming decisions regarding trust distributions, payment of dividends and strategies such as contributing to superannuation.

The changes that apply from 1 July 2024 are:

The bottom tax rate decreases from 19% to 16% for income in the range of $18,201 to $45,000.

The 32.5% tax rate decreases to 30% for income in the range of $45,000 to $135,000

The threshold above which the 37% tax rate applies increases from $120,000 to $135,000

The threshold above which the top 45% tax rate applies increases from $180,000 to $190,000.

*Note that the above rates do not include the Medicare levy of 2%.

Maximise Super Contributions

From 1 July 2024, the general concessional contributions cap is $30,000 for all individuals regardless of age (previously $27,500).

Many people will also have unused contribution caps from prior years so this can provide a good opportunity for a good tax outcome whilst boosting your superannuation.

$20,000 Instant Asset Write-Off

As part of the 2024–25 federal budget the government announced it will extend the $20,000 instant asset write-off limit for a further 12 months until 30 June 2025.

Please note that this measure is not yet law. Under the measure, small businesses with an aggregated turnover of less than $10 million will be able to:

deduct the cost of eligible depreciating assets costing less than $20,000 that are first used or installed ready for use between 1 July 2023 and 30 June 2025

deduct the cost of additions for assets costing less than $20,000 (if an immediate deduction for an asset under the simplified depreciation rules in a prior income year where the amount is less than $20,000).

The proposed $20,000 threshold under the measures applies on a per asset basis, so small businesses can instantly write off multiple assets.

Review Bad Debts

Now is a great time for reviewing the debtor's list for your business and determining which of those won’t be able to be recovered, as writing off the unrecovered income as a bad debt prior to the end of the financial year will provide a tax deduction for the 2025 financial year.

Please note that the debt must be genuinely bad, and not merely doubtful, and the decision to write off the debt must be made in writing before the end of the financial year to claim the deduction.

We are currently scheduling tax planning and meetings for the upcoming months, so if you want to discuss strategies and review your affairs, please contact our team.

Nuffield Australia Scholarships

Fri, 21 Feb 2025 05:00:22 GMT

Offers scholarships for research and travel in the agricultural industry.

Eligibility

Typically between 28-45 years of age. Please note that exceptional candidates outside this age range will be considered
A citizen or permanent resident of Australia
Engaged in farming, horticulture, fishing or associated industries
Intending to remain involved in food and fibre industries in Australia

Scholarship Benefits

15-weeks of purposeful learning and unique access to our approachable, global agricultural network
Connections with the global alumni – over 500 scholars in Australia and 2,000 worldwide
See leading and innovative businesses and identify new best practices
Select a research topic that will be of use to you, your business, community and industry

Value

$40,000 bursary, subject to guidelines set out on this website to cover costs associated with the study and reporting
$3,000 of the bursary will be withheld as an assurance on the submission of an approved report

Click here to view full funding guidelines on the provider's website.

A Practical Guide to Purchasing a Small Business

Tue, 28 Jan 2025 04:55:39 GMT

Buying a small business can offer a range of exciting opportunities for business owners. However, the acquisition process can be somewhat daunting for some buyers and sellers, involving meetings and discussions with terms, words, concepts and processes that may not be familiar. It can be high-pressure and time-critical and can often culminate in the buyer and seller becoming overwhelmed and frustrated. Under these circumstances, it is recommended that advisors (lawyer, accounting, business advisor) are engaged to ensure that information is understood and proper processes are followed. Advisors will, of course, add a cost to the process; however, they will ensure that the acquisition is approached thoughtfully with a clear strategy in place.

Outlined below are key considerations and practical steps to help potential business owners navigate the process of purchasing a small business successfully.

Clarify Your Goals

Before looking for a business to purchase, determine the key business criteria and establish business ownership goals. Perhaps consider the following:

What rate of return is required?
Should the business be under management or managed by a business owner?
How many hours does the business owner want to work each week?
Is there a preferred industry or an industry that should be avoided?
Is stable cash flow preferred, or is growth potential preferred instead?

It will be essential to keep these criteria in mind and refer back to them each time acquisition opportunities arise. This will ensure that the business opportunities that are pursued tick the key boxes.

Review Key Financials

When a suitable business is found, the next step will be to review the financial information that is available from the business broker. This will provide an initial indication of whether the business is financially stable and whether the asking price is fair.

At least three years of profit and loss statements should be provided to check whether the business is consistently profitable, margins, types of expenses, and revenue generated yearly. If profits are up and down or following a declining trend, the acquisition might be risky. The drivers behind profit variation need to be understood.

The seller will often provide adjusted profit and loss statements to the buyer. These remove certain income and expenses to adjust for those specific to the seller, unusual or non-recurring. These adjustments should be understood, and any queries should be clarified.

It is also important to understand whether it is the shares in the business or just some of the business assets being acquired. Most small business acquisitions involve buying just some of the business assets, such as plant and equipment, goodwill, IP, client lists, etc. However, occasionally, the shares or the company itself are acquired. In this situation, the buyer will acquire all the company's assets and liabilities and take on all past, current, and future liabilities. If this is the case, the balance sheet should be requested and reviewed, and thorough due diligence should be performed before settlement.

Understand the Asking Price

It is important to understand whether the asking price for the business is reasonable. A common valuation method for small businesses involves using a multiple of the business’s earnings before interest, taxes, depreciation, and amortisation (EBITDA), which is essentially the adjusted profit. It is highly advisable to get an accountant or business advisor to assist you with this task.

Engage a Lawyer

Once the initial review of the asking price and financials has been performed, the next task is usually to sign an offer and acceptance contract. It is very important that a lawyer assists with this if the buyer is not confident in their ability to understand the terms and conditions of the contract. Some key conditions that are typically included in the contract by the buyer are to make the offer subject to securing finance and subject to due diligence. These terms are aimed at ensuring that if the buyer cannot secure finance or has concerns following due diligence, the contract ceases, and their deposit is recovered.

Securing Finance

Approaching a finance broker or bank with a sense of urgency (or getting pre-approval) is advisable, as securing finance can take some time. The bank will typically require cash flow forecasts for the business and a business plan from the buyer and these can take some time to prepare. An accountant or business advisor will usually assist with this process and can liaise with the bank if required.

Once finance is secured it is also important that the buyer understands the terms of the finance offered. This will likely be discussed with the accountant when cash flow forecasts are prepared, however, if not, the buyer needs to understand key terms such as interest rates, term of loan, the type of loan facility offered, repayments, and the risk involved in securing finance against personal assets.

Perform Due Diligence

Due diligence involves requesting and reviewing information about the business to ensure no hidden issues could become a problem for the buyer after settlement. For a very small business, this process can be less involved. Key areas that due diligence will cover include:

Legal and compliance checks.
Contract and lease reviews.
Thorough financial review.
Review of employee and management contracts and discussions with the seller around roles, responsibilities, key staff and their resistance to change.
Inventory and equipment review, including review of equipment condition and whether the price in the contract represents market value.

Legal and Regulatory Considerations

Once finance has been secured and due diligence has been finalised, the next step will be completing the settlement. A lawyer or settlement agent will usually assist with this process. Prior to settlement, some key legal and regulatory considerations need to be addressed to ensure a smooth settlement and changeover of business ownership. These might include:

Choosing a business structure.
Applying for an ABN or ACN (if necessary).
Organising the transfer of business name.
Registering for GST and PAYG.
Applying for a TFN (if necessary).
Setting up a business bank account.
Writing to customers to explain the change of ownership and new bank account details.
Contacting suppliers to organise new accounts.

Purchasing a small business can be an exciting and rewarding experience. Still, it requires careful planning, thorough research, and an understanding of the business acquisition process, along with knowledge of the financial and operational aspects of the business. The information above is by no means exhaustive; however, it provides potential business owners with some key issues to consider. Ideally, advisors will be engaged throughout the business acquisition process by both the seller and buyer to ensure that each party is well-informed and that correct decisions are made. This approach also helps minimise risk, stress and delays, which are great outcomes for both parties.

If you need help navigating the business acquisition process, please contact Smith Thornton , and we will be happy to help.

Forecasting for Farmers

Fri, 13 Dec 2024 01:04:25 GMT

Farmers know better than anyone that preparing a forecast is not always as simple as cutting and pasting from last year. Profits and net cash flow generated from farming operations can change significantly year on year due to the influences of a multitude of variables. Some variables are unpredictable, such as weather, commodity prices, conflict and government policies. However, farm owners can estimate several income and expense drivers with reasonable accuracy based on their invaluable experience on farm over many decades. With the assistance of an advisor competent in preparing detailed cash flow forecasts, farmers can then use their knowledge to forecast expected profit and cash flow for the year (or years) ahead.

At Smith Thornton, we often assist our farming clients with preparing their annual farm forecast. For some farmers, a quarterly review and update is preferred or required, depending on their financial circumstances, the size of their farming operations, or whether they are experiencing a period of change. In preparing the forecast, it is important to review and discuss key farming inputs and assumptions, future plans, financing, capital expenditure, changes to operations, and even succession. The more information discussed and clearly understood, the more robust the forecasting will be.

Key inputs and assumptions that should be considered include:

Livestock schedules:

Destocking and restocking are occurring across many farming operations off the back of poor pricing and drought conditions. It is therefore important to forecast livestock numbers, including natural increases, birth rates, death rates, sales and purchases. Operational changes such as running a new breed or holding stock longer/shorter than usual also need to be given careful consideration.

Commodity pricing:

Whilst we can’t predict commodity pricing with 100% accuracy, we can apply prices that are reflective of industry forecasts. We can also apply conservative prices to test worst case scenarios.

Crop rotations:

Crop rotations are common and are adopted to improve soil nutrients and yields. This means crop types, hectares and expected yields need to be reviewed yearly.

Fertiliser and chemicals:

Fertiliser and chemical types, quantities and pricing need to be reviewed on an annual basis to ensure that the cost is reflective of cropping and livestock plans. If the farm operates with an overdraft facility and cash is tight, fertiliser payment is often deferred and paid once crop sales are made. It is important to consider the timing of payments to accurately forecast a cash balance.

Seed and seeding:

Consider whether seed is available on farm or whether it needs to be purchased. Consider crop rotations, what type of seed will be required, and what type and how much seed is required for pasture. Seeds will also need to be sown by owners, staff, or a contractor. The costs associated with these vary, so consider which is most appropriate for the year ahead.

Stock expenses:

Lice treatments, vaccinations, tags, drenching and vet expenses are significant costs for livestock farmers. They are also dependent on the breed and livestock numbers on farm, so can change year on year depending on the farming operations.

Shearing and crutching:

Every sheep farmer will understand the large expense involved in shearing and crutching a herd. It is, therefore, imperative that the timing of shearing and crutching throughout the season is considered when preparing a farm forecast, as this will have a significant impact on the monthly cash balance. Destocking and restocking of sheep will also impact this expense, along with the breed of sheep on farm.

Harvesting:

Harvest will occur at a similar time each year, although it can vary depending on weather experienced throughout the season and leading up to harvest. The key to forecasting harvest costs is to consider harvest conditions, fuel, contractor availability, receival and storage fees, and the condition of equipment required for harvest.

Repairs and maintenance:

Repairs year on year can vary wildly and unexpectedly. We can’t forecast unexpected expensive equipment failure, but we can budget for a certain level of repairs, knowing that equipment breaks occasionally. We can also consider the condition of farm equipment, whether major maintenance should be planned, along with the costs associated with regular servicing of equipment/vehicles and property maintenance.

Financing:

Most farms have debt, whether it be through long term loans, equipment finance or an overdraft facility. Understanding the terms of these debt facilities and the impact that they have on cash flow is important.

Plant & equipment:

Equipment gets old, farms expand, and operations change. If plant and equipment need to be replaced or purchased, this needs to be planned for, and financing needs should be considered. Needs will need to be prioritised if cash flow is an issue.

Living expenses:

Farm owners also need to live! Monthly drawings, personal debts, schooling expenses, holidays, personal insurances and income tax should all be considered when preparing a farm forecast.

Preparing a farm forecast is a time-consuming exercise and requires careful thought and consideration. Albeit a tedious task, it does provide peace of mind, knowing what to expect when it comes to cash flow and then having time to change some decisions or talk to the bank if necessary. The information passed around when preparing a farm forecast is also invaluable when the next generation becomes involved in these discussions. It gives the next generation a good insight into the financial considerations of operating a farm, which is a part of the business that they are often not involved in.

If you need help preparing your farm forecast, please contact us at Smith Thornton and we will be happy to assist.

Collaborative Business Ownership: What You Need to Know

Mon, 25 Nov 2024 05:25:33 GMT

Whether you are in business with family members, fellow professionals or a third party, it is important to protect and nurture your co-owner relationships to ensure your business can thrive!

Here are a few tips on what to expect:

1: First and foremost, you need to be able to put personal opinions aside and always decide on what is best for the business.

You are responsible for something much greater than yourself, and the continuity and success of the business must be your priority.

2: You need to be willing and able to adapt to a changing environment, be it financial, political, supply chain or mother nature herself.

Strategic thinking and a willingness to deviate from your original direction are key to protecting your business from factors that are beyond your control.

3: You must be able to treat your business partners with the respect they deserve.

We don’t all have the same skill set, and that is a good thing! You need to recognise those capabilities that make your co-owners a key part of your business, and they need to recognise yours. Make sure that each role is assigned with specialisations and skills in mind so nobody is set up to fail.

4: You need to be able to have a robust and honest conversation without holding a grudge.

We all look at things differently, so when decisions are being made, discussion and even disagreement are positive as it forces us to consider an alternative perspective. The trick is to be able to agree to disagree. You must be able to accept that if you have said your piece and the decision does not go your way, that’s okay. Sulking and stewing is a recipe for disaster; you need to be able to clear the air and move forward, respecting the decision that was made.

5: Do away with the tit-for-tat.

A ‘They got this, so I want that’ attitude does not belong in a business. Refer back to point 1) what is best for the business. This is especially important when you have employees looking to you as an example of acceptable behaviour.

6: Recognise that you and your business partners may be at different stages in your business careers.

You may be in an empire building mindset whilst your partner may be in a kingdom protection stage. It is important to recognise this so that you can each be aware. Then focus on making decisions based on what is best for the business rather than just protecting your place in it.

7: You need to have a problem solving mindset.

Because you will need to help solve a LOT of problems. Think of them as challenges rather than problems if you will, but in any case, one of the key things you will need to do is work together on solutions that will keep the business surviving and thriving.

8: Contribution should be rewarded.

Running a business is hard yakka, so if you are not willing or able to contribute as much as your co-owners, consider a remuneration that will reward them for their additional efforts. This does not need to be fixed either, as circumstances can change. Resentment will soon build if you are just going along for the ride and reaping equal reward.

Hopefully these tips should assist you in building and sustaining a successful business with your partners, making the most of your individual capabilities and ensuring a lasting and rewarding experience.

Looking to strengthen your business relationships? Reach out to us for practical, expert advice.

On Farm Connectivity Program

Fri, 22 Nov 2024 06:57:49 GMT

Assists primary producers to take advantage of digital agribusiness solutions to boost productivity, improve safety and drive more sustainable farming practices.

The On Farm Connectivity Program Round 2 is now open for rebate applications from Approved Suppliers and Primary Producers. Rebates of up to 50% are available for eligible equipment worth up to $30,000 (GST exclusive). Applications close 5pm AEST on 30 April or until funding is exhausted, whichever occurs first.

Broadened eligibility criteria under Round 2 of the program and a larger number of Approved Suppliers means more Primary Producers can benefit from the program.

The objectives of the program are:

Extend digital connectivity and take advantage of advanced farming technology
Enhance a primary producers’ capacity to implement digital agribusiness solutions through improved connectivity
Capitalise on the agricultural sector’s potential for increased productivity and growth
Support access to new communications equipment by offsetting some of the cost.

The intended outcomes of the program are:

Increased investment in equipment to support operations of the agricultural sector
Increased efficiency, competitiveness, productivity and profitability of the agricultural sector
Improved safety on farm
Increased use of advanced farming technology
Improved knowledge of advanced farming technology and digital literacy.

Eligible Primary Producers can only access the program (and rebate) through an Approved Supplier. Download a list of Approved Supplier here.

Primary Producer eligibility

An Eligible Primary Producer must:

be a registered business and have an ABN that has been active for the previous 12 months at the time of applying
have an annual average pre-tax income from primary production of between $40,000 and $4 million. Annual average gross income is calculated as the average of the previous 3 full financial years' income for each ABN
not be a hobby farmer
operate an eligible primary production activity that is defined as those listed in the Australian and New Zealand Standard Industrial Classification (ANZSIC) 2006 (revision 2.0) codes under Division A, Agricultural Forestry and Fishing, Subdivisions 01, 02 and 03
agree to the department contacting you for a case study about your connectivity solution for the On Farm Connectivity Program up to 2 years after the Program has closed.

You can download eligible ANZSIC codes in Appendix D of the On Farm Connectivity Program Round 2 - Grant Opportunity Guidelines here.

As part of the application process, the Primary Producer will be required to sign a declaration to confirm their eligibility.

How much is available?

The Australian Government is providing $18 million in 2024–25 under Round 2 of the Program. Rebates of up to 50% of the cost of eligible equipment are available, with a minimum rebate of $1,000 (GST exclusive) and a maximum of $30,000 (GST exclusive) on offer.

How much is the rebate?

Under Round 2 of the Program, the rebate amount will be up to 50% of the cost of eligible equipment.

the minimum grant (rebate) amount is $1,000 (GST exclusive)
the maximum grant (rebate) amount is $30,000 (GST exclusive)

There is no limit to the amount an eligible Primary Producer may spend, however, the rebate cannot exceed $30,000 (GST exclusive).

Primary Producers can purchase eligible equipment from multiple Approved Suppliers, to a total combined value of $30,000 (GST exclusive).

What products are eligible?

There are 5 broad categories of eligible connectivity solutions and associated eligible equipment:

Low Power Wide Area Networks (LPWAN)
Connectivity Equipment
Environmental monitoring
Farm management
Remote automation and control

You can find the list of eligible equipment categories and sub-categories at the List of Eligible Equipment .

Important notice: Any supplementary products offered by the Approved Supplier are not eligible for the Program and must be purchased outside of the Program.

What's the process?

Once a Primary Producer accepts a quote for the eligible equipment, the Approved Supplier will submit an application for a rebate. If the application is successful, the Primary Producer pays for the equipment at a reduced price. Once the equipment is installed/shipped, the supplier can claim the reduced price back as a rebate. Further information is outlined below:

Step 1 - Support: Primary Producer may engage with the Regional Tech Hub to discuss their connectivity needs and get personalised advice.

Step 2 - Choose: Primary Producer engages with and selects a connectivity solution from an Approved Supplier.

Step 3 - Quote: Primary Producer receives, then accepts quotes from an Approved Supplier.

Step 4 - Application submission: Approved Supplier submits rebate application.

Step 5 - Application assessment: Business Grants Hub assesses application (estimated 2-6 week turnaround).

Step 6 - Rebate outcome: Approved Supplier and Primary Producer advised.

Step 7 - Invoice: Primary Producer receives invoice at discounted price of up to 50% off from Eligible Equipment Supplier.

Step 8 - Payment: Primary Producer pays invoice.

Step 9 - Equipment installed / shipped: Approved Supplier ships product. If required, an appointment is arranged to install the connectivity solution and/or train the Primary Producer in how to use the connectivity solution.

Step 10 - Rebate claim: Approved Supplier is required to submit rebate claims to the Business Grants Hub for payment within a 120 day timeframe, or by 31 May 2025, whichever is sooner.

Payday Super for Employers

Tue, 29 Oct 2024 05:30:26 GMT

The government recently announced that payday superannuation obligations will commence on 1 July 2026. Payday superannuation requires employers to pay their employees' superannuation at the same time as their salary and wages. This means business owners only have 21 months to prepare for the change.

Essentially, the superannuation payment cycle will match the wages/salary/pay cycle from 1 July 2026 onwards. For example, if the pay cycle is weekly , employers will need to forward their employee’s superannuation to a clearing house weekly . So, instead of processing superannuation four times a year, business owners could be required to pay superannuation 52 times a year if they are on a weekly pay cycle.

The Australian Taxation Office’s (ATO’s) small business clearing house will also close on 1 July 2026. Business owners will then be required to either set up a clearing house with one of the many superannuation funds available or use payroll software.

What can business owners do now?

Begin preparing for the cash flow impact now. If a business owner is currently on a quarterly payment basis for superannuation, their last quarterly payment will be due on 28 July 2026. This could potentially mean that, at that point, they will also be paying weekly payday superannuation payments. Depending on the size of the payroll this could have significant cash flow effects for business owners. If you are a business owner and need help planning for this, please contact us.

The best practice would be to integrate superannuation payments through payroll software, as most software payroll programs have an inbuilt clearing house. However, business owners need to be mindful that there are costs associated with using payroll software. If you are currently using the ATO’s Small Business Clearing House (SBCH), you must move to another system by 1 July 2026.

Positives

Some positive outcomes relating to these changes include:

The Superannuation Guarantee (SG) calculation remains the same – based on Ordinary Times Earning (OTE).
No more SGC forms to complete, as the ATO will do this assessment and notify business owners.
Small or irregular payments can be held over until the next payday schedule.
This SGC will now be tax-deductible.
Employees are now able to show their stapled superannuation fund during onboarding.

Negatives

Some issues arising from these changes include:

Employees must pay the SG on the same day the employee is paid.
The seven day rule will still apply, so funds must be allocated to the employee’s superannuation fund within seven days of wages being paid. Once the superannuation payment has been made, this is really out of the business owner’s control, so watch this space to see how the ATO deals with this.
The SBCH is being closed as of 1 July 2026.
The cost of payroll software will increase.

Small business Impact

Small business owners need to be mindful of the following:

Cash flow will definitely be the biggest hurdle for small business owners. While this law ensures that the employee’s superannuation will get paid, a business’s other suppliers may have to wait for payment if the change over the period results in cash flow issues.
This change also brings additional regulatory burdens to employers who are already experiencing the many pressures of everyday business.
The penalties for non-compliance include an up to 60% administrative fee, and interest is charged at 11.36% pa (currently), applied daily to any overdue payment. In addition, another penalty of up to 50% can be applied if the SGC assessment is not paid within 28 days from issue.

Lastly, we leave you with a comment made by the Institute of Certified Bookkeepers concerning the payday superannuation changes as food for thought:

“The Government fact sheet talks about how “8.9 million employees will benefit from…receiving their superannuation contributions earlier.” It fails to acknowledge that 800,000 employers will not benefit from having to pay earlier. If an employee’s super is being paid into cash-rich superfunds, employers who are already struggling with cash management issues due to the cost of doing business will not have that cash. Landlords, suppliers, energy companies, taxes, and business owners will go without cash while the cash sits in the superfunds. Unpaid super is a problem! However, forcing negative consequences on 100% of employers to fix the problems caused by the few (the ATO Super Gap report suggests only 6% of super has to be chased) doesn’t make sense. Now, 100% of employers will suffer from increased processing and payment costs. The adoption of NPP (New Payments Platform: PayTo/PayID) is good. This should enable straight-through processing directly from the employer to the member’s account in the superfund. We will wait to see if the Government enforces this possibility.”

Please contact us if you need any assistance in your business.

Is the RBA to blame? The economic state of play

Thu, 26 Sep 2024 02:56:43 GMT

The politicians have weighed in on the Reserve Bank of Australia’s economic policy and their reticence to reduce interest rates in the face of community pressure. We look at what the numbers are really showing.

Treasurer Jim Chalmers has stated that global uncertainty and rate rises are “smashing the economy”.

Former Treasurer Wayne Swan weighed in and told Channel 9 that the RBA was, “putting economic dogma over rational economic decision making, hammering households, hammering Mums and Dads with higher interest rates, causing a collapse in spending and driving the economy backwards” and that the RBA was, “simply punching itself in the face.”

Australian mortgage holders and renters have had no relief from interest rates following 13 successive interest rate rises to the official cash rate since May 2022.

The Reserve Bank’s position and the flow through effects

The Reserve Bank of Australia (RBA) Board opted to maintain the official cash rates at 4.35% at its September Board meeting. The rationale is that inflation remains persistently high and has been for the last 11 quarters. The consumer price index (CPI) rose 3.9% over the year to the June quarter and remains above the RBA’s target range of 2-3%.

But, it is not persistently high inflation that is causing the politicians to weigh in. RBA Governor Michele Bullock has warned that “it is premature to be thinking about rate cuts” and “the Board does not expect that it will be in a position to cut rates in the near term.”

The Australian Bureau of Statistics (ABS) June Quarter National Accounts paint a bleak picture of the Australian economy. Per capita GDP fell for the sixth consecutive quarter by -0.4% to -1.5%. The longest consecutive period of extended weakness ever recorded.

Household spending weakest since COVID Delta

Household spending fell by -0.2% in the quarter, the weakest growth rate since the Delta-variant lockdown affected September quarter 2021.

Discretionary spending – travel and hospitality impacted most

The ABS says that we spent less on discretionary items (-1.1%), particularly for events and travel. It will come as no surprise that spending on hotels, cafes and restaurants was down 1.5%. Spending on food also fell -0.1% as households looked to reduce grocery bills.

Household savings lowest since 2006

The savings ratio remains low. Households saved only 0.9% of their income over the year. This was the lowest rate of annual saving since 2006-07. Net savings reduce when household income grows slower than household spending.

Economic growth from Government spending

The Australian economy did grow by 0.2%, the eleventh consecutive quarter of growth but the growth rate was unimpressive. The ABS says that, “the weak growth reflects subdued household demand, which detracted 0.1 percentage points from GDP growth while government consumption contributed 0.3 percentage points, the same contribution to growth as previous quarter.”

Government spending increased by 1.4% over the quarter. Commonwealth social assistance benefits to households led the rise, with continued strength in expenditure on national programs providing health services. State and local government expenditure also rose with increased employee expenses across most states and territories.

The RBA’s position on interest rates

The RBA is on a narrow path. It’s trying to bring inflation back to target within a reasonable timeframe while preserving the gains in the labour market over the last few years. The RBA expects to reach this target range by the end of 2025.

Through 2022 and 2023, most components of the CPI basket were growing faster than usual (the CPI is literally a basket of 87 types of expenditure across 11 groups such as household spending, education and transport.) Over the last 18 months, the price of goods has come down as supply disruptions like COVID-19 and the war in Ukraine have eased, and are now growing close to the historical average.

The key problem areas are housing costs and services. In housing, the growth is from increased construction costs and strong increases in rent. For services, while discretionary spending is down, as we can see from the June National Accounts, inflation in this category remains high at 5.3% to the June quarter. Wage increases and lower productivity, combined with the increased costs of doing business (electricity, insurance, logistics, rent etc) are all impacting.

The RBA is keen to point out that inflation causes hardship for the most vulnerable in our community. Lower income households tend to allocate more of their spending towards essentials, including food, utility bills and rent. Higher income households tend to spend more on owner-occupied housing as well as discretionary items such as consumer durables.

Younger households and lower income households have been particularly affected by cost-of-living pressures.

Need help navigating your financial journey? Get in touch with our team to learn how we can support your business.

Property and ‘lifestyle’ assets in the spotlight

Thu, 26 Sep 2024 02:47:18 GMT

Own an investment property or an expensive lifestyle asset like a boat or aircraft? The ATO are looking closely at these assets to see if what has been declared in tax returns matches up.

The Australian Taxation Office (ATO) has initiated two data matching programs impacting investment property owners and those lucky enough to hold expensive lifestyle assets.

Investment property

What investment property owners declare and claim in their personal income tax returns is a constant focus for the ATO. Coming off the back of data matching programs reviewing residential investment property loan data, and landlord insurance, the ATO have initiated a new program capturing data from property management software from the 2018-19 financial year through to 2025-26. Data collected will include:

Property owner identification details such as names, addresses, phone numbers, dates of birth, email addresses, business name and ABNs, if applicable;
Details of the property itself - property address, date property first available for rent, property manager name and contact details, property manager ABN, property manager licence number, property owner or landlord bank details; and
Property transaction details - period start and end dates, transaction type, description and amounts, ingoings and outgoings, and rental property account balances.

While the ATO commit to specific data matching campaigns, since 1 July 2016, they have also collected data from state and territory governments who are required to report transfers of real property to the ATO each quarter.

This latest data matching program ramps up the ATO’s focus on landlords, specifically targeting those who fail to lodge rental property schedules when required, omit or incorrectly report rental property income and deductions, and who omit or incorrectly report capital gains tax (CGT) details.

Lifestyle assets

Data from insurance providers is being used to identify and cross reference the ownership of expensive lifestyle assets. Included in the mix are:

Caravans and motorhomes valued at $65,000 or over;
Motor vehicles including cars & trucks and motorcycles valued at $65,000 or over;
Thoroughbred horses valued at $65,000 or over;
Fine art valued at $100,000 per item or over;
Marine vessels valued at $100,000 or over; and
Aircraft valued at $150,000 or over.

