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Ethical Superannuation Concerns For Members Of Funds

Ethical investing has become increasingly important for individuals managing their superannuation funds.

As awareness of environmental, social, and governance (ESG) issues grows, many Australians want to align their retirement savings with personal values.

Here are key considerations for those interested in ethical investing within their superannuation:

1. Understanding Ethical Investment Options

Ethical investing, often synonymous with sustainable or socially responsible investing (SRI), involves selecting investments based on ethical guidelines. These guidelines can vary widely, encompassing:

  • Environmental Impact: Investments prioritising renewable energy, sustainable agriculture, and companies with low carbon footprints.
  • Social Responsibility: Companies that support human rights, fair labour practices, and community development.
  • Governance: Firms that demonstrate transparency, ethical management practices, and robust shareholder rights.

Investors should understand their superannuation fund’s criteria to classify an investment as ethical and ensure it aligns with their values.

2. Evaluating Fund Performance and Fees

Ethical superannuation funds must balance moral principles with financial performance. Investors should consider:

  • Historical Returns: Compare the performance of ethical funds with traditional funds to ensure competitive returns.
  • Fees and Charges: Assess the cost of managing an ethical superannuation fund. High fees can erode returns, so it’s crucial to find a balance between ethical integrity and cost efficiency.

3. Transparency and Reporting

Transparency is key to ethical investing. Investors should look for superannuation funds that provide:

  • Detailed Reporting: Regular updates on where and how funds are invested, including specific holdings and their alignment with ethical standards.
  • Third-Party Certifications: Accreditation from independent organisations (e.g., Responsible Investment Association Australasia) can provide assurance of the fund’s commitment to ethical practices.

4. Engagement and Advocacy

Ethical investors often prefer funds actively engaging with companies to promote sustainable and responsible business practices. Consider whether your superannuation fund:

  • Engages in Shareholder Advocacy: Uses its influence to drive positive change in companies’ ESG practices.
  • Participates in Collaborative Initiatives: Works with other investors and organisations to push for broader industry standards and policies.

5. Customisation and Flexibility

Many superannuation funds now offer customisable investment options, allowing members to tailor their portfolios based on specific ethical criteria. Investors should explore:

  • Choice of Ethical Investment Options: Funds that offer a range of ethical investment options, from fully integrated ESG portfolios to thematic investments (e.g., green bonds, social impact projects).
  • Flexibility to Adjust Investments: The ability to shift allocations as personal values or market conditions change.

6. Impact on Society and Environment

Ultimately, the goal of ethical investing is to generate positive impacts. Investors should consider:

  • Measurable Outcomes: Funds that provide metrics on their investments’ social and environmental impacts, such as carbon emissions avoided or community projects funded.
  • Long-Term Sustainability: Investments that contribute to sustainable development goals (SDGs) and support a transition to a more sustainable economy.

7. Legal and Regulatory Considerations

Investors should be aware of the legal and regulatory landscape affecting ethical investing in superannuation:

  • Regulatory Compliance: Ensuring that the superannuation fund complies with Australian regulations and guidelines on ethical investing.
  • Tax Implications: Understanding any tax benefits or implications associated with ethical investments within superannuation.

Ethical investing in superannuation allows individuals to ensure their retirement savings contribute to a more sustainable and just world.

You can make informed decisions that reflect your values and financial goals by carefully considering investment options, performance, transparency, engagement, customisation, societal impact, and regulatory compliance.

As the market for ethical investments continues to grow, those prioritising ethical considerations in their superannuation can help drive positive change while securing their financial future.

Posted on 28 May '24 by , under super. No Comments.

Keeping Up With The Instant Asset Write-Off

In a move aimed at bolstering small business cash flow and reducing compliance costs, the Government has announced an extension of the $20,000 instant asset write-off for another 12 months.

This extension, part of the 2024–25 Budget released on 14 May 2024, will see the measure continue until 30 June 2025.

This initiative allows small businesses with an aggregated turnover of less than $10 million to immediately deduct the full cost of eligible assets costing less than $20,000. To qualify, these assets must be first used or installed and ready for use between 1 July 2023 and 30 June 2025.

