CALL US: (07) 3367 0999 | EMAIL US:

Carrying on a business in an SMSF

Posted on August 30, 2017 by admin


Self-managed super funds can carry on a business providing the business is allowed under the trust deed and operated for the sole purpose of providing retirement benefits for fund members. Carrying on a business through an SMSF does have restrictions that other businesses do not have, such as entering into credit arrangements or having overdrafts. SMSF trustees that carry on a business through their fund must adhere to the sole purpose test. The ATO looks for cases where: the trustee employs a family member the ‘business’ is an activity commonly carried out as a hobby or pastime the business carried on by the fund has links to associated trading entities there are indications the fund’s business assets are available for the private use and benefit of the trustee or related parties The same regulatory provisions still apply to funds that carry on a business, i.e, SMSF investments must be made on a commercial ‘arm’s length’ basis, business activities must be conducted in accordance with the SMSF’s investment strategy, collectables and personal use assets cannot be displayed at the business premises and so on. The SMSF cannot be involved in the following business activities: selling an SMSF asset for less than […]


Keep Reading...


Claiming the small business income tax offset

Posted on by admin


The small business income tax offset can help reduce the tax small businesses pay on business income by up to $1,000. This offset is available from the 2015-16 income year onwards. Small businesses with an aggregated turnover less than $5 million can access the concession from the 2016-17 income year. Business income derived by another partnership or trust, in which the small business owner is not a partner or beneficiary, is not eligible for the offset. Small business owners can claim the offset if they receive a share of net small business income from a small business: partnership, in which they are a partner trust, in which they are a beneficiary. The offset is 8 per cent for the 2016-17 income year onwards, 5 per cent for the 2015-16 income year. The offset will increase to 10 per cent in 2024-25, 13 per cent in 2025-26 and 16 per cent in 2026-27.


Keep Reading...


Identifying undervalued assets

Posted on August 23, 2017 by admin


Recent research has found that an alarming 31 per cent of SMSF trustees consider choosing investments as one of the hardest aspects of running an SMSF. Value investing is one such strategy that SMSF investors can utilise to boost their portfolios. Value investing involves identifying undervalued assets that have the potential to increase in value over time. These assets are generally priced well below their intrinsic value due to missed expectations, market crashes, cyclical fluctuations and so forth. To identify undervalued assets or asset classes you need thorough analysis and good judgment. Look for asset classes that are inexpensive and backed by news. It is much better to invest in industries where you understand the business dynamics, i.e., how they make their money, underlying conditions and so on. Furthermore, looking for businesses in industries with a sustainable competitive advantage where external factors do not affect them too much is ideal. When evaluating stocks look at companies with a low debt load, are paying steady dividends and have a quality rating that is average or better. Other metrics to consider include: Price-to-earnings ratio: This is a stock’s current share price divided by its annual earnings. A lower ratio indicates it is […]


Keep Reading...


Have you received personal services income?

Posted on by admin


Personal services income (PSI) is income mainly produced from your personal skills or efforts. There are special tax rules that apply if your income is classified as PSI. Almost any trade, industry or profession can receive PSI. The most common are financial professionals, IT consultants, engineers, construction workers and medical practitioners. PSI does not affect employees receiving only salaries and wages. When more than 50 per cent of the amount you received for a contract was for your labour, skills or expertise, then the income is classified as PSI. If you have received PSI (including if you have received it as a company, partnership or trust), you will need to work out if the PSI rules apply to that income. You can use the ATO’s Personal services income decision tool to do this. Where the rules do apply, they affect how you report your PSI to the ATO and the deductions you can claim. In the circumstances where the PSI rules do not apply, you are still required to declare any PSI amounts at the relevant labels on your tax return. Where you receive PSI but the rules do not apply, there are no changes to the deductions you can […]


Keep Reading...


Increased access to Superannuation Clearing House

Posted on August 16, 2017 by admin


The ATO has changed the conditions of registration for businesses to access the Small Business Superannuation Clearing House. The Small Business Superannuation Clearing House is a free online service available for small businesses to make super contributions for their employees. The Tax Office is now allowing businesses with 19 or less employees or businesses with an annual aggregated turnover of $10 million or less to use the service. These employers can now make super guarantee contributions as a single electronic payment to the Clearing House and it will then distribute the payments to employees’ funds. The super guarantee contributions count as paid on the date the Clearing House accepts them. Employers have 21 days to pass an employee’s choice of fund to the Clearing House. The Clearing House reduces red tape and compliance costs for small business. In early 2018, the Clearing House will be integrated with other ATO online services in the Business Portal to better serve the growing number of users.


Keep Reading...


Increased access to Superannuation Clearing House

Posted on by admin


The ATO has changed the conditions of registration for businesses to access the Small Business Superannuation Clearing House. The Small Business Superannuation Clearing House is a free online service available for small businesses to make super contributions for their employees. The Tax Office is now allowing businesses with 19 or less employees or businesses with an annual aggregated turnover of $10 million or less to use the service. These employers can now make super guarantee contributions as a single electronic payment to the Clearing House and it will then distribute the payments to employees’ funds. The super guarantee contributions count as paid on the date the Clearing House accepts them. Employers have 21 days to pass an employee’s choice of fund to the Clearing House. The Clearing House reduces red tape and compliance costs for small business. In early 2018, the Clearing House will be integrated with other ATO online services in the Business Portal to better serve the growing number of users.


