BUSINESS T h e - Scotts Chartered Accountants
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
The
BUSINESS
A C C E L E R A T O R
MAGAZINE
June 2021
The
BUSINESS
A C C E L E R A T O R
MAGAZINE
IT’S TIME TO WORK ON THE BUSINESS,
NOT JUST IN THE BUSINESS
Most business owners are
familiar with Michael Gerber’s
1986 book, The E-Myth
(Entrepreneurial Myth)
Revisited. Gerber suggests that
people think businesses are
started by real entrepreneurs,
however, in reality, the majority
of businesses are started by
‘technicians’.
A tradesman might be skilled
at building or re-wiring a
house, however, they might
lack the essential marketing,
bookkeeping or financial
management skills to grow
a successful business. An
exceptionally talented motor
mechanic might know very little
about people management,
social media, lead generation
or how to convert those leads
into customers. One of the key
messages for entrepreneurs in
the book is, business owners
need to work ON their business,
not just IN the business.
The challenge for every business
owner is to create a business
that works independently
of them. In other words, a
business that doesn’t rely on
their technical skills to produce
the necessary outcomes and
financial results. A lot of small
business owners genuinely
believe that nobody else can
perform certain technical tasks
better than they can and while
there may be an element of be flexible and multi-task which that could be delegated to team can’t be in 10 places at once.
truth in that belief, there are means you may have to fill the members or outsourced. By systemising all the operating
lots of skilled technicians in the roles of receptionist, recruiter, procedures and documenting
The fact is, most businesses them for others to follow,
marketplace. Of course, the vast cleaner and bookkeeper. The stay small for a reason but
majority of these technicians workload can be overwhelming you can create a business
working ON the business can model that works without your
are not suited to running their but working longer hours have a profound impact on technical input. Trained staff
own business because they is generally not productive, your growth and profitability. provide leverage to help grow
lack the necessary marketing, sustainable or healthy. Working The franchise model is a great the business, the profits and
sales, HR, social media or smarter not harder is the example because you can the business value.
bookkeeping skills.
answer and that includes not open 10 branches of your
As an entrepreneur you need to wasting time on low level tasks business when you obviously - continued over page
The
BUSINESS
A C C E L E R A T O R
MAGAZINE
IT’S TIME TO WORK ON THE BUSINESS,
NOT JUST IN THE BUSINESS
- continued from previous page converts those leads into new customers,
tracks the important key performance
SYSTEMS & PROCEDURES indicators (KPI’s) and produces financial
Systemisation involves identifying every reports without your hands on involvement.
repeatable process or task performed in The challenge is to develop a business
the business and documenting how to where the results are systems-driven, not
perform them. In addition, systemisation people-driven.
also includes listing who is responsible for Only a small percentage of entrepreneurs
each step in the process, what tools or succeed in removing themselves from the
resources are to be used and when these operational side of their business. The
tasks should be performed. majority are overwhelmed by the ‘job’ they
To bring this business model to life you need have created and unfortunately, in many
cases, the financial rewards don’t justify the
to remove yourself from the day-to-day
long hours, pressure and stress. Put simply,
operational tasks and focus on developing
you could already be working incredibly long
systems. By documenting all the procedures
hours so it might not be possible to work any characteristics can devalue the business
for your team to follow ensures that the
harder. If that is the case, it’s time to work
business continues to produce the same and potential buyers don’t want to buy a
smarter not harder because in business,
quality products and awesome customer ‘job’ where the revenue is capped based on
the definition of insanity is doing things the
service. The objective is to have the business the hours the solopreneur works.
same way and expecting a different result.
run on autopilot so you are free to work on
developing and growing the business. The How is it that some business owners seem Having systems in place means you can be
true entrepreneur is focused on strategic to be working less hours and lack the more hands-off so you can focus on working
planning, marketing plus research and marketing skills of their competitors, yet on the business. You can delegate or
development so you continue to innovate they are still able to scale and grow their outsource the repetitive tasks to your team
and implement the latest technology to business? You will find these entrepreneurs members in the knowledge that they are
create more efficient processes. In turn, have simplified, systemised and automated following the precise processes you put in
this will help you motivate and retain the large parts of their business ‘machine’. The place. This produces consistent outcomes
right people to implement your systems. business doesn’t rely on them to crank irrespective of who is completing the task.
