Business Growth Network March 2021

The 2021 business reset: Emerging trends/insights to shape what leaders will do differently in 2021

2020 will be a year to remember for, in many cases, all the wrong reasons.  Like all crises however, there are valuable lessons and many bright spots that will shape business and leadership positively for decades to come.

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Government Stimulus

Federal Budget – Key Takeaways

Federal Budget – Key Takeaways

On 6 October, the Government released the Federal Budget for 2020/21.

It was a budget designed to stimulate the economy and create new jobs. Below is a summary of the key takeaways and some planning opportunities all business owners should consider taking advantage of.

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Government Stimulus

JobKeeper 2.0 – Changes to the JobKeeper Payment

JobKeeper Extended

The Federal Government has announced that the JobKeeper scheme will be extended to 28 March 2021.  It was previously scheduled to end on 27 September 2020.  There will be changes to both the eligibility requirements and payment amounts.

  • The fortnightly payment of $1,500 will be reduced to $1,200 from 28 September 2020 and $1,000 from 4 January 2021.
  • A new two-tiered payment structure will be introduced from 28 September 2020, which will reduce the payment rates for employees who worked fewer than 20 hours per week in February 2020.

The eligibility rules for employees remain unchanged.  Particularly noting that the employees must have been employed as full-time, part-time or long-term casual (employed on a regular and systematic basis for at least 12 months) as at 1 March 2020.

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Reduce Tax

Key Actions That Business Owners Should Take Before 30 June to Reduce Tax

By Chris Smith

For businesses to maximise their cash position, they should consider the following tax planning opportunities before 30 June.

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Business Budget planning

The Importance of Budgeting in Business

By Chris Mandzufas

A realistic and detailed budget is crucial for guiding your business to tackle unexpected challenges and to ensure you stay on track to grow.  

It may seem obvious that business growth can only occur when there is money available for reinvestment, but it is surprising how many businesses do not budget and do not track their performance against a budget.

In the current environment, a realistic and detailed budget is a very important tool for providing valuable information, guiding your business to tackle unexpected challenges and most importantly to ensure you stay on track to grow.

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forcast

Why Preparing Three-Way Forecasts is So Vital

By Tony Monisse

Learn why it is important to forecast the profit & loss, cashflow and balance sheet.

As I see it, a budget is merely a forecast prepared at a point in time.  This point in time is usually tied to the end of the financial year and the business’ planning cycle.

In contrast, a forecast is frequently updated based on the changes in the operating environment e.g. winning a new contract, losing a key customer or a change in the staffing situation.

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Government Stimulus

Details of the JobKeeper Payment – eligibility, how to enrol & critical deadlines

On 21 July the government announced proposed changes to JobKeeper including an extension through to 28 March 2021.  Read our summary of these updates here, or visit the ATO’s website for further details.

From 20 April 2020, you can enrol with the ATO for the JobKeeper payment using the Business Portal and authenticate with myGovID.  You must do this by the end of May to claim JobKeeper payments for April.  Payments will start being made to businesses in May.

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JobKeeper Package

Details of the WA State Government’s Second Economic Relief Package

On 31 March 2020, the WA State Government announced economic relief measures for West Australians.

Key details of the package are:

Small and medium businesses:

  • $2,500 one-off credit to Synergy and Horizon customers who consume less than 50 megawatt hours per year (expected to help 95,000 businesses)
  • Payroll tax waived for 4-month period from 1 March to 30 June 2020 for businesses with taxable wages less than $7.5m.  This replaces the previously announced deferral of payroll tax.
  • Range of license fees to be waived for four months for small and medium businesses
  • Businesses impacted by COVID-19 can apply for interest-free payment arrangements and penalty remissions for payroll tax, transfer duty, landholder duty, vehicle duty and land tax
  • Small businesses impacted by COVID-19 will not be disconnected from water or electricity due to late payments, and no interest will be charged on deferred payments.

Household assistance:

  • Eligibility for the previously announced Energy Assistance Payment boost has been expanded to include new eligible applicants until 30 September 2020.  This means those who are unemployed due to COVID-19 who become eligible for a concession card will receive an upfront $305 credited against their electricity bill (from 11 May 2020) and up to a further $305 credited over the course of the next year.
  • No water and electricity disconnections, and no interest charged on deferred payments
  • The same interest-free deferral of payments referred to above for small businesses.

