Boost your retirement savings

Pre-retirees can take advantage of a range of strategies to boost their nest egg.

Here are three popular ways to top up your retirement savings:

Maximise contributions
Take advantage of the concessional (pre-tax) and non-concessional (after-tax) contributions by contributing as much as you can afford before reaching the caps. From 1 July 2017, the annual concessional contributions cap will be $25,000 for all age groups.

Consider spouse contributions
Spouse contributions are super contributions made on behalf of your spouse. Generally, you can claim a tax offset of up to $540 per year if your spouse is a low-income earner or is not working. From 1 July 2017, the spouse’s income threshold will be increased to $40,000 to assist more couples to support each other in saving for retirement.

Keep on working
The longer you work means more time to leave your savings untouched and additional time to contribute to super. Delaying retirement leads to a shorter retirement and hence more savings. You may also consider working part-time to enjoy income while waiting until Age pension age.

Clarification on ride-sourcing

The Federal Court has recently agreed that ride-sourcing is taxi travel.

For GST purposes, the word taxi means a car (vehicle) made available for public hire that is used to transport passengers for fares.

State and territory laws regulating transportation of passengers contain specific definitions of the term taxi. A vehicle can be considered a taxi for GST purposes, but not for state and territory regulatory purposes.

The ATO defines ride-sourcing as an ongoing arrangement where a driver makes a car available for public hire; a passenger uses, for example, a website or smartphone app provided by a third party to request a ride, i.e. Uber, GoCar and the driver uses the car to transport the passenger for payment with a view to profit.

For those who provide ride-sourcing services, you are most likely to be running a business and therefore, you must:
– keep records
– have an Australian Business Number (ABN)
– be registered for GST, regardless how much you earn
– lodge Business Activity Statements (BAS)
– pay the GST portion of the full fare received from passengers for each trip
– include income from ride-sourcing in your income tax returns.

Working with online influencers

Influencer marketing may seem like a “buzz” term; however, the movement is providing more businesses with online opportunities to expand their customer base.

Online influencers are generally prominent individuals within an industry with large social media followings, i.e bloggers and celebrities. Small businesses can work with online influencers to promote their products and services.

One of the primary reasons businesses may choose to start a working relationship with an influencer is customer acquisition. As online influencers have a large active and engaged following, their exposure to potential target markets is expansive. Influencers tend to have a loyal social following and their followers are generally interested and trust their content.

For businesses who do choose to go down the road of influencer marketing, it is important to establish some base rules with the influencer. For instance, many social users expect influencers such as bloggers to disclose when a social post is an advertisement/paid post for a business. Creating a transparent environment is key to savouring relationships with loyal followers.

It is usually good practice to draft content for the influencer to ensure your business is portrayed in the correct manner. However, this does not mean the influencer has no creativity in the message rather it helps to make sure they understand your goals and stay on track.

Marketing habits to ditch in 2017

Ever-changing trends, increasing competition and changes in customer buying patterns are just a few reasons why business owners should review marketing efforts regularly.

Past marketing activities that were once successful can easily go out of date. There are always new marketing techniques to experiment with but first it is important to let go of the marketing activities that are holding your business back.

Here are three marketing habits to ditch in 2017:

Wasting time on certain social channels
Not all social media channels will deliver results. The reality is your target customers will most likely have a preference for certain channels over others. For example, Facebook and Instagram may be better-suited mediums than Twitter and Snapchat for real estate agents; however, fashion retailers may utilise Instagram and Snapchat. The key is to experiment with different social channels to gauge levels of interest and engagement from followers, then decide on which channels are best to primarily market your business.

Failing to update your goals
It is common for small business owners to use the same marketing plan they created years ago. This can be quite problemsome especially if marketing tactics are not accurately reflecting your business’ current goals. Take the time to review your marketing plan at least annually or when new opportunities and threats arise.

Ignoring mobile
Mobile has now surpassed desktop as the primary device for internet browsing. Website content and social media posts need to be optimised for mobile users to ensure optimal browsing experience. Businesses that fail to customise their online services for mobile will fall behind, as mobile users favour optimised sites.

Overview of the upcoming super reforms

The reforms to superannuation made in the 2016 Federal Budget are on their way with most of the changes commencing from 1 July 2017.

Some of the changes to take place from 1 July 2017 onwards will include:

Lowering the concessional and non-concessional contribution caps
The cap on concessional (before-tax) contributions will be decreased from $30,000 (for those under the age of 50) or $35,000 (for those aged 50 years old and over) to the flat rate of $25,000 per year for all age groups.

The new annual cap for non-concessional (after-tax) contributions will be reduced from $180,000 to $100,000. This will remain available to individuals between 65 and 74 years old if they meet the work test. Individuals under the age of 65 will be able to bring-forward three years of contributions, i.e. $300,000.

Transfer balance cap
The introduction of a $1.6 million cap on the total amount that can be transferred into the tax-free retirement phase for account-based pensions. These pensions are commonly provided to defined benefit funds but may be provided to other funds, including some self-managed super funds.

Reduction of Division 293 threshold
The Division 293 threshold will be lowered from $300,000 to $250,000. Individuals with income and concessional super contributions exceeding the $250,000 threshold will have an additional 15 per cent tax imposed on the amount over the threshold, up to the total amount of concessional contributions not exceeding their concessional contributions cap.

