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What employers need to know about FBT 2020

What employers need to know about FBT 2020

We are living in difficult times, however the world keeps going and our businesses are still expected to meet their Fringe Benefit Tax (FBT) obligations for this year ended 31 March 2020.

The key issues for employers this FBT year and beyond are outlined below.

Should I be registered for FBT? 

If your business has employees (including Directors of a company or trustees of a trust) then it's highly likely your business needs to register for FBT. Generally, your business needs to register for FBT if you are providing any benefits (not in the form of wages) to employees, that are not exempt from FBT. Examples of common fringe benefits are:

- Provision of motor vehicles for employee use;
- Provisions of car spaces for employee use;
- Entertainment expenses (including meals and recreation);
- Employee discounts on goods;
- Reimbursement of private expenses; or
- A myriad of other non-cash benefits. 

The following benefits could be exempt from FBT:

- Portable electronic devices like laptops and iPads;

- Protective clothing;

- Tools of trade;

- Expenses that would be otherwise tax deductible to the employee; and

- Superannuation.

Further, simply forgoing a tax deduction and GST credit does not provide an exemption from FBT.

We recommend that, even if you only have exempt benefits or no fringe benefits, that your business still be registered for FBT and lodge a yearly FBT return. In completing and lodging a yearly FBT return, your business will limit its exposure to Australian Tax Office (ATO) review for a period of 4 years from the date of lodgement of the FBT return. 

Record Maintenance 

It can be difficult to ensure the required records are maintained in relation to fringe benefits – especially as this may depend on employees producing records at a certain time. If your business has cars and you need to record odometer readings at the first and last days of the FBT year (31 March and 1 April), remember to have your team take a photo on their phone and email it through to a central contact person – it will save running around to every car, or missing records where employees forget.

 

Exempt fringe benefits during emergencies

If your business assists employees during an emergency, for example floods, bushfires, or a pandemic outbreak etc., then fringe benefits tax is unlikely to apply to the assistance you provide. While we doubt anyone would be thinking about FBT during a crisis, it's good to know that the tax system does not disadvantage your generosity. 

Examples of the kinds of benefits exempt from FBT include immediate relief you provide to an employee in the form of:

emergency meals or food supplies
clothing, accommodation, transport or use of household goods

temporary repairs, for example on the employee's home or car. Long-term benefits are not exempt from FBT, such as providing a new house or car to replace one destroyed in the emergency event.

 First aid or other emergency health care you provide to an employee is also exempt if it is provided by an employee (or a related company employee), or is provided at your premises (or those of a related company), or at or near an employee's worksite. 

The exemption applies in a range of scenarios including natural disasters, accidents, serious illness, armed conflict, or civil disturbances. 

Motor Vehicles – using the company car outside of work

Just because your business buys a motor vehicle and it is used almost exclusively as a work vehicle, that alone does not mean that the car is exempt from FBT. If you use the car for private purposes - pick the kids up from school, do the shopping, use it freely on weekends, garage it at home, your spouse uses it - FBT is likely to apply. While we're sure the old, "what the ATO doesn't know won't hurt them" mentality often applies when the FBT returns are completed, it might not be enough. The private use of work vehicles is firmly in the sights of the ATO. 

Private use is when you use a car provided by your employer (this includes directors) outside of simply travelling for work related purposes. 

If the work vehicle is garaged at or near your home, even if only for security reasons, it is taken to be available for private use regardless of whether or not you have permission to use the car privately. Similarly, where the place of employment and residence are the same, the car is taken to be available for the private use of the employee.
Finding out that a car has been used for non work-related purposes is not that difficult. Often, the odometer readings don't match the work schedule of the business. These are areas the ATO will be looking at.

Utes and commercial vehicles –safe harbour rules to avoid FBT for 'workhorse' vehicles

When an employer provides an employee with the use of a car or other vehicle then this would generally be treated as a car fringe benefit or residual fringe benefit and could potentially trigger an FBT liability. 

However, the FBT Act contains some exemptions which can apply in situations where certain vehicles (utes and other commercial vehicles for example) are provided and the private use of the vehicles is limited to work-related travel, and other private use that is 'minor, infrequent and irregular'. 

One of the practical challenges when applying the exemption is how to determine if private use has been minor, infrequent and irregular. The ATO recently released a compliance guide that spells out what the regulator will look for when reviewing the use of the exemption. 

