Getting your product range right

As businesses grow, they tend to add more products and services to their range. Research demonstrates that this can lead to reduced sales as customers often become overwhelmed. Creating products with only minor points of difference can also be annoying for customers, as they have to spend time trying to work out which is the right choice. It is businesses’ responsibility to select only the best products to offer customers.

Limiting your range of products/services also demonstrates a degree of confidence in the quality of your products. Not only are customers less likely to purchase a product from an unnecessarily extensive range, but they will also be less satisfied when they do. A customer who is less satisfied is also less likely to purchase the same product again in the future. Additionally, continuing to offer out of date products is not good for your business’s image and brand.

Changes to non-concessional super contributions

Non-concessional contributions to superannuation are contributions that are made from your income after tax. In the 2013-14 financial year the cap on non-concessional super contributions was $150 000, with contributions exceeding this being taxed at 46.5%. As non-concessional contributions to super have already been taxed this meant that contributions exceeding the cap were potentially being taxed at 93%.

Many Australians over the age of 60 were making substantial contributions to their super in order to take advantage of the tax breaks and accidentally exceed the cap.

In the 2014-2015 financial year, the cap on non-concessional super contributions will be raised to $180 000. The government has also announced that it will lift the non-concessional contributions tax. Individuals may withdraw their excess contributions, along with any earnings, and have these taxed at their usual marginal tax rate. This will apply to excess contributions made after 1 July 2013.

Further details of the plan have not yet been decided, as the government is consulting with the superannuation industry.

Making your office more productive

It is incredible the impact that the physical characteristics of an office can have upon workplace productivity. Elements such as colour schemes and office layout, which may seem inconsequential, can have tremendous impacts on productivity. Here are three things to consider when redecorating your office space:

Lighting: Natural light has a positive effect on people’s mood and tends to improve their work. Obviously letting in more natural light is not an option for most businesses, but what you can do is rearrange your office to maximise your employees’ exposure to natural light.

Colour: While there has been some of contradictory research into the psychological effects of colour, one thing that people seem to agree on is the stimulating effect of bright and saturated colours. Whenever possible, choose vivid colours for office supplies and furniture.

Plant life: A few nice plants around the office will help to brighten the mood and increase concentration levels. A small pot plant on each desk can be a great way to show employees your appreciation.

Claiming tax deductions on investment properties

If you own a rental property or are considering purchasing an investment property, it is important to be aware of the tax deductions you can claim. Claiming all of the legitimate deductions on your investment property can save you a lot of money. On the other hand accidently claiming illegitimate deductions can cost you a lot of time and energy, potentially even leading to an investigation by the ATO.

There are some immediate deductions that you can make on a rental property, for example, advertising fees, agent costs, repairs and administrative expenses. Legal fees that are directly related to renting a property, for example those associated with debt recovery, may be claimed. However, you may not claim legal costs incurred at other times, for example the solicitor’s fees when you purchased an investment property.

There are also long term costs associated with investment properties that you can claim as deductions. These include borrowing costs, depreciation on equipment and deductions on structural improvements.

Many costs associated with the loan you have taken out on an investment property are legitimate deductions, but interest on the loan is not. Examples of legitimate costs include mortgage registration, stamp duty on mortgage and loan application fees. These deductions are applicable to loans of five years and under (for longer loans the deductible period is limited to five years).

As the value of the equipment with a limited life, for example carpet, depreciates you may claim this as a tax deduction. The ATO website has a list of the depreciation rates on different moveable household items. The entire cost of items under $300 may be included in your depreciation claim.

If you have spent money on an extension, structural improvement or renovation for your rental property then this cost can be claimed as a long-term deduction (usually 2.5% p.a. over 40 years). This does not cover work done immediately after purchase, and you can only claim this for periods that the property has actually been rented out.

Rules for efficient and effective meetings

Meetings are a great way to allow employees to generate and exchange information, however, they are also a major pain point for many individuals.

The key is not fewer meetings; it is more regular and specific ones.

Here are 4 rules for efficient and effective meetings:

Rule 1- Meet regularly

Good teams use meetings to discuss important decisions. Having regular meetings can remind employees that there is more going on in the workplace than their own deadlines and also encourage collaboration amongst employees.

Regular meetings also allow different areas of the business to align their priorities and goals, as well as keeping employees informed of any changes to the business.

Rule 2- Hold different kinds of meetings

Successful teams hold different meetings for different types of information. For example, a tactical meeting will only discuss new sales plans whereas an administrative meeting will discuss client meetings.

