Dollars and Dirt #4

By Brian Watts

Now that the long hours have passed for another year, crops harvested, stored or sold, dollars in the bank or on the way, what next?

Many will be planning ahead to the next cropping season after a few weeks off hopefully!

Some might wonder was it all worthwhile and be asking what was the ‘bottom line’ for all the effort?

For many, on receiving their Tax and Profit Statements, the first question will be “How much tax?” Many will also ask “How did our farm go despite having a good feel overall based on yields and prices?”

For many, looking at the Profit or Loss (P & L) Report and or the tax return will not answer that question. Why is this so?  Often the profit for ‘tax’ purposes will be very different to the bottom line in the P & L being out by ‘big’ (thousands) dollars. Depreciation is a ‘book entry’ and rarely reflects the real “loss of value” to the farming plant owned by a farming family.  At 30% and now at a 100% write off until 30 June 2022 under the’ Covid19 economic incentives’, will distort the result. Sales of grain after 30 June; stocks of grain in silo’s, wool held over until after 30 June, no dollar value placed on farming family labour unless they are employed by the farm business, livestock valued at $4 at birth very conservatively valued, to name a few.

The median farm in our 2019 Wimmera farming KPI report had $8.2 million dollars of assets being managed; the median return on assets under management was 1.49%. Returns ranged from a high of 14% back to a minus 2%.   These returns are on significant investments. Comparative returns are available against other options and most are aware of these.

With farming, we all are aware that taking one year alone can be very misleading, hence we tend to look at 5 year rolling averages. This was 2.3% taking a closer look at Wimmera farms, and consider what can be done? Some are under performers, and others are high achieving. We simply divide the sample into four quarters; the first being the top 25% and so on.  This then tells us the strengths and weakness for 17 different areas, we now have a report on each farm’s strengths and weaknesses. The ‘lights are then turned on’ as we then are aware of what to work on if improvement is the goal.

Returning to the start of this article. Having removed the anomalies from the P & L and tax returns as listed above, our Wimmera Farm KPI Reports provide 17 realistic answers to “Are we in the top half or in the lower half?”

Not bad information to be had if one wants to get a fair return on their farm investment!

Most have heard of ‘Cost benefit’ appraisal. With the knowledge of a farm’s strengths and any weaknesses on 17 different fronts, Wimmera farmers can then follow a simple process to turn things around.

Many in business will have used the STOP, START, CONTINUE process to improve.

Farmers will be doing this every day, they will STOP what did not work, CONTINUE those practices that were successful, and START some that have been found to be helpful for other farmers or by their advisers. Simply select an aspect that needs improvement (LOW half KPI), and follow this process. Inputs, timing, crop selection, harvest, storage, marketing, are just a few topics that can be ‘worked’ on using this process to build on strengths and make changes to remove the weaknesses.

The Wimmera Farm KPI Report for 2020 will provide guidance on what to work on.

Dollars and Dirt

By Brian Watts

‘Forty bags to the acre has been heard more than once in the last week. Wimmera farmers are enjoying well above average yields for certain grain types. My bet is that 2020-21  will go close to being a one-in-ten year, with farm productivity and profits exceeding the most recent five year moving averages.

Our most recently completed report  on  Wimmera Farm Profit and Performance, the five-year rolling average,  had the median farm – the farm  in  the  middle from lowest to best – spending 60  percent of farm income  on operating costs.  The  top  20  percent profitable farms in the survey only spent 41 percent.

At  this   stage we  can  predict those key performance indicators, KPIs, will be shattered. Farm productivity can be measured by comparing the result, or output, against an input. The productivity of the farmland used,  the  amount of labour,  the amount of income produced from the dollars invested  in farm plant and  farm  assets  being  managed are four key measures.  We expect they will be shattered as well.

In  our  most recent Wimmera farm report, the median farm:
• Earned $343,600 in farm income for each farm worker involved. *Top 20 percent most profitable farms eamed,$592,900.
• Had invested· $122,000, or 122 percent, in farm plant for every $100,000 of farm income earned. *Most profitable farms, $800,000 or 80 percent, with lower meaning better.
• Created a 4.57 percent rate of return in ‘cash profit’ on the value of farmland under management. *Most profitable – land owned; leased or share farmed, 10.5 percent.