Changes to transition to retirement income streams (TRIS)
Currently, where a member receives a TRIS, the fund receives tax free earnings on the super assets that support it. The Government will remove the tax-exempt status of earnings from assets that support a TRIS. Earnings from assets supporting a TRIS will be taxed at 15 per cent regardless of the date the TRIS commenced. Members will also no longer be able to treat super income stream payments as lump sums for taxation purposes.

Spouse tax offset
Currently an individual can claim a tax offset up to a maximum of $540 for contributions they make to their spouse’s eligible super fund if, among other things, the total of the spouse’s assessable income, total reportable fringe benefits and reportable employer super contributions is under $13,800.

The spouse’s income threshold will be increased to $40,000 from 1 July 2017. The current 18 per cent tax offset of up to $540 will remain as is and will be available for any individual, whether married or de facto, contributing to a recipient spouse whose income is up to $37,000. As is currently the case, the offset is gradually reduced for income above this level and completely phases out at income above $40,000.

Rates increase for fuel tax credits

Fuel tax credit rates increased on 1 February 2017. These rates are indexed twice a year, in February and August, in line with the consumer price index (CPI).

The rates vary depending on when you acquire the fuel, what fuel you use and the activity you use it for. Rates may also change for fuel used in a heavy vehicle for travelling on public roads. This is due to changes to the road user charge which is reviewed annually.

If you claim less than $10,000 in fuel tax credits each year, there are now simpler ways to record and calculate your claim. For the BAS period ending 31 March 2016 and onwards, you can:
– Use one rate in a BAS period – the rate that applies at the end of the BAS period
– Work out your litre based on the cost of the fuel you purchased.

To check which rate applies for your business, visit the Australian Tax Office (ATO) website or contact our office. Remember, there are time limits for claiming fuel tax credits, making adjustments and correcting errors – generally, you must claim or amend your claim within four years.

Keeping in touch with old staff members

Many employers will simply lose touch with an old employee once they have left the workplace.

Protecting your finances after separation

The end of a relationship is a particularly difficult time for most individuals – among the emotional pain comes the burdensome administrative tasks such as sorting out finances.

Although these tasks may seem tortuous/complicated; it is best to promptly address financial issues to safeguard your finances against misuse and ensure a piece of mind.

Here are three things to consider when protecting your finances after separation:

Joint accounts
If you think your former partner may exploit your finances, it is worth considering closing your joint accounts. Both account holders need to agree that the accounts should be closed. You will need to discuss how the remaining balance will be divided with your former partner, as you must have zero funds in the account before closing it. It is then necessary to establish your own account and redirect any direct debits or credits from your joint account to your new account (or make alternative arrangements).

Your will and power of attorney
Your will may not be the first thing to come to mind after a breakup, however, it is a critical document that needs to be reviewed, especially if your former partner is listed as a beneficiary or executor. After separating, review your will with a legal professional to make any necessary changes. If you appointed your former partner as your power of attorney, you may also consider revoking them upon separation. Again, a legal professional can aid you with this decision.

Home and other joint loans
Upon separation, it is best to advise any lender/s of your separation and the arrangements for paying the loan. Notify your bank if you wish to discontinue any redraw facilities or linked credit cards attached to your loan. Ask your bank for a written confirmation letter and keep a copy in case there are any issues down the track.

Tips to get out of debt faster

An overwhelming majority of people will face debt at some point in their life.

Uncontrolled debt can easily snowball and severely impact an individual’s lifestyle and financial freedom.

Fortunately, debt is manageable and is often contingent upon an individual’s motivation to get rid of debt fast. Tackling debt is often a process of managing expenses against income and formulating a plan of attack. Here are three ways to get out of debt faster:

Stick to a budget
If you are looking to get out of debt quickly, it is critical to stick to a budget. A budget can help you achieve your financial goals and ensure you do not spend more money than you earn. Budgeting is a great way to review your current expenses and see where you can realistically cut costs. It is also a good way of allocating money for an emergency fund i.e savings for a medical emergency etc.

Don’t borrow more money
Although it seems glaringly obvious, it can be tempting to continue down the borrowing spiral. Avoid getting into any further debt by holding off financing more items, signing up for credit cards etc. Instead, focus on paying off your current debts and necessary living expenses and try to eliminate any unnecessary expenses, such as TV subscriptions, daily takeaway coffee and so forth.

Make extra repayments (if possible)
Any excess cash you receive, i.e tax return, ideally should go towards making extra repayments. Making extra repayments not only shortens the length of time to pay off your debt but saves you paying more money on interest. Be sure to check with your credit provider if extra fees will be incurred for extra repayments.

Team building exercises

While hiring a group of people that work well in a team isn’t always easy, when you do, it can result in a more effective, productive and overall more successful workforce.

To create a strong team of workers, some businesses turn to setting aside a day to undertake team building exercises to rally everyone together and break down communication barriers, overcome shyness, build confidence in one another and overall unite everyone together.

Before engaging in team building exercises, businesses first need to establish the goal they wish to achieve from engaging in such activities. Many employers plan activities with no goal in mind, which often results in employees reverting back to their standard behaviour after the day of fun and games.

Examples of team building goals include overcoming conflict, improving communication, encouraging collaboration or even simply getting to know one another better.

Businesses also need to consider the type of team building exercises they would like to conduct to determine whether they need to set aside an entire day, half a day or even just a few hours to build a strong team of workers.

Location is also very important – is there enough space in the office to engage in team building exercises or will you need a larger area, like an outdoor field. Consider also whether you will need equipment and if employees will need to bring a spare change of clothes. Some employees may not be able to participate if they are wearing suits or heels.