What disqualifies you from an SMSF

Posted on 19 May '19, under super.

SMSF’s are regulated by the ATO and have specific eligibility criteria that members and trustees must follow. While anyone 18 years old or over can be a trustee or director of an SMSF, they mustn’t be under a legal disability, such as mental incapacity, or a disqualified person.

The ATO can render an SMSF trustee as a disqualified person if they see the need, particularly in relation to illegal early access breaches. There are other ways a person may become disqualified and some may not even realise they have been. Continuing to act as an SMSF trustee or director of the corporate trustee while disqualified is an offence, further penalties may apply.

A person is disqualified if they:

  • Have been convicted of an offence involving dishonesty.
  • Are or have been subject to a civil penalty order under the super laws.
  • Are insolvent under administration (including being an undischarged bankrupt).
  • Have been disqualified by a court or regulator (for example, by the ATO or APRA).

The ATO has a Disqualified trustees register to see if an individual has previously been disqualified. The register provides information and easy search options to help determine whether a potential trustee has been disqualified. It is updated quarterly and includes all individuals who have been disqualified since 2012 (when the information was first published electronically).

Choosing the right business location

Posted on 19 May '19, under business.

When setting up your business, choosing a location can be a critical factor in its success. Each organisation has varying requirements, so it is necessary to consider your needs and priorities when deciding on a business premises that will best suit you.

Know your business:
The types of premises will depend on your business. Businesses that offer professional services may consider choosing long or short-term leasing options that will allow you to conduct customer and business meetings from a central location. If you run a retail or hospitality organisation it will involve deciding on the best location to sell your products while also being accessible to customers. For those that involve manufacturing, wholesaling or selling over the internet, then selecting a business location will not impact on attracting customers.

Identify customers:
Identifying who your customers are and how you can best meet their needs can also assist in choosing a location. Researching relevant information, such as where they live and work, and how far they will potentially travel to buy your products or services, can help you decide on a location that is practical for existing customers and attractive to new ones.

Assess the location:
Consider the external elements that can affect your business. Look at the traffic in the area and work out how it can support or hinder you and what services are in the area in which you choose to locate. You may consider asking other local business in your desired location for some advice on the best providers for services such as gas or electricity, water, phone and internet.

Improving your employees’ wellbeing

Posted on 19 May '19, under people.

Providing a workplace that promotes positive wellbeing for its staff is a key responsibility of all employers. Workplace wellbeing refers to both the physical and mental state of employees. While physical wellbeing covers essential elements such as access to natural daylight and temperature control, mental wellbeing is equally as important.

Smart work design:
A pleasant work environment will lead to positive mental wellbeing for your staff. You may achieve this by establishing flexible working hours, addressing a workplace culture of when, where and how you work. Involve your employees in the decision-making process of how work is performed to ensure that it will work for them.

Mental health awareness:
Talk openly about mental health in your workplace, and provide access to information in the form of brochures or noticeboards. You could participate in initiatives like World Mental Health Day or R U OK? Day to further raise awareness among employees and encourage open discussions about these issues.

Support staff:
The more that your staff feel supported, the more likely they are to be motivated and productive. Create a workplace environment that allows employees to share how they are feeling and any problems that they may encounter through open lines of communication. Employees should feel that they can trust their colleagues and managers, ensuring there is a clear process for managing stress.

Tax incentives for start-up investors

Posted on 19 May '19, under tax.

Tax incentives may be available to investors that are considering putting their money into qualifying start-up businesses. Eligible businesses are defined by the ATO as early-stage innovation companies (ESICs).

The two key tax incentives for eligible early-stage investors, also known as ‘angel investors’, who purchase new shares in an ESIC are:

  • Non-refundable carry forward tax offset that is equal to 20% of the amount paid for their qualifying investments. This offset is capped at a maximum amount of $200,000 for the investor and their affiliates combined in each income year.
  • Modified capital gains tax (CGT) treatment, where capital gains on qualifying shares that have been continuously held for at least one year may be disregarded. Capital losses on shares that have been held for less than ten years must be disregarded.

Note that the maximum tax offset of $200,000 does not limit the shares that qualify for the modified CGT treatment.

The early-stage investor tax incentives are available to both Australian resident and non-resident investors. To qualify for the tax incentives, investors must have purchased the shares in a company that meets the requirements of an ESIC immediately after the shares are issued. They must be issued on or after 1 July 2016.

Common mistakes to avoid when launching a business

Posted on 10 May '19, under business.

Starting a new business is an exciting time for many entrepreneurs. However, there are 5 common mistakes many new business owners make. By being aware of these mistakes that may occur when starting a business, you will increase your chances of success and remove the risk of your new venture turning into a failure.

Being unprepared:
Organisation is key when it comes to running a small business. While it may be tedious, implementing a solid plan for your business will benefit your time management and goal setting by mapping out exactly how much time and money it will take you to grow your business.

Avoiding new technology:
While new technology may seem intimidating and require more time initially to learn and understand, an unwillingness to adapt to new technologies may hurt your business down the track.

Failure to delegate:
Effective delegation can be a great way to build and grow your business. It can free up your time for business activities that may require your unique expertise, and help to build a strong team that can work together for collective success.

Ignoring market research:
Test your products and services before you start your business, to identify what target market you are trying to reach and how they may respond to your marketing activities.