If this farm year turns out to be a ‘bottler’, here are some suggestions.
Build resilience into your farming business by taking several steps. The government has offered incredible tax incentives to invest in plant. Wise decisions need to follow.
Know your financial position.
Know your likely ‘taxable’ – as opposed to your ‘real’ – profit to take advantage of this ‘one-in- ten’ year.
Apart from sound grain-marketing decisions that are dependent on storage-capacity and knowledge, many will engage with grain marketing consultants.

Tax planning with your tax ac­countant early to ensure tax-ef­fective decisions are made is en­couraged. However, only invest in plant that -is commercially sen­sible.
We encourage · Wimmera farm­ers to have various tax scenarios calculated by creating ‘what if’ tax outcomes for. major farm out­lays, such as plant, FMDs and superannuation.

Financial decisions such as leas­ing, chattel or .cash need to be weighed up to avoid a mistake.
Perhaps it is time to alter your farm-business structure for both tax and asset protection reasons.
A basic 13–column cash flow budget can be extremely helpful for better decision-making that results in reduced tax bills.

None of us ‘do not know what we do not know’; we all make mistakes, best practice is to minimise such.

Watts Price Accountants of Hor­sham started reporting on Wim­mera farm performance in 1991.
Work on the 30th report – for the 2020 financial year – has already started. Any Wimmera farm is welcome to be involved and re­ceive a comprehensive report on 17 KPIs for 2020 and the previous five-year rolling average.

A $1,200 rebate is now available to put towards adopting new digital technology such as cloud accounting software via the Small Business Digital Adaptation Program established by the Victorian government.

The rebate is now open and will close 28 February 2021 or once the $20 million allocated funds are exhausted.

Eligible businesses will receive a rebate of $1,200 to cover 12 months’ access to a digital product listed under the program. This rebate could be used on digital products such as business management tools, websites, e-commerce and managing finances.

A list of products available under the program has yet to be released but will be listed on the Business Victoria webpage soon. As at time of writing we can confirm that accounting software provider xero is a participant.

Eligible businesses include:

• sole traders, micro and small businesses that operate a business in Victoria
• have held an ABN since 13 September 2019 and
• are registered for GST as of 13 September 2020
• Not-for-profit entities that are registered with the Australian Charities and Not-for-Profit Commission, are also eligible for the program.

Digital products chosen need to be:

• new and not currently used by the business
• on the program’s digital product list
• cannot be a minor upgrade of an existing product
• cannot be a product that was used by the business more than one year ago that it is looking to resume using

How the program works

• Eligible businesses need to apply via the Business Victoria Small Business Digital Adaptation Program webpage.
• Once registered you will gain access to a one month free trial of the registered digital product of your choice as well as various free training and workshops to help you adopt the new online tools.
• Once the trial period is over or once you are ready you can sign up for the paid subscription then you will be able to apply for a rebate of $1,200 to continue access to the product for 12 months.
• You will only receive one rebate but this can be used across a number of subscriptions.
• The Victorian government will reimburse you within ten working days of receiving confirmation of your purchase.

For further information about the rebate visit business.vic.gov.au or phone the Business Victoria hotline at 13 22 15.

How can Watts Price Accountants / Knights Accounting help?

If you are considering moving to a cloud based accounting software package please discuss with us if this is appropriate for you prior. We can also assist with setup (most accounting packages will need at least a Chart of Accounts setup) and one-on-one training.

Watts Price Accountants
Ph: 03 5382 3001
E: mail@wattsprice.com.au

Knights Accounting
Ph: 03 5385 5330

E: info@knightsaccounting.com.au

The Importance of Getting the Superannuation Guarantee Correct!

The ATO now receives information from the employees’ superfund so they can match this against superannuation that should be paid by the employer. This process, known as data matching, means more than ever employer’s need to be on top of their superannuation obligations to avoid potential penalties like the Superannuation Guarantee Charge (SGC).

Superannuation Guarantee (SG)

Generally, the superannuation guarantee applies to employees who are over 18 years and are paid at least $450 (before tax) per month. This includes full-time, part-time and casual employees.

As part of an employee’s employment conditions the employer must pay the super guarantee into the employee’s chosen super fund. The amount is calculated as a percentage of the employee’s Ordinary Time Earnings (OTE) which includes commissions, allowances and bonuses. The current percentage is 9.5%.

Employers have 28 days from the end of the quarter to make the SG payments to their employee’s superannuation fund(s). See Table 1 for the payment due date.

Minimum Pay Rates: Employers need to ensure they are adequately paying their employees based on the appropriate award, enterprise agreement or if neither apply the national minimum wage rate that is annually reviewed.

What if you fail to pay the Superannuation Guarantee on time?