up the engine every day which reduces
It sounds simple in theory, however, the risk for potential buyers because the Systems also mean when you hire new
creating a business ‘machine’ that works business is not totally reliant on the owner. staff (or commence outsourcing tasks) the
like clockwork to produce consistent returns Too often a business run by a technician process is much easier. Every business
without your daily involvement takes a lot grinds to a halt when they aren’t ‘on the owner should aim to reduce the time it
of planning and hard work. The reward is tools’ or are sick. They find it difficult to take takes to train new staff and streamline the
the freedom to work the hours you want time off and rarely have a decent holiday. induction process. This means you don’t
and still generate an income to support They build strong relationships with their have to spend a lot of time explaining
your lifestyle. Imagine having an automated key customers which might prove difficult their role and responsibilities or answering
business engine that generates leads, to transition to the new owner. All these repetitive questions about the tasks. You
or a team member can simply walk them
through a document (or video) that outlines
the relevant processes to follow. This will
save time, money and plenty of angst but
it won’t completely remove the need for
some instructional training. No doubt it will
speed up the process and you won’t have
to micro-manage your team because they
know exactly what they need to do, how to
do it, what tools to use and when to do it.
- continued over page
The
BUSINESS
A C C E L E R A T O R
MAGAZINE
IT’S TIME TO WORK ON THE BUSINESS,
NOT JUST IN THE BUSINESS
- continued from previous page
GETTING STARTED
The starting point in systemising your
business is identifying all the processes
you use. Begin with the repetitive tasks
and document all the steps you follow.
The more detail the better and we
recommend you prioritise the list of tasks
and focus on the ones that soak up the
most time or have the biggest impact on
your business. Think about everything you
do and checklists can prove very useful.
If you can simplify some of the tasks then One area you can focus on automating is
Break down the tasks into the various your marketing including growing your list
you might be able to systemise them
components of your business that might
or even better, automate them using of customers.
include:
technology. Email software tools (like
Technology can automatically add new
Finance - invoicing, bookkeeping and Mail Chimp) can automatically generate a
contacts into your CRM system and given
accounting reports series of emails based on a certain trigger
your customer database is a key business
event.
Human Resources - recruitment, asset, this can make your business more
employment agreements, induction, An online calendar can let your customers valuable and saleable. For example, visitors
training etc. or clients book their own appointments to your website should be encouraged to
Marketing - website maintenance, and then automatically send out exchange their contact details for a lead
social media, newsletters, blogs, appointment reminders by text or email magnet that could be a valuable piece
emails, etc. which can reduce no-shows and late of your content that could be an e-book,
cancellations. This type of software can guide, checklist or even a free sample.
Operations - answering calls and let customers reschedule, cancel or book
emails, onboarding new customers, Their email address is automatically added
regular or recurring appointments without
customer database management, to your CRM (Customer Relationship
interrupting you or your team.
follow up of leads and customers Management) system and you can then
They can potentially accept payments segment your database by areas of
Information Technology - software without interaction with staff and you can interest and target your customers with
and systems
integrate appointment scheduling into your tailored offers. You can then nurture the
Sales & Purchasing Procedures website and Facebook page that can save relationship by sending regular newsletters
a huge amount of time and administration. and offers.
SUMMARY
A business without systems dog’s breakfast and are you improvement means adopting Given we are all adapting to
and automation won’t using the right technology to new technology to create the new post COVID normal,
achieve its full potential. automate some of the tasks? a more efficient business. there has never been a more
What is holding you back from Remember, systems and important time to work ON
systemising your business Entrepreneurs are always technology are constantly
looking for new ways to do your business, not just IN the
processes? Is it time to let go changing so your ‘procedures
of the invoicing, bookkeeping, things and innovation can manual’ will always be a work business. If you need help to
cleaning or some of the improve processes and drive in progress. People’s roles systematise your business
administrative tasks? Is better financial outcomes. also change so your manual we invite you to contact us
your customer database a Striving for continuous will be under constant review. today.