Running out of capital:
You should plan in advance to ensure that you will have enough money to live on while your business is in its startup phase, as well as budgeting for the amount of capital you will require for the business to survive and grow.

Consolidating your debt

Posted on 10 May '19, under money.

Debt consolidation loans are a financial solution that may be suitable when you have multiple debts at once and are struggling to manage them all.

Debt consolidation is the process of bringing together all of your current outstanding debts into one single repayment. This is typically done by taking out a new personal loan to repay your existing debts and then paying this new loan back over a set term. While they may seem like an appealing idea, there are a number of potential negatives to consider as well as the benefits.

Pros:

  • Consolidating your debt into one single loan to repay can be easier to track and manage.
  • Those taking out a debt consolidation loan may benefit from a lower interest rate compared to what they are currently paying. This means that over time, you can expect to save money.

Cons:

  • Without being mindful of your finances, the lower regular payments as a result of consolidating your debt may lead to you spending more overall. This creates the potential to accrue more debt and pay more in the long term.
  • Failing to keep up to date with regular loan payments could end up affecting your credit score and put you in further financial hardship.

Before deciding to apply for a personal loan to consolidate your debt, take the time to consider all of the potential advantages and risks that are involved. Factor in your own circumstances and look for a loan that offers an interest rate and terms that will work for you. For more information, you may consider seeking professional financial advice.

Protecting your business with social media security

Posted on 10 May '19, under web.

With the amount of information that is being shared online increasing more than ever, now is the time to think about social media security for your business.

While there is no doubt that social media can benefit businesses by creating a more engaged and connected world, it can also pose a threat by allowing cybercriminals and online hackers to access business and personal information.

Social media policy:
Creating strong governance practices are essential to managing potential social media security risks. A strong social media policy should outline how your business and employees use social media. This will not only protect you from security threats but also from potential legal and HR trouble.

Train your staff:
Human error is one of the most common social media security threats. Regular social media training will keep employees aware of the policy in place and ensure they adhere to all guidelines.

Invest in secure technology:
One of the most effective ways to protect your business online is by investing in secure technology that can guard against unauthorised access. You may choose to install software on your business computers and devices that can monitor your social media channels 24 hours a day and can automatically alert you of any security risks.

ATO impersonation scam report

Posted on 10 May '19, under tax.

The ATO has released an Impersonation Scam Report for the month of February 2019. Highlighted are the various ways in which scammers have attempted to contact people, posing as the ATO.

The most common method of contact was by phone calls or messages, accounting for 97% of reported scams over the month. Reports of 9,342 phone scams were officially recorded, decreasing significantly from 13,800 reports in January 2019. Emails accounted for 2% of scamming methods. The remaining 1% reported was scam by text message.

According to the ATO, the amount collected by scammers was approximately $256,635, over $240,000 less than January 2019. Payments to these scams by bank transfers significantly increased in February, accounting for 47% overall.

Although trends are down in the last month, the ATO is working to create better public awareness of these scams. The ATO has launched a new scam warning video across their various social media platforms, including Facebook, Twitter and LinkedIn.

ATO warns of TBAR lodgement errors

Posted on 10 May '19, under super.

With upcoming annual lodgement dates for Transfer Balance Account Reporting (TBAR), the ATO is alerting funds of common lodgement mistakes that could lead to delays and additional processing time.

The Transfer Balance Cap (TBC) is a $1.6 million cap on the total amount of superannuation benefits that a member can transfer into a tax-free retirement phase income stream. TBAR is used by SMSF trustees to report to the ATO any events that affect a member’s transfer balance. The information is used to record and track the member’s TBC and apply provisions if the member were to breach the cap.

Reports can be lodged both online or by paper forms. The electronic method is recommended by the ATO as human errors are common when using the paper form to report. These issues are often a failure to provide the fund’s ABN and failing to report the event type. When these errors occur, the form will be suspended for manual review and the ATO may need to contact funds in some cases to resolve any issues.

A TBAR must be lodged for the 2018-19 financial year if any member had a transfer balance account event occur in the last year, and if all members have a total super balance of $1 million. The due date for annual TBAR reporting is the same date as the SMSF annual return on 15 May 2019, although not all funds have the same lodgement due date. Trustees should familiarise themselves with their SMSF’s due dates and ensure they are reporting the correct information to avoid processing delays.

Handling negative feedback

Posted on 5 May '19, under business.

Customer complaints are an inevitable part of running a business. How you handle negative feedback can help or hinder retaining existing customers. Complaints can be a great learning tool for businesses looking to improve their services, products, customer satisfaction and overall competitive edge.

Poorly handled complaints can see customers withdraw their business and encourage others to do so. When businesses take the time to listen and genuinely fix an issue, customers see value in the services they provide. Here are four tips to deal with complaints effectively:

Actively listen:
When an issue is presented, apologise promptly for the matter and don’t blame others. Be sure to thank the customer for raising the complaint and listen intently, asking questions and repeating back what they have said can help to demonstrate this.

Focus on solutions:
Discussing different options for working through the issue with the customer can help as it shows commitment to fixing their problem. Clarify what their desired outcome is and negotiate solutions that meet both parties needs.

Have a dedicated staff member:
Assigning one staff member to manage complaints and responses can help processes to be thorough and consistent. By having a customer service role, with the appropriate training and skills to manage complaints, you also protect the business and the rest of the team who may not be as well equipped to handle negative feedback.