The ATO has indicated that in general, private use by an employee will qualify for the exemption where: 

The employer provides an eligible vehicle to the employee to perform their work duties. An eligible vehicle is generally a commercial vehicle or one that is not designed mainly for carrying passengers. The requirements are very strict and guidance on this is published on the ATO website.

The employer has a policy in place which limits private use and obtains assurance from the employee that the vehicle has only been used for certain purposes.

The value of the vehicle when it was acquired was less than the luxury car tax threshold ($75,526 for fuel efficient vehicles in 2018-19 and $66,331 for other vehicles).

The vehicle is not provided as part of a salary sacrifice arrangement; and

The employee uses the vehicle to travel between their home and their place of work and any diversion adds no more than two kilometres to the ordinary length of that trip

Some private travel is allowed, but the total private travel in the FBT year must not exceed 1000 km and, no single, return journey for a wholly private purpose must exceed 200 km.

 If you meet all these specifications, the ATO has stated that it will not investigate the use of the FBT exemption further. However, the employer will still need to keep records to prove that the conditions above have been satisfied and to show that private use is restricted and monitored. 

If these conditions are not met then this doesn't necessarily prevent the exemption from applying, but you can expect that the ATO would devote more time and resources in checking whether the conditions have actually been met. Employers who do not take active steps to check the way commercial vehicles are being used are at high risk of significant FBT liabilities. There are some practical steps that can be taken to reduce risk in this area.

The ATO's top FBT problem areas

The ATO have identified the following as being problem areas under review:

Fringe Benefits Tax Return and Income Tax Return mismatch. 
FBT contributions made by employees to reduce any FBT liability are considered income for income tax purposes. This income is required to report in the income tax return of the business in the appropriate label.

Non-Lodgement of FBT Returns. 
As discussed earlier, if your business employs staff, it is likely to be subject to FBT and be required to lodge a FBT return. Non-lodgement of returns, could lead to penalties and interest or additional tax payable. 

Business assets used personally. 
The ATO are consistently reviewing business assets that may be used or available for use by directors, employees or associates.  

Entertainment expenses claimed as a tax deduction but not recognised for FBT. 
The ATO have advised that a common area overlooked is where businesses claim a tax deduction for entertainment, but fail to complete the relevant FBT obligations to allow for the claim. The ATO have also advised that a common error made is the misclassification of entertainment expenses as sponsorship, advertising or donations

Motor Vehicle Fringe Benefits. 
The ATO will continue to monitor motor vehicle fringe benefits specifically in relation to business that own a vehicle but do not report or complete an FBT return for personal use of that vehicle. The ATO will also continue to review the incorrect application of FBT exemptions or reductions, especially around Eligible 'workhorse' vehicles such as Utes.

Car Parking Fringe Benefits.
 The ATO have acknowledged that there have been many instances of miscalculating car parking fringe benefits, especially around significant discounts on market values, non-commercial commercial parking rates and lack of supporting evidence. The ATO will continue to have a focus on these benefits. 
 

Latest Update - 23 March 2020

Dear Friends,

We know that these are unprecedented times and we are all facing many challenges. Things are changing hourly if not faster and Adams Triglone are continuing to work around the clock to keep you up to date with  all of these developments. We have put into place arrangements to allow our team members to continue to work to ensure we are here for you when you need us. We are not going anywhere. For the safety of our team, we may be working from home at times but remain available through all the usual channels - emails and phone numbers remain the same. 


We will be updating our Facebook, Linked in and blog regularly as updates come through rather than continually clogging up your inbox. We encourage you to go to these links and like or follow for updates:

Facebook  

Linked in 
 

We understand everyone's circumstances are different and we will be in touch with each of you in due course to determine how this affects you. In the meantime, if you are concerned please call us today or whenever you need to on 02 8848 3000 or you can also email our office at enquiries@adamstriglone.com.au 


Below is further information about the Government Stimulus package announced yesterday.


Some points to consider:


1) Government Stimulus Programs have been released in various jurisdictions to benefit small business owners, veterans, the unemployed and other groups. The provisions of these programs (and associated processes) are evolving as the situation develops. You may be a beneficiary under these programs.

2) Running Your Business: Your industry, market, regulatory environment and other factors will influence what you need to do. Change in demand for your products, unpredictable supply chains, altered working conditions and reduced access to debt may impact you.  We are seeing businesses that are dramatically affected and those which are unaffected. Some businesses are finding opportunities and will be strengthened through these events. Identify the risks and opportunities you are facing and take appropriate steps.