Eligibility

Eligibility to use instant asset write-off on an asset depends on:

  • your aggregated turnover (the total ordinary income of your business and that of any associated businesses)
  • the date you purchased the asset
  • when it was first used or installed ready for use
  • the cost of the asset being less than the threshold.

You are not eligible to use the instant asset write-off on an asset if your aggregated turnover is $500 million or more.

If temporary full expensing applies to the asset, you do not apply the instant asset write-off.

How Does It Work?

The $20,000 threshold applies on a per-asset basis, providing substantial flexibility for small businesses to acquire and immediately write off multiple assets. This can be particularly beneficial for businesses looking to upgrade equipment, invest in new technology, or make other capital improvements without the burden of prolonged depreciation.

The immediate deduction is unavailable for assets valued at $20,000 or more. However, these higher-cost assets can still be placed into the small business simplified depreciation pool. This method allows businesses to depreciate the asset at a rate of 15% in the first income year and 30% each year thereafter, providing a structured yet advantageous depreciation timeline.

The continuation of this measure is designed to aid small businesses by improving their cash flow and reducing the administrative burden associated with asset depreciation.

By allowing immediate deductions on lower-cost assets, the government aims to incentivise investment and growth within the small business sector. However, this will be dependent on the individual circumstances of businesses as to whether or not they may benefit from this measure.

What About The Legislation Of This Measure? 

It’s important to note that while these measures have been announced, they are not yet law. The Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023, which includes provisions for the $20,000 instant asset write-off for the 2023–24 income year, is still before Parliament.

Once passed, this legislation will formalise the extension and ensure small businesses can continue to benefit from these deductions through to the new deadline of 30 June 2025.

The $20,000 instant asset write-off extension could be a significant boost for small businesses, providing immediate financial relief and encouraging ongoing investment in business growth and development.

Small business owners should monitor the legislative process to ensure they can take full advantage of these provisions once they become law.

Speak With Us

If you have any questions about this measure or if it would be suited for your business, why not speak with one of our trusted team for answers? We are here to assist you with any questions or enquiries you may have in the lead-up to the end of the financial year.

Posted on 28 May '24 by , under tax. No Comments.

Tax & The Federal Budget

The Federal Budget dropped last week (14 May), with several key updates involving current measures, rebates and confirmation of the stage 3 tax cuts.

Energy Bill Relief Fund:

The Energy Bill Relief Fund is introducing a $300 rebate for households and a $325 rebate for eligible small businesses on their 2024-24 bills. This initiative extends the previous Budget’s Energy Price Relief Plan.

Extension of Instant Asset Write-Off:

Small businesses with an aggregated annual turnover of less than $10 million will retain the ability to immediately deduct the full cost of eligible assets costing less than $20,000 until 30 June 2025. This extension allows small businesses to instantly write off multiple assets, with assets valued at $20,000 or more being placed into the small business simplified depreciation pool.

Stage 3 Tax Cuts:

Effective from 1 July 2024, all taxpayers will benefit from tax cuts outlined by the federal government earlier this year. These reforms include reducing the 19% tax rate to 16%, lowering the 32.5% tax rate to 30%, increasing the threshold for the 37% tax rate from $120,000 to $135,000, and raising the threshold for the highest 45% tax rate from $180,000 to $190,000.

Strengthening of Foreign Resident Capital Gains Tax Regime:

The Government aims to enhance the foreign resident capital gains tax (CGT) regime to ensure equitable taxation for foreign residents in Australia. Amendments will come into effect from 1 July 2025, including clarifying and broadening the assets subject to CGT for foreign residents, transitioning to a 365-day testing period for the principal asset test, and requiring foreign residents to notify the ATO before executing transactions involving shares or other membership interests exceeding $20 million in value.

Posted on 20 May '24 by , under tax. No Comments.

With EOFY Approaching, What Do Small Businesses Need To Know To Plan Their Cash Flow Management?

Effective cash flow management is essential for the success and growth of any small business.

Proper budgeting, forecasting, and managing finances ensure that your business remains solvent and can seize growth opportunities when they arise.

Here are key tips and strategies to help small businesses manage cash flow and plan for sustainable growth.

