Peter advises the need of simplicity for small business when it comes to Industrial Relations and Awards.

SMSF ELECTRONIC SERVICE ADDRESS
If a fund needs to receive contributions from an employer or rollovers from another fund or the Taxation Office then the fund needs to have an ESA. At one stage we were able to get these for clients for no charge but of course here is an opening for people to make some money from compulsory rules.

To assist client SMSFs we have opened an account with wrkr.com.au and as a firm of public accountants there is a discounted fee of $25 per annum if arranged by us. We will pay this on your fund’s behalf and include in our annual fee to your super fund; too small of an amount to send you a separate invoice.  If you change your arrangements please let us know so that we can cancel the annual payment. If you forget to tell us then we will have to send you the renewal invoice.

SMSF AUDIT PROCEDURE
The Australian Taxation Office says that the accountant that prepares the accounts must be different to the auditor. Their interpretation of APES110 Code of Ethics for Professional Accountants, 211 pages in length, produced by the Accounting Professional and Ethical Standards Board differs from ours but we will comply with their view.

As the tax return includes the date the audit is completed, this now requires a multi step process.

If we are preparing the accounts we will then arrange a meeting and go through them with the trustees who are then able to sign the accounts and other audit documents. On completion of the audit we will then add the correct date to the tax return and then post this to the trustees for signature after which the return can be lodged.

A tax return can be signed in ink and then returned to us for lodgement. Our tax return software also has an electronic signature process and is used to lock the return in our system before our lodgement with the ATO. The electronic signature is basically clumsy and may cause some clients anxiety. Signed returns can also be emailed back to us. As a safety factor we scan all lodged returns into a separate file just in case there might be a mistake. Each version of the tax return has a number in our system for control purposes but this increases the admin burden.

Auditors are allowed under APES110 to prepare tax returns.

ACCOUNTING SOFTWARE PACKAGES
We have used MYOB Accountants Enterprise and its predecessors for 43 years. What has now happened is that software providers are trying to capture the small enterprise market of about 1 million businesses and are not keeping up the professional versions. We are thus being forced to know and use a whole suite of software depending on what the client uses and what the software provider gives us. We have thus switched many of our super funds to BGL from MYOB AE. MYOB AE has also discontinued their investment register where we recorded the cost price of clients’ shares.

The software offered to businesses is geared for the simpler needs of running a day to day business and basically a full set of accounts is too complex and sophisticated for the average user. The beauty of modern packages is that they are in the cloud with the accountant and the client using the same general ledger however this causes problems if the transactions are not correctly recorded. We happily fix messes.

Cloud accounting software can make life easier. However we have a whole list of problems that clients have created for us. We do not object fixing any issues but you need to be willing to 
pay for this service. The alternative is that you get us to review how you are using the software so that this causes us the least of problems.

INFLATION
As stated in our last newsletter you MUST adjust your prices including wages, for inflation. This should be done in small steps and regularly so as not to scare your customers.

The October minibudget gave inflation at 7.3% with a prediction of 6.3% in the year to come. Again we are happy to sit down with you and draw up a plan on how to adjust. With inflation having large amounts owing to you by customers means that these debtors’ balances are losing value over time. There are multiple ways of eliminating trade debtors; customers owing you money. We are also happy to go through how to achieve this with customers’ use of smart phones, credit cards and buy now pay later and direct money transfers.

AND SOME NUMBERS

• The cents per kilometre motor car claim is 75c from 1 July 2022
• Compulsory superannuation contributions   are at 10.5% of “ordinary time earnings”
• Maximum concessional contribution to a super fund is $27,500
• Maximum non concessional contribution to a super fund is $110,000 with 3 year brought forward rules applying
• Transfer Balance Cap is $1.7 million
• Our experience is that clients should talk to us before taking unilateral action. We have had a number of ugly war stories over the years.

PETER'S VIEW

ATO IS OUT TO GET YOU!
As a political response, the ATO during the pandemic ceased its strong arm compliance of taxpayers. These days are now over. There is currently around $44.8 billion owed to the ATO and the ATO is going to get tough on those that owe them money. Luckily we have kept our clients tax affairs in order. The ATO is also getting tough on late lodgement of tax returns. They are imposing $1,000 fines for late lodgement. If you run a SMSF and have not lodged your 2021 return then they will mark it as non complying and your employer will not be able to make contributions to it. So please help us to ensure that your affairs are in order with the ATO. You do not want to have a nasty relationship with the ATO.

Most 2023 returns for 2022 are required to be lodged by 15 May 2023 but you must give us 2 months to complete the work. We do not mind doing the work later, but as long as you can put up with the agro of the ATO including fines. 

ELECTRIC CARS
Here is some good news. There is no Fringe Benefits Tax on electric cars provided by an employer to an employee including a director. This will encourage the switch to electric cars like the switch to high level panel vans and utes. However the fringe benefit for electric cars will be included on your PAYG summary as a reportable fringe benefit but it is not taxable.
  
RECESSION
The journalists like to write emotive headlines. The nature of our society is that it is very difficult for our economy to go into another Great Depression. A stall could happen for 6 months but unlikely for longer. Why? One third of the work force is employed by government and its instrumentalities. Those people will never lose their jobs or have their income go down. About a third work for large businesses and again some employers may have to down size but most large employers have deep reserves to outlast a downturn. Then there is the other one third of small businesses. What do ordinary people do when work is hard to get or costs like interest go up? They work harder or cut back on the “smashed avo”. After six months most of the population have paid back their credit card debt or nowadays their buy now pay later debt. Then the cash builds up in their pocket and they go out and start spending.

If you feel that your finances are getting out of control then as stated the solution is to work a bit harder eg  a bit of overtime or just cut some of the extravagances out of your budget. We can sit done with you and come up with some tactics.

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If you have questions check out our reference pages below:

• Accounting
• Tax or Tax FAQ’s
• Superannuation and Investment
• SMSF
• What to do when you Parent's need help with Financial Matters
• Trust Accounts Audit - Stay Compliant
• Tax Audit Insurance Case Study
• Our Blog

We have offices at:

Lindfield - call us on (02) 9496 2300 or email services@pva.com.au

and if you are in the Hawkesbury area, our Windsor office can help you with Bookkeeping and Tax  - Contact them on  (02) 4577 4455 or email windsoroffice@pva.com.au