3) Personal Affairs: Be aware that these events will affect businesses and also the individuals within them. Some will be subject to travel restrictions, stock market volatility or concerns for the well-being or vulnerable friends and family. Employers should be sensitive to this in the course of business decision-making.

4) An Opportunity to Reflect: Dramatic events prompt us to look critically at our situation and take care of our affairs which we may have neglected. Wills, succession planning and asset protection are a good starting point. Who do you depend upon and who depends upon you? What needs to happen to strengthen these relationships? We can help you navigate this.

5) Thinking Long-Term: While many people will think tactically and short term, this may be an opportunity to set longer-term goals ... and get ahead of the competition.  

6) Access to Information: There are many sources of information but, unfortunately, some are not credible. Try to eliminate the 'noise'. It is unlikely that the decisions you need to make require minute by minute updates on 'breaking news'. Important news will find you... so use the 'in-between time' to strengthen your business and personal affairs.

There are going to be some tough times ahead but working through it together one step at a time we will come out the other side stronger.

 

Please be patient and kind to each other in these uncertain times.

 

Look after yourselves and your family.

 

Greg

Latest information

The Government is now providing up to $100,000 to eligible small and medium sized businesses, and not-for-profits (including charities) that employ people, with a minimum payment of $20,000.

On 12 March 2020, the Government announced the Boosting Cash Flow for Employers measure. The measure initially provided up to $25,000 to business, with a minimum payment of $2,000 for eligible businesses. Small and medium sized business entities with aggregated annual turnover under $50 million and that employ workers are eligible.

The Government has enhanced this measure as part of the second economic response package. Not-for-profit entities (NFPs), including charities, with aggregated annual turnover under $50 million and that employ workers will now also be eligible. This will support employment activities at a time where NFPs are facing increasing demand for services.

An additional payment is also being introduced in the July – October 2020 period. Eligible entities will receive an additional payment equal to the total of all of the Boosting Cash Flow for Employers payments they have received.

This means that eligible entities will receive at least $20,000 up to a total of $100,000 under both payments. This additional payment continues cash flow support over a longer period, increasing confidence, helping employers to retain staff and helping entities to keep operating.

The cash flow boost provides a tax free payment to employers and is automatically calculated by the Australian Taxation Office (ATO). There are no new forms required.

Eligibility


 


Boosting Cash Flow for Employers payments

Small and medium business entities with aggregated annual turnover under $50 million and that employ workers will be eligible. Eligibility will generally be based on prior year turnover.

·        The payment will be delivered by the Australian Taxation Office (ATO) as a credit in the activity statement system from 28 April 2020 upon businesses lodging eligible upcoming activity statements.

·        Eligible businesses that withhold tax to the ATO on their employees' salary and wages will receive a payment equal to 100 per cent of the amount withheld, up to a maximum payment of $50,000.

·        Eligible businesses that pay salary and wages will receive a minimum payment of $10,000, even if they are not required to withhold tax.

·        The payments will only be available to active eligible employers established prior to 12 March 2020. However, charities which are registered with the Australian Charities and Not for profits Commission will be eligible regardless of when they were registered, subject to meeting other eligibility requirements. This recognises that new charities may be established in response to the coronavirus pandemic.

Additional payment

To qualify for the additional payment, your business must continue to be active.

For monthly activity statement lodgers, your additional payments will be delivered as an automatic credit in the activity statement system. This will be equal to a quarter of your total initial Boosting Cash Flow for Employers payment following the lodgment of your June 2020, July 2020, August 2020 and September 2020 activity statements (up to a total of $50,000).

For quarterly activity statement lodgers, the additional payments will be delivered as an automatic credit in the activity statement system. This will be equal to half of your total initial Boosting Cash Flow for Employers payment following the lodgment of your June 2020 and September 2020 activity statements (up to a total of $50,000).

This measure will benefit around 690,000 businesses employing around 7.8 million people, and around 30,000 NFPs (including charities).

Timing

 


Boosting Cash Flow for Employers payments

The Boosting Cash Flow for Employers measure will be applied for a limited number of activity statement lodgments. The ATO will deliver the payment as a credit to your business upon lodgment of your activity statements. Where this places the business in a refund position, the ATO will deliver the refund within 14 days.

Type of lodger

Eligible period

Lodgment due date

Quarterly

Quarter 3 (January, February and March 2020)
Quarter 4 (April, May and June 2020)

28 April 2020
28 July 2020

Monthly

March 2020
April 2020
May 2020
June 2020

21 April 2020
21 May 2020
22 June 2020
21 July 2020

Quarterly lodgers will be eligible to receive the payment for the quarters ending March 2020 and June 2020.