The
BUSINESS
A C C E L E R A T O R
MAGAZINE
THE FEDERAL 2021/22
The Treasurer Josh Frydenberg
released the Federal Budget
BUDGET
on Tuesday May 11 and the
focus is on recovery and
investment to support job
creation to drive economic
growth. The Treasurer
announced an expected deficit
of $161 billion, $36.7 billion
lower than the $197.7 billion
estimated in the Government’s
December Mid-Year Economic
and Fiscal Outlook (MYEFO)
which suggests our economy
is recovering at a much faster
rate than expected.
Australia’s GDP growth is
expected to come in at 1.25
per cent this financial year and
while some sectors such as
recreation and personal service
businesses have returned to
operating at pre-COVID levels,
other sectors impacted by the
ongoing border closure face
significant challenges. With to get the unemployment depreciating assets (first a new airport in NSW.
Australia’s borders unlikely rate below 5 per cent. The used or installed ready
to re-open until at least for use) for entities with A range of welfare
focus is on large spending on
mid-2022, immigration and aggregated turnover of less spending initiatives,
infrastructure and targeted including $13.2 billion
international tourism are still than $5 billion.
support for industries that allocated to the National
off the agenda, as are most
international student arrivals. will continue to suffer while 12-month extension of Disability Insurance
Immigration and international our borders remain closed. the Loss Carry-Back Offset Scheme and $17.7 billion
students are important, not Some of the key measures introduced in the 2020/21 for new aged care funding.
only for the industries and announced in the Budget Budget, allowing corporate
include: Consumption stimulus
businesses they support entities to carry back
through the extension of
through their spending, but tax losses for the 2022/23
12-month extension of the low and middle-income
they also supply labour in income tax year for up to tax offset (LITMO) for a
the temporary full four income years.
many industry sectors. further year.
expensing measures
Much of the spending in this (instant asset write off) $15 billion in additional A $1.7 billion investment
Federal Budget is focused introduced in the 2020/21 infrastructure commitments in childcare to drive
on short-term measures for budget to allow a deduction including a new intermodal workforce participation and
continued economic recovery for the full cost of eligible terminal in Melbourne and
women’s economic security.
The
BUSINESS
A C C E L E R A T O R
MAGAZINE
PERSONAL
INCOME TAX Tax Rate Tax Payable
2021/22 2024/25 Previously
(Per 20/21 Budget) Announced
0% $0 $0- $18,200 $0 - $18,200
19% $0 $18,201 - $45,000 $18,201 - $45,000
30% Not Applicable Not Applicable $45001 - $200,000
32.5% $5,092 $45,001 - $120,000 Not Applicable
37% $29,467 $120,001 - $180,000 Not Applicable
45% $41,667 $180,001+ $200,001+
The Government will maintain the Low and Middle Income Tax income between $37,000 personal income tax plan
changes to reduce personal Offset (LMITO) will be retained and $48,000, and taxpayers remains unchanged and should
income tax. This measure for the 2021/22 income tax with taxable incomes between commence from1 July 2024.
is designed to continue to $48,000 and $90,000 will The table below summarises
year. It provides a reduction in
stimulate the economy by receive the full $1,080. For the resident personal tax rate
increasing the disposable tax of up to $255 for taxpayers
income available to individuals. with a taxable income of taxpayers with a taxable and thresholds (excluding the
$37,000 or less. The LMITO income over $90,000, the 2% Medicare levy).
Income Tax Offsets will increase at a rate of 7.5 LMITO will phase out at a rate
of 3 cents for every additional Medicare Levy Low-
The Treasurer confirmed that cents for every dollar of taxable Income Thresholds
dollar of taxable income. It
will phase out completely at a For the 2020/21 income year,
taxable income of $126,000. the Medicare levy low income
The Low Income Tax Offset threshold for singles will be
(LITO) will also continue to increased to $23,226 (up from
apply for the 2021/22 income $22,801). For couples with no
tax year. For taxpayers with children, the family income
taxable incomes of less than threshold will be increased to
$37,000, the offset is $700. $39,167 (up from $38,474).