1. Understanding Cash Flow

Cash Flow Basics:

Cash flow refers to the movement of money in and out of your business. Positive cash flow means more money is coming in than going out, which is essential for covering expenses and investing in growth. Negative cash flow, on the other hand, indicates that expenses are exceeding income, which can lead to financial trouble if not addressed.

Cash Flow Statement:

A cash flow statement is a financial document that provides a detailed analysis of cash inflows and outflows over a specific period. It is divided into three sections:

  • Operating Activities: Cash generated from day-to-day business operations.
  • Investing Activities: Cash used for investment in assets or received from the sale of assets.
  • Financing Activities: Cash received from or paid to financiers, such as loans and equity investments.

2. Budgeting

Creating a Budget:

A well-planned budget is the cornerstone of effective financial management. It involves estimating your revenue and expenses for a future period, usually a year.

Steps to Create a Budget:
  • Estimate Revenue: Base your revenue estimates on historical data, market trends, and sales forecasts.
  • Identify Fixed and Variable Costs: Fixed costs remain constant regardless of business activity (e.g., rent, salaries), while variable costs fluctuate with production levels (e.g., materials, utilities).
  • Plan for Contingencies: Include a buffer for unexpected expenses or emergencies.
  • Monitor and Adjust: Regularly compare actual performance against the budget and adjust as needed to stay on track.

3. Forecasting

Importance of Forecasting:

Financial forecasting involves predicting future revenues, expenses, and cash flow. Accurate forecasts help you anticipate financial needs, plan for growth, and make informed business decisions.

Types of Forecasting:
  • Short-Term Forecasting: Typically covers the next 12 months and focuses on operational cash flow.
  • Long-Term Forecasting: Looks beyond a year, aligning with strategic goals and growth plans.
Steps to Forecast:
  • Analyse Historical Data: Review past financial performance to identify trends.
  • Consider Market Conditions: Evaluate economic indicators, industry trends, and market demand.
  • Use Financial Models: Employ tools like regression analysis or time series forecasting to project future financial performance.

4. Managing Finances

Accounts Receivable and Payable:
  • Optimise Receivables: Implement efficient invoicing processes, offer early payment discounts, and follow up on overdue accounts to ensure timely collections.
  • Manage Payables: Negotiate favourable payment terms with suppliers and prioritise payments to maintain good relationships and credit standing.
Inventory Management:

Efficient inventory management prevents excess stock and reduces holding costs. Use inventory management software to track stock levels, forecast demand, and automate reordering.

Cost Control:

Regularly review expenses to identify areas for cost savings. Implement cost-control measures such as reducing waste, renegotiating contracts, and improving operational efficiency.

5. Securing Funding and Investment

Funding Options:
  • Self-Funding: Using personal savings or reinvesting profits into the business.
  • Loans: Obtaining financing from banks or alternative lenders. Ensure you understand the terms and can meet repayment obligations.
  • Grants: Applying for government or private grants designed to support small businesses.
  • Equity Investment: Selling shares of your business to investors in exchange for capital. This can dilute ownership but provides significant funding without the obligation of repayment.
Preparing for Investment:
  • Business Plan: Develop a comprehensive business plan that outlines your business model, market analysis, growth strategy, and financial projections.
  • Pitch Deck: Create a compelling pitch deck to present to potential investors, highlighting your business’s value proposition, market opportunity, and financial performance.
  • Financial Statements: Ensure your financial statements are accurate and up-to-date. Investors will scrutinise your balance sheet, income statement, and cash flow statement.
Building Investor Relationships:
  • Networking: Attend industry events, join business networks, and leverage online platforms to connect with potential investors.
  • Transparency: Maintain open and honest communication with investors, providing regular updates on business performance and growth plans.
  • Showcase Traction: Demonstrate your business’s progress through key metrics such as revenue growth, customer acquisition, and market penetration.

Managing cash flow and planning for growth require diligent financial management, strategic planning, and an understanding of funding options.

By creating and monitoring budgets, accurately forecasting financial performance, managing expenses, and securing appropriate funding, small businesses can navigate financial challenges and position themselves for long-term success.

With careful planning and disciplined execution, you can ensure that your business not only survives but thrives in a competitive marketplace.