Monthly lodgers will be eligible to receive the payment for the March 2020, April 2020, May 2020 and June 2020 lodgments. To provide a similar treatment to quarterly lodgers, the payment for monthly lodgers will be calculated at three times the rate (300 per cent) in the March 2020 activity statement.

The minimum payment will be applied to the business' first lodgment.

Additional payment

The additional payment will be applied to a limited number of activity statement lodgments. The ATO will deliver the payment as a credit to your business upon lodgment of your activity statements. Where this places the business in a refund position, the ATO will deliver the refund within 14 days.

Type of lodger

Eligible period

Lodgment due date

Quarterly

Quarter 4 (April, May and June 2020)
Quarter 1 (July, August and September 2020)

28 July 2020
28 October 2020

Monthly

June 2020
July 2020
August 2020
September 2020

21 July2020
21 August2020
21 September2020
21 July 2020

Quarterly lodgers will be eligible to receive the additional payment for the quarters ending June 2020 and September 2020. Each additional payment will be equal to half of your total initial Boosting Cash Flow for Employers payment (up to a total of $50,000). 

Monthly lodgers will be eligible to receive the additional payment for the June 2020, July 2020, August 2020 and September 2020 lodgments. Each additional payment will be equal to a quarter of your total initial Boosting Cash Flow for Employers payment (up to a total of $50,000).

 

Early release of superannuation

The Government will allow individuals in financial stress as a result of the Coronavirus to access up to $10,000 of their superannuation in 2019-20 and a further $10,000 in 2020-21.

Eligible individuals will be able to apply online through myGov for access of up to $10,000 of their superannuation before 1 July 2020. They will also be able to access up to a further $10,000 from 1 July 2020 for another three months. They will not need to pay tax on amounts released and the money they withdraw will not affect Centrelink or Veterans' Affairs payments.

This measure is estimated to cost $1.2 billion over the forward estimates period.

 

Temporary reduction in Minimum Drawdown Requirements

The Government has announced that the minimum pension requirements for 2019/20 and 2020/21 will be re-set to half the normal rates and there will be changes to the deeming rates used to calculate an individual's income for a range of important government benefits (including the age pension). 

 

Similar to the approach taken in the 2008/09 Global Financial Crisis, the minimum drawdown requirements for account based pensions and similar products will be temporarily reduced by 50% for the 2019/20 and 2020/21 years.

The revised rates for the 2019/20 and 2020/21 years will be as follows:

Age of Member

Percentage Factor

Under 65

2

65 – 74

2.5

75 – 79

3

80 – 84

3.5

85 – 89

4.5

90 – 94

5.5

95 +

7

Reducing social security deeming rates

On top of the deeming rate changes made at the time of the first package, the Government is reducing the deeming rates by a further 0.25 percentage points to reflect the latest rate reductions by the RBA.

As of 1 May 2020, the lower deeming rate will be 0.25 per cent and the upper deeming rate will be 2.25 per cent.

The change will benefit around 900,000 income support recipients, including Age Pensioners.

This measure is estimated to cost $876 million over the forward estimates period.

 

 

 

If you are employed, your employer should be setting aside a percentage of your earnings and contributing them into your Superannuation account.


If you are earning less than $53,564 per year in the 2019-20 financial year and put in extra money into your super, you could be eligible for a government co-contribution of up to $500 paid into your super account as a reward.


You won't have to make your contribution all at once, and you won't have to fill in any forms to apply for this scheme. You'll just need to lodge your annual tax return as per usual for the financial year, and link your TFN to your super account - and the ATO will take care of the rest.


This fantastic scheme will allow eligible people to boost their retirement savings. As the Government policies are always evolving, best to get your hands onto the scheme so you don't miss your chance to receive this government co-contribution!


Eligibility Requirements

·         Earn less than $53,564 before tax in the 2019-20 financial year

·         Earn 10% or more of that income from employment or self-employment

·         Be a permanent resident of Australia for the full financial year

·         Have not exceeded the total superannuation balance of $1.6m or the non-concessional contributions cap

·         Lodge a tax return for the 2019-20 financial year

·         Be under the age of 71 years at the end of June 2020; and

·         Satisfy the work test if you are 65 years of age or more (which means you would Have worked a minimum of 40 hours within 30 consecutive days in the financial year you make the contribution)

·         Make an after-tax contribution to your super.