The offset then reduces at a For each dependent child or
rate of 5 cents for each dollar student, the family income
of taxable income to $45,000 threshold will increase by
and at a rate of 1.5 cents for $3,597 (up from $3,533).
each subsequent dollar of For single seniors and
taxable income, completely pensioners eligible for the
phasing out for taxable seniors and pensioners tax
incomes above $66,668. offset, the Medicare levy
Personal Tax Rates low income threshold will be
increased to $36,705 (up
There have been no changes to from $36,056). The family
the personal income tax rates threshold for seniors and
for the 2021/22 income year.
Stage 3 of the Government’s - continued over page
The
BUSINESS
A C C E L E R A T O R
MAGAZINE
are only entitled to deduct the Simplifying Employee
excess of the expenses incurred Share Schemes
over $250. This exclusion
of the first $250 of eligible Leaving an employer will no
self-education expenses is to longer be a taxing point for
employee share scheme
be removed. This measure
entitlements. This means that
will take effect from the first tax deferral for the employee
income year after the date the share scheme entitlements
amending legislation receives will continue until forfeiture
Royal Assent. conditions have passed and
shares held are able to be freely
Simplifying the Australian sold, subject to the maximum
Residency Rules 15-year tax deferral period.
The existing tests for the tax Currently, forfeiture conditions
residency of individuals will and sales restrictions are often
lifted at the time employments
be replaced by a primary ends. The value of shares
- continued from over page Simplifying Deductions for “bright line” test. Any person that a company can issue to
Self-Education Expenses who is physically present in an employee under simplified
Australia for 183 days or more disclosure requirement will
pensioners will be increased to Currently, individuals undertaking in any income year will be an also increase from $5,000 to
$51,094 (up from $50,191). a prescribed course of education Australian tax resident. $30,000 per year.
BUSINESS TAX
The Government has provided be extended until June 30, budget will be extended by a previously being in a taxable
further support for capital 2023 providing additional further 12 months, allowing position.
investment by businesses and time for eligible entities to corporate entities to carry
assistance with cash flows by make capital investments and back tax losses for the The loss carry-back offset
extending the “temporary full benefit from accelerated tax 2022/23 income year for up is limited to a company’s
expensing” measure as well depreciation. to four income years, as far franking account balance and
as the loss carry-back offset back as the 2018/19 income this limitation may prevent
All other features of the entities from accessing the
for an additional income year. year. The loss carry-back
measure remain unchanged measure where they have paid
Important changes to the including the alternative test for offset is available to corporate
minimum threshold for the tax entities with aggregated out franked dividends during
entities that have aggregated the year.
superannuation guarantee turnover of $5 billion or turnover of less than $5 billion
charge (SGC) have also been more, the ability to opt-out and is intended to complement Removal of Minimum
announced. on an asset-by-asset basis, the temporary full expensing Income Threshold for
availability of full expensing measure where tax losses are Superannuation Guarantee
Extension of Temporary
on capital improvements to generated through significant
Full Expensing Currently, employers are
existing depreciating assets capital investments that give
The temporary full expensing and the ability to write off the rise to immediate deductions. not required to make
measures introduced in the entire balance of a general The measure allows for cash superannuation contributions
2020/21 budget provided a small business pool for refunds with the lodgement under the superannuation
deduction for the full cost of small business entities using of the tax return rather than guarantee legislation for
eligible depreciating assets simplified depreciation. future tax savings from employees in receipt of
(first used or installed ready carrying forward tax losses to salary and wages of less
Extension of Loss Carry-
for use before June 30, 2022) later years and can provide than $450 in any calendar
Back Provisions
to entities with aggregated additional cash flow to support month. Many employers
turnover of less than $5 The loss carry-back offset working capital for companies
billion. The measure will now introduced in the 2020/21 who make tax losses after - continued over page
The
BUSINESS
A C C E L E R A T O R
MAGAZINE
- continued from over page change to ensure their payroll $250 million. They must also and Entrepreneurship
systems are correctly set up to have been recipients of the Facilitators Program, to
meet their obligations once the JobKeeper payment between support people who want to
have configured their payroll measures take effect. January 4, 2021 and March start, run and grow their
systems to accommodate this 28, 2021 or were affected own business.
threshold. The Government has Extending the SME by the floods in eligible Local
announced that this threshold Recovery Loan Scheme Government Areas in March 3. A 30% Digital Games Tax
is to be removed with effect, 2021. Offset for eligible
The Government is extending businesses that spend a
most likely from 1 July 2022.
the SME Recovery Loan Industry Specific minimum of $500,000 on
This measure will mean that
superannuation support must Scheme. It includes an Business News qualifying Australian games
be provided to all employees increased government expenditure. This excludes
guarantee of 80 per cent, a 1. Small craft brewers and
regardless of the level of distillers will receive an unclassified games, or
income in any one month and is higher maximum loan size of those that involve gambling.