Posted on 20 May '24 by , under business. No Comments.

Challenges For Tradies Across The Seasons

Whether as a sole proprietor, small business owner, or entrepreneur, operating in a trade presents a unique challenge that requires careful navigation and strategic planning.

From managing day-to-day operations to staying competitive in a dynamic market, trade industry individuals face various obstacles that can impact their success.

Let’s explore some of the specific challenges that you, as someone operating in a trade, might encounter with their business and offer insights into how to overcome them.

  1. Seasonal Fluctuations  

Many trades, such as landscaping, construction, and home renovation, are seasonal in nature, with demand for services varying throughout the year. Seasonal fluctuations can challenge managing cash flow, scheduling work, and maintaining a consistent income.

To overcome this challenge, trade professionals can diversify their services, offer complementary services during off-peak seasons, and implement proactive marketing strategies to attract clients year-round.

  1. Labor Shortages and Skills Gaps

Finding skilled labour can be a significant challenge in the trade industry, particularly during periods of high demand or in regions with labour shortages. Additionally, skills gaps within the workforce may make it difficult to find workers with the specific skills and qualifications needed for certain jobs. To address labour shortages and skills gaps, trade professionals can invest in employee training and development programs, offer competitive wages and benefits, and explore alternative staffing solutions such as subcontracting or outsourcing.

  1. Regulatory Compliance and Licensing Requirements

The trade industry is subject to various regulations and licensing requirements, which can vary depending on the type of trade and the jurisdiction.

Navigating regulatory compliance can be complex and time-consuming, requiring trade professionals to stay informed about changes in regulations, obtain necessary permits and licenses, and ensure compliance with health, safety, and environmental standards. Resources such as industry associations, regulatory agencies, and legal advisors can help trade professionals navigate regulatory requirements effectively.

  1. Competition and Pricing Pressure

The trade industry is often highly competitive, with numerous businesses vying for clients and contracts. Competition can lead to pricing pressure, making it challenging for trade professionals to maintain profitability while remaining competitive in the market.

To address competition and pricing pressure, trade professionals can differentiate their services by offering unique value propositions, focusing on quality and customer service, and developing strong relationships with clients and suppliers.

  1. Managing Growth and Expansion

As trade businesses grow and expand, they may encounter challenges related to scaling operations, managing increased demand, and maintaining quality standards.

Managing growth requires careful planning and strategic decision-making, including infrastructure, technology, and human resources investments. Trade professionals can benefit from developing a growth strategy, implementing scalable business processes, and seeking guidance from mentors or business advisors.

  1. Cash Flow Management and Financial Planning

Cash flow management is a critical aspect of running a successful trade business. Yet, it can be challenging to maintain consistent cash flow due to factors such as seasonality, delayed payments, and unexpected expenses.

Trade professionals can improve cash flow management by implementing efficient invoicing and payment processes, negotiating favourable payment terms with suppliers and clients, and maintaining adequate reserves for emergencies or slow periods.

  1. Technology Adoption and Innovation

Embracing technology and innovation can enhance efficiency, productivity, and competitiveness in the trade industry, but adopting new technologies and processes can also present challenges.

Trade professionals may face barriers such as upfront costs, staff training requirements, and resistance to change. To overcome these challenges, trade professionals can start small by implementing incremental changes, leveraging free or low-cost technology solutions, and investing in staff training and development.

A trade presents unique challenges requiring proactive planning, adaptability, and resilience. By identifying potential challenges and implementing strategic solutions, trade professionals can overcome obstacles, achieve business goals, and thrive in a competitive marketplace.

Posted on 13 May '24 by , under business. No Comments.

Why Millenials & Gen Z Can’t Afford To Forget About Superannuation

Millennials and Gen Z are facing some of the most difficult challenges when it comes to financial priorities.

Between paying off HECS debts/HELP loans and saving for a first home, these immediate concerns can often overshadow long-term goals like retirement planning.

Amid these immediate concerns, it’s easy to overlook long-term goals like retirement planning.

However, when it comes to securing our financial future, superannuation planning should be a top priority. Superannuation planning is crucial for millennials, and starting early can significantly impact your retirement security.