The data collected is substantial including the personal details of the policy holder, the policy details including purchase price and identification details, and primary use, among other factors.

The ATO is looking for those accumulating or improving assets and not reporting these in their income tax return, disposing of assets and not declaring the income and/or capital gains, incorrectly claiming GST credits, and importantly, omitted or incorrect fringe benefits tax (FBT) reporting where the assets are held by a business but used personally.

Need help navigating your financial journey? Get in touch with our team to learn how we can support your business.

It wasn’t me: the tax fraud scam

Thu, 26 Sep 2024 02:20:10 GMT

You login to your myGov account to find that your activity statements for the last 12 months have been amended and GST credits of $100k issued. But it wasn’t you. And you certainly didn’t get a $100k refund in your bank account. What happens now?

In what is rapidly becoming the most common tax scam, myGov accounts are being accessed for their rich source of personal data, bank accounts changed, and personal data used to generate up to hundreds of thousands in fraudulent refunds. For all intents and purposes, it is you, or at least that’s what it seems. And, the worst part is, you probably gave the scammers access to your account.

But it’s not just activity statements. Any myGov linked service that has the capacity to issue refunds or payments is being targeted. Scammers are using the amendment periods available in the tax law to adjust existing data and trigger refunds on personal income tax, goods and services tax (GST), and through variations to pay as you go (PAYG) instalments. In some cases, the level of sophistication and knowledge of how Australia’s tax and social security system operates is next level.

Once the scammers have access to your myGov account, there is a lot of damage they can do.

So, how does this happen and why is it so pervasive? Humans are often the weakest link.

Common scams utilise emails (78.9% of reported tax related scams in the last 12 months) or SMS (18.4% of reported scams) that mimic communication you might normally expect to see. The lines of attack used by tax related scammers are commonly:

Fake warnings about attempted attacks on your account (and requiring you to click on the link and confirm your details);
Opportunistic baiting where some form of reward is flagged, like a tax refund, that you need to click on the link to confirm and access; and
Mimicking common administrative notifications from the Australian Taxation Office (ATO) like a new message accessible from a link.

Approximately 75% of all email scams reported to the ATO to March 2024 were linked to a fake myGov sign in page.

How to spot a fake

Often the first sign that something is amiss is alerts about activity on your myGov account or a change in details - which might seem a little ironic if the way in which scammers got into your account in the first place is via these very same messages. But, there are ways to spot a fake:

The ATO, Centrelink and MyGov don’t use hyperlinks in messages. If you receive a message with a link, it’s a fake.
The ATO will not use QR codes as a method for you to access your account.
The ATO will never ask for your tax file number (TFN), bank account details or your myGov login details over social media. Some scammers have used fake social media accounts mimicking the ATO and other Government agencies. When a query comes in, they respond by asking for information to verify it’s you. The ATO will never slide into your DMs. ATO Assistant Commissioner Tim Loh said, “it’s like giving your house keys to a stranger and watching them change your locks.”
The ATO do not use pre-recorded messages to alert you to outstanding tax debt.
The ATO will not cancel your TFN. Some scammers suggest that your TFN has been cancelled or suspended due to criminal activity or money laundering and then tell you to either pay a fee to correct it, or transfer your money to a ‘safe’ bank account to protect you against your corrupted TFN.
The ATO will not initiate a conference call between you and your tax agent and someone from a law enforcement agency. In one case, the taxpayer was told that the caller was from the ATO and a person from her accounting firm was on the call as well to represent her and work through a problem. The ATO caller and the tax agent were fake. Just hang up and call our office if you are ever concerned. The ATO will never initiate a conference call of this type.
The ATO will also not ask you to reconfirm your details because of security updates to myGov. The link, when activated, takes you to a fake myGov web page that can look very convincing.

In general, you should always log into your myGov account directly to check on any details alerted in messages rather than clicking on links. This way, you know that you are not being redirected to somewhere you should not be.

And, don’t log into your myGov account on free wifi networks. Ever.

Who is getting scammed?

There is a pervasive view that older, technology challenged individuals are the most at risk. And while this might be the case generally, scamming is impacting all age groups.

The ATO says that the demographic who most reported providing personal information to scammers was 25 to 34 year olds. And, the younger generation are more likely to fall for investment scams. According to the AFP-led Joint Policing Cybercrime Coordination Centre (JPC3), people under the age of 50 are overtaking older Australians as the most reported victims of investment scams. Australians reported losing $382 million to investment scams in the 2023-24 financial year. Nearly half (47%) of the investment scam losses involved cryptocurrency.

Other scams

Scammers are in the business of scamming and they will use every trick and opportunity to part you from your money.

Investment scams

Pig butchering.

Pig butchering is a tactic where scammers devote weeks or months to building a close relationship with their victims on social media or messaging apps, before encouraging them to invest in the share market, cryptocurrency, or foreign currency exchanges. Victims think they are trading on legitimate platforms, but the money is siphoned into an account owned by the scammers, who created fake platforms that look identical to well-known trading and cryptocurrency sites. Scammers will show fake returns on these platforms to convince victims to invest more money. Once they have extracted as much money as possible, the scammers disappear with all the invested funds.

Deepfakes.

Deepfakes are lifelike impersonations of real people created by artificial intelligence technologies. Scammers create video ads, images and news articles of celebrities and other trusted public figures to promote fake investment schemes, which can appear on social media feeds or be sent by scammers through messaging apps. Unusual pauses, odd pitches, or facial movement not matching their speaking tone are often giveaways but increasingly, the fakes are difficult to spot.

Invoice scams

The names and details of legitimate businesses are used to issue fake invoices with the money transferred to the scammer’s account. These scams are often tied to cyber breachers where hackers have accessed your systems and have identified your suppliers.

Bank scams

There has been a lot in the media of late about people receiving phone calls purporting to be from their bank, advising them there is a problem with their account, and then walking them through a resolution that involves transferring all their money into a ‘safe’ scammers account. Victims commonly state that they believed the scammer because of the level of personal information they relayed.

Your bank will never send an email or text message asking for any account or financial details, this includes updating your address or log in details for phone, mobile or internet banking.

A CHOICE survey found that four out of five of the victims of banking scams in their report said their banks did nothing to flag a scam before they transferred their money to the perpetrator.

The Australian Banking Association have stated that, if not already, banks will introduce warnings and payment delays by the end of 2024. And, in addition to other measures, they will limit payments to high-risk channels such as crypto platforms.

What to do if you have been scammed

myGov

If you have downloaded a fake myGov app, have given your details to a scammer, or clicked on a link from an email, text message or scanned a QR Code, contact Services Australia Scams and Identify Theft Helpdesk on 1800 941 126 , or get help with a scam here.

Tax scams

Before acting on any instructions, please contact us and we will verify the information for you. If you have already acted, contact the ATO to verify or report a scam on 1800 008 540 . The Government use external agency recoveriescorp for debt collection but we will advise you if you have a tax debt outstanding.

Need help navigating your financial journey? Get in touch with our team to learn how we can support your business.

Divorce, you, and your business

Mon, 26 Aug 2024 05:39:25 GMT

Breaking up is hard to do. Beyond the emotional and financial turmoil divorce creates, there are a number of issues that need to be resolved.

What happens when there is a family company?

For couples that have assets tied up in a company, the tax consequences of any settlements paid from the company will need to be assessed. Settlements paid out by a corporate entity can sometimes be treated as taxable dividends and taxed at the relevant spouse’s marginal tax rate.

If you are receiving assets from a corporate entity as part of a property settlement, it’s essential that you understand the tax implications prior to settlement or a sizeable portion of the settlement could go to the ATO.

For business owners, outside of the tax and financial issues, it’s important to not lose focus on what’s important to keep the business running efficiently.

What happens to your superannuation in a divorce?

A spouse’s interest in superannuation is a marital asset and can be split as part of the breakdown agreement. It’s important to be aware however that superannuation cannot be paid directly to a spouse unless the spouse is eligible to receive superannuation (they have met a condition of release) but it can be rolled over into the spouse’s fund until they are eligible to receive it. Laws exist to prevent taxes such as CGT being triggered when superannuation assets are transferred. This is particularly important where your superannuation fund holds property.

A Court order or Superannuation Agreement is required to give effect to the agreed split in the SMSF assets or to execute a rollover eligible for the CGT rollover concession.

If you have an SMSF and both spouses are members, it’s important to get advice to make sure that all of the appropriate administrative issues are taken care of. Where a divorce is not amicable, it’s important to keep in mind that the SMSF trustee is required under law to act in the best interests of the fund and its beneficiaries. Anything less and the fund members may seek compensation for loss or damage.

Can you protect both parties from divorce?

In a divorce, assets are split based on a multitude of factors such as earning capacity, maintenance of children, and the assets held pre-marriage. Many couples don’t go through their marriage with an equal view of how assets and income should be attributed until something goes wrong. If there is a disparity between the income levels of each spouse, there are a lot of benefits to the household in general of evening out how income flows through to the family. If your partner earns less than you, there is a very real financial benefit to topping up their super as superannuation has preferential tax rates. The same goes for taxable income. If you can even out income coming into the household, it spreads the tax burden. Good planning can make a difference.

Please contact us if you need any assistance in your business.

Wine Tourism and Cellar Door Grant

Fri, 23 Aug 2024 05:09:10 GMT

Supports wine or cider producers who add value by attracting visitors to wine regions, and thereby encourage wine tourism.

Wine producers will be able to access an annual grant reflective of their eligible physical cellar door sales.

Wine producers who have met the eligibility criteria in the preceding financial year may apply for a grant payment of 29 per cent of the notional wholesale selling price of their eligible rebatable domestic cellar door sales (up to $100,000 (GST exclusive)). Total funding under the grant program is capped at $10 million each financial year.

If the total value of all eligible applications exceeds the $10 million program cap in any one year, the value of individual grants will be reduced proportionally and be applied at a consistent rate for all approved applications.

To be eligible for the Wine Tourism and Cellar Door Grant applicants must:

Be a wine or cider producer
Be a legal entity registered for GST and with an active ABN
Have made at least $1,207,000 (GST exclusive) in sales of rebatable wine in the relevant financial year
Accrue rebatable domestic cellar door sales in excess of any such sales used to meet the $1,207,000 (GST exclusive) threshold in the relevant financial year
Have paid the WET on all eligible sales used as part of the application
Have owned or leased a physical cellar door in Australia in the relevant financial year, and/or their related entity/ies have owned or leased a physical cellar door in Australia in the relevant financial year
Have a liquor licence valid in the relevant financial year.

Click here to view full funding guidelines on the provider's website.

AgriFutures Rural Women’s Award

Fri, 23 Aug 2024 05:05:12 GMT

Provides a platform to inspire and support Australian women to use and develop their skills to benefit their industries and communities.

**Note: Applications close 9 October 2024 while NT applications close 24 January 2025.**

Over the past 21 years, the Award has gained a significant profile, and is recognised as a program of influence among parliamentarians, industry, media and Award alumni. Each State and Territory Winner receives a $15,000 Westpac grant for their project, business or program, access to professional development opportunities and alumni networks.

Applicants must have an existing project, business or program which is live and up and running, or will be live within three months of the application being submitted.

The existing project, business or program falls into one or more of these categories:

Community
Collaboration
Commercial

The National Winner will be awarded an additional $20,000 Westpac grant and National Runner Up, an additional $15,000.

Applicants need to be over 18 years old and identify as female.

Click here to view full funding guidelines on the provider's website.

Local Capability Fund Summary

Fri, 23 Aug 2024 04:02:21 GMT

The Department of Jobs, Tourism, Science and Innovation opened new grant funding rounds via the Local Capability Fund (LCF) on 26 July 2024. The LCF helps small and medium-sized enterprises (SMEs) in Western Australia to increase their capability, capacity and competitiveness as suppliers of products, services and works to the Western Australian Government, major projects and other important markets.

Regional Business Round

This round of funding is specifically designed to support regional Western Australian SMEs in improving their business capability, capacity and competitiveness to participate as suppliers of goods, services and works to export markets, Western Australian State or Local Government agencies, the Australian Government and the private business sector.

It is important to note that this LCF round is open to a very broad range of applicants. If you are a regionally based SME in Western Australia that provides goods or services to other businesses, you should spend some time reviewing the guidelines to see if there are funding opportunities available to you.

What are the key criteria?

Business is located in one of the local government areas specified in the guidelines (see the end section).
Operating in that region for at least 12 months.
Be operating in a trade exposed industry (or face competition from national or international SMEs or SMEs outside your region).
Be registered for GST for at least 12 months.
Have an ABN.
Be a for-profit business.
Have at least one full-time employee (FTE) (in addition to the owner) and less than 200 FTE.

How much can I apply for?

The LCF will cover 50% of eligible costs (excluding GST) up to a maximum of $20,000 per successful applicant. For example, to receive the full $20,000, you must have eligible costs of at least $40,000 (excluding GST).

What can I apply for?

External expertise (planning and business advice, improvement to internal business systems and infrastructure, training).
Plant and equipment:
Machinery and equipment (new, second-hand via dealer, modifications)
Upgrades or expansions to applicant owned business operating facilities.
Specialised motor vehicles for business purposes only (not utes, 4WD or vans)
Purchase of specialised computer software and hardware (e.g. tender management software, project management software, online sales and marketing systems).

There are great examples within the guidelines as well as a list of specific activities that are not eligible.

How can I apply?

Eligible applicants must submit their application online via the SmartyGrants portal.

A preview of the application form detailing the required information is available through the portal. Before applying, applicants must read and understand these guidelines and the Financial Assistance Agreement found on the portal.

Submissions close 3pm (AWST) on 13 September 2024.

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Digital Transformation Round

This round of funding is specifically designed to provide financial support to eligible businesses, encouraging the adoption of digital and data technology to improve their productivity, competitiveness, resilience, safety and/or sustainability. The funding supports SMEs in participating as suppliers of goods, services, and works to export markets, Western Australian State or Local Government agencies, the Australian Government, and the private business sector. Once again, this round is open to a wide range of businesses, so please review the guidelines carefully as your business may be eligible.

What are the key criteria?

Business located in Western Australia
Operating in Western Australia for at least three years.
Be registered for GST for at least 12 months.
Have an ABN.
Be a for-profit business.
Have at least one full-time employee (FTE) (in addition to the owner) and less than 200 FTE.
Have a turnover of over $500,000 in at least one of the previous three financial years.

How much can I apply for?

The LCF will cover 50% of eligible costs (excluding GST) up to a maximum of $25,000 per successful applicant. For example, to receive the full $25,000, you must have eligible costs of at least $50,000 (excluding GST).

What can I apply for?

Costs of consultancy services or business planning that address an identified business need or opportunity related to digital adoption or data capabilities.
Improvements in business cybersecurity, including audits, mitigation strategies and staff training.
Implementation of data analysis tools and platforms, data governance and data management.
Establishment of an e-commerce platform and/or secure payment portals.
Integration of technologies to automate business processes, including artificial intelligence products.
Integration of digital devices such as drones, robotic/autonomous devices, sensors, and/or additive manufacturing equipment (3D printers).
Costs of short-term training to address a specific digital capability gap within the business.

How can I apply?

Eligible applicants must submit their application online via the SmartyGrants portal.

Submissions close 3pm (AWST) on 13 September 2024.

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Aboriginal Business Round

This round of funding is specifically designed to support Western Australian Aboriginal small and medium-sized enterprises (SMEs) in improving their business capability, capacity and competitiveness to participate as suppliers of goods, services and works to export markets, Western Australian State or Local Government agencies, the Australian Government and the private business sector.

What are the key criteria?

Be an Aboriginal business (at least 50% owned by an Aboriginal interest).
Be registered with either the Aboriginal Business Directory Western Australia or the Supply Nation’s Indigenous Business Directory.
Business located in Western Australia.
Operating in Western Australia for at least 12 months.
Be operating in a trade exposed industry (or face competition from national or international SMEs or SMEs outside your region).
Be registered for GST for at least 12 months.
Have an ABN.
Be a for-profit business or an incorporated not-for-profit Aboriginal Corporation operating as a commercial enterprise.
Have at least one full-time employee (FTE) (in addition to the owner) and less than 200 FTE.

How much can I apply for?

The LCF will cover 50 per cent of eligible costs (excluding GST) up to a maximum of $50,000 per successful applicant. For example, to receive the full $50,000, you must have eligible costs of at least $100,000 (excluding GST).

What can I apply for?

External expertise (planning and business advice, improvement to internal business systems and infrastructure, training).
Plant and equipment:
Machinery and equipment (new, second-hand via dealer, modifications)
Upgrades or expansions to applicant-owned business operating facilities.
Specialised motor vehicles for business purposes only (not utes, 4WD or vans)
Purchase of specialised computer software and hardware (e.g. tender management software, project management software, online sales and marketing systems).

How can I apply?

Eligible applicants must submit their application online via the SmartyGrants portal.

Submissions close 3pm (AWST) on 13 September 2024.

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Standards Compliance Round

This round of funding is specifically designed to support Western Australian small and medium-sized enterprises (SMEs) with the costs of engaging external expertise to carry out the implementation and third-party certification of the following national and international standards:

ISO 9001 - Quality management standards to help work more efficiently and reduce product failures.
ISO 14001 - Environmental management standard to help reduce environmental impacts, reduce waste and be more sustainable.
ISO 45001 - Health and safety standards to help reduce accidents in the workplace.
ISO 27001 - IT security standards to help keep sensitive information secure.
ISO 50001 - Energy management standards to help reduce energy consumption.
AS/NZS 5131 - Steel industry compliance standards to help improve the integrity of structural steelwork.
ISO 13485:2016 – Medical devices – Quality management systems – requirements for regulatory purposes.

What are the key criteria?

Business located in Western Australia.
Operating in Western Australia for at least three years.
Be operating in a trade-exposed industry (or face competition from national or international SMEs).
Be registered for GST for at least 12 months.
Have an ABN.
Be a for-profit business.
Have at least one full-time employee (FTE) (in addition to the owner) and less than 200 FTE.

How much can I apply for?

What can I apply for?

Assistance under this round will be provided for the costs of engaging external expertise/consultants for the purpose of implementation and certification of the eligible standard(s).

Implementation – This includes the following activities:

Assessment of current systems and practices.
Reviewing existing procedures.
Conducting gap analysis.
Development of manuals, procedures and related documentation.
Staff training relating to the implementation and ongoing maintenance of the related management system.

Certification – This includes, but is not limited to, the following activities:

Registration and certification fees.
Audit fees for initial certification (expended within the financial year).
Travel, accommodation and meals for certification auditor

A condition of this round is that a copy of the certification certificate is provided to the Department as evidence of completion prior to any grant funding being paid out.

How can I apply?

Eligible applicants must submit their application online via the SmartyGrants portal.

Submissions close 3pm (AWST) on 13 September 2024.

Preparing a High-Quality Tender Submission

Tue, 23 Jul 2024 03:26:01 GMT

In the world of business, particularly in industries heavily reliant on contracts and projects, tender submissions are often a necessary evil. Whilst they are time-consuming to prepare and, at times, require what feels like an intrusive amount of information about your business, they are also the gateway to new opportunities and potential revenue growth for your business. So having the skills, time and attention to detail to prepare a high-quality tender submission is essential.

Whether you're a seasoned professional or new to the process, the art of preparing and submitting tenders requires a strategic approach and meticulous attention to detail. Within this article we will explore what tender submissions entail and essential tips to enhance your success rate.

What are tender submissions?

A tender submission is a formal offer to perform a scope of work, supply specified goods, or supply specified services at a specified cost. Typically, multiple submissions are prepared and submitted by various suppliers, all vying to secure a contract from a public or private organisation under a competitive bidding process. The successful applicant secures future business but also enhances their credibility and opens doors to future opportunities.

Key steps and focus points:

Read and understand the requirements

As soon as the tender is open download all documents and get an understanding of the tender process, key dates, contact details for questions and documentation for submission. It is essential that you do this early so that you can prepare a timeframe, key actions required and even a document/response log to help you navigate the submission process.

Study the documentation

Carefully review all tender documents presented in the tender submission package, including specifications, terms, and evaluation criteria. You can expect that the documents' specifications, terms and conditions will form part of your final contract unless you agree otherwise. Some evaluation criteria might be essential, while others might be negotiable; however, the more prepared you are and the more boxes you can tick, the better your chance of success.

Ask questions early

Seek clarification on any unclear points promptly. This not only demonstrates your commitment and attention to detail, but it also gives you the opportunity and time to act on the responses provided, seek further clarification, and negotiate if needed.

Set aside time

Rushing through a tender submission leads to errors. Plan well in advance to gather necessary information, talk to the relevant people, prepare the required documentation and prepare a complete response to all questions.

Prepare your submission

Using your action plan and document/response log, work your way through each question and document that requires completion, preparing answers that are as detailed and complete as possible. If there are certain sections of the submission that you can’t prepare, engage a specialist to assist.

Review and proofread

Review your submission for accuracy, completeness, and consistency. Make sure there are no typos or errors. Attention to detail is important to show that you are a thorough, process-driven, and high-quality supplier. If you are going cross-eyed reviewing after having spent days preparing the content, ask someone you trust to keep the information confidential and who has good attention to detail to review it as well.

Submit

Following the submission procedures set out in the tender package, submit your documentation before the due date. Follow the correct process (e.g. submit it to the correct email address, or upload documents via a portal if specified, save your documents in the correct format, name your documents correctly) and don’t wait for the due date to submit. If technology fails you on the day everything is due you may miss the due date and cause yourself significant stress. Don’t be afraid to also follow up after you submit, checking that your submission has been received and highlighting your interest in the tender.

What should my submission include?

Clear and concise responses

Use clear and jargon-free language in your responses. This will make your submission easier to read and understand during the assessment process.

Experience

Showcase similar projects or successes that demonstrate your capability to deliver. If you have experience and contacts from a similar project that you successfully delivered, contact that customer and ask if they can be included as a referee. It is very important to provide comfort and assurance of your competence and capabilities.

Address all evaluation criteria

Ensure your submission directly addresses how you meet every evaluation criterion outlined in the tender request. If you can’t meet certain criteria, discuss this with the designated contact person early, determine if it is a deal breaker or whether there is an alternative option that works, and explain the discussion and agreed alternative option clearly in your submission.

Depending on the industry, some tender requests require suppliers to show that they are compliant with certain standards (e.g., environmental, occupational health and safety, and document management). If you are not compliant but intend to continue to target this industry as a customer, it might be worth engaging a specialist to help you become compliant so that you can tick those boxes next time.

Competitive but realistic pricing

Your pricing should be competitive enough to stand out but realistic enough to ensure profitability. Do not agree to pricing that puts your business under financial stress. Doing more is only beneficial if it creates more profit. If there are many applicants and although your pricing works for your business, you are concerned that it is too high, don’t be afraid to explain your pricing process. Under the right circumstances, being transparent will build trust with the customer.

Preparing tender submissions is both an art and a science. It requires strategic planning, attention to detail, and a clear understanding of the customer’s needs. By learning about the process and giving it the time required, you can increase your chances of success and leverage tender opportunities to propel your business forward. Remember, each submission is an opportunity to showcase your strengths and capabilities, so make it count.

If you need assistance in preparing tender submissions for your business please contact Jenna van Nierop, who provides business advisory services to our clients.

Agrifood and Beverage Voucher Program

Thu, 18 Jul 2024 07:33:40 GMT

The Agrifood and Beverage Voucher Program is back for Round 6. It supports small businesses across regional and metropolitan WA to access expert advice to build resilience and sustainability, competitiveness, scale and export preparedness into their operations.

Funds of up to $20,000 per business are available, with 50:50 co-contribution, to access professional services with up to two vouchers under 5 categories:

Business Planning
Manufacturing for Business Growth (including transition to manufacturing for producers, HACCP, process engineering and automation)
Sales and Marketing (including e-commerce, marketing strategy, customer relationship management system design, export market development and re-branding)
Financial Health (including succession planning, pitch decks, and other investment planning)
Environmental Sustainability and Social Responsibility (including net zero planning, waste water management plans, sustainable packaging design, and ESG).

Growing and diversifying the State’s economy - Future jobs and skills
Stronger, safer communities
Investing in climate action
Investing in the regions

Eligible small businesses will be required to have an annual sales turnover of between $100,000 and $50 million. For more eligibility criteria and more information about the program visit the Agriculture and Food website, and download the Round 6 Guidelines.

Submissions can be made via the SmartyGrants portal and close 5pm on 27 August 2024. Click here to access the portal.

Xero Beautiful Business Fund

Thu, 18 Jul 2024 07:19:16 GMT

Last year Xero launched the Xero Beautiful Business Fund , which offers more than AU$700,000 in funding to Xero customers across Australia, Canada (excluding Quebec), New Zealand, Singapore, South Africa, the UK and the US. The Xero Beautiful Business Fund is back for 2024 and entries are now open.

If you haven’t applied yet, here’s how to get started:

Step one:

Decide which of the four funding categories you will enter. You can submit an entry in each category if you wish.

Innovating for environmental sustainability: How are you taking the next step on your environmental sustainability journey?
Strengthening community connection: How are you serving your community and making a positive impact?
Trailblazing with technology: How are you seeking to innovate and set pace using merging technologies?
Upskilling for the future: How are you overcoming a skills gap and preparing for the future?

Step two:

It’s easy to enter. All you need to do is complete a short online form and record and upload a 90-second pitch video. This can be as simple as a self-recorded video on your phone.

Step three:

Submit your entry by 27 August 2024 NZT, then sit tight for the winners to be announced at the end of October.

Eligibility Criteria

To be eligible your business must be:

Located in one of the 50 United States and the District of Columbia, Canada (excluding Quebec), South Africa, New Zealand, the United Kingdom, Singapore, or Australia.
Employing between 1-50 employees.
A paying Xero subscriber (either directly or via a Xero accounting or bookkeeping partner) at the time of entry and at the time of announcement of the winners, which will take place at the end of October 2024.
Operating on a for-profit or not-for-profit basis.

You need to complete and submit your entry, including an online form and record and upload a 90-second pitch video. This can be done by either the business owner or a designated employee.

All details can be found here.

Drought Response - Interest-Free Loans

Thu, 27 Jun 2024 02:05:28 GMT

Applications have now opened for the interest free loans as part of the State Government’s 2024 Drought Response. This program will be administered by The Rural Business Development Corporation via DPIRD and applications will need to be made via the SmartyGrant portal.

To assist clients in applying for this loan we have summarised below key criteria and attached some useful documents to use in the submission process. Since this assistance is via loan funding there is a lot more information to submit and boxes to tick in comparison to the grant application that has now closed. It appears that your accountant or a third party are not prohibited from completing and submitting the application on your behalf.

We note that applications close 30 November 2024 or when funding is fully committed. The grant funding was oversubscribed and some farmers did miss out, so we strongly urge you to submit your loan application as soon as possible.

Eligibility

To be eligible for a grant, the applicant must:

Be operating a farm business, on a property within Western Australia (Note – a farm business is a primary production business that excludes Aquaculture, Forestry and Logging, Fishing, Hunting and Trapping, and Support Services).

Have an ABN since at least 1 July 2021 and be registered for GST.

Operate as a sole trader, partnership, trust or private company.

Have owners or beneficiaries who, collectively, earn more than 50% of their total income from primary production in a normal year.

At least one member of the applicant business spends at least 50% of their time on the farm business.

Have gross farm income between $200,000 and $2.0 million in a normal year.

The applicant must have an equity ratio between 50% and 70%, and no greater than $4 million based on their Statement of Assets & Liabilities.

Off-farm assets to be no greater than $2.0 million (excluding assets in a complying superannuation fund).

The applicant has not held funds in a Farm Management Deposit account since 1 January 2024.

Demonstrate they have incurred direct costs of at least $25,000 on expenditure directly due to the impact of this dry season such as stockfeed and its transportation, water including cartage, transportation of livestock, or other drought preparedness measures.

Documentation

Documents that need to be provided:

Rates notice or lease/share farm agreement for the property.

Rates notice and/or lease/share farm agreement for the main farm property.

Last two years business tax returns, balance sheets and financial statements of the applicant farm business (these include profit and loss statements, livestock trading account). Tax assessment notices are not adequate.

Last two years individual taxation returns. Tax assessment notices are not adequate.

Trust deeds (a full executed, signed and certified Trust deed and any amending supplementary deed for all trusts involved in the business structure) (if applicable)

Current (01 Feb 2024 onwards) Statement of Assets and Liabilities of the applicant business, including individual members of the partnership, family trust, or company.

Quarterly BAS statements from the date of the last prepared financial statements.

Confirmation of existing debt e.g. loan/bank statements.

A certified copy of documents that satisfy 100 point check requirements for the applicant, trustees, shareholders with greater than 25% shareholding, all authorised signatories (who would be signing a loan agreement), or persons with effective control.

Most recent bank statement that matches applicant details.

Property Identification Code (PIC) for those with livestock.

The applicant declares in their application that they have not held funds in a Farm Management Deposit account since 1 January 2024.