 

If you need any further advice or assistance regarding this scheme, get in touch with us and we will be able to provide more insight.


Economic Stimulus Package

Media release
12 Mar 2020
Prime Minister, Treasurer

The Morrison Government has today announced a $17.6 billion economic plan to keep Australians in jobs, keep businesses in business and support households and the Australian economy as the world deals with the significant challenges posed by the spread of the coronavirus.

Our targeted stimulus package is focused on keeping Australians in jobs and helping small and medium sized businesses to stay in business. 

The package has four parts:

  • Supporting business investment
  • Providing cash flow assistance to help small and medium sized business to stay in business and keep their employees in jobs
  • Targeted support for the most severely affected sectors, regions and communities;
  • Household stimulus payments that will benefit the wider economy

The measures are all temporary, targeted and proportionate to the challenge we face.  Our actions will ensure we respond to the immediate challenges we face and help Australia bounce back stronger on the other side, without undermining the structural integrity of the Budget.

Prime Minister Scott Morrison said as part of the plan up to 6.5 million individuals and 3.5 million businesses would be directly supported by the package.

"Just as we have acted decisively to protect the health of the Australian people, based on the best evidence and medical advice, our support package responds to the economic challenges presented by this pandemic in a timely, proportionate and targeted way," the Prime Minister said.

"Our plan will back Australian households with a stimulus payment to boost growth, bolster domestic confidence and consumption, reduce cash flow pressures for businesses and support new investments to lift productivity.

"Australia is not immune to the global coronavirus challenge but we have already taken steps to prepare for this looming international economic crisis.

"We've balanced the budget and managed our economy so we can now use this to protect the health, wellbeing and livelihoods of Australians.

"Our targeted stimulus package will focus on keeping Australians in jobs and keeping businesses in business so we can bounce back strongly.

"The economy needs temporary help right now to bounce back better so the livelihoods of all Australians are protected."

Treasurer Josh Frydenberg said Australia is approaching the economic challenge from the Coronavirus from a position of strength with IMF and the OECD both forecasting Australia to grow faster than comparable countries including the UK, Canada, Japan, Germany and France.

"Our plan keeps businesses operating, supports jobs and provides a stimulus to households," the Treasurer said.

"The Government has worked hard over the last six and a half years to return the budget to balance so we have the flexibility to respond to the serious economic challenges posed by the Coronavirus."

"Given Australia's strong economic and fiscal position, the international credit rating agency Standard and Poor's indicated that temporary stimulus would be "unlikely to strain Australia's creditworthiness.

"In our response, we have been very careful not to repeat the mistakes of previous stimulus programs and not undermine the structural integrity of the budget.

"Today's announcement will provide the support businesses need to stay in business and keep Australians in a job.

"By acting decisively this package will put Australia in the strongest possible position to deal with the economic challenges we face and to make sure our economy bounces back even stronger."

Delivering support for business investment

  • $700 million to increase the instant asset write off threshold from $30,000 to $150,000 and expand access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020. For example, assets that may be able to be immediately written off are a concrete tank for a builder, a tractor for a farming business, and a truck for a delivery business.
  • $3.2 billion to back business investment by providing a time limited 15 month investment incentive (through to 30 June 2021) to support business investment and economic growth over the short term, by accelerating depreciation deductions. Businesses with a turnover of less than $500 million will be able to deduct an additional 50 per cent of the asset cost in the year of purchase.

These measures start today and will support over 3.5 million businesses (over 99 per cent of businesses) employing more than 9.7 million employees or 3 in every 4 workers. The measures are designed to support business sticking with investment they had planned, and encouraging them to bring investment forward to support economic growth over the short term.

Cash flow assistance for businesses

  • $6.7 billion to Boost Cash Flow for Employers by up to $25,000 with a minimum payment of $2,000 for eligible small and medium-sized businesses. The payment will provide cash flow support to businesses with a turnover of less than $50 million that employ staff, between 1 January 2020 and 30 June 2020. The payment will be tax free. This measure will benefit around 690,000 businesses employing around 7.8 million people. Businesses will receive payments of 50 per cent of their Business Activity Statements or Instalment Activity Statement from 28 April with refunds to then be paid within 14 days.
  • $1.3 billion to support small businesses to support the jobs of around 120,000 apprentices and trainees. Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice's or trainee's wage for up to 9 months from 1 January 2020 to 30 September 2020. Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer that employs that apprentice.