Starting Early: The Power of Compound Interest

One of the most compelling reasons millennials and Gen Z should prioritise superannuation planning is the power of compound interest. You can use compound growth over time by starting early and consistently contributing to our superannuation funds.

Compound interest allows savings to grow exponentially, as interest is earned not only on the initial contributions but also on the accumulated interest over time. This means that the earlier you start contributing to our superannuation funds, the more time our investments have to grow, ultimately leading to a larger retirement nest egg.

Maximising Savings: Strategies for Building Wealth

While starting early is key, maximising our superannuation savings requires strategic planning and disciplined saving habits. Millennials and Gen Z can use various strategies to boost their superannuation balances, such as salary sacrificing, making additional voluntary contributions, and taking advantage of government contributions.

Contributing more to your superannuation funds can set yourself up for a more financially secure retirement later.

Long-Term Impact: Building Retirement Security

Beyond the immediate benefits of starting early and maximising savings, superannuation planning is crucial in building long-term retirement security.

As millennials and Gen Z are undoubtedly aware, the advantage of time is on their side, allowing them to weather market fluctuations and take a long-term approach to investing.

By consistently contributing to your superannuation funds throughout your working lives, we can create a reliable source of income to support us in retirement and enjoy a comfortable lifestyle in our later years.

Moreover, with the rising cost of living and uncertainty surrounding government pension schemes, it’s more important than ever for millennials to take control of their financial futures through superannuation planning.

With active management of your superannuation investments and staying informed about changes in regulations and market trends, you can ensure that you are on track to achieve your retirement goals and maintain financial independence in your golden years.

Superannuation planning is a crucial component of financial planning for millennials and Gen Z alike, offering the opportunity to build wealth, take advantage of compound interest, and secure our financial futures.

By starting early, maximising savings, and taking a proactive approach to retirement planning, you can set yourself up for long-term financial success and enjoy a comfortable retirement lifestyle.

Posted on 12 May '24 by , under super. No Comments.

What Is ATO-Held Super?

In the labyrinth of finance and retirement planning, superannuation stands as a beacon of financial security for many Australians. It’s the nest egg we diligently contribute to throughout our working lives, hoping it will sustain us in retirement.

However, what happens when these contributions fall through the cracks or accounts are left dormant and forgotten?

Enter ATO-held super, a safety net provided by the Australian Taxation Office (ATO) to safeguard unclaimed or inactive super funds. Let’s delve into what ATO-held super entails and why keeping track of your superannuation is essential.

What Is Ato-Held Super?

ATO-held super refers to superannuation money that has been transferred to the Australian Taxation Office due to various reasons, primarily when the super fund is unable to match the member’s account to an individual.

This situation often arises when a member changes jobs, addresses, or names, and their super fund loses contact with them. It can also occur when a super account has been inactive for a certain period, usually five years or more, and the fund is unable to reach the member.

Why Does Super End Up With The Ato?

Several scenarios can lead to superannuation ending up with the ATO:

  1. Lost Contact: If your super fund cannot reach you, perhaps due to a change in address or contact details, they may transfer your super to the ATO.
  2. Inactive Accounts: If you haven’t made any contributions or rollovers into your super account for five consecutive financial years and your balance is below a certain threshold, your super fund may report it as inactive, leading to the transfer of funds to the ATO.
  3. Unclaimed Super: Super funds are required to report and transfer unclaimed super money to the ATO annually. This typically includes super belonging to members who cannot be contacted, have not made a contribution for at least a year, or whose account balances are insufficient to meet the fund’s minimum balance requirements.

How Can You Reclaim Your Ato-Held Super?

The good news is that reclaiming your ATO-held super is relatively straightforward. The ATO provides several avenues for individuals to reclaim their lost or unclaimed super:

  1. Online Services: Use the ATO’s online services via myGov to view and consolidate your super accounts, including any ATO-held super.
  2. Contact Your Super Fund: If you believe your super has been transferred to the ATO, contact your super fund to confirm the details and initiate the reclaiming process.
  3. ATO Assistance: Reach out to the ATO directly for assistance in reclaiming your ATO-held super. They can provide guidance and support throughout the process.

Why Is It Essential To Keep Track Of Your Super?