Invoices that show expenditure of more than $25,000 that has been incurred as a result of the dry season. Invoices since 01 December 2023 are acceptable. Expenditure would be on stockfeed, water, transportation, or the establishment of feed silos, water tanks, improved irrigation systems, or any other infrastructure that supports drought resilience.

How will this work?

The interest free loan guidelines are attached and we recommend that you read these thoroughly before commencing your application. In short:

The interest free loan will be secured by a registered caveat over all of the applicant’s real estate property, provided there is adequate loan to security value.

The loan will be interest free, with no repayments required for the first two years, then five principal repayments of $5,000 scheduled each 6 months during years three to five. These payments will be made via direct debit.

The loan has a maximum term of five years and is expected to be cleared by then. Loans not repaid by the end of the five-year loan term will be charged interest at a commercial rate, raised 6 monthly on each 31 March and 30 September.

How to apply

Applications for the Hardship Support Grant are now open and must be submitted online via SmartyGrants (scroll down to “Interest-free Loan Scheme 2024”) - click here to access online.

Please download the below documents and read before applying:

1: FAQ sheet

2. Statement of assets & liabilities

3. 100 point checklist

4. Interest free loan guidelines

If you have any further questions please feel free to contact Jenna van Nierop via email: jennav@smiththornton.com.au who will be happy to assist.

Alternatively, you can contact DPIRD’s Rural Business Development Unit by email: ruralbusiness.developmentunit@dpird.wa.gov.au or by calling 08 9368 3082 (during business hours) before the closing date.

ATO fires warning shot on trust distributions

Fri, 21 Jun 2024 08:00:45 GMT

The ATO has warned that it is looking closely at how trusts distribute income and to who.

The way in which trusts distribute income has come under intense scrutiny in recent years. Trust distribution arrangements need to be carefully considered by trustees before taking steps to appoint or distribute income to beneficiaries.

What does your trust deed say?

An area of concern is that trustees are not considering the trust deed before income is appointed. The answer to what the trust can do, and who it can allocate income to and how, is normally in the trust deed. This should be your first point of call.

Review your deed. Conduct a review of the trust deed and any amendments to ensure trustees are making decisions consistent with the terms of the deed;

Check the trust vesting date. The trust deed will specify what happens when the trust vests. If the trust vests, the trustees might be directed to distribute the income and property of the trust to particular beneficiaries. The trustee may no longer have the discretion to decide who to appoint income or capital to;

Check who the intended beneficiaries are, and also keep in mind that some beneficiaries might have different entitlements to income and capital under the trust deed;

Timing and requirements for resolutions. Check the deed for any conditions and requirements for trustee resolutions, including the need to have the resolution in writing and the timing of when it’s required to be made. For example, the deed might require trustees to take certain actions before 30 June;

If you are looking to stream capital gains or franked distributions to certain beneficiaries, check the trust deed doesn’t prevent this and the streaming requirements have been met.

Family trust and interposed entity elections

A family trust election helps wrap the workings of the trust around a specific individual’s family group. These elections can help protect trust losses, company losses, and franking credits but can also cause significant tax problems if they are used incorrectly.

An interposed entity election makes an entity a member of the family group of an individual.

Where these elections are in place, it is essential that trustees understand the implications before making any decisions on distributions. Distributions of trust income outside the specified individual’s family group will trigger family trust distribution tax at penalty rates.

Who receives the benefit?

The ATO is also on the lookout for arrangements where amounts are allocated or appointed to beneficiaries, but they don’t receive the real financial benefit of the distribution. If the arrangement has the effect of reducing the overall tax paid on the income of the trust, then this will normally increase the level of risk involved and attract the ATO’s attention.

Increased reporting on tax returns

Changes have been made to capture more information on the tax return about how trusts distribute income. These include:

Trust tax return – four new capital gains tax labels have been added. This information should be provided to beneficiaries to match what is reported in their returns.

Beneficiaries – all beneficiaries of trust income will be required to lodge a new trust income schedule. This schedule should align to your distributions as set out in the trust’s statement of distribution.

Trusts can be an excellent vehicle for many reasons including the flexibility to determine how income is distributed. The cost of that flexibility is strong controls and compliance.

The ATO is increasingly strident about how trusts are distributing income, and the tax impact of those distributions. It’s important for trustees to get it right because if trust distributions are found to be invalid, the tax ramifications can be significant.

Don't risk non-compliance. Review your trust distributions now. Need help? Our team are ready to assist.

End of Financial Year Preparation – Key Tips

Mon, 27 May 2024 04:56:24 GMT

The end of the financial year is fast approaching, and now is the time to do some homework to avoid the mad rush early in July.

Payroll

Since the inception of Single Touch Payroll (STP), employers are no longer required to issue payment summaries to their employees. This is all done through their STP payroll finalisation.

The Australian Tax Office (ATO) requires business owners to finalise payroll by 14 July. This doesn’t leave much time between the final pay run of the year and the 14th of July to find and fix any payroll errors. Importantly, any errors found after STP finalisation is lodged with the ATO are likely to cause big headaches for employees and employers as they are not simple fixes.

Key tip: It pays to review payroll on a monthly or quarterly basis so issues are easier to identify, but for most business owners, this doesn’t happen. However, now is a good time to do just that to ensure everything is good to go ahead of the lodgement deadline.

Key tip: For all new staff, make sure you have the correct superannuation details, have entered them into your payroll software, and are also the clearing house (if you use a clearing house).

Nothing is worse than entering all of your superannuation payments into a clearing house only to realise you have missed one employee’s details, which requires you to start over again.

Superannuation

Superannuation contributions are due on the 28th of the month after the quarter ends. Additionally, the employee superannuation guarantee increases to 11.5% as of 1 July 2024 for any wage payment made on or after this date.

Key tip: Just a reminder, even though the ATO advise that superannuation contributions are due on the 28th of the month after the quarter ends, what they mean is the payments must be in the employee's superannuation fund by the 28th. So, in order to ensure that the payment is received into the fund on or before the 28th, it is recommended that you lodge and pay by the 20th of the month after the quarter ends. The ATO is imposing harsh penalties on employers who don’t make the contributions on time. Any late contributions cannot be claimed as a deduction.

Key tip: If your payroll ends on 30 June but you don’t pay until 1 July, you will need to pay the 11.5%. All cloud-based programs should automatically update the rate, but you should still check to make sure it is updated, and if you are running old software, you will need to make the change manually.

Taxable Payments Annual Report (TPAR)

The TPAR is an industry-specific report for businesses that need to report the total payments they have made to contractors for services. This report is due to the ATO by 28 August 2024, and the information that needs to be provided is as follows:

Contractor Name and Address
ABN of contractor
Value of services rendered

Services that come under the Taxable payments annual reporting System are:

Building and construction
Cleaning
Courier and road freight
Information technology (IT)
Security, investigation or surveillance

Key tip: Now would be a good time to review your records to ensure you have all the necessary information about your contractors up to date. For new contractors, you should always check that their ABN is correct and that they are registered for GST.

Reconciling

It is also now the time for business owners to check their bank and clearing accounts. This includes:

Reconciling all bank accounts to physical bank statements (ideally, this should be done monthly).
Checking clearing accounts are back to zero and if not, determine why not.
Checking that all suspense accounts are back to zero. If not, each transaction should be narrated so the accountant knows why those transactions are sitting there.
Checking that wages and superannuation amounts match your Profit and Loss.
Checking that the superannuation payable, wages payable and PAYG amount all balance back to your Balance Sheet.

Key tip: If your file contains errors, these reconciliations should help you find them.

However, keep in mind that the Smith Thornton Bookkeeping team is here to support you and guide you in making the end of the financial year run smoothly.

MYOB, Xero Reckon, QuickBooks, Agrimaster, and Employment Hero all have tutorials on their websites for the end-of-financial-year processes. These tutorials are great resources for helping you understand what you need to do and how to do it.

Good luck with your end-of-year process. Again, we are only a phone call away if you need us.

Regional Economic Development Grants (RED Grants) program

Wed, 24 Apr 2024 07:15:24 GMT

Applications are now open for the seventh round of the State Government’s Regional Economic Development Grants (RED Grants) program.

Through the RED Grants program, the State Government is investing $55.85 million over ten years in locally driven projects to stimulate economic growth and development in regional Western Australia. More than $36 million has been allocated towards 355 approved projects across the state through the previous six rounds of the program.

In the Great Southern, up to $250,000 is available for individual projects that increase or sustain jobs, expand, or diversify industry, develop skills or capability, increase business productivity, and attract new investment to the regions.

The Great Southern Development Commission is now accepting applications for the Great Southern region, with applications closing at 12:00pm on 26 June 2024.

All intending applicants in the Great Southern are asked to contact the GSDC to discuss your project in the early stages of the application process.

For more information regarding RED Grants in the Great Southern, visit their website and please contact the GSDC on (08) 9842 4888, or gdo@gsdc.wa.gov.au .

Preparing Your Business for Sale: Essential Steps to Achieve Maximum Return

Tue, 23 Apr 2024 03:13:55 GMT

Selling a business is a significant milestone for business owners, whether it is to pursue new opportunities, a different lifestyle, retire, or simply move on to other ventures. After spending many years building up the business, nurturing staff, creating a household name within the community and possibly losing precious hours of sleep, business owners are rightfully looking to achieve the maximum value possible for their business when it is sold. However, preparing your business for sale is a complex process that requires careful planning and execution to maximise its value. From financial considerations to operational processes, here are some essential steps to get your business ready for sale:

Understand the value of your business

Before putting your business on the market you should be asking yourself “Do I know how much my business is worth?” and “ Do I need it to be worth more than that?” Smith Thornton can certainly help you with this, or you might hire a professional business appraiser or valuation expert. Factors such as revenue, profitability, year on year trends, assets, market potential, business operations and processes, along with industry performance, all impact the valuation. If your business is not worth today what you were expecting, you still have time to implement some business improvement initiatives and increase its value.

Develop a succession plan

Is your business heavily reliant on your knowledge, involvement or leadership? If so developing a succession plan is crucial for ensuring a smooth transition of ownership. In the years before you sell your business identify key personnel who can take on leadership roles or consider hiring and training replacements well in advance of the sale. A clear succession plan demonstrates stability and mitigates the risk of disruption during the transition process. By going through that process it will also ensure that processes and procedures are properly documented and roles are clearly defined, which is also important from a buyer's perspective.

Improve operational efficiencies

Could a buyer walk into your business and easily find information about how to operate it? Efficient and well-documented operations enhance the appeal of your business to potential buyers. You should start documenting operating procedures, streamlining workflows, and identifying areas for improvement to optimise efficiencies. If these are all in place before you start the business sale process you will be able to demonstrate that your business can run smoothly with minimal disruption. Potential buyers will feel confident in their ability to own and operate your business, which in turn, justifies a higher valuation.

Tidy up your financial position

Would a buyer look at your balance sheet and think “Wow this business is a cash cow!” ? In the years leading up to the sale of your business, ensure that you are paying off overdue debts, resolving any legal or tax issues, and streamlining expenses where possible. Large ATO debts, loan defaults, unpaid creditors from a year ago and unnecessary costs such as penalties and interest alert potential buyers to possible cash flow issues.

Diversify revenue streams

Businesses with diversified revenue streams are deemed less risky and potential buyers love low risk. In the years leading up to the sale of your business explore opportunities to expand into new markets, launch complementary products or services, or establish strategic partnerships aimed at diversifying sources. Likewise, having a large customer base and not relying on a few large customers is also deemed less risky. A diverse revenue portfolio demonstrates that your business will adapt to change and has growth potential, increasing the perceived value of your business.

Organise your financial records

Prospective buyers with the help of their accountants will review your financial records to evaluate the health and potential of your business. Ensure that your financial statements, tax returns, ATO lodgements, profit and loss statements, balance sheets, and cash flow statements are accurate, up-to-date, and well-organised. Any discrepancies or inconsistencies could raise concerns and deter potential buyers.

Strengthen customer relationships

A loyal customer base is a valuable asset for any business. Focus on strengthening relationships with existing customers by providing exceptional service, addressing their needs, and building brand loyalty. Positive customer testimonials and customer retention rates will enhance the reputation of your business and its attractiveness to potential buyers.

Seek help from professionals

Selling a business is a complex process that requires expertise in legal, financial, and strategic matters. Consider hiring a team of professionals, including a business broker, lawyer, accountant, and financial advisor, to guide you through the sale process. Their expertise will help you identify potential issues, negotiate favourable terms, and maximise the value of your business.

Negotiate fairly

Negotiating the terms of a business sale requires skill and strategy. Be prepared to negotiate price, payment terms, transition support, and other key aspects of the deal. Emotions may run high throughout this process, so using a professional to negotiate on your behalf is often a wise decision. Remain flexible and open to compromise while also advocating for your interests and ensuring that the terms are fair to you as the seller.

Preparing your business for sale is a multifaceted process that requires planning, attention to detail, and strategy. By actioning these tips well in advance of your business sale you can maximise the value of your business, contribute towards a more seamless sale process and attract the right buyer. If you need any help in getting your business ready for sale please contact us at Smith Thornton and we will be happy to assist.

eID Infrastructure Grants

Tue, 23 Apr 2024 02:58:34 GMT

Provides funding for individual electronic identification (eID) for sheep and goats in WA.

This program provides WA seasonal operators and feedlots with funding to help with the costs of essential eID equipment for sheep and goats.

Funding may be used for the purchase of essential eID equipment and some limited infrastructural costs, including:

Scanners
Readers
Wands
Power supplies
Wi-Fi boosters
Metal interference mitigation materials
Tablets

Click here to view full funding guidelines on the provider's website.

Telstra Best of Business Awards

Tue, 23 Apr 2024 02:48:19 GMT

Celebrates Australia's best small and medium-sized businesses.

Telstra Best of Business Awards were created to celebrate the achievements of these businesses, while giving them the opportunity to learn from Australia’s best business minds. Telstra is passionate about recognising standout businesses while inspiring the next generation of entrepreneurs.

If your small to medium-sized business is eligible, you can be nominated (or nominate yourself) to enter the Telstra Best of Business Awards.

Award categories:

Accelerating Women
Building Communities
Championing Health
Embracing Innovation
Indigenous Excellence
Outstanding Growth
Promoting Sustainability

Nominations are accepted all year round.

Click here to view full funding guidelines on the provider's website.

Bega Better Farms Program

Tue, 23 Apr 2024 02:40:39 GMT

Provides financial grants to eligible dairy farmers who have a current milk supply agreement with Bega Group or Dairy Farmers Milk Cooperative.

Australian dairy farmers are eligible for a Better Farms Program grant if they have a current milk supply agreement with Bega Group or Dairy Farmers Milk Cooperative and if they apply to be considered for a grant.

Grants must be used on one of the three key focus areas: Capital projects, Development & Training or Services Support.

Capital project grants are up to $5,000 per year per eligible dairy farm business.
Advice & Services support grants are up to $1,000 per year per eligible dairy farm business.
Development & Training grants are up to $1,000 per year per eligible dairy farm business.

There is a limit of $1.1M per financial year available for distribution as Better Farms Program grants to eligible dairy farmers.

Click here to view full funding guidelines on the provider's website.

2024 Tax Planning Tips

Wed, 27 Mar 2024 06:16:36 GMT

With 30 June fast approaching, now is the perfect time to start considering your current tax position and year end tax planning strategies. Whilst this looks different for each entity or person depending on their circumstances, outlined below are some actions that could be useful.

Maximise Superannuation Contributions

Contribute up to the concessional contribution cap to your superannuation fund to benefit from tax deductions and boost your retirement savings. Currently, the concessional caps are $27,500 which will increase to $30,000 from 1 July 2024. Also, be aware some taxpayers may be able to make higher concessional contributions depending upon their superannuation balance and their contribution history over the past five years.

Contribute to Spouse's Superannuation

Consider contributing to your spouse's super fund, especially if they have a low income or are not working, to qualify for a tax offset and potentially reduce your overall tax liability.

Review Investment Portfolio

Evaluate your investment portfolio and consider selling underperforming assets to realise capital losses that can offset capital gains tax liabilities.

Utilise Capital Gains Tax (CGT) Discount

If eligible, consider holding onto assets for over 12 months to access the CGT discount, which allows individuals to reduce their capital gains tax by 50%.

Claim Deductions

Ensure you claim all eligible deductions, including work-related expenses, self-education expenses, charitable donations, and investment expenses. Keep accurate records to support your claims.

Prepay Expenses

Business taxpayers can prepay deductible expenses such as insurance premiums, interest on investment loans, or professional memberships before June 30 to bring forward deductions.

Review Depreciation Schedule

For businesses, review your depreciation schedule and consider bringing forward asset purchases to take advantage of instant asset write-offs and accelerated depreciation deductions. Note the instant asset write-off reduced to $20,000 from 1 July 2023.

Small Business Tax Concessions

Small businesses can benefit from various tax concessions, including the instant asset write-off, simplified trading stock rules, and small business income tax offset. Take advantage of these concessions where applicable.

Review Structuring

Review your business structure to ensure it is tax-efficient. Consider restructuring if necessary to minimise tax liabilities and maximise asset protection.

Utilise Research and Development (R&D) Tax Incentive

If eligible, consider investing in R&D activities to qualify for the R&D tax incentive, which offers tax offsets or cash refunds for eligible R&D expenditure.

Review Fringe Benefits Tax (FBT) Implications

Assess any fringe benefits provided to employees and consider restructuring them to minimise FBT obligations.

Review Salary Sacrifice Arrangements

Evaluate your salary sacrifice arrangements, especially for items such as laptops, cars, or super contributions, to maximise tax benefits.

Utilise Family Trusts and Companies

Explore opportunities to distribute income among family members using family trusts and companies to manage tax liabilities effectively.

Maximise Government Grants and Incentives

Investigate and take advantage of government grants, incentives, and rebates available for specific industries or activities, such as energy-efficient investments or hiring apprentices.

Seek Professional Advice

Engage with a qualified tax advisor or accountant to review your financial situation and develop tailored tax planning strategies to optimise your tax position before the end of the financial year.

It is important to assess each strategy in the context of your individual or business circumstances and seek professional advice to ensure compliance with tax laws and regulations. Please contact us if you would like to discuss tax planning strategies and how these might look for you or your business.

The Health Workforce Scholarship Program (HWSP)

Wed, 27 Mar 2024 00:21:00 GMT

Provides scholarships and bursaries to help health professionals in remote and rural Australia retain and enhance their skills, capacity and scope of practice.

HWSP funding can be used towards course fees and/or course related expenses such as travel and accommodation. Courses do not need to be accredited, but will be assessed by Rural Health West for relevance, value for money and the likelihood to meet identified high priority health needs within your community.

Applications are welcome from health professionals from the field of medicine, nursing, midwifery, dental or allied health, including Aboriginal health workers, who are providing primary care services within rural and remote areas of Western Australia (i.e. locations categorised as Modified Monash Model, MM 3-7) in a private, nongovernment organisation, Aboriginal Medical Service or Aboriginal Community Controlled Health Organisation.

Applications are also welcome from health professionals from the field of medicine, nursing, midwifery, dental or allied health, including Aboriginal health workers, who are providing primary care services in an Aboriginal Medical Service or Aboriginal Community Controlled Health Organisation, in locations categorised as MM 1-7.

Health professionals employed solely by the State Government (i.e. employed in a public hospital) are not eligible to apply.

Click here to view full funding guidelines on the provider's website.

Tourism Boost Mentoring Program: Online & International Bookings

Tue, 26 Mar 2024 07:03:28 GMT

Aims to improve the growth of WA tourism businesses to sell their product online and introduce new WA tourism product to relevant markets.

The Tourism Boost Online & International Bookings Program is a free mentoring program funded through Tourism Western Australia and delivered by Tourism Council WA.

Tourism Boost is designed to assist tourism businesses at various levels of market readiness across the state and is delivered in two streams: online self-assessment and a one-on-one mentoring program.

Brand new or established tourism businesses of all sizes which are looking to diversify their income stream and are interested in learning more about how to better distribute their product online and/or engage with international markets should apply.

Any tourism and hospitality business can apply to participate in the Tourism Boost Online & International Bookings Program, however businesses are required to meet the following eligibility criteria:

Currently accredited or registered to complete the Quality Tourism Framework (formerly Australian Tourism Accreditation Program)
Have a listing or in the process of obtaining a listing on the Australian Tourism Data Warehouse.

Click here to view full funding guidelines on the provider's website.

Farm Household Allowance Program

Tue, 26 Mar 2024 06:58:37 GMT

Provides farming families experiencing financial hardship with assistance through planning and training for long-term financial improvements as well as income support for up to 4 years.

Farm Household Allowance (FHA) provides assistance to farming families experiencing financial hardship. This program focuses on helping farmers make important decisions to improve their long-term financial situation.

The support available includes:

A fortnightly payment for up to 4 years in each specific 10-year period
Supplementary allowances such as rent assistance, telephone and pharmaceutical allowances and a Health Care Card
Individual case support with a Farm Household Case Officer (FHCO)
A financial assessment of the farm enterprise worth up to $1500
Up to $10,000 in activity supplements that gives farmers an opportunity to develop skills, access training and pay for - Professional advice to better manage their business into the future.

Additionally, there are one-off relief payments if the 4-year period ends before 1 July 2020. This payment is $7500 for a single farmer or $6500 for each member of a couple.

The amount of FHA payable depends on your individual circumstances.

To be eligible, you must:

Be a farmer or the partner of a farmer
Be 16 years of age or older
Meet the income and assets test
Contribute labour and capital to an Australian farm, or are the partner of a farmer who does
Meet residency rules
Have had less than 4 years of FHA in the specific 10-year period
Additionally, your farm must have significant commercial purpose.

Click here to view full funding guidelines on the provider's website.

Access Asia Business Grants

Fri, 23 Feb 2024 07:47:19 GMT

Helps local small to medium WA enterprises and organisations advance their export and trade activities and build their competitiveness in new Asian markets.

This competitive program provides grants of up to $27,500 (excluding GST) to eligible Western Australian SMEs and organisations. Recipients will need to provide a net co-cash contribution at a ratio of at least 20:80 applicant-to-State Government funding.

This competitive program provides grants of up to $30,000 (excluding GST) to eligible Western Australian SMEs and organisations. Recipients will need to provide a net co-cash contribution at a ratio of at least 20:80 applicant-to-State Government funding.

Projects must be in at least one of the following Diversify WA priority sectors:

Energy
Tourism, events and creative industries
International education
Defence industries
Mining and mining equipment, technology and services (METS)
Space industries
Health and medical life sciences
Primary industries.

Eligible criteria:

Your business is targeting a new Asian market(s) for your export and trade activities, or
Your proposed project is introducing a new product or service into Asian market(s) where the business/organisation already has a market presence
Your proposed project is in at least one of the eight priority sectors outlined in the State’s economic development framework Diversify WA.

And your business/organisation is:

A SME that employs fewer than 200 people, or
A not-for-profit group/industry association/business council that employs fewer than 200 people and is a legally constituted not-for-profit organisation recognised by the Department
A subsidiary that employs fewer than 200 people. (Any subsidiary applying will be required to provide information regarding its group structure and funding arrangements with its group members)
Your business/organisation has been registered and headquartered in Western Australia for at least 24 months.

Click here to view full funding guidelines on the provider's website.

Energy Efficiency Grants for Small and Medium Sized Enterprises Round 2

Fri, 23 Feb 2024 07:30:00 GMT

Provides small and medium businesses up to $25,000 to upgrade or replace inefficient equipment and implement other energy efficiency activities.

The program assists businesses to lower their energy use and improve their energy efficiency. It will also contribute to easing energy price fluctuations for businesses.

The objectives of the program are to:

Improve energy efficiency practices and increase the uptake of energy efficient technologies
Assist small and medium businesses to manage their energy usage and costs
Reduce greenhouse gas emissions.

The intended outcomes of the program are:

Increased awareness of energy efficiency opportunities and help businesses to save energy
Reduced power bills for small and medium businesses
Emissions abatement to contribute to Australia reducing its emissions to 43% below 2005 levels by 2030.

Up to $41.2 million will be available in grants to help businesses fund a range of energy efficiency activities, such as:

Upgrading or replacing inefficient technologies, such as changing existing display fridge cabinets with more efficient models, or gas cookers with electric equivalents.
Improving space and water heating systems
Conducting energy audits
Installing energy monitoring systems.

What do you get?

Grants from $10,000 to $25,000 to cover up to 100% of eligible project expenditure
Grant funding will be distributed between states and territories based on the distribution of small and medium sized businesses nationally
This is a demand driven grant opportunity. Grants will be awarded to eligible applicants on a first come, first served basis until the funding is exhausted in each jurisdiction.

Who is this for?

This grant opportunity is for small and medium sized businesses with an employee headcount of 1 to 199 employees, and businesses must have been in operation for a minimum of 24 months.

Round 2 applications in each state and territory will open for applications over 5 consecutive business days, starting from Thursday 22 February 2024. Opening dates vary based on location.

Location and application opening date:

VIC: Thursday, 22 February 2024
SA: Friday, 23 February 2024
NT: Friday, 23 February 2024
NSW: Monday, 26 February 2024
WA: Tuesday, 27 February 2024
TAS: Tuesday, 27 February 2024
ACT: Tuesday, 27 February 2024
QLD: Wednesday, 28 February 2024.

You can review the businesses/projects that were successful in Round 1 by clicking here.

All details can be viewed online including what you need to prepare to apply - click here.

Can my SMSF invest in property development?

Fri, 23 Feb 2024 06:56:38 GMT

Australians love property and the lure of a 15% preferential tax rate on income during the accumulation phase, and potentially no tax during retirement, is a strong incentive for many SMSF trustees to dream of large returns from property development. We look at the pros, cons, and problems that often occur.

An SMSF can invest in property development if trustees ensure the investment complies with the rules. And, there are a lot of rules. A key is the sole purpose test. Trustees need to ensure the fund is maintained to provide benefits for retirement, ill health or death. Breaches of this fundamental tenet are serious and include the loss of the fund’s concessional tax treatment and civil and criminal penalties.

By its nature property development is high risk and fund trustees need to ensure that the SMSF is not simply a handy cash-cow for a pipe dream, particularly when the developers are related parties.

There are multiple ways an SMSF can invest in property development if the investment strategy of the fund allows:

Directly developing property
An ungeared unit trust or company (the parties can be related)
Investment in an unrelated entity
A joint venture

Directly developing property from fund assets

An SMSF can purchase land from an unrelated party and develop the property in its own right. Common issues that often arise include:

Acquiring the land from a related party: An SMSF cannot purchase land from a related party (unless it is business real property used wholly and exclusively in a business). This means that the lovely block of land inherited by one of the members, or owned by a family trust, that is perfect for development cannot be purchased by the SMSF.

An SMSF cannot borrow to develop property: An SMSF can borrow money to purchase land using a limited recourse borrowing arrangement but it cannot use a loan to improve the asset. That is, borrowings cannot be used to develop the land. And, where the SMSF has borrowed to purchase land, it cannot change the nature of that asset until the loan has been repaid. That is, no development.

Who will develop the property?: Problems often occur when the property developers are related to the fund members. Whilst it is possible to engage a related party builder to undertake the work, there are strict rules that mean that the work and materials must be acquired at market value. That is, there is no advantage from “mates rates”. If you are using a related party builder, ensure that the paperwork is pristine, any transactions are at market value, and all interactions are documented.

GST might apply: Goods and services tax might apply to the development and the sale of any developed property. If the ATO considers that an SMSF is in the business of developing property or is undertaking a one-off development in a commercial manner then GST could potentially apply.

If your SMSF is not undertaking a property development project in its own right, there are a few ways for an SMSF to invest in property development projects:

Related ungeared trust or company

An ungeared company or trust is often used (under SIS Regulation, section 13.22C ) when related parties want to invest in a property development together. The SMSF can invest in a company or trust that is undertaking a property development as long as the company or trust:

Does not lease to a related party (unless business real property)
Does not borrow money or have borrowings (must be ungeared)
Does not conduct a business
Conducts any dealings at arm’s length
And, the assets of the unit trust or company:
Do not include an interest in another entity (i.e., cannot have shares in a company)
Do not have a charge over them (i.e., mortgage over any asset)
Are not purchased from a related party (or was ever an asset of a related party) unless the asset is business real property acquired at market rates.

Profits from the company or trust are then distributed to the SMSF according to its share.

Using the provisions of 13.22C means that the SMSF can invest in property development with a related party without the development being considered an in-house asset. However, if the criteria are not met (at any point), the in-house asset rules apply, and the SMSF might have to sell the units in the trust or shares in the company to return to the maximum 5% in-house asset limit. Generally, this means the sale of the underlying property or a significant restructure.

Problems arise with 13.22C arrangements where the trust or company:

Needs more money to complete the development and borrows money, or issues more units and sells them (is in business)
Accepts a loan from a member of the SMSF
Overdrafts (may be considered loans and breach 13.22C)
Uses a related party builder who either under charges for the work completed or overcharges and strips the profits that should have been returned to the SMSF.