$5 million and a maximum loan increase in the cap for
designed to ensure low income claims on the Excise Refund
earners are not disadvantaged. term of 10 years, with interest 4. Aged Care scored a huge
Scheme from $100,000 to
The proposed changes will rates capped at roughly 7.5 boost with $17.7 billion to
$350,000 from July 1,
primarily impact employers with per cent. Borrowers may be spent over 5 years
2021.
casual and part-time employees also be offered repayment including 80,000
such as those in the retail and holidays of up to 24 months. 2. Almost $130 million is home care packages and
hospitality industries. Employers The Scheme is available to going to the New Enterprise a supplement of $10 per
will need to keep track of this SMEs with a turnover of up to Incentive Scheme (NEIS) resident, per day.
SUPERANNUATION
Superannuation changes announced in increasing access to the bring-forward rule Downsizer contributions do not count
the Budget provide increased contribution for non-concessional contributions. The towards superannuation contribution caps
opportunities for individuals over age 60. bring-forward rule can allow an individual and are permitted irrespective of a total
to make three years of non-concessional superannuation balance. Contributions
Removal of Work Test for Non- contributions in one year (e.g. up to under the measure are available to an
Concessional Superannuation $330,000 from July 1, 2021). However, individual and their spouse even if only
Contributions the ability to make non-concessional one of them was the owner of the property
The Government announced it proposes contributions will continue to be subject (i.e. both may contribute up to $300,000
to permit individuals aged 67 to 74 to an individual’s total superannuation each from the sale if they each satisfy the
to make non-concessional (after-tax) balance being less than the transfer conditions). The measure is a targeted
contributions to superannuation on the balance cap (currently $1.6m increasing reduction in super restrictions that should
same terms as those currently applying to to $1.7m from July 1, 2021) at June 30 provide increased incentive for older
individuals under age 67 by removing the of the prior year. individuals to downsize sooner, thereby
work test for contributions made from 1 increasing the supply of family homes.
Reducing the Age of Eligibility
July 2022. Currently, individuals aged 67 From 65 to 60 Years for Downsizer Increase in Maximum Releasable
and over are subject to a work test, which Superannuation Contributions Amount for First Home
requires the individual to have worked a Superannuation Saver Scheme
minimum of 40 hours over a consecutive The Government announced that it
30-day period in the financial year in will reduce the eligibility age where The Government announced an increase
order to make a voluntary superannuation downsizer contributions can be made into in the amount of superannuation savings
contribution that year (either concessional superannuation from 65 to 60 years of a first home buyer can access to purchase
or non-concessional). age, with the changes expected to come a first home. Under the current First Home
into effect from July 1, 2022. These Superannuation Saver Scheme, up to
Although the work test will be removed measures will allow a person aged 60 or $15,000 of voluntary superannuation
for non-concessional contributions from over to make a one-off non-concessional contributions a year can be accessed early
July 1, 2022, the test will be retained for contribution to their superannuation of for the purchase of a first home, with a
personal deductible (i.e. concessional) up to $300,000 from the proceeds of total withdrawal amount of up to $30,000
contributions. The removal of the work selling their principal residence owned
test for older Australians also includes for ten years or more prior to the sale. - continued over page
The
BUSINESS
A C C E L E R A T O R
MAGAZINE
- continued from over page where ordinary marginal tax rates would Currently, these pensions can only be
apply on earnings. Most first home buyers converted into another pension where
permitted. Under the revised scheme, the would benefit from using the scheme and access to the underlying capital is
annual $15,000 voluntary contributions the Government announced some further generally restricted, with significant tax
amount remains, but eligible individuals technical changes to reduce complexity and estate planning issues arising on
will be able to withdraw up to $50,000 and unintended outcomes which should such a restructure. The Government
in total of eligible super savings for a first make the scheme more accessible to also stated that the social security and
home purchase. This revised scheme first home savers. tax treatment will not be grandfathered
is expected to commence from July 1, for new pensions commenced with
2022. Self-Managed Superannuation
commuted funds and that commuted
Funds and Legacy Pension
Contributions and associated earnings reserves will be taxed as an assessable
Conversion
that are withdrawn under the scheme contribution. Accordingly, the detailed
are taxed at the individual’s marginal The Government stated it will permit rules and individual circumstances will
tax rate, less a 30 per cent tax offset. individuals to exit legacy pension need to be examined before deciding
In most circumstances, the net tax paid products, together with any associated whether conversion of a legacy pension
on contributions and earnings withdrawn reserves, for a limited period of two under this measure is optimal for those
under the scheme would be in the order years. The measure is stated to apply who may become eligible to do so. The
of 15%. As such, this is likely to be a to market-linked pensions, lifetime measure is stated to apply from the first
better outcome compared to the first pensions and life-expectancy pensions financial year after the date of Royal
home deposit being saved personally in self-managed superannuation funds. Assent of the enabling legislation.
