Tax Tips for Small Business

Small Business Tax Deductions

September 24, 2015 brought to you with the help of Online Tax Australia

If you own or run a small business, then you are eligible for certain tax deductions as result of the expenses you incur during your income-earning activities. For the purposes of tax, the Australian Taxation Office (ATO) considers you a small business if your annual turnover is less than $2 million. If you fall into this category, then you can claim most expenses related to the running of your business.

Motor Vehicle Expenses

If you have to travel by car for the purposes of your business, then you can claim a tax deduction for your motor vehicle expenses. There are a number of methods that you can use to calculate your motor expenses, including the cents per kilometer calculation method, or by keeping a vehicle logbook for a 12-week period. For a more in-depth explanation on how to claim motor vehicle expenses, take a look at our blog post, How to Claim Work Related Car Expenses.

Website Expenses

If you run a website as part of your business model, you are able to claim all costs incurred, including purchasing server hardware, buying and developing software and paying website hosting fees. If your costs amount to less than $1,000, you can claim an immediate deduction.
Travel Expenses
You can claim costs, such as accommodation, meals and incidentals that you incur while travelling for work. It’s important that you keep detailed evidence of all expenses. If you travel for one night or more you only need written evidence to substantiate your claim. If you travel for six nights or more you must keep a travel diary to record all your business activities during those travels including:

• The date and time of the activity
• How long it lasted for
• A description of the activity
• Where the activity took place

If the trip was for personal and business reasons, you can only claim the portion of the expenses that were incurred during income earning activities. Your travel diary will be the evidence you provide to demonstrate how you worked out the portion you are claiming.

Operating Expenses

You can claim operating expenses, such as office stationary and wages, during the year you incur them. When claiming on salary and wage expenses, the way your business is structured will affect what you can claim.

• If you operate as a company or a trust you can claim a deduction for any salary or wages that the company pays to you.
• If you operate as a partnership, you are not considered an employee and cannot be paid a wage, therefore you can only claim for the wages you pay to employees.
• If you operate as a sole trader, you are the owner of the business and not an employee and therefore you can only claim for the wages and salary you pay your employees.

You can also make a claim for super contributions you make to employees or certain subcontractors. If you are a sole trader you can claim for your personal super contributions on condition you have not earned more than 10% of your income through another means of employment.

Capital Expenses

Capital expenses refer to cost of purchasing assets such as machinery and equipment. These expenses cannot be claimed immediately but instead are claimed over a period of time based on their decline in value. Businesses are entitled to a 100% expense write off for assets purchased before 12 May 2015, with a cost less than $1,000. The 2015 Federal budget increased that amount to $20,000 for assets purchased after 12 May 2015. If the equipment you are claiming is used for personal as well as business activities you must apportion your claim accordingly.

Home Office Expenses

If you run your business from home or there is a room set aside solely for the purpose of income-earning activity you may be entitles to claim a number of tax deductions based on a percentage use method. These expenses may include:

• Utility bills, such as heating, cooling, internet and water
• Business phone calls and line rental but not installation
• Decline in value of equipment such as computers, photocopiers, desks and filing cabinets
• Depreciation in value of carpets, curtains, light fittings, and so on
• Occupancy expenses, such as rent, mortgage and interest rates

When claiming for home office expenses, all claims should be apportioned on a private/business basis. This is often done by basing the claim on the percentage of space dedicated versus the percentage for everyday personal use.
The other option is to use the ATO approved $0.45 claim per hour for work undertaken at home that relates to running your business. This rate covers the cost of light, heating, chair and desk.
 

The Rules of Redundancy with the compliments of the CCIQ

The Rules of Redundancy

The business is booming, making money, and life is good. But, suddenly, things take a turn for the worse and you are forced to let staff go to make ends meet. Many of our members have been fortunate enough to avoid dealing with redundancy, but when a time does arise where an employee or group of employees must be made redundant, it can be really difficult for business owners to navigate the complex requirements.

A redundancy is genuine if you no longer require anyone to perform a role which an employee currently holds. This can occur due to operational requirements of the business such as: restructure; downsizing; outsourcing; or, the closing down or sale of the business.
I need to reduce my team of five sales employees to three as a result of economic downturn affecting the business. What rules are there to follow when choosing who will remain employed and who will become redundant? 
There are a few ways to select which employees will be made redundant during a downsizing process. The most fair and reasonable way to select which employees will be made redundant is through a skills matrix. When selecting employees, it is important to link your decisions with the operational requirements of the business. The selection criteria should be objective, non-discriminatory, and consistently and fairly applied.
Best practice would be to map all of the affected employees on a matrix, against a series of selection criteria to clearly see which employees best suit the requirements of the business moving forward. Examples of possible selection criteria to use in your skills matrix would be:

• Required skills: relevant experience, training, qualifications
• Productivity levels (using objective, quantifiable records): sales data, daily production rates
• Performance-based (be careful as this can get subjective; it is important that performance based selection is still closely linked to skills and productivity)

Remember: termination for redundancy can only occur where the job is genuinely no longer required by the business; it should not be used as a way to deal with concerns about an employee’s performance or conduct.