Should you have any questions regarding this relief package, please do not hesitate to contact this office on (08) 6212 7200 to discuss.

Government Stimulus

Details of the Government’s Second Stimulus Package

On 22 March 2020, the Federal Government announced further economic stimulus measures for individuals, businesses and the banking sector, to support Australia through the unprecedented impact of COVID-19.

This economic plan will provide significant benefits to small and medium-sized businesses and households in addition to the stimulus package announced on 12 March.

The key announcements relate to:

  • Additional payment to small businesses (up from $2k-$25k, to $20k-$100k)
  • SME loan guarantees
  • Temporary relief under ASIC and Corporations law requirements
  • Early release of Super benefits
  • Reduction in minimum pension payments
  • Increased access to welfare

More details below:

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Government Stimulus

$25,000 cash booster for your business: Details of the government’s $17.6 billion coronavirus stimulus package

The Federal Government last week unveiled their $17.6 billion stimulus package — which includes grants of up to $25,000 for small business, support for those employing apprentices and accelerated depreciation amongst other measures.

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Federal Budget update

Federal Budget Update – Key Takeaways

On 2 April, the Government released the Federal Budget for 19/20.

Below are the key takeaways that may be relevant to you and your group:

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Christmas tree with presents

Season’s Greetings & Best Wishes from Brentnalls WA!

Season’s Greetings & best wishes for a happy, healthy and prosperous New Year from your team at Brentnalls WA!

 

P.S. Please note that our office will be closed from1:00pm on Thursday, 20 December 2018 and will re-open at 8:00am on Monday, 7 January 2019. In case of emergency, please leave a message at our office number 08 6212 7200. We will be checking our messages over the holiday period and will get back to you as soon as possible.
Newsletter

November 2018 Newsletter

Focus on Your Cashflow in the Lead up to the Christmas & New Year Holiday
Brentnalls Affiliation National Conference 2018
My Learnings from China – What Makes a Success Business & Do You Measure Your Competitive Advantage?
Proposed Changes to Division 7A
Practical Advice on Agile Leadership
Brentnalls Affiliation in the Top 100 Accounting Firms for 2018
Every Bit Counts
Did You Know We’re on LinkedIn?

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Targeted amendments to Division 7A – Treasury consultation paper

Today, Treasury has released a consultation paper relating to the proposed amendments to the Div 7A rules that are due to apply from 1 July 2019.

 

The release of this paper is significant as it is the first detail provided by the Government on how the new proposed rules are intended to apply.

Prior to today’s release, the Board of Taxation’s report outlining recommendations to Government (finalised in 2014) was all we had available as a guide on how the new rules may be applied. Treasury has made substantial changes from those original recommendations.

The notable points that may affect your group are:

  • New Div 7A loans will be straight line 10 year – principal and interest paid each year (previously 7 years)
  • Interest rate will increase from current ATO benchmark rates, and will be the “Small business; Variable; Other; Overdraft – Indicator Lending rate most recently published by the Reserve Bank of Australia prior to the start of each income year”. This will result in substantially higher interest and repayments over the term of the loan
  • Existing Div 7A loans will transition to new rules, however loan terms will not be extended
  • 25 year loans WILL NOT be grandfathered. Transitional rules will allow for 2 years to transfer the loan to a new 10 year loan. Failure to convert these loans will result in a deemed dividend
  • The concept of “distributable surplus” is being removed – this will result in previously exempt loans and payments being captured by the Div 7A rules and triggering tax that previously would not be payable
  • Self-correction mechanism will apply to rectify Div 7A breaches – make good catch up payments will be allowed
  • Amendment period relating to Div 7A loans, payments and forgiveness will extend to 14 years as an integrity measure (up from 5 year amendment period)
  • Post December 2009 Unpaid Present Entitlements (UPE’s) will be captured by the new Div 7A rules (this includes Sub Trust arrangements set up under the Practice Statement 2010/4)
  • IMPORTANTLY, IT IS STILL NOT YET CLEAR whether Pre December 2009 Unpaid Present Entitlements (UPE’s) will be included in the new rules. The consultation paper is specifically asking feedback asking “Should UPEs arising prior to 16 December 2009 be brought within Division 7A?”
    The proposed changes will affect a large number of taxpayers and in some instances will require proactive tax planning to ensure tax effective structures are maintained during the transition.