Stimulus payments to households to support growth

  • $4.8 billion to provide a one-off $750 stimulus payment to pensioners, social security, veteran and other income support recipients and eligible concession card holders. Around half of those that will benefit are pensioners. The payment will be tax free and will not count as income for Social Security, Farm Household Allowance and Veteran payments. There will be one payment per eligible recipient. If a person qualifies for the one off payment in multiple ways, they will only receive one payment.

Payments will be from 31 March 2020 on a progressive basis, with over 90 per cent of payments expected to be made by mid-April.

Assistance for severely-affected regions

  • $1 billion to support those sectors, 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 Commonwealth National Parks. It will also include additional assistance to help businesses identify alternative export markets or supply chains. Targeted measures will also be developed to further promote domestic tourism. Further plans and measures to support recovery will be designed and delivered in partnership with the affected industries and communities.

The Government is also offering administrative relief for certain tax obligations, including deferring tax payments up to four months. This is similar to relief provided following the bushfires for taxpayers affected by the coronavirus, on a case-by-case basis.  The ATO will set up a temporary shop front in Cairns within the next few weeks with dedicated staff specialising in assisting small business. In addition, the ATO will consider ways to enhance its presence in other significantly affected regions to make it easier for people to apply for relief, including considering further temporary shop fronts and face-to-face options.

The Government's economic support package is proportionate, timely and scalable to respond to the economic challenges presented by the spread of the coronavirus.

Through our response today and the actions we have taken to bring the Budget back to balance over the last six and a half years, Australians can be confident that our nation is one of the best prepared to respond to the economic impacts of the coronavirus.

These days your personal data is everywhere, and that information is valuable to marketers, hackers and everyone in between. If you want to prevent the unauthorized use of your personal information, you need to take a proactive approach to protecting yourself and your identity.

You can no longer afford to be blasé about your data security - if you are not taking proactive measures to prevent the use of your personal information, you are opening yourself up to all kinds of problems. Here are some tips you can use to protect yourself and your data in this age of data breaches.

Check Your Privacy Settings on Social Media

There is an old saying in the tech world - if the service is free, you are the product. Nowhere is this more true than in the world of social media. Avoid the Facebook may be getting all the headlines, but other social media companies operate in the same manner, selling your personal data to advertisers and serving up targeted marketing messages.

While there is nothing inherently evil in targeted advertising, it can become obtrusive when bad actors get involved. If you want to protect your data from the next Cambridge Analytica, you can start by adjusting your privacy settings. Controlling the type of data that is shared, and who it is shared with, can go a long way toward protecting your privacy.

Designate an Online Shopping Card

Shopping online is convenient, but it is important to stay safe. With so much credit card data being stolen, it has never been more important to be proactive about protecting yourself and your money.

You can start by designating a single card for all your online shopping. Use that credit card whenever you shop online, then check your statements carefully for signs of fraud and unauthorized use.

Avoid Saving Your Credit Card Data at Shopping Sites

It may be convenient to save your payment information, but it is also risky. Avoid the temptation to save your credit card information and instead take the time to enter it each time you shop.

This proactive measure will protect you in two ways. First, it will prevent your credit card information from being revealed in the next data breach, but it will also reduce the impulse purchases that might otherwise wreck your budget.

Use Strong Security on All Your Devices

Your online security is only as strong as your weakest link, so make sure all your devices are well protected. From your tablet to your smartphone to your laptop, make sure you have strong antivirus and malware protection on every device you use.

Implementing strong security and keeping it updated is one of the best things you can do to protect yourself from the next data breach. Think of your online security as a chain, one that requires the robust participation of every link along the way.

Data breaches are inevitable, and the bad guys keep coming up with new ways to steal your personal information. If you want to protect yourself in this dangerous digital world, you need to take a proactive approach, and that means building security into everything you do online.

 

What you need to do before you retire

If you haven't given any thought to what your retirement will look like, now's a great time to start. It might not be the most fun thing to think about-not when there are vacations to plan or houses to buy-but retirement planning is a vital part of your overall financial plan.

Most people dream about they day they no longer have to work. They dream of having a leisurely coffee in the morning without running to a meeting or they want to spend six months of the year visiting exotic locations. Being able to do so requires planning. It means you have to think about your financial future and take steps to make sure you can afford the lifestyle you want to live.

Here are some things to do before you retire.

Examine your retirement needs

Before you can even begin to think about how to save for retirement, you need to know what you want your retirement to look like and how your finances will affect it. Consider how you want to live in retirement. Will you want to travel a lot? Downsize your home? Have your regular home and a holiday spot? Will you need to renovate your house?

