Paying tax on superannuation contributions

The amount of tax an individual pays on their super contributions depends on whether the contributions were made before or after they paid income tax; they have exceeded the super contributions cap or they are a very high-income earner.

ATO develops safe harbour for car fringe benefits

The Australian Tax Office has recently collaborated with industry representatives to develop a safe harbour for car fringe benefits. A safe harbour is a guideline that allows Australian businesses to make use of an efficient way to calculate tax where certain conditions are met.

Businesses can access the safe harbour and use this new simplified approach if they have:

• a fleet of 20 or more ‘tool of trade’ cars, which are not part of salary packaging arrangements and cost less than the luxury car tax limit in the year acquired

• a mandatory logbook policy and hold valid logbooks for at least 75 per cent of the cars in the logbook year

• gathering all log books kept for each car in the fleet

• determining which of those log books are valid

• confirming they have valid log books for at least 75 per cent of the cars in the fleet

• calculating the average of the business use percentages determined in accordance with each of the valid log books

Five ways to increase engagement on Twitter

Twitter is a valuable marketing tool for small businesses wanting to expand and maintain their reach to online audiences.

However, the true value of the social platform lies in its engagement; unless users are actually engaging with your business’s tweets and content, you are wasting precious time and energy reaching out to people who aren’t listening or interacting with your brand.

Here are five ways small businesses can maximise audience engagement on the popular social media channel:

Building your brand on a budget

Many business owners would agree that there are more important things to spend money and time on than simply building their business’s brand.

However, having a strong brand is often quite vital to a business’s success. Effective brands – e.g. Coca-Cola, Nike, Bonds etc. – can make businesses stand out from the competition and gain customer loyalty.

Building a brand doesn’t always have to be an expensive endeavour. While it can be challenging, especially when dealing with the everyday problems running a small business throws at you, many entrepreneurs are finding that taking advantage of social media and other free online marketing opportunities can make the process a whole lot easier – and cheaper!

Here are some ideas small businesses can use to start building their brand on a budget:

Provide amazing customer service
Making your customers feel special and appreciated is a sure way of increasing the likelihood that they will tell others to do business with you. Ensuring that every customer interaction your business has ends on a positive note can fuel word-of-mouth ‘buzz’ around your business – an excellent way to build brand recognition and appreciation.

Get on social media – and be consistent
Sharing your business’s brand and overall message on social media is inexpensive and easy. It also is a good way to reach potential customers and keep track of your online reputation. Businesses can interact with customers directly via social media, which can help quicken response time in situations when customers make complaints or ask questions.

Offer a referral program
Providing customers with perks when they refer a friend or colleague to your business means they are much more likely to do it. Referral programs can generate more word-of-mouth marketing, resulting in more customers walking through your door.

Accessing your superannuation

Australians are required to meet a condition of release under superannuation law before they are allowed to cash preserved benefits, restricted non-preserved benefits or access any of their super.

Some conditions of release restrict the form of the benefit or the amount of benefit that can be paid. These are known as ‘cashing restrictions’.

ATO warns small businesses of SuperStream deadline

The Australian Tax Office has warned small businesses that time is running out to start paying superannuation contributions in the new and mandatory electronic standard called SuperStream.

SuperStream is the new mandatory way employers must make super contributions on behalf of their employees. It involves employers sending all super payments and employee information electronically in a standard format.

Those employers that are still paying their super by cheque must move to the electronic solution to make super contributions.

Small business employers have until this Friday – 28 October 2016 – to become compliant. Small businesses who have failed to adopt SuperStream by this deadline are at risk of being non-compliant.

To become SuperStream compliant, businesses must first choose an option that suits their business, such as a payroll system that meets the SuperStream standard, a messaging portal, a super clearing house or their super fund’s online system.

Once an option is selected, businesses may need to collect new information from their employees and update records, and then they will be ready to start using SuperStream.

Recovering debt

Most businesses will need to recover debt at some stage. Adopting credit control practices and a debt recovery procedure can help prevent debt and promptly collect outstanding payments.

To minimise your risk of debt, it is a good idea to review the terms and conditions in your contract. A contract should specify what goods and services are being supplied, a time for payment and what happens if a payment is not made on time. The contract should also state your business’ process for faulty goods or services and the circumstances where the contract can be terminated.

Before starting a relationship with new customers, perform a thorough background check before offering credit and clearly outline your terms of trade. It is good practice to only release goods when payment has cleared.