We will continue to keep you informed of the changes as further updates come to hand.

August 2018 Newsletter

The latest edition of our Newsletter is on its way to your Inboxes! In it, you will find our Director’s reflection on the current financial market situation, Levi’s take on the importance of understanding the numbers, GrowthCon update & more.

Follow the link to access the Newsletter Download PDF of our August newsletter.

Why establish an estate/business succession plan?

Despite the fundamental importance of succession planning, it is often neglected in current business/farming management practice.

Business owners/farmers should recognise that the need for a fully discussed succession plan is paramount in any business/farming situation. A natural progression from one generation to the next (or in case of unexpected or premature death) through the deceased’s Will. Poor succession planning is the cause of much “hurt in business/rural Australia.” Read more

What Is A Self-Managed Super Fund

A Self Managed Superannuation Fund (SMSF) is a type of super fund set up for those who wish to manage their own superannuation assets privately, rather than be a part of a larger fund where members pool their super funds and these are managed by professional fund managers. It gives the members much greater control over the investment decisions, but also require far greater input by the members of the fund. All super funds are required to comply with their relevant regulatory bodies and with SMSF‘s, trustees are required to oversee these compliance requirements. Read more

Traits of a Successful Business

We want to be the Accountant who will Challenge, Attack, Question, Confront, Dare, Provoke, Contest, Assault, Invade, Blast you on the way you operate your business.

The key areas of any Business that require ongoing maintenance to ensure the Health and Wealth of your business are: Read more

Strategic Planning – 10% Strategy 90% Execution

Where are you on the strategy and execution axis with your business?

It has often been said that an average strategy well executed will always outperform a superior business strategy which is poorly executed. In fact in terms of effort, the development of thebusiness strategy is 10% of the effort and the execution of the business strategy is 90% of the effort. Read more

Improving Value At All Stages Of Your Business

Improving the value of your business is not just about selling. It’s about running the most successful business you can.

The Theory

There are many ways to value a business, however the most commonly used valuation methodology for a profitable trading business is the Capitalisation of Profits Methodology.

This methodology is based on the average earnings of the business (before interest and tax – EBIT) multiplied by a capitalisation rate.

Therefore to increase the value of your business, a business owner should focus on: Read more

Funding Requirement Report

Is it time to visit the Bank?

Visiting your bank is often like visiting the dentist:

• You need to go yearly but you delay it for as long as you can
• Your past sins are obvious as soon as you open your mouth. They can be even worse when the dentist digs a little deeper and does an x-ray!
• The feeling of an unknown outcome – will you get the all clear?
• Feeling like you can’t get your point of view across even when they ask you questions
• The expensive bill at the end of the visit
• The ongoing maintenance and review so you don’t lose all of your teeth. Read more

Fringe Benefits Tax (FBT) and Salary Packaging

The 2011 Federal budget signaled significant changes to the way Fringe Benefits Tax will be calculated on the use of motor vehicles. Traditionally, motor vehicles have formed an essential part of many remuneration packages and it was initially feared that the changes to the legislation would make it prohibitive for employers to use this carrot to entice and retain employees. However, closer analysis suggests that there continues to be scope to tax effectively package motor vehicles into employee’s salary under the new regime.  Read more

What is a Bonus Plan?

Many exceptional companies have bonus plans to reward employees.

Why would you consider a bonus plan?

Advantages include:

  • Staff retention, attraction and motivation.
  • Added incentives to complete jobs on time and achieve agreed milestones.
  • Assists cash flow in the company by minimising annual salary increases.

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Contractors vs Employees: Under the ATO Spotlight

Why Consider the Contractor issue now?

The contractor issue is not at all new, nor has it been subject to any dramatic recent change.  However there are a number of diverse factors that have brought this issue back to the spotlight.

  1. Growth in the number of Contractors: The attractions of contractors are many: a substantial release from the growing obligations that employers face and the flexibility which comes with being able to gain or shed resources in line with needs and the business cycle, just to name a couple.
  2. Government / Treasury Attention: The new contractor reporting regime which will apply to the building and construction industry from 1 July 2012 is the most obvious example of measures to examine contractor arrangements.
  3. Tax Office Attention: The Tax Office’s compliance plan for 2012 is reason enough to note how important the contractor issue has become.
  4. Institutional attention:  It is reasonable to expect that union scrutiny of contractor arrangements will continue.

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