You also need to know what you'll have to pay for, and how. Do you currently own a home but plan to sell it to move into something smaller? Will your home be paid off by the time you retire? Do you want to maintain certain investments in your senior years or would you prefer to be liquid?

Next look at the income you'll have. What will your current investments likely provide for you as you age? What will your pension be? Will you have income you can count on beyond a pension? Are you eligible for other entitlements?

Having a firm understanding of how you want your life to look as you age and what money you'll have to live off will help determine how you can start saving today for retirement and help you sort out when you can afford to retire.

Deal with your debt

Next you need to look at the debt you currently have and make a plan to deal with your bad debt. Although many people think all debt is bad, in truth there is good debt. Good debt is part of a strategy that builds your wealth over time. Owning a home can be good debt. Bad debt takes away from your wealth. This may be through interest, such as on credit cards for example.

Retirement will be less financially stressful if you can reduce your bad debt before you retire-and preferably well before you retire.

Then examine whether there are other financial matters that need addressing. Do you have a current will? Is your insurance up to date? Should your investments be reviewed? Is it worth it to make additional superannuation contributions?

Final thoughts

Once you know what you want your retirement to look like and you have an idea of your finances, you need to develop a financial plan. Retirement savings don't just happen with good intentions. It takes planning, saving, and understanding what financial vehicles are best for you to make your dreams a reality.

Talking to us can help you sort out what you need to do now, a few years in the future and as you enter retirement to ensure you're as financially comfortable as possible.

Ideas for business goals this year

The start of the year is the perfect time to dust off last year's business plan and set some new goals for the future.

While some entrepreneurs love planning, others feel overwhelmed by the process. How do you decide on just a handful of goals that take priority, with so many moving parts that make up a business?

These tips can help you get started brainstorming how your company can plan for greater success in the years ahead.

Redefine your brand

Is the elevator pitch you used a year ago – even six months ago – still accurate? Unless you are crystal clear on who you are as a company, whom you're here to serve, and what you hope to achieve in the next one to three years, it's going to be hard to come up with meaningful goals. Take a look at your company vision, mission statement, and core values. If they need tweaking to reflect where your business is today and where you want it to go, start there. Then you can move on to setting some useful long and short term goals.

Big picture planning

Entrepreneurs dream big-and they should! Thinking big can lead to ground breaking products and services that become the foundation of innovative, successful companies. When it comes to goal-setting, thinking big is great, too. But in order to make those big ideas like "increasing market share" or "growing profits" happen, you need to break them down into smaller, specific goals and strategies tied to a budget and timeline. For instance, while your overarching objective may be to "grow profits by 50% by December 31", your smaller goals might include:

• Launching a social media campaign the first week of March to attract 2,500 new prospects by months' end; or
• Increasing total sales by 40% with the opening of an online store by July 1st. The key is to define goals that are measurable and achievable.

Define smaller goals

Thinking through how you'll achieve your larger objectives can be a fun exercise – one you can turn into a group activity, including your entire team. Sit down and discuss what you know about your customers. Review your historical sales data and look over your up-to-date budget and forecasting. With all the relevant information at hand and everyone at the table, you can come up with strategies that align with your company vision, assign deadlines, and get buy-in on what everyone needs to do to see your ideas through to completion.

Final tips

It's worthwhile to take some time to reflect on your personal goals as you think through your business goals. Maybe you've been wanting to get involved in mentoring, improve your networking skills, or attend more conferences. Self-development is, in a sense, professional development – and vice versa, so include them in your plans. Of course, coming up with business goals is just one part of the equation. You'll also need to monitor your progress, noting milestones and sharing your company achievements with your team on a regular basis. Tracking your results will help your employees stay motivated – and it also gives you the chance to adjust your goals and strategies in time to achieve the best possible results by year's end.

The ins and outs of employee performance reviews

When you run a small business, you're involved in your company's sales, accounting, marketing, and human resources, among other things. Being responsible for human resources isn't just about hiring and firing people, although those are large parts of the role. It's also about managing the people who work for you while they work for you.

Conducting regular employee performance reviews is part of managing your workers. While performance reviews may seem daunting, if you have a plan for doing them and focus on rewarding great employees while helping less successful employees achieve more, you'll find the performance reviews not only motivate your employees, they enhance your business and decrease employee turnover.

Here are some tips on conducting productive performance reviews.

