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My business needs a bookkeeper

Wed, 08 May 2024 01:47:36 GMT

My Business needs a bookkeeper

This video is designed to educate business owners on the value of a professional bookkeeper and BAS Agent - enjoy!

YouTube: https://www.youtube.com/watch?v=KgH8nLT6Ut8

NEW YEAR, NEW CAR?

Sun, 10 Mar 2024 23:20:37 GMT

The Car Limit and Key Exceptions

If you are thinking of a new vehicle this year, it is helpful to understand the rules around what can be claimed from a GST viewpoint and overall implications of the claims you can make depending on your choice of vehicle.

The Car Limit and Key Exceptions

According to the Collins dictionary, a car is a “motor vehicle with room for a small number of passengers”. In everyday life, this definition serves us well. It is simple, sensible and easy to understand. Unfortunately, in the world of tax and GST, nothing is simple, sensible or easy to understand, and this extends to the definition of a “car”!

The definition of a car is very important as it has a role to play in a whole raft of measures, some of which include:

• the so-called “Car Limit”, against which GST claims and depreciation deductions are calculated;

• the applicability of various fringe benefits tax (FBT) concessions and exemptions;

• the applicability of other indirect taxes such as luxury car tax (LCT);

• the manner in which personal income tax deductions are claimed.

Of these, it is the Car Limit - which serves to cap GST claims and depreciation claims for income tax purposes.

What is the Car Limit?

The Car Limit for the 2023/24 financial year is $68,108.

From a GST standpoint, the maximum GST credit you can claim on the purchase of a car (except in certain circumstances) is one-eleventh of the Car Limit, which is $6,191 in 2023/24.

From an income tax standpoint, the Car Limit represents the maximum value that can be used for calculating depreciation on the business use of a car first used or leased in the 2023/24 income year.

The Car Limit is indexed annually in line with movements in the motor vehicle purchase subgroup of the consumer price index (CPI).

For GST-registered businesses, the allowable GST credit (with reference to the Car Limit) should be calculated first. This is then subtracted from the cost of the vehicle and the resulting amount referenced against the Car Limit for a second time in determining the amount by which depreciation can be based for income tax purposes (noting that this calculation is, strictly speaking, the domain of the registered tax agent).

Exceptions

In certain circumstances you can claim a GST credit for the full amount of GST included in the price of a car even if the car costs more than the Car Limit. Those circumstance are where:

1. the vehicle is not considered to be a “car” in the first place; or

2. the vehicle is considered to be a car, but it is used in carrying on a business and at least one of the following conditions is met:

• the car is held solely as trading stock, other than for hire or lease;

• the car is held for the purposes of carrying out research and development for the manufacturer of the car;

• the car is exported in circumstances where the export is GST-free;

• the car is an emergency vehicle;

• the car is a commercial vehicle that is not designed for the principal purpose of carrying passengers;

• the car is a motor home or campervan; or

• the car is a vehicle specifically fitted out for transporting disabled people seated in wheelchairs.

If purchasing a new car this year, even if you are using the car solely for business purposes, the cost limit will come into play where the purchase price exceeds the cost limit. This won’t come into play however, where the vehicle does not meet the definition of a “car” or is a “commercial vehicle not designed for the principal purpose of carrying passengers”. Each of these carve outs are complex in their own ways and you should turn to your bookkeeping technician at Integral Bookkeeping & Business Solutions or contact your accountant for further guidance.

Disaster Recovery Planning

Sun, 10 Mar 2024 23:01:17 GMT

DISASTER RECOVERY PLANNING – A MUST FOR BUSINESSES

The new year has seen parts of Australia suffering in the wake of natural disasters. The Australian Small Business Ombudsman recently stated that three out of four small businesses lacked any contingency plans when it came to responding to a natural disaster. In an era where the frequency and severity of natural disasters, like floods, severe storms, cyclones and bushfires are on the rise, many businesses appear to be under-prepared for such

events.

Is it because, as a small business owner, you don’t know where to start, don’t think it will happen to you, or you simply lack the time to deal with such a plan on top of all the other roles you take on?

The Unseen Financial Implications of Natural Disasters

Natural disasters can have a profound impact on businesses, going beyond the immediate physical damage. There’s an often-overlooked aspect of these events – their long-term financial ramifications. Businesses may face disrupted cash flows, lost revenue due to operational downtime, and unexpected expenses in rebuilding and recovery efforts.

