March 2019 Newsletter

Contents:

  • Beware the legal pitfalls of employees working from home
  • 5 Tax effective renovations for your investment property
  • Potential problems with pension payments
  • Beware super guarantee leave loading issues
  • Announcements

Beware the legal pitfalls of employees working from home

Investors may be able to receive thousands more in tax deductions on renovations by carefully choosing their fixtures, fittings and materials, according to one quantity surveyor.
… it is possible for investors to effectively utilise depreciation to minimise tax on renovations to their investment property whilst still achieving quality results.
 

Potential problems with pension payments

The new rules and regulations for super can be confusing, particularly in regard to pensions. What are some of the potential traps for SMSF clients? There’s no doubt the new rules and regulations associated with super reform are confusing. We are now seeing new issues starting to emerge that will have adverse tax consequences for unsuspecting SMSFs.
 
 
An issue has surfaced in recent times that in some cases may require a change in the approach taken by some employers with regard to them being fully compliant with superannuation guarantee obligations. The problem for some may not be so much ducking the rules, but rather being in sore need of clarification on how the existing rules apply.
 

 


Single Touch Payroll / Software

If you employ staff you should by now know what Single Touch Payroll is. If not you soon will! Single Touch Payroll (STP) is a government initiative to streamline payroll reporting to the ATO and it starts 1st of July 2019 for businesses with less than 19 employees (those with 20 or more commenced 01/07/2018).
 
The reporting of payments to employees such as salary and wages, PAYG withholding and super liabilities needs to be via SBR (Standard Business Reporting) compliant software. What this means is employers need to start thinking about finding a payroll solution very soon to meet the July start date.
 
To find out more about Single Touch Payroll please join us at one of our free STP information sessions (see details below). Employers will have the following options for processing STP:
  1. Do it themselves via their payroll software
  2. Use a Payroll Service provider
  3. Use a Tax or BAS agent
 
For an employer to process the payroll themselves they will need an SBR compliant payroll software solution. This may mean you need to upgrade your existing software or find a compliant solution.
 
Of the various options we support we will briefly outline the three largest providers and their costs from a payroll perspective (suggestion only):
Nbr of employees Xero Quickbooks Online MYOB
1 Standard $50 p/m Simple Start $15 p/m Essentials $45 p/m
2 Standard $50 p/m Simple Start $15 p/m + $4 p/m each additional employee Essentials $55 p/m
3-5 Premium 5 $65 p/m Plus $35 p/m Essentials $55 p/m
6-10 Premium 10 $75 p/m Plus $35 p/m AccountRight Plus $100 p/m#
11-20 Premium 20 $90 p/m Plus $35 p/m + $4 p/m each additional employee AccountRight Plus $100 p/m#
# We have made a few assumptions and in some cases selected a higher priced option due to the extra functionality. The above pricing is correct as at 27/02/2019. We are aware that QuickBooks Plus will increase to $40 p/m on 04/03/19 and MYOB traditionally raise their pricing on the 1st of April each year.
 
The above mentioned software, all provide SBR compliant payroll solutions but as you can see there is a big difference in the pricing so if payroll is the main consideration then we suggest QuickBooks Online. If there is other functionality you require please speak to your accountant to discuss which is the right solution for your needs.
 
Watts Price Accountants offer free software consultations so if you are looking to buy or change accounting/payroll software please talk to us first.
 
Please note that we are able to acquire most of the leading accounting/payroll software for our clients and in some cases are able to pass on preferential pricing. We typically are able to provide a 10% discount off the RRP of all MYOB software and currently we can get Quickbooks Online Plus at $30 p/m locked-in for 24 months.
 
Single Touch Payroll Presentations
 
Rupanyup: Wednesday 13 March 2019 @ 6pm – 6.45pm, Rupanyup Football Club
Horsham: Monday 18 March 2019 @ 6pm – 6.45pm, TBC
Nhill: Monday 25 March 2019 @ 6pm – 6.45pm, TBC
 
This is a must attend session for any employer!
 
To register your attendance at one of our free STP Information sessions or to discuss any of the above information please call on 03 5382 3001 or email us at mail@wattsprice.com.au
   

Announcements:

This month we wish Margaret a very a Happy Birthday!
 
 
 
 
 
 
 

 Commonly Asked Question

How do I know if I’m running a business or it’s just a hobby?

Key questions to consider:

  • Is the activity being undertaken for commercial reasons?
  • Is your main intention, purpose or prospect to make a profit?
  • Do you regularly and repeatedly undertake your activity?
  • Is your activity planned, organised and carried out in a businesslike manner?

If you answered yes to most of these questions, you’re likely to be running a business, although it depends on your individual circumstances.

The ATO website provides further questions, information and examples to help you understand the differences between a hobby and a business.

To get an answer specific to your circumstances, you can:

  • talk to a legal, accountant or business adviser in your area who can help you decide whether you’re running a business or a hobby.
  • get a private ruling from the ATO, which will provide an answer that protects you from penalties and interest.

Source: https://www.business.gov.au/planning/new-businesses/a-business-or-a-hobby

 

All the best from the Watts Price Team!