Keeping track of your superannuation is vital for several reasons:

  1. Maximising Retirement Savings: By consolidating multiple super accounts and reclaiming any lost or unclaimed super, you can maximize your retirement savings and ensure that your hard-earned money is working for you.
  2. Avoiding Fees And Charges: Inactive or forgotten super accounts may incur unnecessary fees and charges, eating into your retirement savings over time. By keeping track of your super, you can minimize these expenses.
  3. Maintaining Control: Taking an active interest in your superannuation allows you to have greater control over your financial future. You can make informed decisions about investment options, insurance coverage, and retirement planning.

ATO-held super serves as a safety net for unclaimed or inactive super funds, ensuring that individuals do not lose track of their retirement savings. However, it’s essential to proactively manage your superannuation to avoid it ending up with the ATO in the first place. By keeping track of your super, consolidating multiple accounts, and staying informed about your retirement savings, you can take control of your financial future and enjoy a comfortable retirement. Remember, your super is your future – don’t let it slip away unnoticed.

Posted on 6 May '24 by , under super. No Comments.

What Your Tax Return Needs When Dealing With A Trust

Managing a trust comes with its share of responsibilities, especially regarding tax compliance.

To assist trustees and administrators, the ATO has provided a checklist that can be used to streamline the tax process. This is a crucial tool for ensuring that the trust’s affairs are managed efficiently and effectively in accordance with tax regulations.

Let’s delve deeper into what the Resolutions Checklist entails:

  1. Distribution Resolutions: One of the primary tasks is to determine how income will be distributed among beneficiaries for the financial year. This resolution must be documented and finalised before 30 June to optimise tax outcomes for the trust and its beneficiaries. Trustees must consider each beneficiary’s tax position and financial circumstances when making distribution decisions.
  2. Trustee Resolutions: Trustee decisions throughout the year, such as acquisitions or disposals of trust assets, loan agreements, or changes to the trust deed, need to be documented and ratified through resolutions. These resolutions serve as formal acknowledgments of the decisions made by the trustees and provide a clear record of the trust’s activities.
  3. Trust Income Allocation: Trust income comprises various components, including assessable income, exempt income, and deductions. Trustees must accurately determine and record each component to ensure compliance with tax laws. Proper recording and reporting of income and expenses are essential for tax purposes and may impact the tax liabilities of both the trust and its beneficiaries.
  4. Capital Gains Tax (CGT) Considerations: Trustees must review any CGT events during the year and determine the distribution of capital gains or losses among beneficiaries. CGT decisions can significantly affect the tax outcomes for both the trust and its beneficiaries, making careful consideration and documentation are essential.
  5. Streaming Resolutions: Some trust deeds allow for income streaming, which involves allocating specific types of income to beneficiaries based on their individual tax preferences or circumstances. Trustees need to make resolutions to implement income streaming effectively, considering the trust deed provisions and tax implications.
  6. Minutes and Records: All trustee resolutions and decisions must be documented in writing, including minutes of meetings and any supporting documentation. Proper record-keeping is crucial for demonstrating compliance with tax regulations and providing an audit trail of the trust’s activities.
  7. Trust Deed Review and Update: Regular review and, if necessary, updating of the trust deed are essential to ensure that it remains compliant with current laws and regulations. Trust deeds should accurately reflect the intentions of the trustees and beneficiaries and provide a solid legal foundation for the trust’s operations.

Trustees can streamline the tax compliance process and minimise the risk of errors or oversights.

However, seeking professional advice is essential if you’re unsure about any aspect of trust management or tax obligations. With proper planning, documentation, and compliance, trustees can ensure that their trusts operate smoothly and remain compliant with tax laws.

Why not start a conversation with us today to find out how we could assist you with your trust documentation?

Posted on 5 May '24 by , under tax. No Comments.

Adjusting Your Business Strategy? Here’s 3 Items You Need To Consider

An effective strategy plan is paramount to steering your business towards increased sales. Here are three essential components to integrate into your next strategy:

Define Your Mission and Goals:

Begin by clarifying your business’s mission statement.

What does your business stand for, and what are its overarching objectives?