Warning on conducting a business

One of the criteria for the exemption in 13.22C to apply is that the trust or company cannot be conducting a business. This requirement may prevent short-term property developments that are built and sold for profit.

Typically, 13.22C arrangements are used for long term investments where the development enables the creation of an asset that is then leased by the trust or company. This could be commercial premises leased to a related or unrelated party (e.g., premises for a child care centre or manufacturing), or residential premises leased to unrelated parties (e.g., townhouses or small developments).

Unrelated property developments

Investing in unrelated entities for a property development is attractive as there is no limit to how much of the fund’s assets can be invested (subject to the investment strategy and trust deed allowing the investment), and unlike ungeared entities, the entity is able to borrow money/place charge over the assets.

Where related parties are investing in the same entity, there are rules governing the percentage of ownership the SMSF and their related parties can hold. To meet the definition of unrelated entity for in-house asset purposes, the SMSF and their related parties must not own more than 50% of the units available. This is because the SMSF cannot control or hold sufficient influence over the entity and remain an unrelated entity. If the ATO considers the entity is related to the SMSF, then it would become a related party and the investment an in-house asset.

Joint venture arrangements

An SMSF can potentially invest in a joint venture (JV) property development, but the criteria are necessarily strict and there are a range of issues that need to be considered carefully. One of the issues that needs to be considered up-front is determining the substance of the arrangement between the parties, because the term JV can be used to describe a variety of arrangements. The ATO confirms that care must be taken to ensure that arrangements with related parties are true JVs.

Under a JV, the SMSF invests in and has a share of the property being developed (not the entity undertaking the development). Each party bears the costs (time and/or money) of the JV and receives this same proportionate contribution from the returns. If the arrangement is not structured properly then the SMSF’s stake in the JV could be treated as an investment in or loan to a related party and be treated as an in-house asset. For example, this could be the case if the SMSF only provides a capital outlay for the arrangement and has no rights other than a contractual right to a return on the final investment.

It is also necessary to consider whether the arrangement between the parties could be treated as a partnership for tax, GST and legal purposes. For example, this could be the case if the arrangement involves the sharing of income, sale proceeds or profits, rather than sharing the output from the project.

It's essential to get advice well in advance – tax, legal and financial - before pursuing a JV.

Is your SMSF the best vehicle for property development?

Trustees need to carefully consider any investment decisions and have a sound rationale for the investment.

Any advice on a property development needs to be from a licenced financial adviser. A lawyer should be used for any contracts or agreements between parties. And, compliance assistance from a qualified accountant. Get in touch if you would like our assistance.

New Industries Fund – Commercialisation Bridge Grant

Mon, 29 Jan 2024 06:33:45 GMT

The new grant assists Western Australian innovators bridge the gap between commercialised innovation and a sustainable business. The CBG aims to assist founder(s)/teams in:

Western Australia that have been developing their innovation-drive business for at least a few years, has customers and the potential to build a scalable, multi-million dollar business.
Contributing to, matching and completing a new funding round, without further diluting the investors.

Strengthening their commercialised product or service, such that it can become a sustainable, profitable and scalable business.

Building a globally focused innovative business and team.

Creating jobs, developing new industries and assisting in the diversification of the WA economy, as per the Diversify WA framework.

A typical startup/ small business that the CBG could fund would:

Be based in WA;

Have at least a three-year trading history

Have developed a commercial innovation

Have some early customer revenues; but

Not yet achieved ‘breakthrough growth’, (but has the potential to do so).

Click here find out all details.

The Redesigned Stage 3 Personal Income Tax Cuts

Mon, 29 Jan 2024 06:13:08 GMT

The personal income tax cuts legislated to commence on 1 July 2024 will be realigned and redistributed under a proposal released by the Federal Government.

After much speculation, the Government has announced that they will amend the legislated Stage 3 tax cuts scheduled to commence on 1 July 2024. This will mean that more Australian taxpayers will receive a personal income tax cut and take home more in their pay packet from 1 July, but for some, the impact will be less favourable than it would have been prior to the redesign.

What will change?

The revised tax cuts redistribute the reforms to benefit lower income households that have been disproportionately impacted by cost of living pressures.

Under the proposed redesign, all resident taxpayers with taxable income under $146,486, who would actually have an income tax liability, will receive a larger tax cut compared with the existing Stage 3 plan. For example:

An individual with taxable income of $40,000 will receive a tax cut of $654, in contrast to receiving no tax cut under the current Stage 3 plan (but they are likely to have benefited from the tax cuts at Stage 1 and Stage 2).
An individual with taxable income of $100,000 would receive a tax cut of $2,179, which is $804 more than under the current Stage 3 plan.

However, an individual earning $200,000 will have the benefit of the Stage 3 plan slashed to around half of what was expected from $9,075 to $4,529. There is still a benefit compared with current tax rates, just not as much.

There is additional relief for low-income earners with the Medicare Levy low-income thresholds expected to increase by 7.1% in line with inflation. It is expected that an individual will not start paying the 2% Medicare Levy until their income reaches $32,500 (up from $26,000).

While the proposed redesign is intended to be broadly revenue neutral compared with the existing budgeted Stage 3 plan, it will cost around $1bn more over the next four years before bracket creep starts to diminish the gains.

The current, legislated, and redesigned Stage 3 tax rates for Australian resident taxpayers:

It’s not a sure thing just yet!

The Government will need to quickly enact amending legislation to make the redesigned Stage 3 tax cuts a reality by 1 July 2024. This will involve garnering the support of the independents or minor parties to secure its passage through Parliament.

How did we get here?

First announced in the 2018-19 Federal Budget, the personal income tax plan was designed to address the very real issue of ‘bracket creep’ – tax rates not keeping pace with growth in wages and increasing the tax paid by individuals over time. The three point plan sought to restructure the personal income tax rates by simplifying the tax thresholds and rates, reducing the tax burden on many individuals and bringing Australia into line with some of our neighbours (i.e., New Zealand’s top marginal tax rate is 39% applying to incomes above $180,000).

The three point plan introduced incremental changes from 1 July 2018, 1 July 2020, with stage 3 legislated to take effect from 1 July 2024.

The three stages of reform:

Note: The information contained in this update has been provided as general advice only. The contents have been prepared without taking account of your personal objectives, financial situation or needs.

You should seek advice before making any decision regarding any information, strategies or products mentioned to consider whether that is appropriate to your own objectives, financial situation and needs.

Current as of 25 January 2024.

The Unofficial Book Club edition

Mon, 29 Jan 2024 04:29:40 GMT

This month we have a different style of article to share, with some book recommendations that relate to money management, wealth and health.

Most people will have heard of the Barefoot Investor, but two of the books below cover similar topics providing some interesting reading on money management and investing.

‘The Richest Man in Babylon’ by George S. Clason

The Richest Man in Babylon" by George S. Clason is a timeless and insightful guide to financial success. Set in ancient Babylon, the book is written as a collection of stories that is easy to follow and makes this a great recommendation for people of all ages, and in particular would be a benefit to children or young adults finding their way in financial management.

The book emphasises the importance of saving, investing, and living within one's means, offering practical tips for building wealth and achieving financial security. Its enduring lessons on budgeting, wise investment, and the value of hard work provide a solid foundation for financial literacy.

‘The Psychology of Money’ by Morgan Housel

Morgan Housel's "The Psychology of Money" is a wonderful exploration of the often-overlooked human side of finance. Housel delves into the emotional and psychological factors that shape our financial decisions, highlighting the irrational behaviours that can impact wealth management. Through engaging anecdotes and real-life examples, Housel weaves together the complexities of money and human behaviour, making complex concepts accessible to a broad audience.

The book goes beyond traditional financial advice, focusing on the importance of understanding one's relationship with money, embracing humility in investment strategies, and recognising the power of time in building wealth. Housel's approach is refreshingly candid, offering a unique perspective on the intersection of psychology and finance. "The Psychology of Money" is an essential read for anyone seeking a deeper understanding of the emotional dynamics that influence financial choices and outcomes.

And lastly, for something different, there is no point having money if you don’t have your health. A terrific book on living healthier for longer.

‘Outlive: The Science and Art of Longevity’ by Dr Peter Attia

"Outlive" by Dr Peter Attia is a thorough exploration of longevity that combines scientific rigour with practical advice. Dr Attia, a prominent longevity expert, delves into the latest research on ageing and presents a comprehensive guide to optimising health-span (living healthier for longer and making the most of your later years, as opposed to simply living longer).

Dr Attia achieves this through a blend of personal anecdotes, data-driven insights, and actionable strategies. Dr Attia addresses the multifaceted factors influencing ageing, from nutrition and exercise to sleep and stress management.

The book may be viewed in two very different halves. The first half is a deep dive into the major chronic diseases, and if you find this tough going with the medical data and statistics you will be happy to know the second half is more practical with ‘how to’ advice. I enjoyed reading about the proactive approach to tackling and avoiding major diseases, rather than waiting to fall ill before taking steps to combat the disease.

My other key takeaway from this book is to look at life with the later years in mind. For example, if I am going to live to 90 or 100 and want to be able to pick up grandchildren and great-grandchildren, walk up sets of stairs, and travel overseas on holidays, what strength and other mobility do I need to have at ages 70, 60, 50 and younger given our muscle mass and bone density are deteriorating as we age? Importantly, it is never too late to start.

Dr Attia also has a podcast called ‘The Drive’, which covers many health topics for those who prefer audio, and the book is also available as an audiobook for those long country drives.

If you have any recommendations of your own, feel free to send them through to us!

Update your trust deed

Tue, 28 Nov 2023 01:31:55 GMT

As Accountants, we are constantly dealing with clients’ family trusts which have been established under the terms of a trust deed. The terms of trust deeds are wide and varied but are usually intended to last multiple generations. Inevitably, at some point in time in, a family trust’s lifespan it will be necessary to amend its trust deed.

Reasons for amending a trust deed may include:

Changing income and capital provisions to take into account updated tax laws and for tax planning purposes.

Changing control of the trust by changing the appointors or trustees.

Dealing with death, bankruptcy and incapacity of trustees, appointors and guardians.

Providing for succession to the next generation including ensuring appointors and guardians can nominate successors during their lifetime.

Addressing evolving family events such as marriages and divorces.

Ensuring the trustee has sufficient powers in relation to:

borrowing, lending and obtaining financial accommodation;
dealing with unpaid present entitlements, sub-trusts and the blending of money;
making in-specie distributions.

Ensuring the provisions for varying the terms of the trust are adequate in the circumstances.

It may be tempting to let sleeping trust deeds lie, however, this can lead to incorrect or non-advantageous distribution of income, distribution made to non-beneficiaries, trustees acting outside of their powers and sometimes even control unintentionally ending up in the wrong hands.

Having an outdated trust deed can also hold up bank financing when you are borrowing within a trust, which in the worst case could cost you a vital opportunity.

We will be writing to those with older Trust Deeds in early 2024 recommending a deed review and update where necessary, using a law firm expert in the field of trusts, Irdi Legal. If you think a review of your deed is more urgent, please contact Smith Thornton to discuss the required steps and costs involved.

Bank Funding Considerations

Tue, 31 Oct 2023 07:08:24 GMT

This month we have been provided with some insights on inflation and tips on securing bank funding from Agribusiness Planning and Finance Consultant, Brett Fallon of Successiv.

CPI and interest rate insights

Inflationary pressures have remained fairly consistent in the market.

The labour market is one of the most obvious inflationary pressures and continues to impact local businesses. It also impacts daily household lives, with strong inflation evident in household services costs.

Fuel prices are another key inflationary pressure. Fuel prices have been recently under pressure and energy prices have a long range forecast of increasing, with the green electricity future clearly laid out ahead for Australians.

These factors indicate a future with potential upward living cost pressures.

What does this mean for business? It means that if rates don’t go up, it could be read in the tea leaves that they are certainly not coming down any time soon. Fixed rate quotes over the last couple of months have looked attractive relative to the potential uncertainty that the modern world poses.

The current RBA interest rate is 4.1% and is tipped by many economists to increase. It is easy to see why many are tipping this when rates are 5% or higher in other countries such as USA, NZ, UK and Canada.

Business Finance – making it easy

The best tip for securing bank funding is to undertake early planning for bank discussions.

Get your end of year information to your accountant pronto as the most recent financial year statements are always preferred.
Make sure that all ATO debt is cleared and that you meet your due dates. There are only a small number of financiers that will restructure ATO liabilities.
Have profit versus tax planning discussions with your accountant. Keep in mind that profitable businesses can generally borrow more at lower rates.

All financiers have different risk appetites and policies. You don’t necessarily need to take the first no as the answer. Contact your advisor about your specific needs.

Personal Finance – gets tough

Home loans and personal loans are regulated lending and have less flexibility than what many business owners are used to with their business lending needs. Given the global economic shock post COVID, the current lending environment includes larger sensitisation on living expenses and interest rates.

Early planning is again the key. Live like you already have the new debt. Perhaps even put aside the expected repayment into savings in anticipation. That would then help you watch your personal spending and set you up for a smooth and easy loan application.

As a guide of the current market, most home loan rates are 5.7-5.9% and upwards based on individual risk assessments.

Local Capability Fund - Digital Transformation Round

Fri, 27 Oct 2023 07:30:44 GMT

Provides support for eligible businesses to adopt and use digital technology and data for the purpose of improving their productivity, efficiency, competitiveness, resilience and/or safety.

This Pilot will also assist with the Government’s understanding of the challenges, needs and opportunities for Western Australian SMEs in relation to digital transformation.

The focus of this round is supporting the take-up of existing technologies and services, rather than supporting research or commercialisation of new ideas.

To be eligible for funding applicants must:

Be registered for GST for at least 12 months prior to application submission date
Have an Australian Business Number (ABN)
Be a for-profit organisation or business (Not-for-profits and charities are ineligible)
Have its principal place of business (operating facility) in Western Australia and continue to be based in Western Australia for at least the next 12 months following application submission date
Employ less than 200 people
Have been operating for at least 3 years in Western Australia at the time of submitting an application for funding.

Additional business eligibility criteria (specific to this round):

Currently have at least one FTE employee
Turnover at least $500,000.

This round closes 8 November 2023. For more information please:

Click here to find out more online
Click on “Apply Now” for the Digital Transformation Round.
Download the guidelines from “Click here to view the guidelines”.

If you have any questions please email our Business Services Advisor Jenna van Nierop at jennav@smiththornton.com.au or call her on 9842 5155.

Trips and Traps of Grant Applications

Fri, 27 Oct 2023 07:20:13 GMT

“I have a great business idea that would provide great opportunities for local employment but no funding to get it off the ground.”

“I have plans to grow my business but no funding to help me get there.”

“Digital transformation would be a game changer for my business, but I just can’t afford to implement it.”

Many business owners (or aspiring business owners) are faced with these problems and have similar thoughts. Securing bank funding in 2023 is very expensive with a lot of hurdles to get over. Another funding option is sourcing private investors, however shareholder reporting and scrutiny can feel overwhelming at times. So how else can you find some additional funding to help you with your business plans?

Grant funding is a great source of funding for businesses and community groups. With thousands of grants available Australia wide it can be difficult to find one that suits your needs. Some grants are fully funded, whilst some will require the applicant to contribute a certain amount towards their project or activity. There are nationwide grants available, whilst some are for specific states or cities/towns. Many grants are charity focused, however a large number of grants are aimed at helping businesses. Don’t be turned off though - with the right search tools it is quite easy to see what is out there and available in the world of grants.

If you do find a grant that might suit your business needs, you then need to submit a grant application and possibly source supporting information required by the grant body. Preparing a grant application can be time consuming however, if you are lucky enough to secure those much needed funds then that time was well spent. Outlined below are a few things to consider to ensure you give yourself the very best chance of writing a stellar grant application.

Why do I need funding?

Before starting, get a clear understanding of what you need the grant for. Keep this purpose in mind when reviewing your eligibility and in preparing the application. Showing very clearly that your purpose meets their criteria is critical.

Am I eligible?

All grants have boxes to tick that determine whether you are eligible or not. These criteria range from the size of your business, your business structure, what you are applying for, whether capital items are funded, whether they will be funded retrospectively, and the list goes on. Read the grant criteria thoroughly before you spend time preparing your application.

Do I have the support of the public/community?

Grant bodies love to see that there is a real need for the concept or project that you are proposing. Get some community support, ask for letters of support to boost your chances of success and show the body that their funds would be well spent.

What did previous grant recipients get funding for?

Research the funding body and the types of projects that they have previously supported. This will give you an indication of whether your request would be considered favourably.

Am I committed to the process?

Grant applications take time and the reporting requirements often continue once you have secured the grant. You need to be realistic when starting on the grant journey, be prepared to jump through the hoops and also be organised. This will make the whole process much easier for you and less stressful.

Have I articulated my project clearly in my application?

Be very clear about what your business needs, why you need it and how it ticks all the boxes. It is critical that your project is well researched, any milestones are clearly defined, the need is clearly articulated and any evidence based research is included and referenced. If you are sourcing funding for a service, get a service provider to explain to you step by step what would need to be done. If you are applying for funds to secure plant or equipment, research the plant, determine how that plant would fill your business needs. The more information you can provide in your application, the more legitimate and committed you will appear.

How much will my project cost?

Almost every grant application will have a budget section. The more information you can gather for this the better. Secure quotes in advance, understand how much the whole project will cost and how you will fund any shortfalls. Grant providers do not want to see their funds wasted on half finished projects because the applicant ran out of money.

Does my application read well and are there errors?

Review your application and then get someone that you trust to review it. Whether that is your business partner, employee or accountant, make sure it is easy to understand, succinct and that there are no grammar or spelling errors.

Have I given myself enough time?

Don’t leave your grant submission until the last day. Most applications have questions to respond to, require quotes and request supporting information. It does take time to get all of this together, so start early and have time to deal with any unexpected setbacks that might arise.

Local Capability Fund Grants – New Round

Wed, 27 Sep 2023 01:04:20 GMT

Local Capability Fund – Standards Compliance Round

Helps local businesses improve risk management, business performance and efficiency.

This round opens at 9am (AWST) on Wednesday, 20 September 2023 and will remain open until funding is committed.

The Standards Compliance Round provides funding support to Western Australian small to medium enterprises (SMEs) to engaging external expertise to carry out the implementation and third-party certification of the following national and international standards:

ISO 9001: Quality management standards to help work more efficiently and reduce product failures
ISO 14001: Environmental management standard to help reduce environmental impacts, reduce waste and be more sustainable
ISO 45001: Health and safety standards to help reduce accidents in the workplace
ISO 27001: IT security standards to help keep sensitive information secure
ISO 50001: Energy management standards to help reduce energy consumption
AS/NZS 5131: Steel industry compliance standards to help improve the integrity of structural steelwork
ISO 13485:2016: Medical devices – Quality management systems – requirements for regulatory purposes.

The level of funding support under the Standard Compliance Round is 75% of eligible activity costs (excluding GST) up to a maximum funding level of $20,000 per successful applicant. Find out more here.

Local Capability Fund – Supplying Key Projects Round

Provides funding support to Western Australian small to medium enterprises (SMEs) to enhance their business capability and capacity to supply to major Western Australian State or Local Government agencies, the Australian Government and the private sector.

The focus of this round will be on assisting SMEs supplying to projects in these priority sectors:

Energy (oil and gas renewables)
Mining
Civil construction
Defence
Marine

To be eligible for funding, applicants must:

Be a company or trustee incorporated in Australia
Be a for-profit organisation or business (Not-for-profits and charities are ineligible)
Have been operating for at least 3 years at the time of submitting an application for funding
Have its principal place of business (operating facility) in Western Australia and continue to be based in Western Australia for at least the next 12 months following application submission date
Employ less than 200 people.

The level of funding support under the Supplying Key Projects Round is 50% of eligible costs (excluding GST) up to a maximum funding level of $50,000 per successful applicant. Find out more here.

Local Capability Fund – Aboriginal Business Round

Provides state-wide Western Australian Aboriginal businesses with funding support to enhance their capacity, capability and competitiveness as suppliers of products, services and works to Western Australian State or Local Government agencies; the Australian Government and the private sector.

The objective of the LCF is to provide small and medium-sized enterprises (SMEs) with funding support to enhance their capacity, capability and competitiveness to supply major projects and markets in Australia and overseas.

The objective of this targeted round is to increase Aboriginal business opportunity to participate competitively in public and private sector market opportunities.

To be eligible for funding, applicants must:

Be a company or trustee incorporated in Australia
Be an Aboriginal business (at least 50% owned by an Aboriginal interest)
Be registered with either the Aboriginal Business Directory Western Australia or the Supply Nation’s Indigenous Business Direct
Be a for-profit organisation or business (Not-for-profits and charities are ineligible)
Have been operating for at least 12 months at the time of submitting an application for funding
Have its principal place of business (operating facility) in Western Australia and continue to be based in Western Australia for at least the next 12 months following application submission date
Employ less than 200 people.

Assistance provided under the LCF may include:

Upgrading plant and equipment
Staff training and upskilling
Implementing improvements to internal business infrastructure
Overcoming barriers and constraints impacting on business viability
Seeking specialist advice on eligible activities such as business and market planning and improvements to internal business systems.

The level of funding support under the Aboriginal Business Round is 50% of eligible costs (excluding GST) up to a maximum funding level of $50,000 per successful applicant. More details here.

The $20k instant asset write-off is back: Here’s what it means

Wed, 27 Sep 2023 00:35:52 GMT

New legislation reintroduces the $20k instant asset write-off threshold.

The temporary full expensing rules, which provided an immediate deduction for the full cost of assets acquired from 6 October 2020, ended on 30 June 2023. While the instant asset write-off threshold was due to drop back to $1,000 from 1 July 2023, the Government has introduced a Bill to Parliament which contains amendments to ensure that a $20,000 threshold will apply to small business entities for the 2024 income year.

The rules

For a small business entity to access the instant asset write-off threshold of $20,000 the following conditions need to be satisfied:

The entity must carry on a business under general principles in the 2024 income year;
It must have aggregated annual turnover of less than $10m;
This can be based on current year or previous year figures;
It must choose to apply the simplified depreciation rules for the 2024 income year;
The asset must have a cost of less than $20,000; and
The asset must be first used, or installed ready for use, for a taxable purpose between 1 July 2023 and 30 June 2024.

It is important to note that if a small business entity does not choose to apply the simplified depreciation rules for the 2024 income year then it won’t have access to the instant asset write-off rules, regardless of whether the other basic conditions can be met.

The write-off threshold applies per asset, so a small business entity can potentially deduct the full cost of multiple assets across the 2024 year as long as the cost of each asset is less than $20,000.

The increased instant asset write-off threshold also means that a $20,000 threshold applies for the purpose of determining whether the full pool balance is written off in the 2024 income year. Just remember that when you are applying these rules you don’t actually look at the closing pool balance, you are looking at what the pool balance would have been if you ignored the current year depreciation deductions for the pool for the 2024 year.

The provisions that prevent small business entities from re-entering the simplified depreciation regime for five years if they opt-out will continue to be suspended until 30 June 2024 (the lock-out rules).

What assets are eligible

The instant asset write-off rules only apply to assets that fall within the scope of the depreciation provisions. Expenditure on capital improvements to buildings that fall within the scope of the capital works rules do not qualify.

Assets with a cost of $20,000 or more (which cannot be immediately deducted) can continue to be placed into the small business general pool and depreciated at 15% in the first income year and 30% each income year thereafter.

The messy history of depreciation deductions

A range of measures have been introduced over the years to encourage business investment. A brief summary of the rules is set out below:

What changed on 1 July 2023?

Thu, 24 Aug 2023 08:16:15 GMT

When we said goodbye to the 2023 financial year and 1 July 2023 arrived what did this mean to you? To many it may have meant that the days became longer, the Ashes drama continued to unfold, or that Barbie was about to take over our news feeds and screens. But for us in the accounting and tax world, and for you as business owners and tax payers, there were a few other key changes that took place on 1 July 2023.

Employers & business

Superannuation guarantee increased to 11% from 10.5%
National and Award minimum wage increases took effect.
The minimum salary that must be paid to a sponsored employee - the Temporary Skilled Migration Income Threshold - increased to $70,000 from $53,900.
Work restrictions for student visa holders reintroduced 48 hours per fortnight.
The cap on claims via the small claims court procedures for workers to recover unpaid work entitlements increased from $20,000 to $100,000.
Energy Bill Relief Fund for small business kicked in – it will apply to your energy bills if you meet the criteria.
Sharing economy reporting to the ATO commenced for electronic distribution platforms.

Superannuation

Superannuation guarantee increased to 11%
Indexation increased the general transfer balance cap to $1.9 million.
Minimum pension amounts for super income streams returned to default rates.
SMSF transfer balance event reporting moved from annual to quarterly for all funds.

For you and your family

The new 67 cent fixed rate method for working from home deductions commenced – make sure you have a record of when you work from home. The ATO won’t accept a simple “I work from home every Wednesday” x 8 hours calculation.
Access to the first home loan guarantee expanded to “friends, siblings, and other family members.”
The Medicare low income threshold increased for 2022-23.
The child care subsidy increased from 10 July 2023 for families with household income under $530,000. See the Services Australia website for details.
New parents were able to claim up to 20 weeks paid parental leave.
Access to the age pension increased to 67 years of age.

If you would like to discuss how these changes affect you and your business, please get in contact.

The 120% technology and skills ‘boost’ deduction

Thu, 24 Aug 2023 08:04:30 GMT

Almost a year after the 2022-23 Federal Budget announcement, the 120% tax deduction for expenditure by small and medium businesses (SME) on technology, or skills and training for their staff, is finally law. But there are a few complexities in the timing - to utilise the technology investment boost, you had to of purchased the technology and when it comes to acquiring eligible assets, installed it ready for use by 30 June 2023; that’s just seven days from the date the legislation passed Parliament.

Who can access the boosts?

The 120% skills and training, and technology boosts are available to small business entities (individual sole traders, partnership, company or trading trust) with an aggregated annual turnover of less than $50 million. Aggregated turnover is the turnover of your business and that of your affiliates and connected entities.

$20k technology investment boost

The Technology Investment Boost provides SMEs with a bonus deduction for expenses and depreciating assets for digital operations or digitising from 7:30pm (AEST) on 29 March 2022 until 30 June 2023.

You ‘incur’ an expense when you are in debt for it; this might be a tax invoice or it might be a contract where you are legally liable for the cost.

For depreciating assets, like computer hardware, there is an extra step. The technology needs to have been purchased and installed ready for use. For example, if you ordered 10 computers, you need to have received the computers and had them set up ready to use by at least 30 June 2023. Ordering them on 29 June won’t be enough to claim the boost if you did not receive them.

The types of expenses that might be eligible for the technology boost include:

Digital enabling items - computer and telecommunications hardware and equipment, software, internet costs, systems and services that form and facilitate the use of computer networks;
Digital media and marketing - audio and visual content that can be created, accessed, stored or viewed on digital devices, including web page design;
E-commerce - goods or services supporting digitally ordered or platform-enabled online transactions, portable payment devices, digital inventory management, subscriptions to cloud-based services, and advice on digital operations or digitising operations, such as advice about digital tools to support business continuity and growth; or
Cyber security - cyber security systems, backup management and monitoring services.

The technology also must be “wholly or substantially for the purposes of an entity’s digital operations or digitising the entity’s operations”. That is, there must be a direct link to your business’s digital operations. For example, claiming the drone you bought at say Christmas 2022 won’t be deductible unless your business is, for example, a real estate agency that needed a drone to take aerial images of client homes to market on their website. The expense needs to relate to how the business earns its income, in particular its digital operations.

Repair and maintenance costs can be claimed as long as the expenses meet the eligibility criteria.

Where the expenditure has mixed use (i.e., partly private), the bonus deduction applies to the proportion of the expenditure that is for business use.

There are a few costs that the technology boost won’t cover such as costs relating to employing staff, raising capital, construction of business premises, and the cost of goods and services the business sells. The boost will not apply to:

Assets that you purchased but then sold within the relevant period (e.g., on or prior to 30 June 2023).
Capital works costs (for example, improvements to a building used as business premises).
Financing costs such as interest expenses.
Salary or wage costs.
Training or education costs, that is, training staff on software or technology won’t qualify (see Skills and Training Boost).
Trading stock or the cost of trading stock.

Let’s look at the example of A Co Pty Ltd (A Co) that purchased multiple laptops on 15 July 2022 to help its employees to work from home. The total cost was $100,000. The laptops were delivered on 19 July 2022 and immediately issued to staff entirely for business use.

As the holder of the assets, A Co is entitled to claim a deduction for the depreciation of a capital expense. A Co can claim the cost of the laptops ($100,000) as a deduction under the temporary full expensing in its 2022-23 income tax return. It can also claim the maximum $20,000 bonus deduction in its 2022-23 income tax return.