Why Disaster Recovery Planning is Essential

A Disaster Recovery Plan is a comprehensive document outlining how a business will continue its operations during and after a significant unexpected event. This plan is not a luxury but a necessity, ensuring that businesses can quickly resume critical functions following a disruption. The lack of such a plan can exacerbate the challenges faced during recovery, potentially leading to prolonged business interruption, loss of clients, and even business closureThe new year has seen parts of Australia suffering in the wake of natural disasters. The Australian Small Business Ombudsman recently stated that three out of four small businesses lacked any contingency plans when it came to responding to a natural disaster. In an era where the frequency and severity of natural disasters, like floods, severe storms, cyclones and bushfires are on the rise, many businesses appear to be under-prepared for such events. Is it because, as a small business owner, you don’t know where to start, don’t think it will happen to you, or you simply lack the time to deal with such a plan on top of all the other roles you take on? The Unseen Financial Implications of Natural Disasters Natural disasters can have a profound impact on businesses, going beyond the immediate physical damage. There’s an often-overlooked aspect of these events – their long-term financial ramifications. Businesses may face disrupted cash flows, lost revenue due to operational downtime, and unexpected expenses in rebuilding and recovery efforts.

Putting the Super into Pay Day

Thu, 31 Aug 2023 23:30:43 GMT

THE PROPOSAL IN A NUTSHELL:

The proposal is to align the payment of employee Superannuation Guarantee (SG) payments with the employee’s pay day (Pay Day Super) by 30 June 2026.

Why is the project underway?

The targeted benefits of Pay Day Super are severalfold: 1. Employee retirement benefits should be higher by the earlier investment of contributions. 2. The SG Gap (unpaid SG) caused by employers going broke and deliberate non-payment should be lessened. There are downsides of course, employers’ cash flow will need to be brought forward and this could be an issue particularly for those employers that do not experience regular cash flow such as seasonal earners and those with sporadic invoicing. There will also be the additional administrative cost in both labour and software.

The Pay Day Super challenges:

The task is huge especially when you consider the subchallenges that are inherent in it, including:

Facilitating Real-time Payments:

A few years back the notion of paying SG and having it arrive in the employee’s superannuation account in real time would not have been possible, technology could not have made it happen. In more recent times, it is conceivable with banking changes such as New Payments Platform or a crypto platform. In addition to the speedier payment, the selected platform also needs to be able to transmit sufficient data with the payment to properly identify the recipient and the character of the superannuation contribution.

Historic handling of SG contributions:

The typical passage of SG from employer to employee’s super account goes like this: the employer sends funds to their bank, who pass it to a Clearing House who pass it to the employee’s Superannuation fund who then allocate it to a members account. This process typically takes somewhere between 4 or 5 days and up to 2 weeks. This sort of lag does not accord with the notion of Pay Day Super.

Legislation:

New legislation will need to be drafted to govern each of the stakeholders; employers, superannuation funds, Clearing Houses, the ATO etc. This will be a significant body of work and will need government and possibly bi-partisan support to pass it into law.

Superannuation Guarantee Charge (SGC):

The current rules around SGC are draconian and full of inequitable outcomes to both employers and employees. Well intentioned employers can end up with significant SGC liabilities resulting from circumstances outside their control. Employees reliant on the SGC to recover shortfall SG payments from errant employers are often left unpaid. The current penalty regime and system of assurance that SG will be paid must be improved for Pay Day Super to boast success.

The Benefits of Hiring a Bookkeeper

Thu, 12 Jan 2023 03:25:44 GMT

Hiring a bookkeeper is an important decision for any business. Having a trained and experienced professional to maintain your financial records can be invaluable. Here are some of the key advantages a bookkeeper can provide:

Accuracy

Properly maintained records are essential for accurate reporting and the correct filing of taxes. A qualified bookkeeper knows the best practices in accounting and record keeping to ensure information is entered correctly into your books, which will lead to accurate reporting, budgeting and filing taxes. If records are not kept accurately, it can result in costly mistakes and audits or, even worse, a lawsuit.

Time Savings

Maintaining clean and organised books requires considerable time on top of running the day-to-day operations of your business. With the help of a bookkeeper, you can focus on what matters most—growing and running your business. Bookkeepers are trained to be efficient with their time and will ensure all tasks are completed promptly and accurately.

Strategic Insight

Bookkeepers can provide valuable insights into improving your business’s financial health, such as finding ways to reduce costs or increase profits. They have the knowledge and experience in analysing financial data, which can be used to help you make decisions about the future of your business.

Peace of Mind

Accurate financial records are an excellent way for a business owner to have peace of mind that all finances are in order and being taken care of professionally at all times. A bookkeeper will ensure everything is up-to-date and accurate, so you don’t have to worry about it.

Overall, a bookkeeper can be a great asset to any business. Their expertise and knowledge can help save time, provide accuracy, offer strategic insights, and give you the peace of mind that your finances are in order. If you’re looking for reliable assistance with your business’s financial records, consider hiring our bookkeepers at Integral Bookkeeping & Business Solutions. You won’t regret it!