Tag: compliance

audit & assurance

Safeguard Your Affairs with Audit Insurance

Posted on | by Allan Hall

Audit Insurance: A different perspective on a wise investment

In the dynamic world of business, facing an Australian Taxation Office (ATO) audit can be a daunting and costly experience for both business owners and individual taxpayers alike.

However, did you know that already 15% of Allan Hall business clients have chosen to secure their financial well-being by opting for audit insurance?

This strategic decision is not just about protecting finances; it’s about ensuring peace of mind during potential ATO reviews.

The Cost of an ATO Audit

The average cost for professional fees associated with a standard ATO review of a proprietary limited (Pty Ltd) company can be as high as $18,000. This figure includes the expenses incurred in navigating through the intricacies of tax regulations, responding to ATO queries, and addressing any discrepancies that may arise during the audit process.

The Affordable Solution

Enter audit insurance — a financial safety net designed to alleviate the burden of exorbitant audit-related expenses. For an average annual cost of around $600, businesses can secure comprehensive coverage that not only shields them from the financial impact of an ATO audit but also allows them to navigate the process with professional support.

Why Choose Audit Insurance?

1. Cost Mitigation:

  • Shield your business from hefty expenses associated with ATO audits, including accounting and legal fees.
  • The annual investment in audit insurance is minimal compared to the potential costs of an unexpected ATO review.

2. Peace of Mind:

  • Focus on running your business without fear of unexpected financial setbacks due to audits.
  • Audit insurance provides peace of mind, allowing you to concentrate on growth and development rather than compliance concerns.

3. Professional Support:

  • Freedom to access our team of experts to assist in handling ATO audit queries ensures that your business is in capable hands.
  • Receive guidance throughout the audit process, ensuring compliance and minimising the risk of financial penalties.

Being prepared for unforeseen challenges is a mark of a prudent entrepreneur. Audit insurance emerges as a sensible investment, providing a safety net against the potential financial impact of ATO audits.

With an average annual cost that pales in comparison to the potential expenses of an initial review or an extensive audit, business owners can make an informed decision to safeguard their financial health. In the end, the choice is yours but with audit insurance, you can make that choice with confidence and financial security.

READ MORE OR REQUEST A QUOTE

Compliance cogs

Steps to Prepare for New Fixed Term Contract Rules

Posted on | by Allan Hall

From 6 December 2023 there have been substantial changes in the usage of fixed term contracts.

What are the New Rules?

There are new rules for fixed term contracts that are designed to regulate employment duration and extensions. These changes will bring about a significant shift in how employers engage workers on a fixed term contractual basis.

The main changes encompass three key areas:

  1. Time Limitations: Fixed term contracts cannot exceed a duration of 2 years.
  2. Renewal Limitations: Contracts cannot have an option to extend or renew to lengthen the employment period beyond the stipulated 2-year period. Additionally, extensions or renewals cannot occur more than once.
  3. Consecutive Contract Limitations: Employees cannot be offered a new fixed term contract if specific conditions apply. These include if:
    • their previous contract was fixed term, and
    • their previous and new contracts are mainly for the same work; and
    • there is continuity in the employment relationship between contracts. 

Additional considerations include whether:

  1. the employee’s previous contract contained an option to extend and was used;
  2. the total period of employment is greater than 2 years;
  3. the new contract has a clause to extend; and
  4. the previous contract was fixed term, similar work and there was substantial continuity of the employment relationship.

These new rules do not cover casual employees and contain exceptions for certain types of fixed term contracts. 

Contracts made before 6 December 2023 won’t fall under these new limitations, but the rules will apply to fixed term contracts entered into on or after this date.

Employers are mandated to provide a Fixed Term Contract Information Statement (FTCIS) to new employees engaged under these contracts after 6 December 2023. This statement outlines the regulations and entitlements related to fixed term employment.

Download the Fixed Term Contract Information Statement (FTCIS) here »

Steps to Ensure Compliance

In order to ensure compliance with the new changes, we recommend that businesses take the following steps:  

  • Familiarise yourself with the new rules as per the Fixed Term Contract Information Statement (FTCIS) above
  • Conduct an audit of any current employees on Fixed Term Contracts within the business to assess if contracts will be compliant moving forward
  • Identify whether the business or individual employee may be exempt from the new changes 
  • Revise Fixed Term Contract templates terms and conditions to ensure you are compliant.  