The $20,000 bonus deduction is not paid to the business in cash but is used to offset against A Co’s assessable income. If the company is in a loss position, then the bonus deduction would increase the tax loss. The cash value to the business of the bonus deduction will depend on whether it generates a taxable profit or loss during the relevant year and the rate of tax that applies.

The good news for many eligible businesses is that your technology subscriptions and other products you use in your business might qualify for the boost.

The boost is claimed in your tax return with the extra 20% sitting on top your normal claim. That is, however the way the expense or asset is claimed (immediately or over time), the bonus 20% applies in the same way.

The Skills and Training Boost

The Skills and Training Boost gives you a 120% tax deduction for external training courses provided to employees. The aim of this boost is to help SMEs grow their workforce, including taking on less-skilled employees and upskilling them using external training to develop their skills and enhance their productivity.

Sole traders, partners in a partnership, independent contractors and other non-employees do not qualify for the boost as they are not employees. Similarly, associates such as spouses or partners, or trustees of a trust, don’t qualify.

As always, there are a few rules:

Registration for the training course had to be from 7:30pm (AEST) on 29 March 2022 until 30 June 2024. If an employee is part the way through an eligible training course, enrolments in courses or classes after 29 March 2022 are eligible, not before.
The training needs to be deductible to your business under ordinary rules. That is, the training is related to how the business earns its income.
A registered training provider needs to charge your business (either directly or indirectly) for the training (see What organisations can provide training for the boost).
The training must be for employees of your business and delivered in-person in Australia or online.
The training provider cannot be your business or an associate of your business.

Training expenditure can include costs incidental to the training, for example, the cost of books or equipment necessary for the training course but only if the training provider charges the business for these costs.

Let’s look at an example. Animals 4U Pty Ltd is a small entity that operates a veterinary centre. The business recently took on a new employee to assist with jobs across the centre. The employee has some prior experience in animal studies and is keen to upskill to become a veterinary nurse. The business pays $3,500 for the employee to undertake external training in veterinary nursing. The training meets the requirements of a GST-free supply of education. The training is delivered by a registered training provider, registered to deliver veterinary nursing education.

The bonus deduction is calculated as 20% of the amount of expenditure the business could typically deduct. In this case, the full $3,500 is deductible as a business operating expense. Assuming the other eligibility criteria for the boost are satisfied, the bonus deduction is calculated as 20% of $3,500. That is, $700.

In this example, the bonus deduction available is $700. That does not mean the business receives $700 back from the ATO in cash, it means that the business is able to reduce its taxable income by $700. If the company has a positive amount of taxable income for the year and is subject to a 25% tax rate, then the net impact is a reduction in the company’s tax liability of $175. This also means that the company will generate fewer franking credits, which could mean more top-up tax needs to be paid when the company pays out its profits as dividends to the shareholders.

What organisations can provide training for the boost?

Not all courses provided by training companies will qualify for the boost; only those charged by registered training providers within their registration. Typically, this is vocational training to learn a trade or courses that count towards a qualification rather than professional development.

Qualifying training providers will be registered by:

Tertiary Education Quality and Standards Agency (search the register – includes States and Territories)
Australian Skills Quality Authority (ASQA)
Victorian Registration and Qualifications Authority (search the register)
Training Accreditation Council of Western Australia

While some training you might want to have engaged might not be delivered by registered training organisations, there is still a lot out there, particularly the short-courses offered by universities, or the flexible courses designed for upskilling rather than as a degree qualification. If you have recently completed performance reviews for staff and training is part of their development pathway, it might be worth exploring.

Please get in touch if you would like our assistance.

ATO Rental Property Blitz

Thu, 20 Jul 2023 07:18:53 GMT

The Australian Taxation Office (ATO) has launched a full-on assault on rental property owners who incorrectly report income and expenses.

The ATO’s assessment, based on previous data matching programs, is that there is a tax gap of around $1 billion from incorrect reporting of rental property income and expenses. And, they would like that back now please.

As a result, banks and other financial institutions will be required to hand the ATO residential investment loan data on an estimated 1.7 million rental property owners for the period from 2021-22 through to 2025-26.

The data collected will include:

identification details (names, addresses, phone numbers, dates of birth, etc.)
account details (account numbers, BSB's, balances, commencement and end dates, etc.)
transaction details (transaction date, transaction amount etc.)
property details (addresses, etc.)

In addition to identifying whether landlords are declaring their residential investment property income at all, the data matching program is looking specifically at how rental property loan interest and borrowing expense deductions have been reported in the rental property schedules, and whether net capital gains have been declared for property used to generate income.

Banks are not the only source of data. In a complimentary program, the ATO is targeting rental property management software. Over the last decade, much of the financial management of residential rental property has moved online, facilitated by various platform providers. The ATO will require these rental property software providers to provide details of property owners including their bank details, income, expenses and the amount of those expenses, and details of their associated rental properties and agents. Data collection of the estimated 1.6 million individuals in this data program will cover the period from 2018-19 to 2022-23.

With that, let’s recap on the common problem areas:

Claiming interest and redrawing on the loan

The interest component of your investment property loan is generally deductible. However, if you redraw on your invest loan for personal purposes, interest on this portion of the loan will not be deductible. This means that interest expenses will need to be apportioned into deductible and non-deductible parts and repayments will often need to be apportioned too. If the redrawn funds are used to produce investment income, then the interest on this portion of the loan should be deductible.

Borrowing costs

You can claim a deduction for borrowing costs (typically over five years) such as application fees, mortgage registration and filing, mortgage broker fees, stamp duty on mortgage, title search fee, valuation fee, mortgage insurance and legals on the loan. Life insurance to pay the loan on death is not deductible even if taking out the insurance was a requirement to get finance. If the loan is repaid early or refinanced, the whole amount including mortgage discharge expenses and penalty interest can often be deductible.

Repairs or maintenance

Deductions claimed for repairs and maintenance is an area that the Tax Office always looks closely at so it’s important to understand the rules. An area of major confusion is the difference between repairs and maintenance, and capital works. While repairs and maintenance can be claimed immediately, the deduction for capital works is generally spread over a number of years.

Repairs must relate directly to the wear and tear resulting from the property being rented out. This generally involves a replacement or renewal of a worn out or broken part – for example, replacing damaged palings of a fence or fixing a broken toilet. The following expenses will not qualify as deductible repairs, but are capital:

Replacement of an entire asset (for example, a complete fence, a new hot water system, oven, replacing a shower curtain with a glass wall, etc.)
Improvements and extensions.

Also remember that any repairs and maintenance undertaken to fix problems that existed at the time the property was purchased are not deductible.

If you would like to discuss your rental property and any tax implications, please contact us.

End of Financial Year Payroll Tasks

Tue, 20 Jun 2023 07:07:12 GMT

It’s that time of the year again and as we all know there are many things that need to be completed to make sure we remain compliant with Australian Taxation Office and Fairwork requirements.

Following are just a few of the things your need to consider at this time of year.

1 July 2023

The Super Guarantee goes from 10.5% to 11.0%. If your pay run finishes on 30 June 2023 and you do not pay the wages until the 1 July 2023 then you will need to apply the new rate of 11.0% for that pay run. Most software providers will update the software for you but just do a quick calculation on your first pay run to ensure it is updated.

Check the current award for your industry as 1 July 2023 is when the new awards are published. The new rates only apply to your first full pay run after 1 July 2023. Also check your award for other updates (e.g. Christmas shutdown rules have changed).

14 July 2023

An end of year payroll STP finalisation declaration needs to be completed. If not finalised by the due date, it should be done as soon as possible thereafter. This is to ensure that employees can access their information to complete their income tax return.

STP reporting allows employees to view their payment information at any time through their myGov account. It is not advisable to finalise your STP prior to 1 July 2023 as they are performing software updates right up until this date. Lodgements prior to this may not be accepted.

How to prepare for finalisation

Ensure that the STP information is correct.

Check that all employee details are correct and up to date, including:

Name and address details, including state, postcode and email address.
Tax file numbers (TFN). If exemption codes (e.g., 000 000 000) were used initially, have they been updated or checked?
Employee superannuation details, including advising their superannuation funds of their TFN details.
Termination dates – check that terminated employees’ information and termination dates are up to date.

Check that payroll activity and ATO STP reports match/reconcile at a completed date prior to 30th June so that any discrepancies or omissions may be corrected prior to finalisation.
Check that all payroll categories are assigned to correct ATO categories for STP reporting.

The following software links will give you a detailed guide on finalising your payroll.

MYOB: https://help.myob.com.au/academy/eofy/documents/eofy_payroll_checklist.pdf

Xero : https://central.xero.com/s/article/Payroll-year-end

Quickbooks: https://quickbooks.intuit.com/learn-support/en-au/help-article/payroll-compliance/create-lodge-finalisation-event

Reckon: https://www.reckon.com.au/blog/Documents/EndofFinancialYearProcesses_payroll.pdf

28 July 2023

The June quarter employee superannuation is due. This does not mean you have until the 28 July 2023 to pay the super. It is due in the employee’s superannuation fund account by the 28 July 2023, so best practice would be to have it remitted and paid by the 14 July 2023 to avoid interest and penalties being imposed by the ATO. We note that you can be penalised for overdue payments even though it may only be two or three days overdue.

28 August 2023

Your taxable payments annual report must be lodged by 28 August 2023.

If you have any questions or concerns, we are always here to help.

From the bookkeeping Dream Team.

Stocktake Tips and Traps

Thu, 18 May 2023 05:48:54 GMT

It is almost that time of the year again. Counting stock is overwhelming for a lot of small business owners – it is a time consuming task and day to day business often takes priority over stocktake.

Whilst it may be overwhelming, having an understanding of your stock levels is a good tool to have. It will help you to understand:

Am I ordering too much?
Is there old stock that needs to be discounted now, before I have to write it off?
How did I end up with so much old stock?
What should I do differently next year when it comes to ordering?
How should I adjust our ordering processes?
What is my optimal ordering strategy?
Do I have a theft problem and what areas of my store need to be monitored? Or should I rearrange stock?
Are my staff accurately recording stock sales at the point of sale? How can I ensure that there is less room for error in this process?

Too much stock or dead stock is not the best use of your funds – so use the stocktake process as a way to learn more about your business and make it less about compliance.

How often should you stocktake?

Ideally stocktakes should not be performed just at year end. If you perform regular stocktakes (monthly, weekly or sometimes daily for some industries) you will obtain better knowledge about your business. You will be able to quickly determine what is selling and what isn’t, items that are in high demand and that might warrant a price increase, items that need to be discounted and sold before they are required to be written off, and even items that are being stolen that warrant extra security measures.

How should you perform a stocktake?

Create an inventory sheet. Your POS system should be able to provide this for you.
Decide which staff are best placed to be involved. Walk them through the process and ensure that everyone understands. They will all need to be familiar with stock codes and inventory procedures.
You might assign certain parts of the store to certain staff. If you intend to perform frequent rolling stocktakes, create a schedule for sections of the store, dates for stocktake and who is responsible.
Perform a physical count of every item in your store. Ensure that the amount that you count is accurately recorded on the inventory sheet against the correct item.
Highlight variances in stock levels (stock levels that your POS shows compared to amounts physically counted).
If you have barcodes and an ability to scan items, cross check your inventory sheet with a scan of the item that you have on hand. This will ensure that you are recording against the correct item on the inventory sheet.
Review your report and make sure everything is accurate.
Provide this information to your accountant.

What can I do to make stocktake easier?

There are a few tips to consider to make your stocktake process easier:

Plan ahead – organise your records and make sure all data is up to date before you commence.
Perform regular counts – this will ensure there are less surprises and headaches at year end.
Automate – find a POS system that works for your business, allows you to track inventory levels and provides useful inventory reports.
Train your staff – make sure your staff understand the importance of stocktaking, why you do it and how to do it correctly. Don’t make it all about compliance – why not talk to them about the information that stocktake provides you as a business owner and how you can use it to better service your customers? Untrained staff are more likely to double count, count incorrectly or record data against the incorrect item. This is costly for your business.
Organise your staff – assign each person a specific job, clear timeframe and ensure they understand how they can work quickly and efficiently.

What next?

Don’t just hand the information over to your accountant and sigh with relief that the dreaded task is over for another 12 months! Now that your staff are trained and know how this works, put in place a stocktake calendar so that items are counted regularly throughout the year.

In addition, use the data that you have now collected. Analyse it and determine how you should improve your stock ordering processes, the levels of stock that your business needs, stock that you need to remove and stock that you need to revise pricing for. Look at discrepancies and try to determine whether items are being recorded accurately at the sales desk, or whether you have a theft problem that you need to address.

If you need help understanding your stock please feel free to contact our Business Services Advisor Jenna van Nierop on 9842 5155.

ATO Small Business Incentives

Mon, 24 Apr 2023 06:37:08 GMT

In the 2023/24 Federal Budget it was announced that small businesses will be provided with a bonus deduction for certain types of expenditure.

The Small Business Technology Boost provides eligible small businesses (a business with a turnover of less than $50 million) with a tax incentive to invest in technology and digital tools. Small businesses can now claim a bonus 20% deduction for eligible assets such as hardware, software including cloud based software subscriptions, and IT equipment.

It is important to note that eligibility criteria do apply for both the Small Business Technology Boost and the Small Business Training Boost (discussed in more detail below).

And importantly although these incentives were announced in the 2022/23 Federal Budget, due to the change in Government they have not yet been passed as legislation at the time of writing. The specifics below may be subject to change but hopefully we have some certainty soon with the end of the financial year fast approaching.

The first of the incentives is the Small Business Technology Investment Boost;

In addition to the standard deduction you will receive a bonus 20% deduction for eligible expenditure up to a maximum of $20,000 per year (ie up to $100,000 of eligible expenses will provide a bonus deduction of $20,000).
The bonus deduction will be capped at $20,000 for the 2022 financial year and a further $20,000 in the 2023 year, where both bonus deductions will be claimed in the 2023 tax return.

Eligible expenditure may include items associated with digital adoption such as;

Computers and telecommunications hardware & equipment, some software systems & services,
Portable payment devices,
Cyber security systems.
Digital media & marketing – audio visual content that can be created, accessed, stored or viewed on digital devices.
e-commerce – supporting digitally ordered or platform enabled online transactions.

The expenditure needs to be incurred between 29 March 2022 & 30 June 2023.

If depreciating assets are acquired the asset must be installed and ready for use by no later than 30 June 2023, and the asset must still be held at 30 June 2023.

Ineligible expenditure includes salary & wage costs, capital works associated with buildings, financing costs, training & education costs and expenditure that may be included in trading stock.

The second incentive announced is called the Small Business Skills & Training Boost.

The important things to note;

In addition to the normal deduction you will be able to claim 20% of the eligible expenditure, however no cap applies.
The expenditure is available for external training provided to their employees, either in person, in Australia or online.
The training must be charged either directly or indirectly by a registered training provider and be within the scope of the providers registration.
The registered training provider must not be the small business or an associate of the small business.
The expenditure must already be deductible under tax law.
Expenditure must be incurred between 29 March 2022 and 30 June 2024.
The expenditure must be for the provision of training, where the enrolment or arrangement with the registered training provider occurs after 7.30pm on 29 March 2022.

We are here to assist you in identifying eligible assets and training programs, and help you make the most of these incentives.

Please do not hesitate to contact us if you have any questions or require assistance with claiming these initiatives.

Striving for a Mentally Healthy Workplace

Thu, 23 Mar 2023 05:02:06 GMT

Small business owners and employees are increasingly aware of and dealing with mental ill-health in their workplace. This is not surprising given that one in five Australians aged 16-85 have suffered, or are suffering, from mental ill-health. Conversations around mental health disorders can be difficult, or even confronting, for people if they don’t feel equipped with the right skillset. However, small business owners can have a positive impact on the mental health of their staff by providing mentally healthy workplaces.

Some of the benefits of creating a mentally healthy workplace include:

Thriving workers and owners
Increased productivity
Decreased unplanned leave
Decreased occupational injuries and illnesses
Decreased workers compensation claims
Increased engagement and job satisfaction
Decreased turnover and rehiring costs
Increased employee loyalty

The National Mental Health Commission has recently released the Small Business Guides for Mentally Healthy Workplaces, which provide information about key topics, clear examples, helpful tips and links to further support and guidance. These guides are built around three main pillars: Protect, Respond and Promote.

Protect

The Protect pillar focusses on protecting the business owner and employees from work related risks to mental health. For the employees, this involves the business owner identifying and managing psychosocial hazards in the workplace. For the business owner, this involves putting things in place to protect their own mental health at work.

Some examples of possible psychosocial hazards include high workloads and demands, lack of role clarity, insufficient resources, sexual harassment, workplace bullying, low control over work, violence or aggression, and conflict or poor workplace relationships. Small business owners can seek to actively identify these hazards, assess and then identify ways to eliminate or minimise. Elimination or minimisation of risks might be achieved by changing the work environment or work duties, providing more support or training, implementing policies and procedures (with regular check ins on staff adherence to these), educating staff on correct procedures, and rewarding staff for behaviours that support mental health.

There are also many contributors to mental ill-health of small business owners. Research conducted indicated that some of the common strains on a small business owners include:

Working long hours
Feeling obligated to work when sick
Financial stress
Business profitability and survival
Having multiple responsibilities
Finding and retaining customers
Managing employees

Some preventative measures that business owners can implement in order to help reduce every day stress include:

Planning for unexpected events (losing data, fire, robbery, owner sickness, lost premises etc.).
Reducing financial stress (keep good records, prioritise debt, budget, actively collecting debt, seek help where required).
Managing competing priorities (understand daily tasks, schedule tasks/meetings, concentrate on one thing at a time, set time limits, prioritise and set boundaries).
Managing burn out stress.

Respond

The Respond pillar is aimed at helping small business owners:

Identify and respond to an employee experiencing mental ill-health or distress.
Support themselves or other people to stay at work or return to work during periods of mental ill-health.
Implement strategies to support themselves if they are experiencing mental ill-health.
Improve workplace culture through mental health stigma reduction.

Common signs of mental health ill-health that a business owner may need to respond to include changes in behaviour (withdrawn, making more mistakes than usual, late or absent from work, unable to concentrate etc.), certain feelings (overwhelmed, irritable, lacking confidence, unhappy etc.), certain thoughts/statements (“I’m not good enough”, “I can’t do anything right” etc.) and physical features (tired, sick and run down, sleep problems, panic attacks etc.).

Responding to notable changes in employees and approaching them about mental ill-health can be difficult; many small business owners don’t know where to start. However some simple steps can help the conversation. The Respond guide helps guide business owners through this process, additionally the ALGEE mental health action plan is another good approach to consider.

In terms of helping staff member stay at work throughout periods of mental ill-health some adjustments could be considered:

Flexible working hours
Working from home
Adjusted workload
Modified tasks
Time management tips
Regular check-ins

Small business owners can also put strategies in place to help themselves through periods of mental ill-health. Some of these might include:

Building extra time into job estimates to help reduce stress.
Setting up automated emails.
Training their team in day to day business essentials.
Creating a “cheat sheet” about the operation of their business.
Using a password manager.
Making a plan for periods of absence.

There are also things that a small business owner can do ensure that the workplace culture is conducive to someone with mental ill-health returning to work. Reducing the mental health stigma in the workplace is an important part of this. This might involve:

Learning the basics of mental health and encouraging staff to do so too.
Being equipped with basic response skills.
Using appropriate language when talking about mental health.
Challenging false beliefs.
Normalising mental ill-health by displaying information and participating in mental health campaigns.

Promote

The third pillar is Promote, which concentrates on promoting mental health in the workplace. This involves recognising and enhancing the aspects of work that make employees and business owners feel good. This will help staff members to thrive and can also have a positive impact on business performance through decreased absenteeism, increased productivity, improved staff engagement and higher staff retention rates. Some simple things that a business owner can implement to help promote mental health in the workplace include:

Providing recognition and rewards for good work.
Providing opportunities to shape work.
Promoting social connections at work.
Improving workplace culture.
Promoting inclusion and diversity.
Providing staff with autonomy and control over their work.

It is also important for the business owner to look after and promote their own mental health. This could involve prioritising small but regular time slots to exercise, setting healthy boundaries between work and home, and allowing time to sleep and eating healthy. Planning and budgeting for holidays is also important, to ensure that a break from work is achieved with time to unwind and recharge. Building a support network and having regular social connections, whether is with other business owners or existing friendship groups, is also recommended. This enables the business owner to connect with others, buffer the impacts of stress and have a supportive network to lean on through times of mental-ill health.

While owning a small business can be stressful and time restrictive, it is also important to reflect on the positive aspects of owning a business. These might be that it connects the business owner to the community, provides autonomy and freedom, allows for creative control, provides the ability to do something that they enjoy or are passionate about, or gives them direct benefits from hard work.

This article provides a brief summary of some actions and workplace practices that a small business owner might consider when looking to build a mentally healthy workplace. There is much more detail, ideas and helpful materials contained in the Small Business Guides for Mentally Healthy Workplaces, which can be downloaded from this website: www.haveyoursay.mentalhealthcommission.gov.au/small-business-guides-to-mentally-healthy-workplaces

If you need help to prepare a budget for your business or to assess the financial performance of your business please contact Jenna van Nierop, who is also an Accredited Mental Health First Aider, on 9842 5155 or Jennav@smiththornton.com.au .

How to successfully implement change

Tue, 21 Feb 2023 07:16:02 GMT

Introducing change into your organisation requires careful thought and consideration in the planning phase to maximise success.

Unlike the metamorphosis of a butterfly, your organisation will not emerge triumphant if you do not prepare for and plan the implementation of change, and support those who are affected by change.

In managing change, you will need to:

Anticipate the emotions people may experience with change and respond appropriately.
Manage stakeholders and classify the degree to which they will be impacted by a change initiative.
Understand the reasons why people resist change and be prepared for how to manage this.

You should also factor in ‘change fatigue’. When major change is thrust upon people who have not yet, or only recently made it through the last change cycle, it can have a negative effect on their mindset and performance. Be conscious of your timing for any big changes made in your business and the impact it will have on your team.

There are three key stages in leading change. First and foremost is communication. The best planned implementation will come undone without effective communication, it really is the heart and soul of good change management.

Secondly, supporting resources should be anticipated and prepared to assist those in adapting to the change. Training manuals, how-to guides, FAQs guides etc. will be a necessary resource for team members to lean on as they upskill and embrace new procedures. Research shows that an average learner forgets 70% of what they learned in a training session within 24 hours and 90% of what they learned in a week if they don't make an effort to retain it. Therefore providing reference material to staff after meetings, training or change update sessions are essential to ensure your team has the confidence to implement change based on their knowledge of new processes.

Thirdly, ongoing support must be provided to help everyone reach the other side of the change journey successfully.

Communication Plan

Who is your audience? What needs to be communicated? When does it need to be communicated? Each communication should include:

The Why, highlighting the risk of not changing and ‘what’s in it for me’.
The What, creating an interest for the change at all levels and reinforcing the positive impact of the changes.
How & When – how can include live presentations, meetings and forums, flyers and posters, briefing documents, help desk, email for briefing document or invite only – long wordy emails are not effective.
Feedback – provide ongoing feedback to key stakeholders as the change rolls out.

To assist you in gaining buy-in, welcome suggestions and ideas, organise forums to ask for feedback and how to create workable strategies to manage the change. You can also appoint change champions to drive positivity and facilitate a successful outcome for the business. Someone who is personally invested in the change can see the vision and genuinely wants to help bring everyone along for the journey.

Preparing supporting resources

An important part of this preparation phase is to deliberately allocate time and resources to develop all the supporting materials and activities. This will ensure that all the key elements are ready to go during roll out and implementation.

Prepare managers and team leaders who are responsible for implementing the change by:

Providing an overview of the change process and their role in it.
Role modelling enthusiasm for the change and leading by example.
Providing skills on how to deal with resistance.

For newcomers – development of job aids and quick reference guides to be used for when the roll out occurs

Ongoing Support

Providing opportunity for ongoing feedback during and after change is implemented is essential. Activities such as regular check-ins, workshops, and feedback forums should be scheduled with appropriate team members to assess how everyone is tracking. This will identify those who are struggling to adapt so continued support can be provided. Use practice, triggers, reflection and reminders to reinforce the new normal as a collective group.

Was the implementation successful?

When measuring the success of change management, look holistically across a range of variables, including help desk calls, employee feedback and engagement, client retention and feedback and observations in changed behaviour. Encourage feedback from the team to provide insight on how you can improve your change management skills for the next big thing.

If you would like to speak with anyone at Smith Thornton regarding this or any other matters please don’t hesitate to get in touch .

Worker's Compensation and Superannuation Obligations

Mon, 23 Jan 2023 00:24:55 GMT

I recently came across a situation where our client (the Employer) was contacted by the Tax Office regarding a non-payment of superannuation for an employee (the Employee) on workers compensation.

The Employee had been on workers compensation for about 13 months, then he was given permission to return to work but only on light duties. As the Employer was unable to accommodate this request due to the nature of their business, the insurance company found a host employer (replacement employer) who could employ the Employee on whilst he was on light duties. Under the host employer arrangement:

The original Employer was still responsible for the Employee’s wages whilst he worked for the host employer.

The insurance company did reimburse the original Employer for the payment of wages

The host employer benefited from the arrangement by having an additional employee at their disposal without any of the usual employer responsibilities.

It is usual for an employee to continue to receive workers compensation payments when they return to work, even if they are put on light duties. In terms of superannuation, in this case the Employer thought:

“… He hasn’t returned to us, he is being hosted by another employer, so superannuation does not apply…”

Well think again!

Upon conducting further research into this matter which involved liaising with the various government departments, we were told the following:

Fairwork Australia said;
“We cannot give you that advice, you need to speak with the Tax Office’s superannuation division”.

Tax Office’s Superannuation Division advised;
“We cannot give you that type of advice” and asked us to call Fairwork Australia or the Insurance Company.

The Insurance Company advised;
“We can’t give you that type of advice” and asked us to call Fairwork Australia.

The above scenario is a common occurrence that many people face - a revolving door of passing the buck – without any real help provided to fix the issue.

Unfortunately whilst the Employer was trying to get assistance with this issue, the Employee contacted the Tax Office and reported the Employer for failing to pay their superannuation guarantee. It took that action for the Tax Office to assist the Employer with their queries. The Tax Office still did not provide any formal advice but did provide information that helped the Employer navigate through the situation and calculate the superannuation liability owed.

The specific employment award for this industry provides superannuation from day one of an injury for a period of 52 weeks, and then again when the employee returns to work regardless of who they are employed by. This clause is more common than most people realise.

This Employer did not have any objection to paying the superannuation guarantee if it was owed, they were simply unaware that it was required. However they could have faced large fines for the late superannuation payments. In this instance, the ATO Officer could see that the Employer had made a genuine effort in trying to determine what their responsibilities were. And on this occasion they used their discretion to waiver the penalties that would normally have applied.

Smith Thornton recently came across this website which is a useful tool to check if the award your employee(s) fall under carries the same requirements as the aforementioned client. Identify the relevant award, find the superannuation clauses within the award and look for Absence from work / Work-related injury or illness.

www.fairwork.gov.au/pay-and-wages/tax-and-superannuation

We strongly recommend that you seek assistance from a Human Resources consultant who has the expertise in workplace law. As trying to obtain accurate information from the various government departments or insurance companies is sometimes almost impossible.

Fairwork Australia introduces universal paid leave for family and domestic violence *

All employees in the FairWork system (including part-time and casual employees) will be entitled to 10 days of paid Family and Domestic Violence Leave in a 12-month period.

This new entitlement will replace the existing entitlement of five days of unpaid Family and Domestic Violence Leave under the National Employment Standards (NES).

Employees will be entitled to the full 10 days upfront, meaning they won’t have to accumulate it over time. The leave won't accumulate from year-to-year if it hasn’t been used.

The new leave entitlement will be available from:

1 February 2023, for employees of non-small business employers
1 August 2023, for employees of small business employers.

Employees can still access five days of unpaid Family and Domestic Violence Leave until the new paid leave entitlement becomes available to them. Family and Domestic Violence Leave should not show on an employee’s payslip and must be recorded/shown as Ordinary Time Earnings (OTE).

*Article from Institute of Certified bookkeepers, December 2022

The top Christmas tax questions

Thu, 08 Dec 2022 05:53:52 GMT

Every year, we are asked about the tax impact of various Christmas or holiday related gestures. Here are our top issues:

Staff gifts

The key to Christmas presents for your team is to keep the gift spontaneous, ad hoc, and from a tax perspective, below $300 per person. $300 is the minor benefit threshold for Fringe Benefits Tax (FBT) so anything at or above this level will mean that your Christmas generosity will result in a gift to the Tax Office as well. To qualify as a minor benefit, the gifts also have to be ad hoc (no ongoing gym membership payments or giving the same person regular gift vouchers amounting to $300 or more).

A question we often get is what is the tax impact if you give your team say a hamper and a gift card? The good news is that the tax rules treat each item (the hamper and the gift card) separately. FBT won’t necessarily apply as long as the value of each item is less than $300. However, the minor benefits exemption is a bit more complex than this. For example, you need to look at the total value of similar benefits provided to the employee across the FBT year etc.