There are many debt recovery methods for those collecting debt. Firstly, the collector must ensure it is necessary and reasonable to contact the debtor. It is reasonable to provide information to the debtor about their account, make a demand for payment, offer a flexible repayment arrangement, make arrangements for repayment of a debt and so forth.

When recovering debt, be mindful that debtors need to be treated with respect, fairness and courtesy. The Australian Competition and Consumer Commission (ACCC) considers it unreasonable to frighten, intimidate, demoralise, tire out or exhaust the debtor. Embarrassing the debtor in front of other people is also considered unreasonable.

If payment is overdue, firstly send a friendly reminder to the customer and agree on the next payment date. In the event that the customer misses the next payment or there has been no contact, send the customer an overdue payment reminder. A final notice can be sent is the customer fails to meet extended payment dates.

Issuing a letter of demand is the next step if payments are not received within the set time. A letter of demand advises the debtor of the outstanding balance, provides a timeframe for action and informs the debtor that further legal proceedings may commence if the debt is not paid. This is usually the final reminder letter before taking legal action.

Investing in employee wellness

Investing in a workplace wellness program is one way employers can foster a culture of health and fitness among employees.

Workplace wellness programs are designed to support, encourage and reward healthy behaviours. As healthy employees are shown to be more productive, have higher levels of morale and less absenteeism – it pays to invest in your employee’s health.

Here are a few things to consider when designing a workplace wellness program:

Incorporate all aspects of health
Although, physical health is imperative – don’t forget to include assistance and activities which benefit employee’s mental, emotional and spiritual health. A comprehensive program combines targeted activities for developing physical health, such as a 10K-a-day walking challenge, with services for work/life balance, such as yoga or stress management workshops.

Make it fun
For higher levels of employee participation and involvement, make sure your activities are enjoyable and best fit the needs of your business. Get your staff involved by encouraging them to submit their ideas and run some of the programs. Ensure the activities in your program are diverse so there is something for everyone.

Community partnerships
Consider teaming up with local business providers and invest in a community partnership. Collaborating with local businesses can improve the health of employees and the surrounding community. Some examples are neighbouring businesses enforcing no-smoking policies for both staff and guests; collaborating with a healthy catering company; fundraising team events etc.

Taking out a chattel mortgage

Taking out a chattel mortgage to finance the purchase of a business vehicle is an attractive option for small business owners from a tax-saving perspective.

A chattel mortgage is a mortgage on a movable item of property i.e. motor vehicles. A finance company lends money to a business to purchase a car, which the business then pays back through regular repayments.

Among the many business car finance options available, a chattel mortgage can provide significant financial advantages for companies, partnerships and sole traders looking to buy a vehicle to be used primarily (50 per cent or more) for their business. The interest rates for chattel mortgages are also generally quite low, as the finance is secured against the purchased vehicle.

While the business takes ownership of the vehicle at the time of purchase, the finance company takes out a mortgage over the vehicle to provide security for the loan.

Chattel mortgages are a viable vehicle financing option for certain businesses, as they can claim any GST paid on the purchased motor vehicle in their business activity statement (BAS). Business owners can also claim depreciation and interest charges on their BAS.

Other benefits include flexible contract terms ranging from 12 months to five years, fixed interest rates and fixed monthly repayments.

What to consider before rebranding your business

Branding can help small businesses stand out from the competition and gain customer loyalty – but only if it is effective.

Businesses with brands that are confused, outdated or simply not appealing to the eye can hurt a business’s reputation and even repel customers. Businesses suffering from a branding problem may need to look at rebranding.

Rebranding should never be taken lightly –  it can be expensive, time-consuming and involve a lot more than simply tweaking a logo and hoping for the best. But it may be necessary to strengthen a business.

Here are three things to consider before embarking down the rebranding path:

Recognise your branding problem
Before committing to a rebranding strategy, ensure that you are fixing an actual branding problem; updating your logo won’t fix issues like slow customer service or poor communication. Identify why you want to rebrand your business and establish how rebranding will help fix your problem.

Plan to start small
One of the best ways to assess whether your rebranding idea is heading in the right direction is to start with small, subtle changes i.e. sharing a rebranded logo on your website or social media sites. Sharing this small change with your online customers can gauge customer reactions and even gain some valuable feedback as to whether they like the new you.

Consider hiring an expert
Rebranding can be especially difficult for small businesses who know their brand too well to be objective. This is where hiring an expert can come in handy. Using an expert’s unbiased opinion can often be invaluable when establishing a rebranding strategy.