These changes aim to protect employees and ensure fair employment practices, while simultaneously providing clarity and guidelines for employers navigating the realm of fixed term contracts.  

Need Assistance?

At Allan Hall HR, we have a team of experienced consultants to assist with all your employment contractual arrangements and ensure your business is compliant with current legislation. If you are uncertain about how the new legislation applies to your business, please feel free to call us on 1300 675 393 or contact us here. To learn more about our HR services, please click here.

stopwatch countdown to deadline

Small business lodgement penalty amnesty deadline

Posted on | by Allan Hall

Clock ticking on small business lodgement penalty amnesty

Small businesses have until the end of December 2023 to get back on track with overdue forms via the small business lodgement penalty amnesty.

Late lodgement penalties will be remitted under the amnesty which ends on 31 December 2023 for small business income tax returns, fringe benefits tax (FBT) returns and business activity statements (BAS) originally due between 1 December 2019 and 28 February 2022.

More than 14,000 small businesses have taken advantage of the amnesty since it kicked off on 1 June 2023, with more than $48 million in failure to lodge (FTL) penalties remitted.

Directors who bring their company lodgements up to date can also have FTL penalties remitted if they rely on company lodgements to finalise their tax affairs. This applies to eligible lodgments made between 1 June and 31 December 2023.

The amnesty provides an opportunity for small businesses to re-engage with their tax affairs and get back on track with their lodgement obligations without penalties.

If a small business has ceased trading, they need to advise their registered tax professional or contact the ATO directly to seek assistance with finalising their tax obligations, which may include lodging overdue returns, cancelling their ABN and paying any amounts overdue.

While penalties will be remitted under the amnesty, if a business finds themselves with a tax debt after their overdue forms are lodged, they must pay in full to avoid further interest charges or check the ATO website to see if they are eligible for a payment plan.

CONTACT ALLAN HALL BUSINESS ADVISORS

November

Retirement of Trading Names

Posted on | by Allan Hall

Check if a retirement of trading name applies to your business

The Australian Business Register (ABR) has been phasing out the use of trading names and trading name terminology since 2018 and will no longer display pre-existing trading names against an entity’s Australian Business Number (ABN) from 1 November 2023.

The ABR now requires that all businesses that have been operating under the now-retired trading name branding shift to operating under either the name registered against the ABN or a registered Business Name.

Does this apply to my business?

If your registered company such as “Sales Pty Ltd” is registered against an ABN, no change is needed.

However, if you conduct business under a name other than your own or your ASIC-incorporated entity name, you will be required to register a Business Name with the Australian Securities Investment Commission by 1 November 2023. All business names need to be registered against an ABN which is managed via ASIC Connect.

You can find more about Business Name registrations here: Registering a business name | ASIC

To discuss if this should apply to you or for assistance in registering a Business Name please, contact our team on 02 9981 2300.

CONTACT ALLAN HALL BUSINESS ADVISORS
calculator on AUD$

Using business money for private purposes

Posted on | by Allan Hall

2 steps to take

If you use money or assets from your company or trust for private purposes and don’t account for the transactions correctly, there can be tax consequences.

That’s why it’s important to get it right.

Business money and assets you take or use for private purposes can include:

  • salary and wages
  • director fees
  • fringe benefits, such as an employee using the company car
  • dividends paid by the company to you as a shareholder (that is, distribution of the company’s profits)
  • trust distributions if your business operates under a trust and pays you as a beneficiary
  • loans from a trust or company
  • ad hoc drawings or takings
  • allowances or reimbursements of expenses you receive from a trust or company.

If you’ve used business money or assets from a company or trust for private purposes, follow these steps to avoid unintended tax consequences:

  1. Keep accurate records of the transactions, and
  2. Account for the transactions in the company or trust tax return and your individual tax return, if applicable.

Remember, there are different reporting and record-keeping requirements for each type of transaction, so make sure you know how to keep accurate records to suit your circumstances.

You can also practise good record-keeping habits by regularly cross-checking your records against the original documents so you can fix mistakes earlier and monitor your business’s cash flow.

Taxpayers are ultimately responsible for keeping business records and what you claim in your tax returns, however Registered Tax or BAS Agents like Allan Hall on the Northern Beaches can help and advise on your tax.