If you are planning to provide your team with a cash bonus rather than a gift voucher or other item of property, then this will be taxed in much the same way as salary and wages. A cash bonus at Christmas is not a gift; it’s still income for the employee regardless of the intent. A PAYG withholding obligation will be triggered and the ATO’s view is that the bonus will also be treated as ordinary time earnings which means that it will be subject to the superannuation guarantee provisions unless it relates solely to overtime that was worked by the employee.

The staff Christmas Party

If you really want to avoid tax on your work Christmas party then host it in your office on a work day. This way, Fringe Benefits Tax is unlikely to apply regardless of how much you spend per person. Also, taxi travel that starts or finishes at an employee’s place of work is also exempt from FBT. So, if you have a few team members that need to be loaded into a taxi after overindulging in Christmas cheer, the ride home is exempt from FBT.

If your work Christmas party is out of the office, keep the cost of your celebrations below $300 per person. This way, you won’t generally pay FBT because anything below $300 per person is a minor benefit and exempt.

If the party is not held on your business premises, then the taxi travel is taken to be a separate benefit from the party itself and any Christmas gifts you have provided. In theory, this means that if the cost of each item per person is below $300 then the gift, party and taxi travel can all be FBT free. However, the total cost of all benefits provided to the employees needs to be considered in determining whether the benefits are minor.

The trade-off to this is that if the costs associated with hosting the party are not subject to FBT then it would be difficult to claim a tax deduction or GST credits for the expenses.

If your business hosts slightly more extravagant parties and goes above the $300 per person minor benefit limit, you will generally pay FBT but you can also claim a tax deduction and GST credits for the cost of the event.

Client gifts

Few of us have that much time in the diary for pre-Christmas entertainment so why not give a gift instead? In addition to a few extra hours saved and a lot less calories to work-off, there is also a tax benefit. As long as the gift you give to the client is given for relationship building with the expectation that the client will keep giving you work (that is, there is a link between the gift and revenue generation), then the gift is generally tax deductible as long as it doesn’t involve entertainment.

Entertaining your clients at Christmas is not tax deductible. If you take them out to a nice restaurant, to a show, or any other form of entertainment, then you can’t claim it as a deductible business expense and you can’t claim the GST credits either. It’s goodwill to all men but not much more.

Charitable gift giving

The safest way to ensure that you or your business can claim a deduction for the full amount of the donation is to give cash to an organisation that is classified as a deductible gift recipient (DGR). And, the charities love it as they don’t have to spend any of their precious resources to receive it.

There are a few rules that make the difference between whether you will or won’t receive a tax deduction.

The charity must be a DGR. You can find the list of DGRs on the Australian Business Register .
If you buy any form of merchandise for the ‘donation’ – biscuits, teddies, balls or you buy something at an auction – then it’s generally not deductible (the rules become more complex in this area). Your donation needs to be a gift, not an exchange for something material. Buying a goat or funding a child’s education in the third world is generally ok because you are generally donating an amount equivalent to the cause rather than directly funding that thing.
The tax deduction for charitable giving over $2 goes to the person or entity whose name is on the receipt.

If your business is making a donation on behalf of someone else, such as a client or that friend ‘who has everything’, it will depend on how the donation is structured. The tax rules generally ensure that the deduction is available to the individual or entity who actually makes the gift or contribution. Having receipts issued in someone else’s name can make this more complex.

If you would like to speak with anyone at Smith Thornton regarding this or any other matters please don’t hesitate to get in touch .

2022 Smithink Young Guns Workshop

Fri, 21 Oct 2022 06:35:35 GMT

Recently some members of our team were lucky enough to attend the 2022 Smithink Young Guns Workshop at the Gold Coast. The workshop was designed for emerging leaders and covered a wide range of topics relevant to the accounting industry from a leadership perspective. It also gave us the opportunity to meet and connect with other accountants and professionals from firms located across Australia and New Zealand. Whilst some of the topics were specific to the accounting industry, others were applicable to leaders in general and the learnings could be applied within local businesses.

As such, outlined below are some of the broader key learnings from the workshop:

Leading Teams

Be mindful with how you are communicating with your team. The medium used to communicate, and the content of the communication, can sometimes cause a difference between how you meant the message to be received, and how your staff (or customers) actually received it.
Whilst leadership does involve managing people, it should also be focussed on the strategic direction and tasks of your business. If your days are filled with operational tasks and people issues, the strategic tasks will be forgotten.
It is important to do things right, but it is also important to focus on the right things. As a leader you need to prioritise your time and tasks so that your focus is on planning. At times you will move into crisis mode, you will have general chat with staff or customers, or you will have interruptions, and all of these are a part of day to day business. However your need to ensure that you focus shifts back to planning.
A leader that has highly developed delegation skills gets things done more efficiently and effectively, creates autonomous staff and encourages high performers. Remember to choose the right person with the right skillset to delegate to, or upskill your staff to get them to this level.
Encourage your staff to share information and listen to other staff members. Also encourage them to ask questions, talk to you if they don’t like something and challenge you if they don’t agree with you. This will avoid silent judgement within the workplace.

Strategic Planning

57% of SMEs have no long term strategic business plan.
If business owners have a strategic business plan in place they are more likely to succeed in business and remain focussed on their end goals.
Over time goals can change and that is expected. However as your goals change you should be updating your strategy.
The first step to strategic planning is identifying issues in your business (internal/external strengths, threats, opportunities or weaknesses).
Understand your goals and how these can be achieved knowing the issues within your business. Develop multiple strategies and assess their viability.
Document your goals and action plans. These must be associated with tasks, timeframes, people and KPIs.
To achieve your goals, review your strategic plan and assess progress at least quarterly.

The Importance of Questions

Adopt a growth mindset – with a growth mindset you accept that your skills and intelligence can be improved and that there is always room for change. With this mentality questions becomes more natural.
Be a “learn it all” not a “know it all”. A “learn it all” approach to decision making or problem solving in your business might involve asking yourself where your blind spots are, who you haven’t heard from in your team, and how you might think about the problem differently.
When dealing with customers or staff, ask questions that can’t be answered with a yes or no response. You will learn more about them and build rapport faster.
If you are planning staff meetings prepare questions about the outcome, purpose, attendees and time spent to make the meeting worthwhile and targeted. Don’t forget to reflect on the meeting and how it could have been better!
Think about how you can respond to staff or customer requests that you really want to say no to but don’t know how to. Time management is crucial so ask questions to better clarify the request and understand who really needs to be involved.
One of our favourite parts was around questions that leaders should be asking themselves. What should be stop doing? What is something I could do to make everything else easier? What rule can we kill? What is the best use of my time?

Mental Health Insights and Strategies

In Australian this year 1 in 5 will experience a mental health disorder and only 35% will seek help.
People are more likely to seek help if someone else suggests it.
Small business owners are more at risk of depression, anxiety and high rates of stress.
Understand the warning signs of depression, anxiety and stress for yourself as a business owner but also your staff.
If you are responding to a mental health situation with a staff member first ensure that everyone is safe and establish whether an ambulance needs to be called.
The ALGEE approach is a great way to frame a mental health discussion with a staff member, friend or family member. When having this discussion don’t be critical, interrupt, distracted, pass blame or tell the person what to do.
Consider completing the Mental Health First Aid course to better equip yourself or give you more confidence to have these conversations. Some members of our organisation have completed this course and found that it was a very rewarding experience.
Consider your exercise, eating and sleep routine to help improve your mental health, in conjunction with advice from your doctor. Also practice breathing, pausing, decluttering, smiling and not passing judgement.
Prepare a Mental Health Plan for your business and actively promote it amongst your staff members.
One of our favourite phrases from the session was “It’s not good, it’s not bad, it is what it is” – don’t stress, just find a solution to the problem. Be kind to yourself and the people around you!

If you would like more information on the presenters of each of these topics, please visit the Smithink Young Guns website . Or if you need some assistance with strategic planning please contact Jenna van Nierop on 9842 5155 to discuss your situation and how we can help you.

Employee superannuation obligations

Tue, 27 Sep 2022 07:25:28 GMT

Coming up to the end of the quarter it is timely to consider your employee superannuation obligations.

To avoid additional costs (including the superannuation guarantee charge (SGC)), you must pay the right amount of super for all your eligible employees by the quarterly due date.

Whether you're paying super weekly, monthly, or quarterly it's important to check that the super guarantee (SG) you pay takes into account changes that started on 1 July 2022, which included:

the increase in the SG rate from 10% to 10.5%
the removal of the $450 per month eligibility threshold when paying SG.

You must have applied these changes to all the salary and wages you paid from 1 July 2022.

All other eligibility requirements for super remain in place. For example, an employee aged under 18 years must still work for you more than 30 hours in a week to be eligible for super.

You need to make sure:

your payroll and accounting systems are up to date and include the recent changes to SG
you've calculated and paid the right amount of SG for all your eligible employees
you pay SG amounts in full by the due date.

You'll have to pay the Super Guarantee Charge if your total SG amounts for the period 1 July 2022 to 30 September 2022 aren't received by your employees’ super funds by 28 October 2022.

If you need help meeting your SG obligations please contact us for assistance.

What happens if you don't pay the right amount of Super?

If you don't meet your SG obligations, you'll have to pay the Super Guarantee Charge and self-assess by lodging an SGC statement and pay the Super Guarantee Charge to the ATO.

This will cost you more than paying the correct SG on time. SGC is not tax deductible.

You may also have to pay additional penalties or charges.

Sourced from the ATO.

If you would like to speak with anyone at Smith Thornton regarding this or any other matters please don’t hesitate to get in touch.

Domain names, STP Phase 2 and other updates

Tue, 27 Sep 2022 06:58:57 GMT

With so much going on I wanted to highlight some important recent updates and news you need to be across for your business.

Website domains and cyber security

Just recently in Australia a new category of domain names has been developed, known as ‘.au direct’. This will be a shorter domain name such as demobusiness.au, without having .com or .net required. This change commenced on 20 September 2022.

These new domain names will be in addition to existing domain names so if you have a website it is important you look into this as soon as possible in order to prevent another business from taking your domain name, or worst still cyber criminals registering the new domain and fraudulently impersonating your business.

October also happens to be Cyber security month in Australia, and in addition to the above changes it is very important to ensure that you are keeping on top of software updates, are using Multi-factor authentication (MFA) and taking regular backups of data whether it be by external storage devices or cloud based solutions.

STP Phase 2

Single Touch Payroll is undergoing some further developments by shifting to Phase 2 reporting. Although this came into effect on 1 January 2022 some payroll systems have obtained deferrals as they upgrade systems and business owners adapt to the changes.

There are some changes to reporting for allowances, salary sacrifice reporting and the assignment of income types so it is important to get up to speed with these changes as soon as possible.

The deferrals for MYOB, Reckon and Xero are below, if you are using alternate software please check with the provider;

MYOB: 1 January 2023

Reckon: 1 January 2023

Xero: 31 March 2023

Some further information may be found at this link.

TFN Declarations for new employees

New employees can now complete a TFN declaration using the ATO’s online services, rather than being prepared by the employer. This may prove helpful to any employers that are still using paper based TFN declarations.

If your new employee has a MyGov account they can simply go to the ‘Employment’ menu in MyGov and select ‘New employment’. Importantly the employee will require the business ABN in order to submit the declaration.

Once prepared, the employee will need to print or provide the summary to the employer for entry into the payroll system.

Employees can then also use MyGov to update any changes in circumstances such as residency status, study loans or whether they are claiming the tax free threshold.

Reminder on Director ID’s

Just a reminder for anyone who is a Director of an Australian company that hasn’t yet registered for a Director ID, this will need to be done by no later than 30 November. Visit the ABRS website for all details.

If you would like to speak with anyone at Smith Thornton regarding this or any other matters please don’t hesitate to get in touch.

The keys to strengthening financials decisions.

Thu, 25 Aug 2022 02:10:14 GMT

Do you know how to manage and strengthen your cash flow?

Do you know how to best manage your overheads?

Can you test the financial impact of business decisions before you make them?

Every business has a code that underpins the way they operate from a financial viewpoint.

The four drivers of profit are:

Price
Volume
Direct costs/Cost of Goods
Overheads

The three drivers of the balance sheet are:

Accounts Receivable days
Inventory days
Accounts Payable days

These seven drivers are the principal levers of a business. They are the drivers that business owners should have some control over. Business improvement is driven by changes to these drivers.

Our keynote speaker Mark Holton, Smithink Director, Accountant and Business Advisory specialist who we have worked with for a number of years, will share with you how to understand how these seven drivers impact your profit, cash flow and value of your business and how this will help you to make key business decisions at our event coming up on Thursday 15 September, 5-7.30pm.

Attending is free - please register here to confirm your attendance. Numbers are limited!

Finfluencer

Thu, 25 Aug 2022 00:00:16 GMT

I met this bloke down the pub, and he gave me this great investment tip…

Hopefully dear reader, you haven’t been guilty of that, but on a much larger scale, these things have indeed been happening today.

That larger scale is known as social media - think of Instagram, Facebook, TikTok. And the same bloke down the pub now calls himself a personal finance influencer – or finfluencer – with followers numbering in the many thousands.

The Austrian Securities and Investments Commission (ASIC) recent released research showing an alarming proportion of investors were relying on social media for their information. Up until recently, this has been an unregulated activity, and so far it’s been open to anyone with an opinion on how and what to invest in.

That changed last week.

The corporate watchdog has cracked down on this form of unlicensed financial advice, warning commentators they could face fines up to $1 million and jail. ASIC is not denying anyone from sharing their financials tips, all you need is to get a licence.

So the common sense approach is, take advice from people with reputations and credentials. Certainly you can rely on the bloke down the pub, just make sure you know his backstory.

If you are looking for a source of sound financial advice we have fantastic financial advisors located in our office. Please contact Tammy Stone from the Knight Financial Group on Tammy.Stone@knightgroup.com.au .

Small Business Owners – Time Poor with Too Many Hats

Mon, 20 Jun 2022 03:02:55 GMT

Small businesses have always formed an important part of the Western Australian business landscape. They provide a great source of employment opportunities, they supply products and services tailored to the community, and help create a sense of community amongst locals and business owners. According to the Small Business Development Corporation, as at 30 June 2021, there were 223,524 small businesses in Western Australia, which amounts to 97.2% of all businesses in Western Australia. At 30 June 2020, small businesses in Western Australia employed 462,995 people, or 38.4% of the workforce, and added $54.4 billion to the economy. Small business owners play a very important role in our community.

Being a small business owner can be very rewarding. It can provide an opportunity to build a business based on passion, beliefs and values. There can also be a sense of independence when owning a small business, the power of hiring and creating a team suited to your needs, and of course the possibility that it might become a great money maker! But as with most things in life, with pros also come cons.

A small business owner wears many hats. Unlike large corporations, the small business owner is often the sole person responsible for many critical functions within the business. These include roles such as customer service, cash flow management, legal compliance, marketing, growing whilst maintaining quality, risk reduction and managing employees and all of the people issues that arise. Wearing this many hats and being available to customers and employees sometimes seven days a week is stressful, and often leads to burn out. So what can business owners do to avoid this?

The first step is for the business owner to decide where their time is best spent. The main focus of the business owner should be customer satisfaction, client relationships and business growth. If other tasks are getting in the way of this focus then the question needs to be asked - are there roles in the business that require specialist input and are better suited to being outsourced? Can someone else do this better than me? Do I really have the time to do all of this?

Some key areas within a small business that can be outsourced include:

Accounting, compliance and bookkeeping

If you are not an expert in this area it can take a lot of your precious time performing these tasks. There is also the risk that it is being done incorrectly. A skilled accountant or bookkeeper can perform this task for you quite efficiently.

Cash flow management

This task is often poorly managed by business owners, not necessarily because they can’t do it, but because they just don’t have time for it. It is however a critically important role in the business. It doesn’t matter how good the service or product is if the business owner doesn’t invoice on time, chase debtors, make debt repayments, replace aged plant and equipment, can’t pay its staff, or receive a reasonable return on investment. Monitoring cash flow is a key task that a qualified professional can do.

Marketing

Word of mouth is great however there can be great benefits in trusting a marketing specialist with your marketing plan, special events, advertisement content and social media. They do provide new ideas, creative solutions and strategies that the business owner may not have time to contemplate.

IT Management

IT is one of the largest outsourced industries worldwide. Given that most businesses in 2022 have some sort of IT reliance, and in most cases a heavy IT reliance, getting this part of a business correct is essential. Turning it on and off doesn’t always work, so building a relationship with and using a trusted IT firm that can provide on demand assistance is money well spent.

Human Resources

Dealing with staff can be the most rewarding and difficult hat that a business owner wears. When the business owner is time poor and is faced with staff leaving, training new staff, or managing staffing issues, it can become overwhelming. There are also day to day staff related tasks to deal with, such as employee benefits, leave queries, payroll, and time or attendance problems. Getting a HR specialist involved in some of these tasks can offer peace of mind and result in a more beneficial long term outcome with staffing.

Of course all of these services come at a cost so it is important for business owners to determine which roles are most critical to their business, are most neglected and take up too much of their time. The time saved by dealing with some of these tasks more efficiently and with more expertise could also result in more sales, less risk, happier customers and better qualified staff members.

If you need assistance with accounting, compliance, bookkeeping or cash flow management, please contact us at Smith Thornton Accountants on 9842 5155.

Tax Planning – would this benefit me?

Fri, 27 May 2022 07:37:46 GMT

With another financial year about to end, it is important to review your situation ahead of 30 June so some important decisions can be made. Planning ahead can help you avoid any nasty surprises and give you time to prepare for future cashflow needs.

How much tax will I have to pay?

How much can I contribute to Superannuation?

I have just bought a new asset, can I fully expense this in the 2022 year?

I want to buy a new asset, should I do this before 30 June? When does the temporary full expensing end?

How should our Trust’s profit be distributed?

Should we pay a Dividend from our Company?

I have made a profit on shares or cryptocurrency, what impact does this have?

These are common questions, and questions that are best answered this side of 30 June.

Trust Resolutions need to be completed prior to 30 June and with increased focus from the ATO on this matter (as previously discussed in this article ), it is important that these are carefully considered and completed. Tax planning can ensure that this an informed decision.

We assist many clients with tax planning and enjoy the clarity it provides. If this is something you feel would be of benefit to you please get in touch.

Lies, dammed lies, and statistics (and your superannuation)…

Mon, 25 Apr 2022 08:05:15 GMT

That phrase was popularised by Mark Twain 120 years ago (but not the super bit). So please dear reader, consider if this is a lie…

The Association of Superannuation Funds of Australia (AFSA) found that:

90 percent of those aged over 80, on their death, had no superannuation
75 percent of those aged between 70 to 79, on their death, had no super
Just over 50% among those 60 to 69, on their death, had no super

What? Empty? Nothing left? Nothing?

There are those who do indeed challenge these statistics. The debate goes like this, and I’m sure you have heard it before. This alternative view suggests that retirees are living so frugally there exists a wealth transfer to the next generation. Rather than using their superannuation to enhance their standard of living, instead they end up dying with large superannuation balances (2020 Treasury Retirement Income Review).

Hmmm...Who do you believe?

What really does represent a healthy draw down on your retirement reserves whilst leaving enough for later?

And how long will I live?

Like you, I have some very definite opinions on this, and as a proponent of “Lifestyle Engineering”, my opinion won’t agree with lots of people.

But the answer is out there…

Smith Thornton Accountants has great financial advisors in this space. They even look after my own superannuation fund, and I take their counsel regularly. For someone like me being in the game for over 45 years, I reckon they provide balanced sensible advice. If you are concerned about engineering your retirement lifestyle, you should talk to Tammy Stone at the convenience of our Albany office. She is part of the Knight Financial Group. Tammy.Stone@knightgroup.com.au

ATO Aims to Blow Trust Distributions Out of the Water

Mon, 28 Mar 2022 07:00:29 GMT

Apologies upfront as this is a bit technical and not an easy read, however if you have a discretionary/family trust or unit trust in your entity structure then it is important that you are familiar with what the ATO is proposing.

The ATO has been looking at issues associated with Trust Distributions for some time.

On 23 February 2022, the ATO released new draft guidance materials on the application and operation of section 100A and Division 7A of the Income Tax Assessment Act 1936.

Background

Section 100A is an anti-avoidance provision of the Tax Act which has been around since 1979. It was introduced at that time to target fairly specific arrangements, however the ATO is now seeking to expand its interpretation of this section and in the process invalidate many trust distributions. Worse still, it is proposing to back-date the ruling to encompass trust distributions outside of the normal amendment period (four years for most trusts).

The Government originally introduced section 100A because it was concerned about avoidance arrangements where a beneficiary was made presently entitled to income of a trust leaving the trustee relieved of any tax liability on the income, but also where the beneficiary did not pay tax. This may be, for example, because the beneficiary’s income is exempt from income tax or there is another trust with sufficient deductible losses to absorb its share of income as a beneficiary of the first trust.

So what is the Issue?

It is common for trust beneficiaries to be made presently entitled to trust income.

Sometimes (though much less commonly), a beneficiary's present entitlement to a share of trust income arises out of, or in connection with, an arrangement:

Involving a benefit being provided to another person,
Intended to have the result of reducing someone's tax liability, or
Entered into outside the course of ordinary family or commercial dealing.

In these cases, section 100A generally applies to make the trustee, rather than the presently entitled beneficiary, liable to tax at the top marginal rate.

The draft guidance material provides the Commissioner's view about these arrangements and the four basic requirements for section 100A to apply, being:

'Connection requirement' - for section 100A to apply, broadly stated there must be a present entitlement, or deemed present entitlement, of a beneficiary (other than a beneficiary under a legal disability) to a share of trust income, which has arisen out of, in connection with or as a result of a reimbursement agreement (being an agreement, understanding or arrangement that has the three qualities described in the following dot points).

'Benefit to another requirement' - the agreement must provide for the payment of money or transfer of property to, or provision of services or other benefits for, a person other than that beneficiary.

'Tax reduction purpose requirement' - a purpose of one or more of the parties to the agreement must be that a person would be liable to pay less income tax for a year of income.

'Ordinary dealing exception' - the agreement must not be one that has been entered into in the course of 'ordinary family or commercial dealing'.

Importantly in the last dot point, section 100A doesn’t apply to “ordinary family or commercial dealings” (OFOCD). This concept has been commonly used to validate trust distributions to beneficiaries within a family group for many years. But the ATO has taken the position that a number of arrangements that are common in a family setting, are artificial or contrived and thus outside the OFOCD exception.

The ATO are also concerned about certain other arrangements including:

Where distributions are made to adult children but it is not intended that the children will receive the income and as such the distribution is predicated on avoiding tax.

Distributions to corporate or bucket companies and how Division 7A impacts on such distributions.

What is the ATO Proposing?

In issuing the draft guidance the ATO sets out a risk assessment framework to determine the allocation of ATO compliance resources. The framework contains four risk zones that determine the ATOʼs compliance approach, ranging from no compliance resources being allocated, to the ATO conducting further analysis on the facts and circumstances of an arrangement as a matter of priority, which may proceed to audit.

The ATO explains that:

They generally won’t allocate compliance resources to arrangements entered into before 1 July 2014 (noting there are some exceptions); and

Taxpayers can rely on existing ATO web guidance if this is more favourable to their circumstances than the outcome under the PCG for arrangements entered into before 1 July 2022.

Where to From Here?

It is important to note that the guidance materials issued by the ATO are still in draft and as such can, and probably will change following a consultative period.

There is a case on appeal to the Full Federal Court (the Guardian case) which depending upon the outcome may also have an impact on the ATO’s final position.

The issues that will be of most interest for most “vanilla flavoured” trusts will be around the “ordinary family or commercial dealing” and how the ATO will assess the risk zone which will determine the likelihood of audit activity.

We will be keeping an eye on the outcomes and certainly be considering the effect of final rulings on our client’s circumstances, both historical and future. If you want to read more about the ATO’s stance, here is a link to their guidance:

https://www.ato.gov.au/General/Trusts/In-detail/Trust-entitlements---draft-guidance/

Please contact us if you would like to discuss your personal circumstances.

Operating Understaffed and in Survival Mode

Sun, 27 Feb 2022 23:37:34 GMT

With Western Australian borders remaining closed the job market continues to be tight, with business owners struggling to find staff to fill positions within almost every industry. Labour analysis released by the National Australia Bank in January found that 40% of all Australian businesses are experiencing workforce shortage. Western Australia recorded the highest results, with 44% of businesses reporting labour shortages that have significantly impacted their business. Unfortunately, this is expected to continue over the next 12 months, with skilled and unskilled employees remaining difficult to source.

Everyone is aware of the national labour shortage and business owners are doing their best to keep their businesses operating under tough conditions. Some of the key impacts a labour shortage has on businesses include:

Staff become overworked – the day to day list of jobs doesn’t get any shorter when there is less staff. Staff end up working longer hours than usual and become burnt out or unhappy in their job – ultimately resulting in a higher staff turnover in an employees’ market.

Business owner shifts focus – the business owner falls into the trap of significantly increasing their hours to support their employees and keep customers satisfied. Unfortunately as the business owner spends more time in the business, they also spend less time working on the business. Debt collection and business goals are forgotten while customer service and day to day tasks are tended to.

Customers become dissatisfied – no matter how much staff members step up, some staff shortages are too big to fill. When a business continually operates understaffed the standard of service inevitably falls and customers become disgruntled. This has a flow on effect, as unhappy customers are less likely to become returning customers.

A solution to the workforce shortage appears to be some time away and even when the Western Australian borders open it will take some time for the international workforce to return. To many business owners this is quite concerning, with some possibly wondering how they can keep their doors open. There are however some changes that can be made to try to ease the workload and help keep employees happy. These include:

Consider giving staff a longer lunch break to recharge the batteries or even an additional day of annual leave each year on their birthday. Sometimes even the smallest gestures make a difference to an employees’ job satisfaction.

Take 15 minutes each week to check in with your staff, clearly convey to them that the current understaffing is not the norm and that you are open to ideas on how to relieve the stress. You will need to listen and action – listening with no actions will aggravate staff even more.

Hire a part time assistant to do simple jobs such as filing, stocking shelves, cleaning or running errands, leaving existing staff members more focussed their technical tasks.

Outsource tasks that you as the business owner don’t need to be doing. This could mean talking to your accountant about payroll or bookkeeping, getting an IT specialist involved instead of you spending time problem solving, or engaging a marketing consultant to manage your website, advertising or social media. This leaves you more available to help staff and work on urgent tasks that no one else can do.

Prepare a list of tasks for the business and rank them by importance. Employees should be spending 80% of their time on the 20% of the tasks that are most important. This will help ensure that the business operates as efficiently as possible under difficult circumstances.

Consider adjusting your operating hours so that the staffing hours you have available more closely align with the hours that you are open. Would it really impact your customers if you opened an hour later and closed an hour earlier? Would you still get the same amount of customers if you were open five days a week instead of six? The answers to these questions won’t be the same for every business but you should take some time to really contemplate how this might look for your business.

Assess your service offerings and only offer those that are in most demand and most profitable. For many businesses the more varied your service offering is, the more staff are required to deliver it. Use your POS program to analyse your sales, which will assist you in making these decisions.

If you would like to discuss how we can help you work through your operational issues, or understand the financial impact of operational changes, please contact our Business Services Advisor Jenna van Nierop on 9842 5155.

Deductions For Working From Home

Sun, 23 Jan 2022 22:00:00 GMT

As COVID makes its way across the country at an increasing speed, working from home will become far more common, so it's a good time to cover what you can claim as an employee when it comes time to prepare your tax return and importantly what records you'll need.

There are in fact three ways to calculate your deduction for working from home expenses, including;

Each of these will be discussed in more detail below, but with each method the key criteria will be to maintain thorough records as you go.

For anyone that has a home-based business there will be some changes to what you can potentially claim, so please get in touch if you want further information on this.

The Fixed Rate Method

The Fixed Rates Method is simply a flat rate of 52 cents per hour spent working from home. This covers running expenses incurred such as electricity and gas, cleaning costs, and decline in value of office equipment items such as desks and chairs.

This rate of 52 cents per hour however doesn't cover telephone and internet usage, nor does it cover the decline in value of other office equipment such as computers and laptops. The calculation of these items will be based on the work related use.

In order to claim using this method, you will need to maintain a dedicated work area at home, retain records of the work-related portion of the expenses not covered by the fixed rate, and record the number of hours spent working from home for the whole income year.

If your pattern of work is quite consistent, you may record a diary for a representative four-week period to show your usual pattern of working at home, and then apply this across the rest of the income year to work out the total number of hours you worked from home. If your work pattern changes however you'll need to prepare a new diary.

For expenses in addition to the 52 cents per hour such as telephone and internet, you'll need;

The Shortcut method

The shortcut method is similar to the Fixed Rate Method, with the key difference here being that the 80 cents per hour covers everything, so there is no need to calculate deductions for telephone, internet, utilities and depreciating assets. The requirement to keep track of your work schedule will remain, and a diary may be the best option for this. Timesheets and rosters are also possible options.