The
BUSINESS
A C C E L E R A T O R
MAGAZINE
2021 TAX RETURN
– HOME EXPENSE CLAIMS
As we approach the end of those related to a child’s method has been extended The shortcut is all-inclusive
the 2020/21 financial year, education. These include to June 30, 2021. Taxpayers and can’t be supplemented
the Australian Tax Office has online learning courses and can claim a rate of 80 cents by additional, individual
indicated that several types laptops. per hour to cover all their expense claims on items like
of costs associated with running expenses rather than phone and internet costs.
The ATO also warned that calculating specific costs for
working-from-home will not Taxpayers don’t need to have
working from home doesn’t running expenses. Taxpayers
be eligible as a tax deduction. a dedicated work-from-home
make it a place of business simply need to record the area to claim under this
With so many people working for tax purposes. Employees hours they worked at home method and multiple people
from home through 2020 and generally can’t claim rent, on timesheets or have diary in a household can claim
beyond, the ATO have issued mortgage interest, property notes. The rate of 80 cents per using the shortcut method.
a reminder that personal and insurance or rates. The Tax hour covers costs including:
occupancy expenses cannot Office also warns that claiming The shortcut method is
be claimed. Personal expenses occupancy expenses could Electricity for lighting, optional, and individuals can
like tea, coffee and toilet paper potentially expose the home to cooling, heating and elect to claim based on the
that are typically supplied capital gains tax on sale. running electronic items actual expenses incurred but
by employers, aren’t directly they would need to comply
Home Office Expenses Phone and internet costs
related to earning income and with the more complex,
therefore cannot be claimed Last year the ATO announced The decline in value of a record-keeping requirements
by taxpayers who were forced a simplified method of computer, laptop home Taxpayers should choose the
to work from home. Other calculating home office office furniture and appropriate method for their
ineligible expenses include expenses and this ‘shortcut’ furnishings. circumstances.The
BUSINESS
A C C E L E R A T O R
MAGAZINE
ATTENTION
ALL COMPANY DIRECTORS
identity and receive their unique DIN. This
includes a driver’s licence (or learner’s
permit), passport, birth certificate,
Australian visa and Medicare card. The
Registrar may also request the director’s
tax file number (TFN) and the Registrar
can ask the ATO to provide the TFN of an
individual who has applied for a director ID
to verify the identity of the individual.
As the DIN system will be administered
by the Commonwealth Registrar operating
under a separate statutory function of
the ATO, bad director behaviour should
come to the attention of the ATO more
often and more quickly. Any insolvency
practitioner who enables directors in their
phoenixing activity will also come to the
ATO’s attention faster.