Do I always have to offer a redundant employee another role within my business? 
No. You only need to redeploy an employee if it is reasonable to do so. If you do not have a suitable position for the employee, that is okay. For redeployment to be reasonable:

• The employee must have the skills and competencies...

https://www.cciq.com.au/advocacy/blog/the-rules-of-redundancy?mkt_tok=3RkMMJWWfF9wsRolu67KZKXonjHpfsX67%2BgvWbHr08Yy0EZ5VunJEUWy3IYAStQ%2FcOedCQkZHblFnVgMQ62%2FWLkNracF

The cost of doing business has climbed steadily over the past few years..........

ATO data shows the cost of doing business in Australia is steadily increasing

Broede Carmody / Wednesday, March 23 2016

The cost of doing business has climbed steadily over the past few years, according to data from the Australian Taxation Office.

Figures released by the ATO show Australian businesses spent $47.44 billion on rent in 2014, up from $45.99 billion the previous year.

Meanwhile, in 2012, businesses forked out $42.41 billion on rent.

Since 2012, the number of businesses in Australia has remained relatively stable at just over the 2 million mark, according to the Australian Bureau of Statistics.

Superannuation expenses have also jumped slightly in the past two years, with Australian businesses collectively setting aside $32.15 billion towards superannuation in 2014, in comparison to $29.47 billion in 2013.

The ATO data also shows businesses are spending more on maintenance and motor vehicles in comparison to previous years.

Rent increases a “challenge” for retailers

Pana Barbounis, the founder of Pana Chocolate, told SmartCompany increasing rental expenses is a common headache for bricks-and-mortar retailers.

Pana Chocolate operates retail outlets in Melbourne and Sydney, as well as wholesaling its organic, raw chocolate bars.

“Rent does take a large chunk out of any business and makes it challenging,” Barbounis says.

“Your rent can go up, but potentially a competitor a couple of suburbs away doesn’t receive that and they can better control their prices.

“I always try to keep my rent a certain percentage below my turnover, but to get them [stores] in really good locations – such as the CBD – that’s a challenge.”

Barbounis says he would advise other business founders to spend time negotiating leases in order to get the best deal possible and to make sure the shopfront is the best fit for the business long term.

“Look at where you sit now and what options you have to move on if need be,” Barbounis says.

“It’s a barter. You might take over a site and the landlord doesn’t want a lot of rent. If you can renovate, that’s a better option than something that’s halfway there but you have to pay more rent for it.”

Objects of the Emerald Chamber of Commerce Inc.

The objects of the Chamber are to promote the interests of the members generally and as “The Voice of Central Queensland Business” to promote in particular the establishment and development of trade, commerce and industry and all forms of economic and business activity whether domestic or international in the Central Queensland area. The Chamber is a non-political and non-sectarian organisation.

Welcome to the new Emerald Chamber of Commerce News Site.

This blog site has been created for the purpose of delivering news that will be of interested to the business leaders of Central Queensland and beyond. We hope that it will be of some assistance to many during these tough times.
In time when this site is properly structured readers will be invited to provide feedback.

Red Tape Report Shows Little Reduction in Burden

Media Release - 16 March 2016

While a $3 billion reduction in regulatory burden is highly commendable it is a mere drop in the ocean, according to free market think tank the Institute of Public Affairs.

This is especially so considering in 2014 the Commonwealth government imposed around $65 billion in regulatory costs over 85,000 individual regulations.

“If Australia is to regain productivity growth and compete globally we must focus on cutting the red tape burden on Australian businesses and taxpayers,” says Darcy Allen, Research Fellow at free market think tank the Institute of Public Affairs.

Mr Allen’s comments follow the latest federal government report, Annual Red Tape Reduction Report 2015, released yesterday, which updates the government’s progress in its Regulatory Reform Agenda.

“Red tape forces businesses to transfer resources away from productive income generating activities to employ compliance officers, slowing down the Australian economy,” says Mr Allen.