At this stage this method is only available until 30 June 2022.

The Actual Cost Method

This method will require the most record keeping of the three options, and for the vast majority of people may not be worth the more onerous record keeping and calculations, especially if the periods working from home are intermittent such as for two week isolation.

The basic criteria are;

This means that you aren't able to claim anything that is provided by your employer, or if you are reimbursed for out of pocket expenses.

Possible deductions can include the work related usage of;

You won't be able to claim occupancy expenses for your home including rent, mortgage interest, property insurance and land taxes. However the good news is that because your occupancy expenses are not deductible, working from home during COVID-19 will not disqualify you from claiming the capital gains tax (CGT) main residence exemption when you sell your home.

Record keeping for actual costs method

To claim your work from home expenses using actual costs, you must either keep a:

You must also keep all the receipts, bills and other documents which show the additional running expenses you incurred while working from home and that you used to work out your deduction.

For additional information on the above, or if you happen to be running a business from home, please refer to the ATO website as there is an increasing amount of materials provided to assist.

If you would like to speak with anyone at Smith Thornton regarding this or any other matters please don't hesitate to get in touch.

Crypto crackdown

Sun, 23 Jan 2022 22:00:00 GMT

Even though the technology behind cryptocurrencies is innovative and new, the tax laws that apply are well established under capital gains tax provisions for cryptocurrency investors.

The Australian Taxation Office (ATO) estimates more than 600,000 Australian taxpayers have invested in crypto assets in recent years, some of whom have failed to declare their capital gains. It is concerned many taxpayers believe their cryptocurrency gains are tax free or only taxable when their holdings are cashed back into Australian dollars. That's not the case.

Generally, as an investor, if you buy, sell, swap or exchange one cryptocurrency for another, the transaction is subject to CGT and must be reported.

Cryptocurrency gains are treated in the same way as gains from other investments, such as shares.

"While it appears that cryptocurrency operates in an anonymous digital world, we closely track where it interacts with the real world through data from banks, financial institutions and cryptocurrency online exchanges to follow the money back to the taxpayer," warns Tim Loh, ATO's assistant commissioner.

The ATO has had a data-matching program in place to track cryptocurrency transactions since early 2019, and receives bulk records from Australian-designated service providers as part of the program.

Data provided to the ATO includes cryptocurrency wallet information, including names and addresses, bank details and transaction information in relation to purchases, sales and transfers.

There are other circumstances where the ordinary income rules apply, and this includes where the client is conducting a cryptocurrency trading business. In this case, the trading stock rules apply, and not the CGT rules.

Proceeds from the sale of cryptocurrency held as trading stock in a business are ordinary income, and the cost of acquiring cryptocurrency held as trading stock is deductible.

This is much the same treatment that would apply to a person who is carrying on a business of share trading.

There are also situations where an isolated cryptocurrency transaction or series of transactions can give rise to ordinary income if the transaction was entered into with a purpose or intention of making a profit, and the transaction is part of a business operation or commercial in character.

If you should have any doubts about the tax implications of your activities with cryptocurrency, please talk to us.

Business Health Checks – In Vogue or Necessary?

Wed, 22 Dec 2021 22:00:00 GMT

Unless you have been living under a rock you would have seen or heard the term "Business Health Check". It is used by banks, advertised in newspapers and online, and has commonly become a service provided to businesses in the advisory sector. But what does it mean and is it important to you as a business owner?

A business health check is not just about assessing business finances. Analysing the financials is a great place to start and will highlight key issues to address. However the actions arising from these issues won't just be finance based, they should focus on a whole range of issues such as people/staffing, processes, succession, inventory, cash flow planning, risk minimisation etc.

A thorough business health check will assess the finances of your business, make industry comparisons, and consider non-financial components such as policies, procedures, employee roles, job descriptions, work-life balance and compliance. The business health check should be followed up with a list of time based actions to ensure that the findings and issues are resolved in a timely manner. There is no point in completing an online business health check survey if the issues that arise are not dealt with. Working with an advisor to ensure that you remain focussed on actions will give a better outcome for your business. You will become answerable to your actions and this will drive the change needed to grow and strengthen your business.

A business health check should be important to every business owner. In order to grow and be profitable, the business owner needs to understand their financial results and everything that contributes to (or hinders) business success. If you are in doubt ask yourself these questions:

Every business owner should be answering yes to these questions. If you can't answer yes then you need to consider seeking the help of a business advisor to give you the necessary information and tools.

Smith Thornton Accountants can provide a no cost Needs Analysis meeting to business owners, (like a business health check, but better). The analysis performed not only covers the business health, but also the personal affairs of the business owner such as work life balance, succession planning, and assessing risks external to the business. Our Strategy 360 service is aimed at working with you to address issues or actions that arise from this assessment, along with regular reviews of financial performance and budgets to ensure that you remain on track to reach and exceed your goals and aspirations. Contact us to find out more.

The necessity of cash flow forecasting

Thu, 16 Dec 2021 22:00:00 GMT

Cash flow forecasts are an important tool used to predict the cash position of a business at some point in the future. Business owners are typically quite familiar with budgets or the budgeting process, which are used to show expected income and expenditure over a 12 month period. However cash flow forecasting is much more detailed and spans a longer time frame, making it representative of short and long term business plans. It also allows the business owner to test the financial impact of business decisions before they are made, which is an invaluable capability to have.

So why is it important to plan your business finances and to represent them in a cash flow forecast? The December 2020 Small Business Counts report prepared by the Australian Small Business and Family Enterprise Ombudsman found that from June 2015 to June 2019 on average only 65% of small businesses survived past the four year period. In 2018 the Australian Centre for Business Growth asked 650 CEOs of small and medium enterprise (SME) if they had ever experienced business failure and why the business failed. Of the 134 CEOs who answered yes, 14% said it was due to poor financial management. The only reason for SME failure that scored a higher percentage was inadequate marketing and market research. This demonstrates why it is so important to plan and forecast cash flow to give your business the best chance to grow, thrive and survive.

To prepare cash flow forecasts you will need to consider all income and costs relevant to your business. You might start with reviewing previous years financial performance however you will need to consider all factors that might impact income and costs going forward. If you are a start-up business owner, you will need to base your cash flow forecasts on industry research, market research and the income or costs known or locked in. Some key questions we would ask clients when preparing cash flow forecasts include:

The timing of the income and expenses discussed above is critical in order to predict a cash balance for your business each month over a three to five year period. As such it is also important that your cash flow forecast also considers things like PAYG withholding, superannuation, GST and income tax, which all have specified payment arrangements.

Once you have gone through this process you will not only have a fairly accurate understanding of your cash needs and your ability to pay bills, but you will also have a better understanding of your business plans going forward. It is also important to review your cash flow forecast regularly (ideally quarterly) to ensure that any changes in your business are reflected, and to monitor any variances in your forecasting against your actuals. If your cash balance looks low at some point in the future you can plan for this, make changes if possible, or contact your bank early to discuss your overdraft needs.

If you would like to discuss cash flow forecasting or the monitoring of your performance against budget please contact our Business Services Advisor Jenna van Nierop on 9842 5155 or by email: Jennav@smiththornton.com.au

Key Performance Indicators – Help or Hindrance?

Mon, 22 Nov 2021 22:00:00 GMT

When Key Performance Indicators or KPIs are mentioned to business owners the response can be quite varied. Some are indifferent or curious as they haven't heard of them before. They want to learn about them and how they could help drive improvement within their business. Some get excited as they have heard of KPIs previously but have never found the time to implement or monitor them. For others their eyes glaze over, often because it is their honest opinion that KPIs are either time intensive, that their time could be better spent on other business tasks, or that they promote a bad working environment.

So which response is right? Are KPIs a help or a hindrance to a business?

The answer is simple – setting the right KPIs for your business, and implementing and monitoring them in an effective way will help improve efficiencies and the financial success of your business. They can also be one of the most important gifts you can give to your staff to help them improve and thrive. However, setting KPIs that are not suited to your business, or the use of poorly implemented or monitored KPIs won't result in improvement – and who wants to spend time on something in their business that doesn't have a positive impact?

This is why it is so important to go through the correct process when setting, implementing and monitoring KPIs. Here are some key points to remember when considering KPIs for your business.

If you would like to discuss your business and KPIs please feel free to contact Jenna van Nierop at Smith Thornton on (08) 9842 5510.

Employer Alert - Single Touch Payroll Phase 2 (STP2)

Mon, 22 Nov 2021 22:00:00 GMT

STP2 begins from 1 January 2022 unless a deferral is in place.

What is STP2?

STP2 is an increased level of reporting each time a pay run is processed. STP1 was all about reporting gross wages, tax withheld and superannuation to the ATO. STP2 will incorporate more information so that other Government Departments can streamline their services. Separation Certificates will no longer need to be provided to employees on termination, child support deductions will be automatically reported and income and allowance will automatically be reported to Services Australia, meaning that employers will no longer need to verify employment status and income for employees.

What does it mean for employers?

Most software providers are already compliant with the new requirements and will be ready for the transition on 1 January 2022. Xero has a deferral in place to December 2022, which means that their clients have until then to begin reporting. Some software providers will transition their clients progressively to avoid system issues caused by too many users trying to lodge at the same time.

Your software payroll settings need to be accurate that the correct items are being reported. This may require a re-mapping of payroll codes.

The ATO will write to every employer informing them of STP2 requirements by the end of November 2021, and the ATO Website has guidelines for employers.

If you would like assistance to review your payroll settings or prepare for STP2, our bookkeeping team are only too happy to assist!

Director IDs

Sun, 24 Oct 2021 22:00:00 GMT

From November 2021, company directors will need to verify their identity as a part of a new director identification number (director ID) requirement.

Directors will need to apply for their ID themselves to verify their identity. No one can apply on their behalf.

The director ID confirms identity and traces relationships to the relevant companies.

Directors can apply from November 2021, and new company directors can apply before being appointed.

The date at which each company director must have a director ID depends on when a director was appointed:

To apply for a director ID, there are three options:

Identification Confirmation details are required to provide evidence of identity including TFN, residential address and two other verification documents such as a bank statement, ATO assessment, dividend statement etc.

If you need any guidance in applying for your director ID, please contact us for further assistance, we are only too happy to help.

The annoying reality of non-arm’s length transactions

Mon, 18 Oct 2021 22:00:00 GMT

What is a non-arm's length transaction?

Parties are usually 'at arm's length' if they are unrelated and neither entity is effectively controlled by the other. If you are dealing with a related entity or associate, all transactions are considered to be non-arm's length and can be scrutinised to ensure that the ATO has not missed out on a taxing opportunity.

Meaning of related entity

A related entity or associate is any of the following:

And the list goes on!

How is this treated for Income Tax purposes?

There is specific legislation that requires market value substitution for non-arm's length transactions, including for purchasing trading stock, remuneration to associates (such as relatives, shareholders and directors), and international transactions (known as transfer pricing).

Generally, you can only claim a deduction for the market value of a cost, regardless of how much you pay to a related entity. And vice versa with income, you must declare income for sale of an item at market value, regardless of how much you sold it for to a related entity.

How is this treated for Capital Gains Tax (CGT) purposes?

Where a CGT asset is acquired or disposed of at less or more than fair market value in a non-arm's length transaction, the asset will be deemed to be acquired/disposed of at fair market value for capital gains tax purposes. This means that where you are dealing with a related entity when purchasing or selling a CGT asset, you must have supporting evidence of market value, you cannot simply rely on the agreed value or financial exchange as a basis for calculating any capital gains tax liability. This happens more often than you realise, with CGT assets being passed between family members or transferred from one entity structure to another for discounted or no consideration.

There are some concessions for small businesses who are transferring assets to an alternative structure that can be adopted if appropriate.

How is this treated for GST purposes?

A basic principle of GST is that, for there to be a taxable supply, the supply must have been made for consideration.

However the GST Act provides that the fact that a supply to your associate is without consideration does not stop the supply being a taxable supply if either your associate is not registered for GST or the supply is not solely for a creditable purpose (that is not input taxed or private in nature).

Where a taxable supply is made to an associate for less than the market value, the taxable supply will be treated as if it were made for market value, rather than the actual consideration received.

What is Market value substitution?

The ordinary meaning of Market Value is the price that a willing but not anxious buyer would have to pay to a willing but not anxious seller for the item. Market value has also been described as the best price that may reasonably be obtained for a property if sold in the general market. In addition, all possible buyers should be taken into account, even a buyer who, for their own reasons, is prepared to pay an excessive price.

If shares are listed on a stock exchange, the most appropriate market to use for determining value is normally the stock exchange market. If considerable amounts are involved, a tax payer would be prudent to obtain the services of a qualified value where there is any doubt as to the fair market value.

The take away message

Take care when recording and documenting transactions with relatives and associates and consider whether the market value should be ascertained and documented for evidential purposes (especially when acquiring assets that might be subject to future capital gains tax). If you are unsure if this poses an issue for you, please give us a call to chat about your particular circumstances.

Super Stapling starts 1st November 2021

Mon, 18 Oct 2021 22:00:00 GMT

What is Stapling and why is it being introduced?

Stapling is an Australian Government superannuation reform that will be introduced from 1 November 2021 and applies to new employees (it cannot be used for existing employees).

Aimed at avoiding the creation of multiple unintended super accounts that are eroded away with fees and charges, the ATO will have a record of every employee's eligible super fund and these details are "stapled" to the employee.

What is it replacing?

Currently if an employee does not provide super fund details or they are incorrect, an employer must pay eligible super contributions into the employer's nominated default fund. From 1st November 2021, this will no longer be the case.

What does stapling means for employers?

Under the new reform, an employer MUST contact the ATO and obtain the details of the new employee's stapled fund if the employee does not provide you with their super details or nominate a choice fund.

You will be able to request your employee's stapled super fund after you have lodged a Tax File Number (TFN) declaration or a Single Touch Payroll (STP) pay event for the employee.

How can an employer obtain the stapled fund details?

You will receive a response on-screen within minutes. The ATO will notify your employee of the request and the fund details provided to you. The ATO will also be monitoring this service to ensure employers are using it appropriately and are making genuine requests.

Stay tuned for updates that are sure to come as the ATO refine the process!

Cryptocurrency

Tue, 21 Sep 2021 23:00:00 GMT

With cryptocurrency becoming more prominent in today's world, it's a good time to touch on what this looks like for you in regards to your tax return.

Cryptocurrency is an area which is evolving rapidly, and given its complexity and the increased investment across Australia it has well and truly got the attention of the Australian Taxation Office (ATO). The ATO is using more tools that are available to track cryptocurrency transactions and some are now appearing on Pre-Filling reports to notify Tax Agents of transactions. Some of the tools the ATO is using include data matching programs using designated service providers (DSP's), and in total have over 60 sophisticated identity matching techniques.

In the last year, the ATO has written to more than 100,000 taxpayers regarding cryptocurrency, and is expecting to prompt over 300,000 people in relation to the 2021 tax returns.

Given how vast and complex the area of cryptocurrency is, this article's sole intention is to provide some background information and perhaps get you thinking about your situation. This article doesn't explore many other aspects, including what it means for self-managed superannuation funds (SMSF's).

By now I'm sure you may have heard of Bitcoin, but for those not as familiar with the cryptocurrency world, there are now approximately 6,000 active cryptocurrencies, and it is estimated over 600,000 Australians have invested in the market.

Whether or not the sale of cryptocurrency is ordinary assessable income, a Capital Gains Tax event or a personal use asset will depend on the intent in buying and selling, the commercial (or non-commercial) manner in which you do so, and the scale and approach you take to trading cryptocurrency.

For the vast majority of us who buy cryptocurrency, it will be a Capital Gains Tax (CGT) event when it is sold or disposed of. It is important to know that a disposal of cryptocurrency can include;

In the cases where you exchange cryptocurrency for another cryptocurrency, you are disposing of one cryptocurrency and acquiring another. The market value you receive is effectively the sale price of the cryptocurrency being sold.

Each cryptocurrency is its own asset, similar to owning shares in ASX listed companies for example.

Cost Base

The cost base of your cryptocurrency may include;

Record Keeping

It is worth looking at the record keeping requirements for cryptocurrency, as the reporting systems may not be as sophisticated as traditional investments that have buy and sell contracts, or the year end investment report packages. The information that will have to be recorded includes;

You will need to maintain these records for a period of five (5) years, and if you have a capital loss you will need to keep them for two years after offsetting against a capital gain.

Strong record keeping is critical and reasonable care needs to be taken.

As mentioned earlier, this is just a brief summary on cryptocurrency and some areas we haven't covered include;

The information in this article is for general information purposes only. It is not intended as financial or investment advice.

If you would like to discuss your specific tax requirements, please contact our team on 08 9842 5155.

Lifestyle Assets – the ATO is watching…

Mon, 23 Aug 2021 23:00:00 GMT

Do your lifestyle tastes extend to fine art or thoroughbred horses? The ATO is interested too…

The ATO regularly collects information about certain categories of lifestyle assets, using data extracted from insurance policies. It singles out assets with values exceeding:

This information is generally used by the ATO when identifying audit targets, particularly under what could loosely be termed as its 'cash economy' audit program. They use this data to compare with personal income, and identify those who may seem to be living beyond their means.

Release from Tax Debt

In a same-but-different example, an individual taxpayer was denied relief from a tax debt on grounds of serious hardship.

The taxpayer was unable to work due to injuries suffered whilst at work and her husband has suffered health issues and a subsequent reduction in his income.

They applied for relief from an $18,000 tax debt on grounds of serious hardship.

Upon scrutiny, it was found they had incurred significant discretionary spending, including the purchase of a new car for $37,500, a European trip for herself and her family and the provision of financial assistance to other members of her family.

The taxpayer was denied tax debt relief, because they had demonstrated: "… a willingness to put personal discretionary spending ahead of her obligation to the Australian community to pay her tax liabilities…"

Reference: SYRF and Federal Commissioner of Taxation (2021) AAT 1845

If you would like to talk to one of our accountants, contact us to discuss your specific requirements.

EOFY dinner wrap up and 25 year anniversary celebration

Tue, 27 Jul 2021 23:00:00 GMT

The Smith Thornton team celebrated the end of the financial year in style at Garrison Restaurant on 3rd July. There were many reasons to smile, with the end of a hectic year, the celebration of Smith Thornton's 25 year anniversary and a chance to unwind with our comrades. Garrison certainly put on a show with delicious morsels to delight us and fabulous cocktails that looked as good as they tasted. There were a few speeches to be made, especially given the 25 year milestone and thanks, of course, to our hosts and the organisers of the event. We couldn't be happier with the way the evening turned out, there were many laughs to be had and a chance to shake off the year that was. We recognised special staff members that had come and gone (and some who have stayed) as well as some very select clients who have been with us from the beginning. Mention was also made of some significant events over the years, it has certainly been a journey and we wouldn't have it any other way. We even had a photo display of what current staff looked like 25 years ago – given our youngest staff member, Sam Wilson, is only 22, this proved to be quite an interesting exercise! He is pictured here (centre) with Melinda Hudson (left) who has just seen out her 20 year anniversary and Nancy Lembo (right) who has been on board from day dot. Of the evening, Sam said "A great time shared with a great crew!", while Nancy, who has attended her fair share of these events to say the least, said "A lot of wonderful memories flooded back as we prepared for our special EOFY Party in celebrating the business's 25 year anniversary. There was lots of fun and laughter on the night reminiscing the many years together and recalling many funny stories to those newer team members to Smith Thornton." Bring on the next 25 years!!!

Succession planning for farmers

Sun, 25 Jul 2021 23:00:00 GMT

Historically farms and farming businesses have been passed down from one generation to the next, seemingly with little input from third parties or advisors. Still to this day many farming families choose to keep this process internal and see little need for assistance. So why are farm owners and their families increasingly choosing to get an external third party to help plan for succession and mediate the process?

Advisors and accountants often become involved in succession planning for their clients and the part that they play can be quite varied, depending on what level of help the farming family needs. Possible ways that your advisor or accountant can guide you through succession planning include:

If you are looking for help in any aspect of your farm succession process please contact us at Smith Thornton on 9842 5510.

TFNs – handle with care or pay the price

Wed, 16 Jun 2021 23:00:00 GMT

Privacy (Tax File Number) Rule 2015 is in full force and requires TFN recipients to take special care on how we receive, store and disclose TFNs. I am a TFN recipient, and it's quite likely that you could be as well! Examples include:

The ATO

Tax Agents

Employers

Bookkeepers/payroll officers

Banks

Super Funds

Collection of TFN information

TFN recipients must only request or collect TFN information for a purpose authorised by taxation law, personal assistance law or superannuation law. Remember that it is not an offence for an individual to not disclose their TFN.

Use or disclosure of TFN information

TFN information must only be used or disclosed by TFN recipients for a purpose authorised by taxation law, personal assistance law or superannuation law, or for the purpose of giving an individual any TFN information that the TFN recipient holds about that individual. It is imperative that TFNs are not disclosed via email due to the security risk (especially for free email addresses where emails can be scrutinised by the provider) unless the information is password protected or encrypted. This type of breach used to happen frequently with Employee PAYG Payment Summaries being emailed directly to staff, however the Single Touch Payroll system has helped to fix this.

Storage, security and destruction of TFN information

TFN recipients must take reasonable steps to protect TFN information from misuse and loss, and unauthorised access or disclosure and ensure that access to records containing TFN information is restricted to individuals who need to handle that information for taxation law, personal assistance law or superannuation law purposes.

A TFN recipient must take reasonable steps to securely destroy or permanently de-identify TFN information where it is no longer required by law to be retained, or necessary for a purpose under taxation law, personal assistance law or superannuation law (including the administration of such law). Banking systems do this well. Once your TFN is entered into their system, it is no longer accessible by staff.

Staff training

TFN recipients must take reasonable steps to ensure that all staff are aware of the need to protect individuals' privacy when handling TFN information, and all staff who collect or access TFN information are aware of the Privacy (TFN) rule.

What are the penalties for breaching the TFN rule?

You could in some circumstances face criminal penalties, civil penalties and orders to pay damages and a large fine and/or up to 2 years' imprisonment can apply for this type of breach. As well as constituting a breach of the TFN Rule, unauthorised use or disclosure of TFNs can be an offence under the Taxation Administration Act 1953 (TAA) and attract penalties including imprisonment and monetary fines.

Federal Budget Summary 2021-22

Sun, 30 May 2021 23:00:00 GMT

Summary and Key announcements

Whilst the 2021-22 budget announced on 11 May didn't contain any groundbreaking initiatives, it did serve to extend certain personal and business tax initiatives and streamline other areas.

Of all the budget measures that have been announced, the two that will be of interest to the vast majority of individuals and business owners will be the extension of the Low and Middle Income Tax Offset (LMITO) until the end of the 2022 financial year, and the extension of the Instant Asset Write-Off Provisions and Loss Carry Back Provisions until the 2023 financial year.

Another notable change that will impact many businesses will be the removal of the $450 minimum threshold for Superannuation Guarantee contributions. For businesses that employ casual or part time employees this will be very relevant. This change still requires royal assent so doesn't yet have a definitive commencement date - however it is widely expected to be in place commencing 1 July 2022.

Whilst on Superannuation, it is worth mentioning that the superannuation guarantee increase from 9.5% to 10% is still in place from 1 July 2021 and has not been deferred, so employers will need to pay careful attention to the first pay runs in July to ensure that the payroll software is calculating this correctly – particularly those that aren't on cloud based systems.

The budget measures are further discussed below.

Individuals

LMITO – the Low and Middle Income Tax Offset has been extended until the end of the 2022 financial year, which provides for an offset of up to $1,080 ($2,160 for a couple). The offset begins to phase out once taxable income hits $90,000 and is Nil once taxable income exceeds $126,000.

Medicare Levy increases - The income thresholds have received minor increases to assist singles, families, seniors and pensioners.

Self education expenses - The Government is removing the exclusion of the first $250 of deductions for prescribed courses of education. This change alleviates some time and effort in calculating non-deductible expenses in order to offset the $250 exclusion – with a view to reducing the compliance costs. This won't be in effect for the 2021 income year, as it will commence from the first income year after the date of Royal Assent.

Tax Residency simplification - In what will be welcome news to many, the current individual tax residency rules will be replaced with more simplified residency tests, in order to provide a framework that will reduce compliance costs and provide more certainty to taxpayers. The new test will be referred to as a 'Bright line test', meaning where a person is physically present in Australia for 183 days or more in any income year they will be deemed an Australia tax resident. An additional test will be provided with other measurable criteria if required. These changes will apply from 1 July following Royal Assent.

Business

Temporary full expensing - Instant asset write off. The Government is extending the temporary full expensing measure for 12 months and it will now be available until 30 June 2023. The measure allows eligible businesses to deduct the full cost of eligible depreciable assets of any value acquired on 6 October 2020 and first used or installed ready for use by 20 June 2023. Note, for anyone looking at accessing this for the 2021 income year, the assets acquired need to be delivered and ready for use prior to 30 June 2021 in order to be claimed in the 2021 income tax return.

Temporary loss carry backs - Temporary loss carry-back will also be extended by one year until 30 June 2023. This will allow eligible companies to carry back tax losses from the 2022-23 income year as far back as the 2018-19 income year. This will help increase cash flow for businesses in future years and support companies that were profitable and paying tax but find themselves in a loss position as a result of the COVID-19 pandemic.

Tax relief for brewers and distillers - The Government has increased the Excise Refund Scheme cap from $100,000 to $350,000. Commencing 1 July 2021, small (eligible) brewers and distillers will receive a full remission (increased from 60%) of any excise they pay on alcohol produced up to the cap of $350,000. This is designed to align with the benefits available to wine producers (Wine Equalisation Tax Producer Rebate).

Corporate tax residency rules – The Government has announced amendments with regards to the corporate residency test, for companies that were incorporated offshore. The Government is also consulting on tests for trusts and corporate limited partnerships.

Digital economy strategy - In order to further align the tax treatment of intangible assets to tangible assets, the Government will allow taxpayers to self-assess the effective life of certain depreciating intangible assets for tax purposes. This will apply to patents, registered designs, copyrights, in-house software, licenses and telecommunications site access rights. This will take effect from 1 July 2023.

Superannuation

Superannuation guarantee - The rate will increase to 10% as is currently legislation from 1 July 2021 – so no change here and won't be deferred.

Minimum threshold - The Government will remove the $450 per month minimum threshold – where currently employees do not have to be paid superannuation guarantee by their employer if they earn under this amount. This will take effect from the first income year after Royal Assent of enabling legislation.

Work test - The Government has announced that the work test will be abolished for those aged 67-74 who wish to make non-concessional and salary sacrifice contributions. Personal deductible (concessional) contributions still require the work test. These changes will apply from 1 July following Royal Assent, and it is expected this will be 1 July 2022.

Downsizer contribution - the age requirement has been reduced from 65 to 60. The downsizer contribution allows eligible individuals to make a one off, post-tax contribution to their superannuation of up to $300,000 per person from the proceeds of selling their home. These changes will apply from 1 July following Royal Assent.

Residency - The Government has announced more relaxed residency requirements for self-managed superannuation funds (SMSF's) and small APRA-regulated funds (SAF's). Importantly these changes will allow members to contribute to their SMSF whilst temporarily overseas for work or education – as the central management and control test has been extended from 2 years to 5, and the active membership test has been removed. These changes will apply from 1 July following Royal Assent.

This article provided a brief overview of each of these measures, if you wish to discuss these or your personal circumstances in more detail please get in touch.

Too good to be true?

Mon, 19 Apr 2021 23:00:00 GMT

Ponzi is a term you would have heard bandied about again recently. It paints a picture of investor fraud where investors capital is repaid to them under the false guise of earnings. The recent death of fraudster Bernie Madoff in a US prison – 12 years into his 150 year sentence – for a $25 billion Ponzi scheme, should remind us of the timely catchphrase "if it sounds too good to be true, it usually is…".

Perhaps I live a sheltered existence, but lots of my client's investment portfolios that cross my desk every day are from those who seemingly apply conservative balanced risk, seeing investment returns around 5%. I regularly test my observations with Tammy, our in house financial planner, and she says "…yep, that's about right…".

Whether it's your gut or your head, I'm sure you can tell if something sounds too good to be true. The spruikers wanting to get their hands on your hard earned cash will forever prey on the human emotions greed, fear, and even the combination of both – FOMO – the fear of missing out.

Back yourself - that deep down feeling says it all.

If you would like to talk to one of our financial advisors, contact us to discuss your specific requirements.

The Outsourced CFO

Tue, 23 Feb 2021 22:00:00 GMT

Over the past few years the rapid development of cloud based software systems has seen the rise of outsourced roles within many businesses. COVID has accelerated this even further, highlighting the need for businesses to create efficiencies, remain agile and to scale up or scale down in a short time span.

As businesses continue to seek additional ways to create these efficiencies and push further towards cloud based software systems, this has opened the path for the role of Chief Financial Officer to be outsourced.