For employers that fail to pay their SG payments to their employee’s super funds by the due date they will be liable to pay what is called a Superannuation Guarantee Charge (SGC) to the ATO.

What you need to know about the Superannuation Guarantee Charge:

• The charge consists of three amounts
  1. A SG shortfall – the amount of SG the employee(s) was not paid
  2. A nominal interest rate of currently 10%

• An administration fee of $20 per employee per quarter

• The SG shortfall amount doesn’t just include Ordinary Time Earnings (OTE). It is calculated using the employee’s entire salary or wages which includes any overtime or annual leave loading.
• The Superannuation Guarantee Charge will not be tax deductible to the employer hence they cannot claim the super contribution or any additional costs or penalties as a tax deduction.
• The Superannuation Guarantee Charge scheme is currently self-assessed by the employer and the onus is on them to report and correct any missed superannuation contributions.
  • Employees may contact the ATO if they have reason to believe that they are not receiving the correct SG amount from their employer.
  • With the commencement of Single Touch Payroll the ATO will soon be able to track non-compliance via their integration with the Super Funds and SuperStream gateway providers.
• The payment of the Superannuation Guarantee Charge must be accompanied by a Superannuation Guarantee Charge Statement. Failure to lodge the SGC Statement on time may result in an additional levy of up to 200% of the charge amount.
• Once the ATO receives the SGC Statement and payment they will transfer the shortfall amount and interest to the employee’s nominated super fund.
• Employers can contact the ATO to arrange an extension of the cut-off date however interest will continue to accumulate.
• The ATO has a number of actions available to deal with non-payment of SGC debts including SGC audits and issuing Director Penalty Notices

Table 1

Conclusion

Paying your employee’s superannuation obligations on time is of critical importance as the Superannuation Guarantee Charge and potential ATO audit can quickly cripple a business’ cash flow.

To ensure you are being compliant:

• Know the relevant Awards that apply to your employees
• Ensure all employees are paid the correct amount per the relevant Award or Agreement
• Dedicated bookkeeping or payroll software can assist in this regard
• Ensure the employee superannuation guarantee contributions are paid on time and via a SuperStream compliant gateway

If you have any queries, or need assistance to get your superannuation obligations on track, contact our office:

Watts Price Accountants (Horsham) 03 5382 3001 or mail@wattsprice.com.au

Knights Accounting (Rupanyup) 03 5385 5330 or info@knightsaccounting.com.au

Claiming the GST on a new motor vehicle purchase

If your business has motor vehicles (under 1 ton & less than 9 passengers) you are probably already aware of the logbook method for claiming business related expenses such as running costs and decline in value.

Earlier this year there was a change to the method for calculating the GST you can claim on the purchase of a new vehicle that now makes it imperative to use a logbook (or diary) for the first four weeks after the new purchase to calculate your business-use percentage for the purpose of calculating the GST you can claim.

For those already keeping a logbook there is no additional requirements as you can use your existing logbook. Our recommendation is that businesses with a motor vehicle should keep a logbook for a continuous period of at least 12 weeks commencing from time of purchase of a motor vehicle, by doing so you satisfy the requirements for calculating both:

• the GST you can claim on the new motor vehicle purchase and
• business related expenses you can claim

By keeping a logbook for a continuous period of at least 12 weeks you satisfy the tax office recording requirements for 5 years before you are required to start the process again (if still required and assuming there have been no material changes to your motor vehicle use).

Can I claim the GST on a new car purchase?

Generally speaking, you can claim GST on the purchase of a new motor vehicle if you meet the following criteria:

• you intend to use your purchase solely or partly in carrying on your business and the purchase does not relate to making input-taxed supplies
• the purchase price included GST
• you provide, or are liable to provide, payment for the item you purchased
• you have a tax invoice from your supplier

How much GST can I claim on a new car?

• When it comes to claiming GST on a car, it’s very similar to claiming GST on any other business expense.
• You can only claim the GST to the percentage that it relates to earning an income in your business.
• So you need to keep a logbook. A logbook tracks the number of business-related kilometres that you drive, and your total kilometres in that time.  This will give you your ‘logbook percentage’.
• Your logbook percentage will tell you the percentage of GST, and tax deductions for car related expenses that you can claim in your BAS and tax return.
• Also note that if you buy a car with a GST-inclusive value above the LCT (Luxury Car Tax) threshold, there are limits to the GST you can claim based on the fuel efficiency of the vehicle

When can I claim the GST on a new car?