The DINs Will Benefit Almost
Everyone Involved in a
Company
In addition to helping deter and identify
illegal phoenix activity, and with it reduce the
New Director Identification So What Impact Will the DINs number of creditors left unpaid, the DINs
Number Have on Company Directors, will also benefit investors, shareholders
The Government has introduced a Aside From More Form Filling? and company directors by giving them
Director Identification Number (DIN) to For most directors, the impact of the access to better background knowledge
provide greater transparency around new Director Identification Number will of a director, particularly their relationships
the background of company directors to be minimal. For those who comply with with companies past and present, and help
combat illegal phoenix activity that leaves Australia’s corporate laws and regulations, prevent them appointing fictitious directors,
creditors unable to recover debts. The the DIN is simply a unique identification i.e., those with false identities.
introduction is very timely given the number number issued by the government that
they retain for life. Directors must apply for their DIN by
of financially distressed companies on the
November 30, 2022 and penalties will
verge of insolvency due to the COVID-19 There’s no fee and the government apply for falsifying identity information or
pandemic. administers the system through the new applying for multiple DINs. New company
The Director Identification Number is Australian Business Registry Services
directors registered under the Corporations
designed to deter Directors from engaging (ABRS), which is consolidating ASIC’s
Act must apply for a DIN within 28 days of
in illegal phoenix activity and will help 31 business registers and the Australian
Business Register. becoming a director. With the legislative
regulators detect phoenix activity. Directors changes, now more than ever, directors
need to be aware of their obligations and All directors will be required to provide need to be aware of their obligations.
the penalties of such activity include large a number of documents to the
fines and up to 15 years’ imprisonment. Commonwealth Registrar to establish their2021 Tax Return
Client Checklist
June 2021
2021 - Individual Tax Returns
Income Deductions Rebates
• Gross salary, wages, allowances, • Investment and property expenses • Private health insurance annual
benefits, earnings, tips, Directors (carefully detail interest and repair statement (request from Health Fund)
Fees and Insurance for lost wages. claims), supply statements. • Details of superannuation
• Work-related subscriptions or contributions where no tax deduction
• Income from business activities. can be claimed.
memberships (not including sporting
• PAYG Payment Summaries or or social clubs). • Any changes in dependants,
Income Statements from MyGov children’s details, DOB and
• Employment related expenditure any Centrelink benefits
• Details of any non-cash benefits such as self-education, protective applicable(income of spouse should
received including discount(s) on clothing, tools, union fees, uniform also be provided).
and laundry expenses.
employee shares or rights. • Details of any income received in
• Motor vehicle expenses, car finance a lump sum which was accrued in
• Lump sum and termination lease statements (include petrol, earlier income years (e.g. assessable
payments. All documentation repairs, parking and maintain a pensions).
should be provided including an Motor Vehicle Log Book where
ETP Payment Summary from the necessary). • Details of any remote work
employer or fund. performed for 183 days or more.
• Donations of $2 and over.
• HECS-HELP Debt details.
• Government Social Security • Income Protection Insurance
payments, including pensions, Premiums.
unemployment and sickness
benefits. • For Self-Employed persons, details
of any Superannuation Contributions
• Details of any CGT asset sales made.
(e.g. shares, business and real • Home office expenses where
estate). Please include dates of, and employment requires use of your
costs associated with, acquisition computer, phone or other device.
and disposal (You can save tax if
you qualify for the variety of CGT • Tax Agent Fees and other
concessions).
accounting/tax audit fees. 8 Most Common Errors
• Special deductions (Australian in Income Tax Returns
• Annuities, including allocated films, investment shelters and
pensions or superannuation income agribusiness-type schemes). 1. Omitting Interest Income
streams.
• Unrecouped prior year losses. 2. Incorrect or Omitted Dividend
• Income from trusts and partnerships. Imputation Credits
Statements of distribution should be 3. Capital Gains/Losses are
provided where appropriate. Incorrect or Omitted
• Rental income. 4. Understating Income
• Interest and dividends received from 5. Home Office Expenses
any source including life insurance or
friendly society bonuses and any tax 6. Depreciation on Rental
deducted. Include details of franked Property Fixtures and Fittings
dividends (i.e. imputation credits). 7. Depreciation on Income
Producing Buildings
• Foreign source (employment and New Clients
pension) income and details of • Last year’s Notice of Assessment 8. Borrowing Costs associated
any foreign tax credits, assets or and Tax Return (if available) with Negative Gearing
property.2021 - Companies, Partnerships,
Trusts and Other Businesses
Income • Superannuation contributions. Assets
• Trading Income. • Subscriptions. • Details of depreciable assets
• Other Income (e.g. Rent, Interest, • Car expenses (remember to acquired and/or disposed of during
Royalties). include petrol, repairs and parking this income year, including:
and maintain a log book where • type of asset;
• Stock on Hand at June 30, 2021 necessary).