Do them frequently and regularly

Once a year isn't regular enough because employees will go for too long without having a sense of how well they're doing, or what areas they can improve in. By the time you get around to discussing an issue, it's likely gone on a long time.

Instead, have more frequent discussions with your employees and set up shorter-term goals. Conducting reviews every two to three months keeps your employees informed about their performance and gives them time to address any feedback you give them. That helps them feel secure in their role. It also gives you a chance to see how employees view your business and make sure you're all on the same page about expectations.

Be present

The majority of workers want to do a good job and want to learn where they can improve. Your performance evaluations are important to them and also to the future of your business. Show your employees you care about them and their growth by being dedicated to those conversations.

Don't check your email, texts, or voice mail while conducting an evaluation. Make sure other employees know not to disturb you during this time. Also, make sure the focus stays on the employee in front of you, not on other employees and their performance, or on office drama. This performance evaluation should be as important to you as it is to your employees.

Be consistent and flexible

Owning a small business means you likely have personal knowledge about some or all of your employees.

That's why it's vital you be consistent in how you evaluate employees. If one employee would receive a special bonus for meeting her sales quota, all employees should receive that bonus. No one should receive special treatment just because you know more about their personal circumstances. That said, it's also important to be flexible. A person whose focus is sales can't be measured on the same scale as someone in marketing. They each contribute differently to your bottom line but still have a vital part in the success of your business. Your reviews need to take into account each employee's role within the company, what their goals are, and how effective they are at getting their job done in their department.

Final thoughts

Performance evaluations are vital for your small business. They help you keep communication with your employees and monitor how well your employees are meeting their goals. Even the best employees have issues that arise once in a while, and conducting a regular performance evaluation helps identify those issues early and develop a plan for addressing them, preventing minor troubles from becoming insurmountable. Finally, by rewarding your great employees during performance evaluations, you can motivate them to achieve their goals and you can decrease turn-over rates.

What to do if you get audited

No business owner looks forward to a letter from the taxman requesting a closer look at the books.

If you've received an audit letter – an official request by the tax authority to review your accounts and confirm your taxes have been paid to date – don't panic.Prepare.

These four steps will help you get through the process with minimal stress and the best possible outcome.

Respond promptly

If you file your taxes reliably and pay on time, there's a good chance the government tax office contacted you for a spot check.

In this case, all that may be asked is that you provide receipts and answer a few questions.Give the tax office the information they've requested promptly so they can close the file quickly, and you can move on. If an on-site audit is required, you can't avoid the inevitable. Call to confirm the date and request any information the auditor will need to help you prepare.

Responding promptly and cooperatively every step of the way is the best strategy for getting through an audit. Reacting defensively or unprofessionally can invite more probing questions.

Seek professional help

Get in touch with your accountant as soon as an audit has been scheduled for advice and support. And if you've been handling the books on your own, now is the time to consider hiring a tax accountant.

A tax accountant can explain the audit process, help you get your books in order, and offer personalized advice to help you prepare.

You may want to hire a tax lawyer if you have concerns that are beyond an accountant's scope – if, for instance, you have unfiled returns, under-reported income, understated tax liabilities, or if you can't validate all of your expenses for the tax year in question.

Many tax lawyers offer a free consultation and can provide peace of mind by explaining your obligations and rights, and ensuring those rights are protected.

Get organized

An auditor will ask you to provide receipts that prove you qualify for any write offs you've claimed. On the day of the audit, be ready with your paperwork and be prepared to answer any questions.

Being organized and prepared shows you've done your best to report your taxes accurately. If your papers are in good order, and you don't raise any red flags, it's much more likely the auditor will wrap up once the audit's basic requirements are met.

As a word of caution, only provide the auditor with the information they've asked for – no more, no less. Offering more explanation or "proof" in the hope of avoiding further questions may backfire, raising new ones. Stick to specifics.

Pay quickly

In the best possible scenario – your records are in order and you've been conscientious about paying your taxes – an audit won't lead to any unpleasant surprises.

If, however, an auditor finds that you do owe unpaid taxes, unless you have a solid reason to challenge the auditor's findings, pay what you owe immediately.

You'll avoid accruing additional penalties, interest, fees and payments. Perhaps more importantly, you'll be able to put the audit behind you so you can get back to focusing on your business.

Final thoughts

A final word to the wise: if you do try to fight the taxman, before pursuing legal action weigh the cost and benefit. Legal fees can add up quickly, so be sure the amount requested by the auditor - including interest and penalties - is worth what you'll end up paying in legal fees.

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