“It is disappointing that the government recently axed their red tape repeal days. The repeal days, however effective, at least payed lip service to a consistent and continuing deregulation agenda,” says Mr Allen.

In 2013-14 Australia ranked 128th of 148 economies in the World Economic Forum’s Global Competitiveness Index for business’ perception of ‘the burden of government regulation’. While our position improved to 80th in 2014-15, there is still much work to be done.

“Without a consistent red tape deregulation agenda Australian living standards and productivity are threatened,” says Mr Allen.

The government’s report, Annual Red Tape Reduction Report 2015, from the Department of the Prime Minister and Cabinet, is available at: https://cuttingredtape.gov.au/annual-red-tape-reduction-report-2015.

For media and comment: Darcy Allen, Research Fellow, Institute of Public Affairs, dallen@ipa.org.au or 0402 284 305.

Emerald Chamber of Commerce history per courtesy of the ABC archives.

Emerald, Qld Health mull flying service for patients

 

Posted 6 Dec 2007, 11:45amThu 6 Dec 2007, 11:45am

 

A plane that could transport patients between Rockhampton and western towns is one option being considered by the Emerald Chamber of Commerce and Queensland Health.

Emerald Chamber vice president Craig Edmonston says the service could fly patients to the Rockhampton Hospital as well as bring specialists to rural areas.

"Dr Beresford said he could provide large support and more than $1 million in business just by ferrying in Queensland health patients to and from Rockhampton, Emerald and Longreach and vice versa," he said.

Central Queensland Health director Bill Beresford said little after the meeting except that plans are under way.

Five ways to beat procrastination at work

Highly productive people don’t suffer from procrastination less often than others, they just know how to put their head down and wade through less interesting tasks, according to one leadership expert.

Dr Travis Bradberry, the co-founder of TalentSmart, says the best way to tackle procrastination is to use a calculated approach.

In a post published on LinkedIn, Bradberry says everyone can overcome a productivity slump – they just need to find the technique that works best for them.

Here are five ways to power through work when you’re feeling unmotivated, according to Bradberry:

1. Figure out why you’re procrastinating

Bradberry says often people fall into a procrastination “loop” because they are unable to figure out why they are unmotivated in the first place.

“When you aren’t in the mood to work, procrastination is telling you something important,” Bradberry writes.

“It could be something simple, such as you need to take a break or get something to eat. It could also be something complex, such as you’re carrying the team on your back and you’re dissatisfied with your job. Whatever it is, instead of punishing yourself for procrastinating, take a moment to reflex.”

2. Remove distractions and get on with the job

Sometimes the only way to battle procrastination is to put your head down and get things done, according to Bradberry.

This means staying away from incoming emails and distracting Slack notifications.

“That first step is difficult, but once you get going – typing that first paragraph or taking off on that first wave – your mood improves dramatically,” he says.

“When you focus your attention on how difficult and cruddy it is to get started, you discourage yourself from doing so.”

3. Don’t be a perfectionist

Another way to tackle procrastination is to stop trying to get everything right the first time.

“We tend to freeze up when it’s time to get started because we know that our ideas aren’t perfect and what we produce might not be any good,” Bradberry writes.

“But how can you ever produce something great if you don’t get started and give your ideas time to evolve?”

4. Learn to forgive yourself

Not enough people realise it’s okay to procrastinate, according to Bradberry.

In fact, it’s completely normal. The main thing to remember is not to beat yourself up over it, Bradberry says.

“You might think that punishing yourself will help you to avoid procrastination in the future, but it actually has the opposite effect,” Bradberry says.

“Beating yourself up sends you right back into the procrastination doom loop.”

5. Work in the right environment

If all else fails, a change of scene might help beat a mid-week slump, Bradberry says.

This could mean walking around the block or even working from another desk.

“This isn’t what works for everyone, but you need to exercise discipline by working in the environment that’s right for you,” Bradberry says.

 

Supermarket Monsters by author and journalist Malcolm Knox

Did you know that according to author and journalist Malcolm Knox every man, woman and child in Australia spends on average $100 a week at Coles and Woolworths or one of their related retail businesses?

The companies each operate nearly 1000 supermarkets, as well as hundreds of petrol stations and other retail outlets, and more than 70 cents of every dollar spent in Australian supermarkets goes to Coles and Woolworths.

The supermarket chains are among the country’s largest employers: they employ a combined 400,000 people and according to Knox, only the state governments offer more work than the two corporations. Eighty-seven people start working for Woolworths every day of the year.

You can read more about the sheer dominance of Australia’s two market leading supermarket chains in his book, Supermarket Monsters.............