• If your business is registered for GST on a cash basis then you can claim the GST on the new car in the quarter that you take delivery (or settlement) of your car. This is because either your finance company has ‘paid’ for the car on that date.  Or, you’ve paid for that car in full from your bank account.
• Your upfront claim of the GST can be used to fund the first few instalments payable to your finance company.

If you have any questions regarding claiming the GST and/or business-related expenses on motor vehicles please contact our office.

Watts Price Accountants (Horsham) 03 5382 3001 or mail@wattsprice.com.au

Knights Accounting (Rupanyup) 03 5385 5330 or info@knightsaccounting.com.au

In response to the tougher economic conditions the government has announced a stimulus package that will assist most small businesses in some form.

Below are the measures introduced by the government as summarised by NTAA (National Tax & Accountants Association). We have also included a number of links to more detailed articles on the specific incentives.

If you would like to discuss if any of these incentives are appropriate to you please contact our office by phone or email.

Government announces increased tax benefits in response to the Coronavirus

The Government has announced its economic response to the Coronavirus in the form of a $17.6 billion economic stimulus package. The package has been marketed as a measure to protect the economy by maintaining confidence, supporting investment and keeping people in their jobs.

It is expected that an appropriate package of Bills (which will provide further detail in relation to the proposed measures) will be introduced into Parliament in the final sitting week in March 2020 (i.e., presumably from 23 March 2020) for urgent consideration and passage.

The Key Tax Measures include:

• From Thursday 12 March 2020, the instant asset write-off threshold has been increased from $30,000 (for businesses with an aggregated turnover of less than $50 million) to $150,000 (for businesses with an aggregated turnover of less than $500 million) until 30 June 2020.

• A time-limited 15-month investment incentive (through to 30 June 2021) which will operate to accelerate certain depreciation deductions. This measure will also be available to businesses with a turnover of less than $500 million, which will be able to immediately deduct 50% of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost. As announced, this measure is proposed to only apply to new depreciating assets first used, or installed ready for use, by 30 June 2021.

• Tax-free payments of up to $25,000 for eligible small and medium businesses (i.e., with a turnover of less than $50 million that employ staff) based on their PAYG withholding obligations.

• Tax-free payments of $750 to social security, veteran and other income support recipients and eligible concession card holders. It is estimated that around half of those who will benefit will be pensioners. These payments will commence to be automatically made from 31 March 2020.

• Administrative relief from the ATO for some tax obligations for people affected by the Coronavirus outbreak, on a case-by-case basis. Additionally, the ATO is setting up a temporary shop front in Cairns within the next few weeks with dedicated staff specialising in assisting small business and is currently considering further temporary ‘shop fronts’ and face-to-face options.

In addition to these key tax measures, the Government has also announced additional economic stimulus measures including:

• Wage subsidies to support the retention of apprentices and trainees – Employers with less than 20 full-time employees may be entitled to apply for Government funded wage subsidies amounting to 50% of an apprentice’s or trainee’s wage for up to nine months from 1 January 2020 to 30 September 2020. The maximum subsidy for each apprentice/trainee is $21,000. Importantly, where an employer is not able to retain an apprentice, the subsidy will be available to a new employer that employs that apprentice. It is proposed that employers will be able to register for the subsidy from early-April 2020.

• Assistance to severely affected regions – The Government has also committed to set aside $1 billion to support regions and communities that have been disproportionately affected by the economic impacts of the Coronavirus, including those heavily reliant on industries such as tourism, agriculture and education.

This will include:
– The waiver of fees and charges for tourism businesses that operate in the Great Barrier Reef Marine Park and the waiver of entry fees for Commonwealth National Parks.
– The provision of additional assistance to help businesses identify alternative export markets or supply chains.
– Further targeted measures to further promote domestic tourism.

Useful links
The Government’s economic response targets four key areas:

• Delivering support for business investment
• Cash flow assistance for employers
• Stimulus payments to households to support growth
• Assistance for severely affected regions

https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Assistance_for_businesses.pdf
https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Support_for_business_investment.pdf
https://treasury.gov.au/sites/default/files/2020-03/fact_sheet_3_individuals_-_revised_for_clearance.pdf
https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Assistance_for_regions.pdf

Our Contact Details

Watts Price Accountants 03 5382 3001 or mail@wattsprice.com.au
Knights Accounting 03 5385 5330 or knightsaccounting.com.au

Important Change for Employers

Single Touch Payroll (STP) Finalisation Report

The 2019 – 2020 financial year saw the introduction of Single Touch Payroll for all small employers (those with less than 20 employees) which meant employers needed to start providing Wages, PAYG tax and superannuation information in an electronic format to the Tax Office.