(and basis of valuation) – note any • date of acquisition;
obsolete stock. • Tax agent’s fees and other
accounting and tax audit fees. • consideration received/paid.
• Work-in-Progress at June 30, 2021 • Lease commitments.
• Royalties paid.
• Primary Producer subsidies (if • Debtors at June 30, 2021.
assessable). • Details of the destination and
purpose of any interstate or • Commercial debts forgiven.
• Details of CGT assets (e.g. shares overseas trip. Expenses must be fully
and real estate) sold, including documented where travel involves Additional Information Required
dates of, and costs associated with at least one night away from home.
acquisition and disposal. • Franking account details/
Travel diaries should be included movements.
• Dividends, including details of where travel exceeds five nights.
franking credits. • Overseas transactions, exchange
• Research and development gains/losses.
• Income from foreign sources expenditure.
including details of any foreign taxes • Private companies – remuneration or
• Bank fees (where the credit or loans to directors, shareholders and
paid. deposit represents assessable their relatives.
income).
Deductions • Changes to the capital of the
company.
• Repairs and maintenance. Liabilities
• Whether family trust elections have
• Salaries, including fringe benefits. • New loans taken out during the been made in relation to trusts.
• Fringe benefits tax paid. year and their purpose, including
any new lease or chattel mortgage
• Rates, land taxes and insurance agreements on vehicles, equipment
premiums. or machinery.
• Advertising expenses. • Statements from the lending
• Interest on borrowed monies. authority detailing the opening and
• Deductions relating to foreign-source closing balances of existing loans Note:
during the financial year. To ensure that you obtain the
income.
maximum deductions to which you
• Prepaid expenses (subject to • Provisions for long service and
are entitled and in consideration of
transitional rules). annual leave.
the penalty provisions, FULL DETAILS
• Retirement payments and golden • Creditors at June 30, 2021. of any claim should be provided and
handshakes. • Details of loan accounts to directors, supporting documentation made
shareholders, beneficiaries and available. For employee taxpayers
• Bad debts actually written off during
partners. and for travel and motor vehicle
the year.
claims by self-employed taxpayers,
• Donations of $2 and over depending • Accrued expenses (e.g. audit fees,
documentation must be a receipt,
on the recipient. interest payments).
tax invoice or similar document
• Commissions. • Commercial debts forgiven. which contains certain details. For
other taxpayers, documentation
• Legal expenses.
may comprise receipts, dockets,
• Lease or Chattel Mortgage payments diary notations or reasonable and
on motor vehicles and equipment. supporting estimates.
• Losses of previous years
IMPORTANT DISCLAIMER: This document contains general advice only and is prepared without taking into account your particular objectives, financial circumstances and needs.
The information provided is not a substitute for legal, tax and financial product advice. Before making any decision based on this information, you should speak to a licensed financial
advisor who should assess its relevance to your individual circumstances. While the firm believes the information is accurate, no warranty is given as to its accuracy and persons
who rely on this information do so at their own risk. The information provided in this bulletin is not considered financial product advice for the purposes of the Corporations Act 2001.The
BUSINESS
A C C E L E R A T O R
MAGAZINE
Sladen House,
410 Pakington Street,
Newtown VIC 3220
Phone: (03) 5224 1133
Fax: (03) 5222 1195
Email: info@scottsca.com.au
Website: www.scottsca.com.au
IMPORTANT DISCLAIMER: This newsletter is issued as a guide to clients and for their private information. This newsletter does not constitute advice. Clients
should not act solely on the basis of the material contained in this newsletter. Items herein are general comments only and do not convey advice per se. Also
changes in legislation may occur quickly. We therefore recommend that our formal advice be sought before acting in any of these areas. The information
provided in this bulletin is not considered financial product advice for the purposes of the Corporations Act 2001.You can also read