Keep Reading...


Tax penalty remissions

Posted on by admin


The Australian Taxation Office distributes penalties to ensure individuals are not making misleading or false statements regarding income, business and wealth matters. Studies indicate there is over $5.5 billion lost every year through tax avoidance in Australia, a massive amount of money. One of the reasons these penalties exist is to ensure taxpayers take more care and responsibility in adhering to their tax responsibilities. While the ATO has the power to distribute penalties, they also have the discretion to reduce or modify the penalties individuals owe. If you find yourself in a position where you are owing money due to penalties such as failing to lodge in due time, PAYG withholding, etc., there are a number of actions you can take. You can make a request to remit or cancel your penalty either online, by phone or by mail. In your request to remit or cancel a taxation penalty, you will need to provide the following: Full name Name, address and contact number to contact you (or an individual on behalf of you) regarding your request Tax file number/Australian business number Reference number (you will be advised of when you receive your penalty notice) Reason/s as to why penalty should […]


Keep Reading...


Tax penalty remissions

Posted on by admin


The Australian Taxation Office distributes penalties to ensure individuals are not making misleading or false statements regarding income, business and wealth matters. Studies indicate there is over $5.5 billion lost every year through tax avoidance in Australia, a massive amount of money. One of the reasons these penalties exist is to ensure taxpayers take more care and responsibility in adhering to their tax responsibilities. While the ATO has the power to distribute penalties, they also have the discretion to reduce or modify the penalties individuals owe. If you find yourself in a position where you are owing money due to penalties such as failing to lodge in due time, PAYG withholding, etc., there are a number of actions you can take. You can make a request to remit or cancel your penalty either online, by phone or by mail. In your request to remit or cancel a taxation penalty, you will need to provide the following: Full name Name, address and contact number to contact you (or an individual on behalf of you) regarding your request Tax file number/Australian business number Reference number (you will be advised of when you receive your penalty notice) Reason/s as to why penalty should […]


Keep Reading...


Understanding SMSF trustee responsibilities

Posted on August 14, 2017 by admin


Self-managed super fund (SMSF) trustees have onerous duties and responsibilities in relation to the management of their fund. An SMSF trustee primarily needs to ensure the fund is properly managed for the benefit of members for their retirement. All trustees must ensure the fund assets are held in trust and invested on behalf of the members. Trustees need to ensure their fund complies with all super rules including super laws and the fund’s trust deed. Trustees must regularly review and update the fund’s trust deed and investment strategy in accordance with the law and the needs of the SMSF’s members. Another responsibility is to accept contributions and paying benefits (income streams and lump sums) in accordance with super laws and the fund’s trust deed. Trustees must also advise the Tax Office of any changes in trustees, directors or members within 28 days of the change taking place. SMSF trustees also have the duty of undertaking various administrative tasks such as lodging annual returns and record-keeping, as well as ensuring an approved SMSF auditor is appointed for each income year. Where a conflict arises between your wishes as a member and your legal responsibilities as a trustee, you must comply with […]


Keep Reading...


Understanding SMSF trustee responsibilities

Posted on by admin


Self-managed super fund (SMSF) trustees have onerous duties and responsibilities in relation to the management of their fund. An SMSF trustee primarily needs to ensure the fund is properly managed for the benefit of members for their retirement. All trustees must ensure the fund assets are held in trust and invested on behalf of the members. Trustees need to ensure their fund complies with all super rules including super laws and the fund’s trust deed. Trustees must regularly review and update the fund’s trust deed and investment strategy in accordance with the law and the needs of the SMSF’s members. Another responsibility is to accept contributions and paying benefits (income streams and lump sums) in accordance with super laws and the fund’s trust deed. Trustees must also advise the Tax Office of any changes in trustees, directors or members within 28 days of the change taking place. SMSF trustees also have the duty of undertaking various administrative tasks such as lodging annual returns and record-keeping, as well as ensuring an approved SMSF auditor is appointed for each income year. Where a conflict arises between your wishes as a member and your legal responsibilities as a trustee, you must comply with […]


Keep Reading...


Business
advice

taxation
planning

compliance
services

News

How does the super guarantee charge work?

September 20, 2017

Employers who do not pay the minimum amount of super guarantee for their employee(s) by the due date may have to pay the super guarantee charge (SGC).

The charge is made up of super guarantee shortfall amounts including any choice liability calculated on your employee’s salary or wages, interest on those amounts (currently 10 per cent) and an administration fee ($20 per employee, per quarter).

Employers must report and rectify the missing payment by lodging an SGC statement by the due date and paying the SGC to the ATO. Employers may be able to use a late payment to reduce the amount of SGC, however, they must still lodge an SGC statement and pay the balance of the SGC to the ATO.

The ATO prioritises the collection of unpaid SGC debts. If an employee reports an employer for unpaid super, the ATO will investigate on their behalf.

Employers must lodge their SGC statement and pay the charge by the due date.

Quarter Period Due date
1 1 July – 30 September 28 November
2 1 October – 31 December 28 February
3 1 January – 31 March 28 May
4 1 April – 30 June 28 August

If a due date falls on a weekend or public holiday, the payment can be made the next working day.

Once the statement has been lodged and the SGC is paid, the ATO will transfer the super guarantee shortfall amount and any interest to the employee’s chosen super fund.