Many businesses, especially those in the start up or growth phase don't necessarily have the financial resources to employ a full time CFO. The average salary for an experienced CFO across Australia is upwards of $200,000, which is quite prohibitive for many businesses.

With the resources that are available it is likely that the full time employees would be operational / sales staff or internal accountants/bookkeepers to ensure that the day to day operations of the business are running smoothly and the statutory requirements are met.

Whilst this may be the case, many businesses would benefit from the services a CFO would provide.

The list of services an outsourced CFO can provide, along with the benefits include;

Substantial cost savings: CFO's can be engaged for the specific services that the business requires, with the flexibility of additional services to be added or removed as required;

Ryan McLaren is a Chartered Accountant who has worked as a CFO for the past 4+ years and also has over 15 years' experience in public practice.

Would you like to find out more about outsourcing CFO services? Don't hesitate to call Smith Thornton to discuss your needs.

Inheriting assets – the hidden tax implications

Tue, 26 Jan 2021 22:00:00 GMT

If you have inherited or are likely to inherit an asset in your lifetime, keep reading...

It is important to understand the tax implications of selling inherited assets like property and shares so that you can make informed financial decisions.

Capital Gains Tax is calculated on the difference between the sale proceeds of an asset and its cost base. This is where things get complicated. The sale proceeds will be easily calculated, but what about the cost base?

Calculating the cost base can be quite challenging depending upon the deceased level of record keeping.

So what exactly do you need to know?

The first thing you need to ascertain is the date that the asset was acquired by the deceased person.

If the date of acquisition was before 20th September 1985, your cost base becomes the market value of the asset at the date of death.

If the date of acquisition was after 20th September 1985, your cost base becomes the original cost of the asset plus or minus any applicable adjustments to the cost base.

And what if the asset was originally inherited by the deceased person?

In that case, you need to firstly work out the acquisition date (date of death of the previous benefactor). If the acquisition date was before 20th September 1985, your cost base becomes the market value at date of death as in the earlier example.

If the date of inheritance was after 20th September 1985 and the original date of purchase was also after 20th September 1985, you need to ascertain the original cost of the asset by the previous benefactor plus or minus any applicable adjustments to the cost base.

If the date of inheritance was after 20th September 1985 but the asset was purchased by the previous benefactor before that date, cost base will be market value at the previous benefactor's date of death.

And what if you inherited half an asset from your deceased spouse (having already owned the other half)? Once again, we go back to acquisition date. If you and your spouse originally acquired the asset before 20th September 1985, the cost base of the inherited half will be market value at date of death and your original half will be exempt from Capital Gains tax when you sell. If you originally acquired the asset after 20th September 1985, the cost base for both halves will be original cost price plus or minus adjustments but each half will have a different acquisition date.

Confusing right?!

Add into the mix CGT exemptions including the main residence exemption and small business concessions, and it becomes clear that you should be seeking professional advice sooner rather than later if you have inherited or will be inheriting assets from loved ones.

Important records and evidence can often be accidentally destroyed, leaving you with little hope of correctly calculating the cost base of an inherited asset so the sooner you get advice, the sooner you can start searching for appropriate records.

Do you still own assets that you inherited years ago? It still pays to collate the cost base information now so that you either have it ready for when you sell the asset or alternatively have it ready for your beneficiaries to use upon your death.

So the moral of the story is to make sure you have kept or found records associated with assets you own or will inherit. This information is important in avoiding adverse tax consequences when assets are sold or passed to the next generation.

And if you are thinking of selling an inherited asset, be aware of the tax implications of the sale before you go and buy that big yacht!!

If you would like find out how to best manage selling or receiving an inherited asset, please contact our team on 08 9842 5155.

Agtech helping farmers solve problems

Tue, 26 Jan 2021 22:00:00 GMT

Did you see the 'Remote Access' article in November 2020's AgJournal (with Roger Fletcher on the cover) by Sue Neales?

It is a fascinating read for those looking to increase profits through utilisation of agtech and automation. Did you know that in 2019, more than $90 million of capital flowed into new agtech ventures? In the article, Sue Neales predicts the 10 biggest ag changes in the next decade as:

From SwarmFarm robots, to automated headers, water analytics and drones to satellite spatial images, agtech success lies in helping farmers solve their problems.

The big question is, does the investment justify the outcome? We can help you to look at the financial outcome of different scenarios so that you can make an informed decision about which direction to head in when it comes to improving your farm operations.

Subscribe to AgJournal at www.weeklytimesnow.com.au/agribusiness

Our team is very experienced in working with rural businesses, please contact our team on 08 9842 5155 if you would like to find out more.

Succession Planning – Getting Started

Tue, 15 Dec 2020 22:00:00 GMT

In basic terms, succession planning is the process a business or family goes through to determine what each participants' role will be when the existing business owners, farm owners, or key employees enter into retirement or decide to exit the business. Many business owners or farming families take the approach "I'll deal with that when it comes to that point" – however good planning years in advance can improve the end result significantly, in terms of business value, having a saleable business, appropriate knowledge transfer, family relations and importantly, having everyone work towards the same end game. Every family and business situation is unique but undertaking the basic steps towards succession planning will start to give all family and business participants a clearer picture of the future.

Some basic steps that you can take now for succession planning include:

Check in on your succession plan every year – situations changes so it is important to update your plan when necessary.

If you need help getting started on succession planning and would like help from a facilitation, accounting or tax perspective, please contact our Business Advisory team on 9842 5155.

Claiming false tax deductions – it affects accountants too…

Tue, 15 Dec 2020 22:00:00 GMT

This is a case where two tax agents were habitually making incorrect tax deductions on behalf of their clients, and the consequences saw them put out of business.

Using comparisons of statistical data, the ATO had decided to monitor and then audit some of the agent's clients because of concerns that some of their clients had claimed work related expense deductions which were unusually high. Due to the incorrect claims, the clients were required to amend their income tax returns, resulting in a tax shortfall of over $135,000 and penalties totalling $52,694.55.

Disciplinary action was first taken by the Tax Practitioners Board, and upon appeal, to the Administrative Appeals Tribunal. The Tribunal concluded that the agents were not fit and proper persons, and also stated: "Tax agents have a duty to take reasonable care in the provision of their services. Clients trust that their tax agent has the requisite level of training and knowledge to advise them appropriately." Their licences to operate as tax agents were cancelled.

Ref: Yvonne Anderson and Associates Pty Ltd and Tax Practitioners Board [2020] AATA 4022

Business Owners in Control and Kicking Goals

Mon, 23 Nov 2020 22:00:00 GMT

Have you ever heard of the saying "Most people that aim at nothing achieve it every time"? This also applies to business owners – it is imperative that business owners understand their current position, their long term goals and all the short term goals or actions to tick off along the way. Business owners that take the time to do this are in control of their business and where it is heading.

To understand your current position you need to ask yourself a number of questions (and answer them honestly!). Some of these questions might include:

Knowing the answers to these types of questions is just as important as dealing with the day to day issues you face as a business owner. It is also just as important to understand the answers to all questions and not just focus on obvious issues. For example, you might know that your business is not profitable. To fix this you also need to know if your staffing mix is correct, those industry benchmarks your business doesn't align with, weaknesses to be overcome and strengths to maintain.

It is also imperative that you ask yourself – are these things important to me? Do I care that my business owns me if I'm doing what I love and my time is not needed elsewhere? If your business owns you but that is not a problem, then there is no gap to be bridged and no goal to be set. In asking yourself what is important to you and finding the gaps you are on your way to realising the goals that need kicking.

Setting goals is an art in itself and there are a few easy processes that you can follow that will help make them meaningful. The first step should be to understand what your long term goals are. These goals require you to look forward five or more years from now. How much time do I want to be spending in my business in five years? How much revenue do I want my business to be making in five years? Are there assets you need to replace in five years or will your current premises be big enough? These are all examples of broad long term goals, which are great ideas but to achieve them you will need to set more specific short term goals and actions.

A series of short term goals will be needed to keep you focussed. If you want to be starting to step back from your business in five years how are you going to achieve this? What needs to happen to make this your reality? Can your business operate without you there every day? Are there processes in place for a manager to take over easily? Do you have a manager in training? Will your customers and suppliers only liaise with the business owner? Every little action that needs to take place before your long term goal can be achieved needs to be documented as a short term goal, ideally using the SMART goal setting concept.

S MART is a goal setting acronym that has been used by management and boards for over 40 years. The SMART goal setting concept ensures that the goals you set are clear and achievable:

After you have set your SMART short term goals that work towards your SMART long term goals, it is also best practice to write yourself an action list. Any actions that arise during the goal setting process need to be tabled with target dates. This will ensure you have a document that you can refer to each day or week, either pinned up at your desk or even on your fridge, that will dictate what you need to do each week or month in order to achieve your goals.

Goal setting for your business is a great habit to get into and should be updated regularly to ensure your goals remain relevant. If you need help setting goals, creating a business plan or a strategic plan, or even if you need a trusted advisor to keep you on track, our Business Advisory team is ready to help!

If you have any questions don't hesitate to contact us.

2020 Federal Budget Announcement

Tue, 20 Oct 2020 22:00:00 GMT

The 2020 Federal Budget Announcement on 6 October included significant measures to encourage consumer spending and drive the economy out of its current state. The key areas are summarised below, of which several have already passed through legislation.

Inclusions in the Tax Bill (Passed)

Personal income tax cuts

Personal income tax cuts will now be brought forward and backdated to 1 July this year. There are two key parts:

Part 1 – A larger 2021 tax refund (in most circumstances) to account for the extra tax withheld in the July-Oct 2020 period.

Part 2 – A reduction in tax withheld from wages going forward giving a bigger net pay packet. This will start in the next few weeks. Here is an example of what you can expect:

Non-employees should consider varying PAYG Instalments to account for the cuts from September onward.

Instant asset write-off

This will allow any business with an aggregated turnover of less than $5 billion to immediately deduct the full cost of eligible depreciable assets of any value from 6 Oct 2020 which are installed and ready for use prior to 30 June 2022.

Second-hand assets are excluded from this measure, however small and medium-sized businesses with an annual turnover of less than $50 million will be able to fully expense second-hand assets.

Loss carry-back

Companies will be able to carry back tax losses from the 2019–20, 2020–21 or 2021–22 income years to offset against tax paid in a previous income year as far back as the 2018–19 income year. The applicable offset will be called a 'Loss Carry-back Tax Offset' and is available to companies earning less than $5 billion.

The tax refund will be limited by requiring that the amount carried back is not more than the earlier taxed profits and that the carry-back does not generate a franking account deficit.

Small business concessions expansion

Entities with a turnover of less than $50 million will also now be able to access 10 small business tax concessions (this was previously capped at $10 million):

R&D tax incentive

For companies with a turnover of less than $20 million, there will be no cap on the amount of refundable R&D tax offset a company can claim.

The refundable R&D tax offset for small companies will also be set at 18.5 percentage points above the claimant's company tax rate (up from 13.5 per cent from the current bill).

Larger companies with an annual turnover of $20 million or more will face a simplified two-tier intensity approach.

Other Federal Budget Announcements

Small Business Pooling – Immediate Write Off

Small business entities that have a turnover of less than $10 million and are using the pooling system can claim the balance of their depreciation pool at the end of the 2021 year as a deduction.

This means that all remaining depreciation can be claimed in 2021 but also means there is no further depreciation claim for assets previously purchased. It also means that proceeds on the sale of any depreciated assets are 100% taxable.

JobMaker

A credit will be available to eligible employers for additional new jobs they create for an eligible employee. The credit will be $200 per week for employees aged 16-29 and $100 per week for employees aged 30-35 and is payable over a 12 month period.

To be eligible, the employee will have to work a minimum of 20 hours per week and have received JobSeeker, Youth Allowance or Parenting Payment for at least one month out of the three months prior to start date.

Employers will also need to prove that the new employee will increase overall headcount and payroll.

Apprenticeship Commencements

A 50% wages subsidy will be available to businesses who take on a new or recommencing Australian apprentice, up to a maximum of $7,000 per quarter.

Economic Support Payments

For those people who receive a range of government payments, including aged pension, carer payment and family tax benefit, they will receive two $250 cash payments paid in December and March 2021.

Fringe Benefits Tax

The record keeping burden for FBT purposes will be reduced and an exemption will be provided for retraining and reskilling benefits that employers provide to redundant, or soon to be redundant employees where the benefits may not be related to their current employment.

Water Infrastructure Grants

This year's Budget includes $50 million to top up the on-farm emergency water rebate scheme that provides farmers with a rebate of up to $25,000 to clean dams and drill bores, which ran out of money 18 months early. This funding is contingent on being matched by the states.

Have you reassessed your eligible employees for JobKeeper?

Tue, 18 Aug 2020 23:00:00 GMT

If you are receiving a monthly JobKeeper subsidy for employees, it is essential that you reassess eligibility for any employees that are either new, or were not previously eligible. This must be done without delay to ensure that any 'newly eligible' employees are paid the minimum amount of $1500 per fortnight from the fortnight starting on 3rd August.

What has changed…..

Basically, all criteria was based around a date of 1st March 2020. THIS DATE HAS NOW CHANGED to 1st July 2020.

This means that:

a) staff who started after 1st March but before 1st July may now be eligible, and

b) staff who did not meet the criteria on 1st March may now meet it.

What if I do nothing……

If you have newly eligible employees and do not reassess and complete the necessary steps, you will not be eligible for any JobKeeper subsidy from 3rd August, as it is a 'one-in, all-in' rule.

Please contact us if you need help or if you are not sure whether or not this applies to you – it is better to be safe than sorry.

Case law update - Casuals v Permanent Employees

Thu, 02 Jul 2020 23:00:00 GMT

If you engage casual employees, make sure you're aware of the latest updates.

What is happening?

Next steps

Download the below fact sheets for more information.

The impact of the Rosatto decision fact sheet

The engaging casuals fact sheet

Please contact us if you would like any assistance.

Covid 19 - Business Planning

Sun, 22 Mar 2020 22:00:00 GMT

COVID-19 – Business Planning

We are receiving a number of enquiries from clients worried about what impact COVID-19 will have on their businesses.

You may find the following information and ideas helpful in navigating your way through this period and as always we are here to assist you with your financial affairs.

Consider adopting a TCUP mantra – "Thinking Clearly Under Pressure" and remember "Worrying is not Thinking". (reference https://www.inc.com/business-insider/13-secrets-to-performing-well-under-pressure.html )

Consider your purpose – generally this would be to keep your business running normally through the crisis and beyond.

Consider your strategy – what is your strategy for keeping your business running.

It may be useful to understand that there are four possible stages that business owners will go through in the current crisis.

Stage 1 - Denial

- Being cynical or believing the whole thing has been blown out of proportion and is overdone.

- As business owners we need to accept that there is a crisis and therefore consider what a worst case scenario might look like for our businesses.

Stage 2 – Recognising there is a Crisis

- Identify the current conditions and parameters that your business is operating in.

- Review your obligations including:

o Government Requirements, i.e. what limitations and restrictions are being forced upon your business by Government.

o Understand your obligations to employees.

o Do you have contractual obligations to customers and/or suppliers eg provision of goods and services, leases etc.

- What are the supply and demand implications for your business.

- Where appropriate keep your employees and other stakeholders informed about the steps you are taking to minimise interruption and harm. Experts generally agree that open communication is advantageous in times like this.

Stage 3 – Planning Stage

- Scenario planning – what do your best, worst and probable scenarios look like.

- Review financial modelling.

- Prepare "What If" scenarios.

- What is the likely timeline for the business interruption events.

- Consider employee issues including, what are our leave obligations, do we need to stand people down, can we job share, can we make employees redundant, etc

(reference www.employsure.com.au/coronavirus and https://www.fairwork.gov.au/ )

- Will you need to fund business interruption – do you need to be talking to your financiers.

- Do you have ATO debt and if so what is the strategy for dealing with the ATO.

- Can technology be better utilised in your business.

- Generally do you have a business "Continuity Plan".

Stage 4 – Once the Threat has Passed

- There will be opportunity for entrepreneurial thinking.

- If you made changes through the crisis can any of these changes be used to your advantage going forward eg staff working from home with less requirement for office space.

- Are there ongoing benefits of using different technologies after the crisis.

- There may be less competitors in your industry, if so do you have strategies to attract potential new business.

- What lessons have been learnt from the crisis and what "risk mitigation" strategies can be implemented in the event of future catastrophic events.

Coronavirus Special Update

Sun, 22 Mar 2020 22:00:00 GMT

Government's Stimulus Package in response to the Coronavirus

Editor: What a changed world we are living in as we all try to navigate the challenges arising from the current Coronavirus Pandemic, including protecting the health and safety of our friends and family, and the viability of our businesses, employment and investments.

The purpose of this communication is to provide you with an update relating to the Government's Economic Stimulus Package in response to the Coronavirus. Our office will continue to apply its available resources to assist and support you where we can through this uncertain period as we attempt to survive the ever changing restrictions we are all dealing with.

The following is a broad summary of the key aspects of the Federal Government's stimulus package in response to the Coronavirus, as recently announced and enacted.

These measures were implemented via various Bills introduced into Parliament, which very quickly received Royal Assent on 24 March 2020 (including the Coronavirus Economic Response Package Omnibus Bill 2020 ), so as to give effect to the Government's stimulus package.

Income support for individuals

Various measures have been introduced so as to provide a 'safety net' for individuals who are financially impacted by the Coronavirus.

The new Coronavirus supplement

A new six-month 'Coronavirus supplement' of $550 per fortnight will be paid to individuals who are currently eligible for certain income support payments, including the:

Furthermore, it appears that this new (additional) supplement will be paid to eligible individuals as part of their existing income support payments (e.g., Jobseeker Payment and Youth Allowance).

Expanding access (and eligibility) to certain income support payments

For the period that the Coronavirus supplement is paid, the Government will also expand access to certain income support payments (e.g., the Jobseeker Payment, the Youth Allowance Jobseeker and the Parenting Payment) for eligible individuals.

For example, a new category of Jobseeker Payment and Youth Allowance Jobseeker will become available for eligible individuals financially impacted by the Coronavirus.

According to the Government, this could include, for example, permanent employees who are stood down or lose their employment; sole traders; the self-employed; casual workers; and contract workers who meet the income tests, as a result of the economic downturn due to the Coronavirus.

Additionally, asset testing for the JobSeeker Payment, the Youth Allowance Jobseeker and the Parenting Payment will be waived for the period of the Coronavirus supplement. Income testing will still apply to the person's other payments, consistent with current arrangements.

Tax-free payments of $750 to eligible recipients

The Government will be providing two separate $750 tax-free payments (referred to as 'economic support payments') to social security, veteran and other income support recipients and to eligible concession card holders.

The first $750 payment will be available to individuals who are residing in Australia and are receiving an eligible Government payment, or are the holders of an eligible concession card, at any time from 12 March 2020 to 13 April 2020 (inclusive). This payment will be made automatically to eligible individuals from 31 March 2020 .

The second $750 payment will be available to individuals who are residing in Australia and are receiving one of the eligible Government payments or are the holders of one of the eligible concession cards on 10 July 2020 (except for those receiving an income support payment that qualifies them to receive the $550 fortnightly Coronavirus supplement). This payment will be made automatically to eligible individuals from 13 July 2020 .

Each of the $750 payments will be exempt from income tax and will not count as income for the purposes of Social Security, the Farm Household Allowance and Veteran payments.

Early access to superannuation benefits

The Government will introduce a new compassionate ground of release that will allow individuals to access their superannuation entitlements where those benefits are required to assist them to deal with the adverse economic effects of the Coronavirus, but only where one or more of the following requirements are satisfied:

Under this new compassionate ground of release, eligible individuals will be able to access (as a lump sum) up to $10,000 of their superannuation entitlements before 1 July 2020 , and a further $10,000 from 1 July 2020 (subject to a six-month time frame).

Eligible individuals who are looking to access their superannuation entitlements under the above new ground of release will be able to apply directly to the ATO through the myGov website (at www.my.gov.au) and certify that the relevant eligibility criteria is satisfied.

Editor: Importantly, such lump sum superannuation withdrawals under this new compassionate ground of release will not be taxable to the recipient (i.e., they will be tax-free ). Also, according to the Government, the amount withdrawn will not affect Centrelink or Veteran's Affairs payments.

Reducing the minimum drawdown amounts for superannuation pensions

The Government will be temporarily reducing the superannuation minimum drawdown amounts for account-based pensions and similar products by 50% for the 2020 and 2021 income years.

Editor: This basically means that the total minimum annual pension amount that a superannuation fund is otherwise required to pay to a member receiving a pension from the fund (e.g., an account-based pension) will be reduced by half for these two income years.

Reducing social security deeming rates

From 1 May 2020, the Government will be reducing both the upper and lower social security deeming rates by a further 0.25 percentage points. This is in addition to the recent 0.5 percentage point reduction, resulting in an overall reduction to the social security deeming rates of 0.75 percentage points.

On this basis, as of 1 May 2020, the upper deeming rate will be reduced from 3% to 2.25%, and the lower deeming rate will be reduced from 1% to 0.25%.

Editor: These reductions reflect the low interest rate environment and its impact on the income from savings. Broadly speaking, the social security deeming rates apply (for 'income test' purposes) to determine the amount of income that an individual is 'deemed' (or taken to) earn from financial investments (e.g., cash deposits and listed securities), irrespective of the actual amount of income (e.g., interest income and dividend income) earned by the individual. In most cases, the deeming rates apply for the purposes of applying the Age Pension 'income test'.

Cash flow assistance for businesses

The Government is also providing cash flow assistance for eligible businesses in the form of two separate measures.

Boosting cash flow for employers

Small and medium-sized businesses and not-for-profit entities, with an aggregated annual turnover of less than $50 million (usually based on their prior year's turnover) that employ people, may be eligible to receive a total payment (in the form of a refundable credit) of up to $100,000 (with a minimum total payment of $20,000 ), based on their PAYG withholding obligations in two stages:

Stage 1 payment (credit)

Commencing with the lodgment of activity statements from 28 April 2020, eligible employers that withhold PAYG tax on their employees' salary and wages will receive a tax-free payment equal to 100% of the amount withheld, up to a maximum of $50,000.

Eligible employers that pay salary and wages will receive a minimum (tax-free) payment of $10,000, even if they are not required to withhold PAYG tax.

The tax-free payment will broadly be calculated and paid by the ATO as an automatic credit to an employer, upon the lodgment of activity statements from 28 April 2020, with any resulting refund being paid to the employer. This means that:

Note that, the minimum payment of $10,000 will be applied to an entity's first activity statement lodgement (whether for the month of March or the March quarter) from 28 April 2020.

Stage 2 payment (credit)

For employers that continue to be active, an additional (tax-free) payment will be available in respect of the June to October 2020 period, basically as follows:

Again, the ATO will automatically calculate and pay the additional (tax-free) payment as a credit to an employer upon the lodgment of their activity statements from July 2020, with any resulting refund being paid to the employer.

Editor: It should be noted that eligibility for the above payments is subject to a specific integrity rule that is designed to stamp out artificial or contrived arrangements that are implemented to obtain access to this measure. In particular, if an employer or an associate enters into a scheme with the sole or dominant purpose of obtaining or increasing any of the above payments for a particular employer, for a period, the employer will not be eligible for any such payments for the relevant period.

Wages subsidies for apprentices and trainees

Employers with less than 20 full-time employees, who retain an apprentice or trainee (who was in training with the employer as at 1 March 2020) may be entitled to Government funded wage subsidies.

These will be equal to 50% of the apprentice's or trainee's wage paid during the nine months from 1 January 2020 to 30 September 2020.

The maximum wage subsidy over the nine-month period will be $21,000 per eligible apprentice or trainee.

Employers can register for the subsidy from early April 2020.

Increasing the instant write-off threshold for business assets

Broadly, the depreciating asset instant asset write-off threshold will be increased from $30,000 (for businesses with an aggregated turnover of less than $50 million) to $150,000 (for businesses with an aggregated turnover of less than $500 million) until 30 June 2020.

The measure applies to both new and second-hand assets first used or installed ready for use in the period beginning on 12 March 2020 (i.e., the date on which this measure was announced) and ending on 30 June 2020 .

Small Business Entities ('SBEs')

Editor: These are businesses with aggregated turnover of less than $10 million.

SBEs will be able to claim an immediate deduction for depreciating assets that cost less than $150,000 , provided the relevant asset is first acquired at or after 7.30 pm on 12 May 2015, by legal time in the ACT, and first used or installed ready for use on or after 12 March 2020, but before 1 July 2020.

Additionally, SBEs will also be able to claim an immediate deduction for the following:

M edium Business Entities ('MBEs')

Editor: These are businesses with turnover of at least $10 million and less than $500 million.

MBEs can immediately deduct the cost of an asset in an income year if the asset has a cost of less than $150,000 and it was first acquired in the period beginning at 7:30pm, by legal time in the ACT, on 2 April 2019 and ending on 30 June 2020, and the taxpayer starts to use or have the asset installed ready for use for a taxable purpose in the period beginning on 12 March 2020 and ending on 30 June 2020 .

Additionally, MBEs can also claim a deduction for certain amounts included in the second element of the cost of a depreciating asset, where the amount of the second element cost is less than $150,000 , and is incurred on or after 12 March 2020 but before 1 July 2020.

The threshold will generally be applied to the GST-exclusive cost of an eligible asset (i.e., assuming the relevant business is entitled to an input tax credit for any GST included in the acquisition cost).

Importantly, this increased threshold also continues to operate on a 'per asset' basis, which means that eligible businesses can immediately write-off multiple assets (as long as each of the assets individually satisfy the relevant eligibility criteria).

Currently, the instant asset write-off threshold is due to revert to $1,000 for small businesses (i.e., those with an aggregated turnover of less than $10 million) from 1 July 2020.

Accelerating depreciation deductions for new assets

Broadly, a new time-limited 15-month investment incentive (available for eligible assets acquired from 12 March 2020 up until 30 June 2021) will also be introduced to accelerate certain depreciation deductions for businesses with an aggregated turnover below $500 million .

The amount that an eligible entity can deduct in the income year in which an eligible depreciating asset is first used or installed ready for use is:

Different rules will apply where an SBE is using the general small business pool (i.e., for assets not qualifying for the instant asset write-off). In this case, an SBE may deduct an amount equal to 57.5% (rather than 15%) of the business-use portion of the cost of an eligible depreciating asset in the year is it allocated to the pool.

Unless specifically excluded, an eligible asset is a new asset that can be depreciated under Division 40 of the ITAA 1997 (i.e., plant and equipment and specified intangible assets, such as patents), where the asset satisfies all of the following conditions:

Note that a depreciating asset is not an eligible asset where a commitment to acquire or construct the asset was entered into before 12 March 2020.

Please Note: Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information's applicability to their particular circumstances.

Coronavirus - Federal and State Government Assistance to Business

Mon, 16 Mar 2020 22:00:00 GMT

Currently the Federal and State Governments have outlined the following assistance to small business.

Boosting Cashflow for employers with <$50m turnover.

Supporting Apprentices

Plant & Equipment

Administration

The Government have stated that they will offer relief on some tax obligations for businesses affected by the COVID-19 to be determined on a case by case basis.

WA State Government Assistance for Business

This is obviously fluid environment and we would expect to see more announcements and assistance being delivered by Government and will attempt to keep you updated as and when these occur.

Other assistance from Smith Thornton

What happens when a Discretionary Trust Vests?

Thu, 07 Feb 2019 22:00:00 GMT

There is a lot of confusion as to what happens when a Discretionary Trust reaches its vesting date, in particular:

Interestingly enough, from a legal position it is in fact the beneficiaries' interest that vests on vesting date, not the trust itself.

On that date, the beneficiaries' interests in the assets of the trust become fixed. The trustee then holds the trust property for the absolute benefit of those beneficiaries who are specified in the Trust Deed as the takers on vesting. This does not mean that the trust itself comes to an end. In other words, the trust becomes a fixed trust rather than a discretionary trust.

In reality, a trustee may have a practical problem in the event that the takers on vesting are deceased by the vesting date as many trusts will vest up to eighty years after establishment. In many cases, the deed will contemplate this (e.g. by providing a cascade of alternative takers on vesting), but in the event that the deed is silent, the trustee may need to seek an order from the Supreme Court to determine the consequences under the trust law.

As a Trustee or Director of a Corporate Trustee of a Discretionary Trust, what should you be doing now?

Read the Deed!! This will tell you what the vesting date is and which beneficiaries are specified as the takers on vesting. If the Deed is not clear or you do not understand the terminology (very common with legal documents!), speak to your accountant or solicitor.

If you wish to distribute capital to beneficiaries other than the specified takers on vesting, you should investigate the financial consequences (including capital gains tax and stamp duty) of distributing them prior to vesting date. The Deed will provide the necessary information about any restrictions on distributing capital to beneficiaries.

Most importantly……..

Get the advice you need from one or more professionals to minimise risk and secure the assets you hold in discretionary trusts.