CONTACT ALLAN HALL BUSINESS ADVISORS

team training session

Respect@Work Legislation

Posted on | by Allan Hall

Practical Steps for Small Businesses to comply with the new Respect@Work Legislation

As previously advised to our clients, a significant shift will occur in the Australian employment landscape on 13th December 2023. There are a number of legislative changes which employers are required to comply with under the Respect at Work reforms.

These amendments place a ‘positive duty’ on employers to take reasonable and proportionate measures to eliminate, as far as possible, unlawful sexual discrimination in their workplaces.

How to Comply – To comply with these laws, you need to take proactive steps and implement preventative actions against discrimination based on sex, harassment, hostile work environments and victimisation related to complaints or allegations.

Here are some practical steps for small businesses to prepare and comply with these changes:

1. Educate Your Team: The first step towards compliance is understanding the changes.

Educate and formally train your managers and employees about the updated legislation, emphasising the importance of respect, dignity, and equality in the workplace. This training should focus on ensuring everyone is aware of their rights and responsibilities and understands what is and isn’t appropriate workplace behaviour.

2. Review and Update Policies: Formalise your company expectations.

Review your existing workplace policies, especially those related to discrimination, harassment, or bullying. Ensure they align with the legislative changes. Take this opportunity to check that your Work Health and Safety policies place equal emphasis on psychosocial hazards as well as physical hazards, to ensure you comply with applicable Work Health and Safety legislation. Ensure your Compassionate Leave Policy specifies that employees and their partners can access miscarriage leave.

Once these changes are made, ensure you clearly communicate these changes to your employees. Having clear and legally compliant policies in place not only ensures compliance but also sets the tone for a respectful work environment.

3. Foster a Respectful Culture: Proactively promote a culture of respect, inclusivity and diversity.

Encourage open communication, active listening, and empathy among employees. Lead by example, demonstrating respectful behaviour at all levels. Demonstrate your positive steps to avoiding sexual harassment and sex-based incidents by clearly communicating what is and isn’t appropriate. If you have a client-facing business, ensure that your clients also act respectfully with your team members by communicating your expectations. By fostering a positive workplace culture, you create an environment where everyone feels valued and supported.

4. Seek Feedback: Give your team a chance to share their experiences.

Seek feedback from employees through anonymous surveys or focus groups to gauge their experiences within the work environment. Regularly review your workplace practices and culture to identify areas for improvement. Use this information to make necessary changes, ensuring your workplace remains respectful and inclusive.

5. Establish Reporting Procedures: Create effective reporting channels

Create clear and confidential reporting procedures for incidents of harassment, discrimination, or bullying. Ensure employees know how to report such incidents and that they can do so without fear of retaliation. Having a well-defined reporting process demonstrates your commitment to addressing workplace misconduct promptly and effectively.

6. Provide Ongoing Training and Support: Keep everyone up to date.

Equip your employees with the knowledge and skills to identify and address disrespectful behaviour. Offer regular and ongoing refresher training on topics such as conflict resolution and unconscious bias. Provide support such as confidential access to counselling services for employees who may have experienced harassment or discrimination.

7. Consult Experts: Don’t get caught short.

The legislation applies to every business, regardless of type, size and scope. If you would like assistance in actioning these steps, our HR Team is assisting many of our clients with tailoring the above steps to suit their business. The HR Team can provide guidance, training, advice and essential templates to assist you in meeting the minimum requirements for your business. If you are uncertain about how the new legislation applies to your business and what you need to do to comply, please contact Allan Hall HR at [email protected] or call us on 1300 675 393.

taxation & accounting

Business income: it’s not just cash

Posted on | by Allan Hall

Clothing, jewellery, gaming products, flights and crypto assets are just some of the things you might have to account for in your tax return as part of your business income.

If you received these or any other non-cash benefits instead of money for your goods or services, or as a tip or gift – you must record them as income at their market value.

This means you record the cash price that you would normally have to pay for those goods or services.

You may be able to reduce the assessable amount of a non-cash benefit you’ve received, by the amount you would have been able to claim as a deduction if you had purchased the item to be used in carrying on your business.

It’s important to report your regular forms of income

Such as:

  • cash and digital payments
  • vouchers or coupons
  • business investments
  • online and overseas business activities
  • services you provide using your personal effort and skills (personal services income)
  • the sharing economy, such as ride-sourcing
  • assessable government grants and payments
  • the value of trading stock you take for your own use
  • payments from insurance claims.

