End of Year Tax Advice: Compliance Program

November 23rd, 2009 by Cat

The 2009–2010 ATO compliance program has been released. This document gives us a good idea of what areas the Australian Taxation Office will be focussing on in the next 12 months or so.

For Small to Medium Enterprises (SMEs), the ATO will be taking a close look at the following areas in particular:

  • Recouping outstanding tax debts and liabilities
  • Adherence to Fringe Benefits Tax guidelines
  • Conformity to Income Tax regulations
  • Implementation of the Investment Allowance protocols

If you are operating a SME, make sure your accountant is aware that these areas will be closely monitored by the ATO in the year to come and that your accounts are fully  compliant.

You can find out more about the Investment Allowance tax break by reading this article written by Your Business Angels CEO Gavin Waring.

End of Year Tax Advice: The Office Christmas Party

November 23rd, 2009 by Cat

Have you booked the restaurant yet? The function space? How about the speech to thank your employees for another year of hard work?

The Office Christmas Party is fast approaching and it is now time to get organised and make your plans for it!

Now, I’m not just talking about food, drinks and some cracking tunes on the speaker, but also some tax advice. That’s Fringe Benefits Tax advice:

  • Gifts for your employees are eligible for deductions and you can claim the GST
  • Employee gifts over $300 will incur Fringe Benefits Tax
  • Depending on where you host your party, you may incur Fringe Benefits Tax: host at your offices and you can avoid FBT for your employees

You can find out more about Fringe Benefits Tax and Christmas Parties on the Australian Taxation Office website. Ask your accountant about hosting your Office Christmas Party, or call Your Business Angels if you need more advice.

End of Year Tax Advice: Investment Allowance

November 23rd, 2009 by Cat

The calendar year is coming to a close, so it’s time for some end of year small business tax advice.

Following up on this post from May, you can see that small businesses are running out of time to take advantage of the Investment Allowance. Businesses with a turnover of less than $2 million may be eligible for to receive a tax deduction of up to 50% on capital asset investments made before December 31 this year.

Businesses with a turnover of more than $2 million may still be eligible for the Investment Allowance tax deduction to a lesser percentage.

In both cases, the capital invested in may be purchased, constructed or an improvement made to an existing asset. The nature of the asset and the date by which it is installed and ready to use may also affect the amount of tax deduction your business is eligible for.

Find out if your business is eligible for the Investment Allowance tax deduction at the Australian Taxation Office website.

This is a great opportunity to make some savings on important capital investments for your business.

Bonus Tax Advice!

Don’t forget Gavin’s important tax advice that “nothing is as expensive as something you don’t need”.

SME Advice Video: Chapter Two – Business Structure

November 10th, 2009 by Cat

The latest YouTube video from Your Business Angels is up! This video tackles the weighty theme of choosing the correct structure for your business.

We will be posting regular videos to YouTube, so you can subscribe to the Your Business Angels channel, or check back here for the next episode! Chapter 2 will be dealing with the topic of Business Structure.

If you have any suggestions for future videos or comments on the series, please don’t hesitate to contact Your Business Angels.

Tips for Debt Repayment and Collection

November 4th, 2009 by Gavin Waring

One of the most effective policies I instigated a long time ago at Your Business Angels involves paying our tax obligations weekly. We also make sure that all our monthly contracts (mostly media) are paid every week as well.

In addition, we ask our clients to pay our fees weekly through ezidebit. For our clients these small bite size amounts seem easier to digest, and it suits the way we pay our creditors. Sure it doesn’t always work, but essentially it’s the key tactic to keeping our business cash flow moving along.

When a client comes to us with problems paou outing creditors I ask them “how would you eat an elephant?”. The answer of course is slice by slice (I wish I could remember where I first heard that!). I then explain that like eating an elephant, it’s best to start with a small-and-often payment plan to reduce your debt. It doesn’t matter who the creditor is, it’s important that you begin making the effort.

Now, I know that here is where I should be all threatening and start talking about insolvency. I should be defining insolvency for you. The truth is, that if the official definition of insolvency[1] in Australia for both cash and capital was applied to all Australian businesses then most Australian businesses would disappear.

Instead, let me give you some basic ideas for dealing with your business debt when your cash flow is looking poor in the short term (if you have medium to long term cash flow problems then we really need to have a chat):

  1. Acknowledge to yourself you can’t pay everyone immediately.
  2. Start paying something – the creditor will probably get angry, reject the offer, but keep paying anyway. You will be amazed how quickly creditors quieten down once they start to receive regular payments. The amounts that you are paying may in the first instance be small and almost insulting but regular payments will at least begin the journey to repay your creditor
  3. Always make a payment with any offer you make. Don’t wait until it has been rejected (it probably will be), send the first cheque or deposit funds directly into your creditor’s accounts with any offer, and “keep the promise” (that is, keep paying).
  4. Never make an offer that you can’t keep. That is why we always recommend that you start the effort of payment as soon as you can with a small payment.
  5. This applies to the ATO. Start paying the ATO little and often. A case manager will see the payments coming through on their running balance account and perhaps call someone else.
  6. Look at your market – can you charge more? You have to get the extra cash from somewhere and perhaps you are letting your clients of the hook. Remember you don’t have to be too competitive, just competitive enough.

Once you have developed some faith with your creditor, then discuss the future with them. They have been good enough to extend credit to you and so it’s important that you respect them and bring them back to being a supplier.

The same will apply to debts that are owed to you. If you know a business is going to struggle to pay you, then subscribe to ezidebit, send the form to your client and have them start repaying you in the same manner.

We advise that you never ever give credit to a customer.

There are lots of reasons that your business may struggle with cash flow. At Your Business Angels we have a number of ideas that help you through this.

Sometimes it’s a case of adapting your business model. Cash flow is going to be tough for Australian SME’s for a long time and there is a lot to consider.

If you are having problems, consider contacting Your Business Angels and we may be able to give you the advice you need, arrange short term funding or help with a remodel of the business so that you can move forward with a better cash flow.

Happy trading


[1] To find out more about insolvency, visit Your Business Angels FAQ section or the Australian Government’s Insolvency and Trustee Service Australia