As the 2019 – 2020 financial year draws to a close, employers need to be aware of their obligation to lodge a Finalisation Report by July 14, 2020. This finalisation report will provide the ATO with annual Gross wages, PAYGW tax and super information for all staff employed during the financial year. Until this is lodged employees will not be able to lodge their own tax returns!  This replaces the need to issue a Payment Summary to the employee.

All employers will need to:

• Use their STP solution to ensure the Finalisation Report is lodged by 14 July 2020
  • Check the links below for the relevant software instructions
• Inform their employees that:
  • They will not be issued with a payment summary
  • They can access their salary information via their myGov account via the ‘Income Statement’
  • Let employees know that they should not lodge their tax return until their status reads ‘Tax Ready’ (check myGov or ask your accountant)

Where Watts Price or Knights Accounting process your STP obligations:

• We ask that you process your transactions monthly rather than wait until the end of the quarter i.e. process all transaction for April, then May and finally June as soon as possible at the end of the relevant month rather than doing them all in July
• In June we will request from you a total by employee of the wages paid to date for the year so we can compare this to the total of the wages we have processed for the Year to Date (YTD) via STP
• The first two weeks in July we will prioritize the processing of these Finalisation Reports to ensure employers meet the July 14 deadline.
• By July 14 we will contact each employer with a report of the wages for the FY2020 to sign off prior to the lodgement of the Finalisation Report
• If you are going to be away during June or July or if you will not be paying wages at this time please contact us so we can arrange to lodge your report earlier than the deadline.

Useful Links

ATO STP Finalisation Factsheet

Update Pay Events via Quickbooks Online

STP and Finalisation Xero

End of Year Finalisation MYOB

If you have any questions please contact Watts Price on 5382 3001 or mail@wattsprice.com.au or Knights Accounting on 5385 5330 or info@knightsaccounting.com.au.

GST Implications for Holiday Houses, Stayz (HomeAway), Booking.com & Air BnB style Properties

Harold and Mage, who live in Ramsay Street Ballarat, currently rent 2 short term stay Holiday 3 Bedroom houses in Torquay through AirBnB that they have operated since 2010. They are increasing their investment in this area by adding another 2 x short term stay, newly constructed 3 Bedroom units to their portfolio in Ballarat available for booking from January 2019. In the future, they may also expand their operation to offering (yet to be constructed) a short term stay 2 Bedroom accommodation in Daylesford on land they own through the same business structure.

Other considerations to note:

• They lease an entire house/unit when booked. i.e. they do not sell accommodation by the room.
• They generally use external cleaners for the Torquay property and will clean the Ballarat / Daylesford units themselves after a stay
• All units/houses are fully furnished, linen and towels are provided, TV’s, DVD’s, Washing Machines, Dryers, fully equipped kitchens, cooking utensils and pots/pans etc.
• They monitor customer reviews and use AirBnB Manager software features to keep track of which properties are more popular, changes in customer ratings and summarising sales by house/units.
• They will generally attend to any property maintenance themselves
• They will make any improvements suggested and required to increase their customer rating on the AirBnB, to attract new clientele and remain competitive in the market.

Hence, a reasonably sophisticated operation of a network of short term stay properties and as a clear alternative to motel/hotel accommodation in their respective locations.

Q – Should the Accommodation Sales attract GST as a Taxable Supply OR be treated like any other rental property as input taxed supplies ie. Rental income?

A – Generally, Accommodation sales for the above example are input taxed and will not attract GST.

Q – Can we claim the GST on the cost of construction of the Ballarat and future Daylesford properties?

A – No, given that the actual and intended use of the property is for accommodation sales that are input taxed sales, the construction costs associated will also be input taxed.

Why?

The ATO provides guidance with the two following rulings

• GSTR 2012/5 Goods and services tax: residential premises (NO GST APPLIES)

where the premises are occupied as a residence              OR for residential accommodation, regardless of the term of occupation.

• GSTR 2012/6 Goods and services tax: commercial residential premises (GST APPLIES)

Which includes the following seven paragraphs:

• a hotel, motel, inn, hostel or boarding house;
• premises used to provide accommodation in connection with a school;
• a ship that is mainly let out on hire in the ordinary course of a business of letting ships out on hire;
• a ship that is mainly used for entertainment or transport in the ordinary course of a business of providing ships for entertainment or transport;

1. da) a marina at which one or more of the berths are occupied, or are to be occupied, by ships used as residences;

• a caravan park or a camping ground; or
• anything similar to residential premises described in paragraphs (a) to (e).