There are some payments that aren’t assessable income, so you don’t need to include them on your return, such as:

  • non-assessable non-exempt (NANE) government grants
  • bona fide gifts or inheritance
  • GST you’ve collected
  • money you’ve borrowed or contributed as the business owner.

Always keep accurate and complete records to prove the income you report and the expenses you claim as deductions.

Remember, registered tax professionals like Allan Hall in Brookvale can help and advise on your tax.

CONTACT ALLAN HALL BUSINESS ADVISORS

Compliance cogs

Understanding Director Penalty Notices

Posted on | by Allan Hall

Navigating the ATO’s Enforcement Measures

In the complex territory of tax obligations, the Australian Taxation Office (ATO) is actively deploying Director Penalty Notices (DPN) at an average rate of 60 per day, as revealed by the ATO themselves.

A DPN does not confer liability upon directors for outstanding company debt, as directors are inherently liable by law. Rather, it serves as a formal notification that initiates a countdown, compelling directors to either remit the debt promptly or confront the ensuing consequences.

There are imperative steps for directors to take in response to a DPN:

  1. Complete business lodgements even if there is an inability to pay associated liabilities such as PAYG, GST and superannuation
  2. Ensure business address accuracy on ASIC’s register
  3. Seek advice from a liquidator if you are unable to meet the DPN amount.

Lockdown DPNs

A lockdown DPN comes into play when a company fails to lodge Business Activity Statements (BAS) and Instalment Activity Statements (IAS) within three months of the due date or Superannuation Guarantee Charge (SGC) statements within one month and 28 days after the quarter’s end to which the superannuation charge contribution relates. In such cases, directors face automatic and permanent exposure to penalties, with the sole remedy being full payment of the debt.

Non-lockdown DPNs

Conversely, a non-lockdown DPN provides directors with a 21-day window to consider options for remitting the applicable tax (penalty). The available choices include paying the debt, appointing a voluntary administrator, engaging a small business restructuring practitioner or appointing a liquidator. Failure to act within this timeframe results in the penalty becoming permanent, empowering the ATO to initiate debt recovery proceedings.

Adding a layer of complexity, the ATO now issues DPNs that break down amounts owed into lockdown (monthly unremitted amounts) and non-lockdown (monthly remitted amounts) columns.

Navigating the intricacies of DPNs can be challenging for directors, so engaging with a qualified tax advisor is crucial to gaining the necessary support and understanding:

  • Explaining the mechanics of DPNs
  • Reviewing individual circumstances to provide tailored assistance and outlining options based on unique circumstances
  • Offering support throughout the decision-making process.

In essence, understanding and responding to Director Penalty Notices requires a comprehensive approach, combining intricate tax knowledge and strategic insights, ensuring directors are well-equipped to address these ATO enforcement measures.

CONTACT ALLAN HALL BUSINESS ADVISORS

Related reading

Director penalty notices
Parliament House

Support for Australian small business

Posted on | by Allan Hall

The Government has introduced the Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023 (the Bill) into Parliament.

The Bill delivers measures announced in the 2022‑23 Budget to ease pressure and boost resilience for small businesses.

Schedule 1 to the Bill will implement a $20,000 instant asset write‑off for one year, as announced in the 2023‑24 Budget, to improve cash flow and reduce compliance costs for small businesses.

Small businesses with aggregated annual turnover of less than $10 million will be able to immediately deduct eligible assets costing less than $20,000, from 1 July 2023 until 30 June 2024.

The $20,000 threshold will apply on a per asset basis, so small businesses can instantly write off multiple assets.

This is targeted, responsible support, to help Australia’s small businesses continue to grow.

Schedule 2 to the Bill will introduce the Small Business Energy Incentive, a 2023‑24 Budget measure designed to help small and medium businesses electrify and save on their energy bills.

Up to 3.8 million small and medium businesses with aggregated annual turnover of less than $50 million will have access to a bonus 20 per cent deduction for eligible assets supporting electrification and more efficient use of energy.  

The new tax incentive applies from 1 July 2023 until 30 June 2024. Up to $100,000 of total expenditure will be eligible for the incentive, with the maximum bonus tax deduction being $20,000.

The new Small Business Energy Incentive builds on the Albanese Government’s measures to help small businesses become more energy efficient and ease pressure on their energy bills.

Small businesses are the engine room of Australia’s economy, which is why these new measures are so critical.

CONTACT ALLAN HALL BUSINESS ADVISORS