Your mission statement should serve as a guiding beacon, while your goals and objectives should align with and propel its fulfilment. Utilise the S.M.A.R.T. framework to ensure your goals are Specific, Measurable, Achievable, Relevant, and Time-bound.

Identify Your Ideal Customer:

Understanding your ideal customer persona is foundational for shaping your marketing strategy. Dive deep into demographic research to grasp their needs, desires, and aspirations, and consider how your products or services can fulfil them. Extend your analysis beyond basic demographics to encompass attitudes, aspirations, and lifestyle choices.

Conduct a SWOT Analysis:

A thorough SWOT analysis provides invaluable insights into your business’s Strengths, Weaknesses, Opportunities, and Threats. Consider the following points:

  • Strengths: Identify your key assets, evaluate the proficiency of your sales and marketing team, assess competitive advantages, and take stock of available resources.
  • Weaknesses: Pinpoint areas requiring improvement, address customer complaints, acknowledge competitive gaps, and recognise limitations in resources or skills.
  • Opportunities: Capitalize on changes in the business landscape, leverage market shifts, and exploit competitors’ weaknesses or market gaps.
  • Threats: Recognize competitors’ growth trajectories, gauge customer satisfaction, and anticipate economic, behavioural, or regulatory factors impacting sales.

In moments of uncertainty, seek guidance from trusted business advisers who possess the expertise to assist you in crafting a comprehensive business plan tailored to your enterprise’s present and future needs.

Posted on 30 April '24 by , under business. No Comments.

Navigating Eligibility: Medicare Levy Exemptions

The Medicare levy, an additional payment atop your taxable income tax, serves to support Australia’s public health system, Medicare.

Ordinarily, your employer includes this levy, typically set at 2% of your taxable income, in the pay-as-you-go amount withheld from your salary or wages.

But what about the additional Medicare levy surcharge (MLS)?

You’ll encounter the MLS if, along with your spouse and dependent children, you lack adequate private patient hospital cover and earn above a certain income threshold. The MLS adds to the Medicare levy.

To preempt future MLS payments, securing the appropriate level of private patient hospital cover for yourself, your spouse, and your dependents is advisable.

Medicare Levy Thresholds For Individuals

For the 2022–23 financial year, you did not have to pay the Medicare levy if your taxable income is equal to or less than the lower threshold. This should also be the case for the 2023-24 income year.

Your Medicare levy as an individual will be reduced if your taxable income is above the lower threshold and at or below the upper threshold. The ATO works out the reduction for you when you lodge your tax return.

If you were entitled to the SAPTO (seniors and pensioners tax offset), the taxable income’s lower threshold is $38,365, and the upper threshold is $47,956. Your Medicare levy would be reduced if it was between those two amounts (and you meet other possible criteria).

Other taxpayers may be eligible for a reduction if their taxable income is above the lower threshold ($24,276) and below the upper threshold ($30,345). You may still be eligible for a medicare levy reduction if you do not qualify for a medicare levy exemption.

Medicare Levy Reductions Based On Family Taxable Income

Family taxable income is either:

  • the combined taxable income of you and your spouse (including a spouse who died during the year)
  • your taxable income if you were a sole parent.

You might qualify for a Medicare levy reduction based on your family’s taxable income if you satisfy the following criteria:

  • Your individual taxable income exceeded $30,345 ($47,956 for seniors and pensioners entitled to SAPTO) in the 2022–23 fiscal year.
  • You meet one of the following conditions:
    • You are married or in a de facto relationship.
    • Your spouse passed away during the year, and you remained without another spouse by the year’s end.
    • You are entitled to an invalid and invalid carer tax offset for your child.
    • You are the sole caregiver of one or more dependent children.

If you have a spouse, it’s important to note that you may not receive SAPTO, even if you meet all eligibility requirements. This occurs because the tax offset amount is calculated based on your individual rebate income, not the combined rebate income of you and your spouse. Additionally, even if you qualify for SAPTO but do not receive the offset, it does not automatically entitle you to a Medicare levy reduction.

Unsure about the Medicare levy, or your own eligibility for reductions or exemptions? Start a discussion with us. We’re here to assist.

Posted on 29 April '24 by , under tax. No Comments.