This helps employees stay focused on the one topic, instead of being confused by an overload of information.

Rule 3- Assign a moderator

It is quite common for a meeting to go off on a tangent, especially when multiple employees are contributing to the discussion. A moderator can help to keep the team on track, ensuring that time is not wasted.

Rule 4- Spend the last 5 minutes recapping the meeting

For productive meetings, the end is just as important as the beginning. It is important that everyone be on the same page when they leave the meeting to prevent any arguments in the future.

Tips to consider before signing a contract

A contract is a formal document between two or more parties that is legally enforceable, so it is important that all parties be aware of what they are signing.

All individuals who sign a written contract should also take the time to ensure they understand what is outlined.

Here are some tips to follow when signing a written contract:

Read the entire contract

All parties should read the entire contract- from start to finish. The contract should be consistent with any negotiations that were discussed between parties.

Do not rush

Individuals should not feel pressured to sign a contract on the spot. It is a good idea to take the contract away and read it again, ensuring they fully understand everything listed in the contract.

Negotiate

If a party is unhappy, or does not agree with any clause in the contract, it is important that they negotiate the necessary changes with the parties involved.

Ensure the contract is complete

Never sign an incomplete contract as this could run the risk that other parties will insert a clause in the contract that has not been discussed.

Consider help

Contracts are often complex and written in legal jargon, which can make it difficult to interpret. A professional can assist in explaining the issues of the contract, ensuring that the individual is aware of what they are signing.

Reducing the risk of refund fraud

Refund fraud occurs where tax returns, activity statements and other documents are deliberately falsified in order to claim a tax refund a taxpayer is not entitled to.

Fraudulent claims can be lodged by individuals on their own account or third parties on behalf of others. Often, this can involve identity crime, where taxpayer identities are used by third parties to make fraudulent claims for personal gain.

Some examples of refund fraud are deliberately over-claiming deductions, offsets, or expenses by providing false or misleading information, understating income and/or providing fictitious payment summary details, providing false information in a business activity statement and making claims through fraudulent registrations or using false or stolen identities.

The ATO have a range of controls and systems in place to detect potential refund fraud, these include:

-analytical  models that use behaviour and statistical algorithms to analyse information on income tax returns, business activity statements and other tax forms lodged

-sharing data and intelligence with their partner agencies

-obtaining information about suspected fraud from the community and other government agencies

Temporary Budget Repair Levy

The Government has introduced a three-year Temporary Budget Repair Levy on individuals who have a taxable income in excess of $180,000.

The levy is payable at a rate of 2 per cent of each dollar of a taxpayer’s annual taxable income over $180,000. No levy is payable where the taxpayer has a taxable income of $180,000 or less.

The levy will apply from 1 July 2014 and apply to the 2014-15, 2015-16 and 2016-17 financial years. It is expected to raise around $3 billion.

The introduction of this levy means that individuals with taxable incomes exceeding $180,000, and who are liable for the Medicare levy surcharge, will be subject to the top marginal rate of 50.5 per cent of income.

Non residents are also expected to bear the burden of the Temporary Budget Repair Levy.

Audit activity on the rise

The ATO’s audit activity is on the rise with key areas including payroll tax and GST.

Payroll tax 

Regulators are looking for those who understate or avoid their payroll tax obligations. A few of the common problem areas are:

-contractors

-grouping provisions

-interstate wages

-miscalculating the payroll tax threshold

GST

A business that has a GST refund due is likely to be audited. The trigger for a GST audit is often large or abnormal  refunds, however, it can also be as simple as not reconciling the quarterly activity statements.

The art of negotiation

Successful negotiators understand how to negotiate so that both parties feel like they are winning.

Preparation is the key. Knowing what to concede, when to compromise, and how to handle negotiations are all useful tools.

Here is a summary of tips that will help any business owner succeed at the negotiating table:

-Have some ground rules about the negotiation process before beginning. This is particularly important if there is a cultural or linguistic barrier.

-Do the homework and know the point at which the deal would not financially benefit the business.

-Decide ahead of the negotiation what is important to the business and what it can afford to give up.

-Establish the validity of the offer by making small concessions. This suggests that there is little room to manoeuvre.

-Build trust and communication with a give and take process. When another negotiator looks for a concession, ask for something of equal or greater value. Think about what the business agrees to.

-Stay on track and be focused throughout the negotiation, don’t let the business unwittingly give away more than planned.