Newsletter - June 2021
Cents & Sensibility | Tax News | Views | Clues
Managing Data using Cloud Technology – Mei Wu
I am passionate about the ability of technology to simplify - it stores sensitive information efficiently and effectively.
This is an introduction to cloud software available today. You may be subscribed to Microsoft 365 (O365) with access to the general suite of applications ranging from Word, Excel, PowerPoint, Outlook, OneNote, OneDrive and Skype. The benefit of O365 is its accessibility to multiple devices, such as desktop, laptop, tablet and mobile phone. If you save your data using OneDrive, O365’s cloud storage service, you can access your files from any of your devices. Ensure you activate your two-factor authentication for an extra level of security.
I encourage my clients to create a financial year folder in their OneDrive for everything relating to their tax. They can simply share the folder with me to access their tax information without sending files through email. Moreover, they can share the folder to specific people for a specified period of time. If they need to add more information to the shared folder, they can do so at any time. Similar features are also available for other types of cloud storage on the market, such as Google Drive, Box, Dropbox.
There are many vendors suitable for sole traders and small businesses. At knp, we use Xero, and we are a Xero Gold Partner. With this software, invoicing becomes more efficient, helping with cashflow, as well as bank reconciliations being completed daily through the bank feeds feature. Dashboards can be set up to give you visual updates on progress.
If you have not explored cloud technology, perhaps now is a good time to do so.
If you would like to discuss any of these options, please contact your knp representative.
ATO's taxable payments reporting system update
The ATO has confirmed that more than 60,000 businesses have not yet complied with lodgement requirements under the taxable payments reporting system ('TPRS') for 2019/20.
The TPRS is a black economy measure designed to assist the ATO to identify contractors who don’t report or under-report their income.
The ATO estimates that around 280,000 businesses need to lodge a Taxable payments annual report ('TPAR') for the 2020 financial year.
Importantly, 2020 was the first year that businesses that pay contractors to provide road freight, information technology, security, investigation, or surveillance services may need to lodge a TPAR with the ATO (in addition to those businesses providing building and construction, cleaning, or courier services).
Businesses who have not yet lodged need to lodge as soon as possible to avoid penalties.
ATO Assistant Commissioner Peter Holt added that some businesses may not realise they need to lodge a TPAR, but may be required to, depending on the percentage of payments received for deliveries or courier services.
“Many restaurants, cafés, grocery stores, pharmacies and retailers have started paying contractors to deliver their goods to their customers. These businesses may not have previously needed to lodge a TPAR. However, if the total payments received for these deliveries or courier services are 10% or more of the total annual business income, you’ll need to lodge,” Mr Holt said.
Warning regarding new illegal retirement planning scheme
The ATO has recently identified a new scheme where SMSF trustees were informed that they could set up a new SMSF to roll-over the fund balance from the old SMSF and then liquidate their old SMSF, in an attempt to avoid paying potential tax liabilities.
The ATO warns that taking part in this arrangement and others like it can result in civil and criminal actions and could ultimately put the members' retirement savings at risk.
If a trustee of an SMSF believes they have been approached by a promoter of a retirement planning scheme, the ATO recommends they seek a second opinion from a registered tax agent or appropriately qualified financial adviser, and also report the promoter to the ATO.
New succession planning guide for family businesses
The Australian Small Business and Family Enterprise Ombudsman, in conjunction with Family Business Australia, has released a new online guide to succession planning — the “Introductory Guide to Family Business Succession Planning” — which provides a step-by- step guide to passing the family business on to the next generation.
A recent report revealed that 54% of family businesses have no documented succession plan in place and no retirement plan for the current CEO.
The easy-to-read guide offers tips on how to handle tense conversations that can arise between family members throughout the transition phase.
The guide is free and available on both the Family Business Australia and the ASBFEO’s websites.
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.
knPeople – The Push Up Challenge
Some of the knp team have currently been taking part in the ‘Push-Up Challenge’ this month. The challenge strives to raise awareness for mental health, who’s motto is, “get fit, have fun and learn about mental health.” We have just passed the halfway stage, if you would like to donate, please use the link below.
The Push-Up Challenge (thepushupchallenge.com.au)