Monthly Archives: September 2018

Computer safety – insurance

Incidences of cyber crime are sharply on the rise.

What would happen to your business if you were subject to a hack or ransom?

Did you know you can take out cyber insurance?

Check with your insurance broker as it is now a normal add on to core business insurances.

Customers – not all your customers are profitable

Not all your customers are profitable.  You know who the ones are that give you the wrong specs, are difficult to deal with, rude to your team and probably add further insult by paying  you late.  There is a point of view that a business should cease acting for its lowest 5% of its customers.

Who are your worst 5% of your customers?

What extra profit would you make by not servicing such customers?

How would you and your team feel if they you know worked with them?

Please contact us if you would like help in devising a customer ranking tool.

Employment – WorkCover injury poster

It is compulsory in Victoria to have If you are injured at work poster displayed in your work place.

Please call us on 9899 7511 if you would like on of these posters.

Cash flow – include due date on your invoices

You will find your customers & clients pay you quicker if you state the actual due date (like 15th October 2018) rather than 15 days.

Password fatigue – and what to do about it

If you are like me, you are finding you are doing more and more on line. And with this comes the need to make up strong, unique and memorable passwords.

And with that comes password fatigue.

And no wonder as it is recommended that a password needs at last 12 if not 15 or more characters; and those being a combination of letters, numbers and characters.

So what should you do?

The answer is to use a password program that stores all your passwords.  There are many such programs and all give protection via one strong and unique password.

You will also benefit from such a program as it will allow you to regularly change your passwords – as keeping the same password is another source of risk.

Please let us know if you would like a referral to an IT specialist who can recommend and install a password protection program for you.


Special disability trusts

Special disability trusts are a most effective way to provide for a family member who suffers from a severe disability. Special disability trusts provide for the accommodation and care of family member.  Such trusts receive substantial social security and tax relief.

Special disability trusts receive the following social security concessions:-

  • Up to $500,000 can be gifted into a special disability trust before gifts are counted under the asset gifting rules .
  • The first $669,750 within a special disability trust will not be assessed under the assets test.
  • The income of a special disability trust doesn’t count against the beneficiaries income test.
  • All reasonable medical and home care expenses can be paid by the trust.
  • A special disability trust can also pay up to $12,000 of discretionary expenses.

By transferring a parent’s assets into a special disability trust, a parent can improve their age pension entitlement.

A special disability trust can be established in two way:-

  • Via a will. However, it must be noted that there is a risk that the provisions of a will may not comply with future laws.
  • In one’s lifetime. However, this means that on-going costs are incurred from day one.

Does a special disability trust sound like a good option for your family’s situation?

You should only make that decision after receiving financial planning advice from a qualified financial planner.  You also need a referral to a qualified lawyer who specialises in this area (we can refer you).

You should also have Centrelink assess your child to ensure they qualify.

What is the company income tax rate for 2018?

What is the company income tax rate for 2018? Sounds like an easy question doesn’t it.  And so it should be?  It has however proved to be anything but – until now.

Thankfully, and at long last, the Senate has passed the legislation that determines which companies pay the 27.5% income tax rate after 30th June 2017.  Corporate businesses with turnover of less than $25,000,000 for the year ended 30th June 2018 (and $50,000,000 thereafter) will pay the 27.5% company income tax rate if they pass a new income test.  The planned further reductions in the company tax rate did not pass.

Confusion has reigned until now. For the 2017 year, the ATO defined a company as carry on a business where there was a view to making a profit.  It was justified on the basis of very old case law (none of which I ever recall studying at university).  More notably, it was completely contradictory to what was considered a business where operated within in a trust of partnership or by an individual.

Why did the ATO take this approach?

It meant that dividends could be franked at only 27.5% (despite having paid tax at 30% on those profits). It meant that individuals would either pay more tax or receive a lesser refund.  Some consider it to be theft.

So why did the government fix this?

The government was clearly annoyed that the ATO took the approach they did. They proposed legislation a year ago – which has taken until now for our parliamentarians to pass.

So which company businesses qualify for the 27.5% company income tax rate?

Companies that receive less than 80% of its revenue from passive sources. Passive sources include:-

  • Interest
  • Rents
  • Capital gains
  • Dividends from companies where less than 10% of the issued shares are held.
  • Trust distributions and profit shares – their character depends on the nature of the income as earned by the trust or partnership.

Franking rate

The same test will also apply to determining the franking rate. That said, one refers to the income derived in the prior year to determine the current year franking rate.  Yes, it is possible to be paying 30% tax yet only be able to frank dividends at 27.5% in any one year.

We would welcome any question you may have.


What you need to know about the new Comprehensive Credit Reporting regime

You need to know about the new Comprehensive Credit Reporting regime that came in took effect from 1st July 2018.

Comprehensive Credit Reporting (CCR) is designed for lenders and borrowers to more openly share data. The goal is to have lenders be able to readily access information about borrowers from a shared source.  Gone will be the days that borrowers could relatively easily hide certain information from a potential lender.

Most importantly, CCR requires both positive and negative information be recorded about borrowers.

So what does the Comprehensive Credit Reporting regime mean to you?

This means that possible lenders will be able to access information about one’s recent repayment history. Adverse events will include such things as late payments of monthly credit card due amounts.

Perhaps it is time for you to schedule paying off credit card balances or making a minimum payment a day or two earlier than normal.

CCR is still in implementation. The Big 4 banks were required to be 50% ready by 1st July 2018.  They will be required to be 100% data ready by 1st July 2019.

Some argue that reporting of the payment history of telcos and power bills should become part of this system as it is with the New Zealand model. It may well be added in time as it is argued that provides a great insight into one’s financial commitment capabilities.