Several factors also come into play as to whether the operation is a supply of Commercial Residential Accommodation such as those listed at paragraph 41 of GSTR 2012/6, but not limited to the following:

• Commercial intention
• Multiple occupancy (unrelated guest stays in the one unit)
• Holding out to the public
• Accommodation is the main purpose
• Central management
• Management offers accommodation in its own right.
• Provision of, or arrangement for, services (Concierge type services)
• Occupants have status as guests

Harold and Mage can tick many of these boxes, but they lack multiple occupancy and concierge type services like a Bed and Breakfast offers. It is the lack of these type of factors that would likely deem it the provision of Residential Accommodation only as opposed to Commercial Residential Accommodation.

If you are unsure of how your circumstances please contact us at Watts Price Accountants

Author

Laurie Liston, Senior Accountant
Certified Practising Accountant
Watts Price Accountants

Sources                https://www.ato.gov.au/law/view/document?docid=GST/GSTR20125/NAT/ATO/00001

https://www.ato.gov.au/law/view/document?docid=GST/GSTR20126/NAT/ATO/00001

This piece was prepared and published as at 14 March 2019

Disclaimer

In relation to the above example and Names, characters, businesses, places, events, locales, and incidents are either the products of the author’s imagination or used in a fictitious manner. Any resemblance to actual persons, living or dead, or actual events is purely coincidental. Although the author and publisher have made every effort to ensure that the information above was correct at publication time, the author and publisher do not assume and hereby disclaim any liability to any party for any loss, damage, or disruption caused by errors or omissions, whether such errors or omissions result from negligence, accident, or any other cause.

Are you prepared for the new Data Breach Notification Laws?

On February 22, 2018 the new Data Breach Notification Laws came into effect.

Many Australian organisations are now legally required to notify affected individuals, and the Australian Information Commissioner, of any eligible data breach affecting personal information.

Does this affect your business?

This new legislation applies to any organisation currently subject to responsibilities under the Privacy Act, which essentially includes businesses and not-for-profit organisations with an annual turnover of $3 million or more, and a number of other identified organisations specified in the Act, such as health providers, credit reporting bodies, employee associations and service providers under a Commonwealth contract) and any entity that receives an individual’s tax file number (TFN).

What is an eligible data breach?

An eligible data breach arises when the following three criteria are satisfied:

1. there is unauthorised access to or unauthorised disclosure of personal information, or a loss of personal information, that an entity holds (soft or hard copy documents)
2. this is likely to result in serious harm to one or more individuals and
3. the entity has not been able to prevent the likely risk of serious harm with remedial action

What constitutes Personal Information?

Personal information includes names, signatures, address, telephone number, date of birth, medical records, bank account details, credit information… or any other personal information about an identified, or reasonably identifiable person.

What Do You Do If an Eligible Data Breach Occurs?

If you’re an affected organisation who suspects an eligible data breach has occurred, you have 30 days to assess the breach and determine whether notification is required.

Failure to comply with the mandatory notification regulation is viewed as “interference with privacy of an individual”, and is punishable by forced notification, public apologies, compensation payments and fines up to $360,000 for individuals and $1.8 million for organisations.

Prevention is the best medicine

All business owners, not just those deemed to be affected organisations would be wise to consider what steps they can take to prevent any potential data breaches, this may include:

• Ensuring adequate security measures are in place.
• Preparing a data breach response plan
• With the increasing threat of Cybercrime, Cyber Insurance becomes an important consideration for any business or organisation

What steps has Watts Price Accountants undertaken?

As an organisation that holds client’s TFN and other personal details we have always been overly diligent about security.

Some of the measures we use include:

• Staff training in how to identify issues, what to do & who to contact
• IT Usage Policies
• Mandatory Strong password policy
• Use of Two Factor Authentication
• Automatic security and system updates for all computers, server and our website
• Use of document destruction bags for paper documents and a fire-protected compactus for physical file storage
• Use of a Firewall to stop ransomware, encrypted threats and phishing attacks, over not only wired but also wireless and mobile networks
• Anti-virus software
• Messaging Security software

If your business needs assistance in preparing for the new Data Breach Notification Laws or just some advice on security measures in general please contact Richard Kemp our Practice Manager on 5382 3001 or via email at richardk@wattsprice.com.au.