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How to keep your receipts under control for tax time

Date posted: Friday, September 25, 2015

For many people, tax time brings to mind long hours at the computer, elbow deep in little bits of paper that make up your business receipts for the year. They get lost, they fade, they come in all shapes and sizes and are almost impossible to keep in one neat pile.

As everyone knows, managing receipts is a vital step in staying out of hot water if the ATO comes knocking on your door – but there are easier ways!

Keeping and managing your receipts doesn’t need to be the taxation nightmare it so easily can be – for individuals or small businesses.

Scanning receipts and managing on an online or cloud-based software program is now one of the best ways to keep your tax situation under control. While we don’t recommend throwing out all your bits of paper since businesses need to have back ups for six financial years, with programs like these you can certainly make them out of sight and out of mind.

The ATO also understands the limit of paper receipts, now accepting scanned documents for Business Activity Statements, annual returns and most other taxation purposes.

There are many programs out there to help out with sorting receipts, including Evernote, Docketbank, Expensify, Paperport and Shoeboxed. Each have different features and focus so make sure you do a bit of research to determine which is right for your own needs.

Once receipts are safely scanned and stored online, the data can easily be transferred to Accounting software like Xero, MYOB, Saasu or Reckon, and then on to us at PTA to finalise everything you need in tax and accounting!

We thrive on being the best accounting and taxation consultants in Pakenham and the South Eastern suburbs. If you have any questions about how to manage your receipts, be sure to talk to our team at Pakenham Taxation + Accounting.

The new tax-free threshold for online purchases

Date posted: Thursday, August 27, 2015

Something quite topical in the press of late are the scheduled changes to the GST tax-free threshold set for 2017. A question quite commonly asked is ‘will shoppers be required to pay tax for overseas purchasers with online retailers?’

If you’re curious about these changes you might possibly be an avid online shopper or potentially an Australian retailer with an online store.

If you’re an online shopper, and you love shopping with Topshop – and pretty much anywhere you can get awesome product for a great price – you’re probably wondering if the changes to the tax-free threshold will cost you and your online shopping habit more money than it already does. Tax-free shopping is pretty attractive after all.

Or perhaps you’re an Australian retailer or business and you want to know if the changes in the tax-free threshold policies will effect your position in the market.

Well the good news is for Australian businesses. As of July 1, 2017; purchases of any amount by Australian consumers (with local or international retailers) will incur a 10% GST mark-up. This move is intended to ensure a fairer competing chance for all retailers in the Australian market, especially for local businesses.

We thrive on being the best taxation consultants in Pakenham and the South Eastern suburbs. If you have any questions about the tax-free threshold changes and how it will effect you be sure to talk to our team at Pakenham Taxation + Accounting.

How to apply for GST

Date posted: Thursday, July 23, 2015

As a new business you might be wondering, ‘how do I apply for GST?’

Setting up your GST and other relevant tax structures is a vital part of the process of starting a business, not to mention integral to the tax system itself running successfully.

Before you take the plunge however, you should consider if you actually need to register for GST. Signing up is only legally mandatory if:

• Your business has a GST annual turnover (gross income minus GST) of $75 000 or more
• Or you’re a not-for-profit organisation with a GST turnover of $150 000 per year or more
• You’re a taxi or limousine business, regardless of your GST turnover – this applies to both owner drivers and if you lease or rent a taxi
• You want to claim fuel tax credits for your business or enterprise.

Any questions? Talk to our team at Pakenham Taxation + Accounting, the local experts in setting up businesses, GST and business tax.

Are utilities tax deductible if you work from home?

Date posted: Monday, June 15, 2015

Businesses get heaps of different tax deductions, from phone bills to utilities – but you work from home, so can you get the same deal?

The short answer: yes!

The long answer: well, it depends.

The Australian Taxation Office (ATO) has different definitions of what it means to work at home. Either you run your business at home, meaning your home is also your principal place of business (think having a home office set aside especially, or a consultation room where you see clients). Alternatively, you work from home, which means you have a main office/workshop somewhere else but you might still put in a few afterhours work at home.

No matter what situation you’re in, it’s definitely worth looking at what your eligible for so you save as much as possible come tax time.

At Pakenham Taxation + Accounting we’re experts in all the details business tax deductions and company taxation. Make this end-of-financial year easier for yourself and contact our team for further questions about what you can and can’t claim on tax.

Small businesses are the big winners in Hockey’s Federal Budget

Date posted: Friday, May 15, 2015

It’s that time of year again: winter is setting in, the days get shorter – and there’s the Federal Budget.

This week Joe Hockey saturated all our screens as he laid down his second national budget as Treasurer, with what some are calling a more softly-softly approach after the more than chilly reception last year’s received.

In the Liberal Party’s constant battle to reduce the national deficit, the 2015 budget was geared towards boosting economic activity (and therefore tax revenue).

There were several key measures put in place that will work towards this goal, and you can get a good overview from the Australian Financial Review here.

If you’re a small business however, you’re in luck. Hockey’s centrepiece is a $5.5 billion “tax surprise” for you, including a 1.5% decrease in company tax to 28.5% starting July 1 this year. Find out all the details here. 

If you have any questions or concerns about your own tax, personal or otherwise, don’t hesitate to get in touch with us at Pakenham Taxation and Accounting.

 

Claiming petrol on your tax return and fuel tax concessions for small businesses

Date posted: Friday, April 3, 2015

Enter a car, truck, vehicle or any other kind of heavy equipment into the equation, and your tax can get complicated – whether you’re a small business or an individual at end of the financial year.

Luckily, we can shed some light on any confusion you want to get out of the way before tax time rolls in again.

For individuals

You can claim travel expenses – including your car’s petrol and public transport costs – as long as they’re directly connected with your work. However you can’t claim travel between home and work, as this is considered a private expense.

When you use your own car in the course of performing your job however, there are quite a few instances where claiming is all a-go, including:

• carrying bulky tools or equipment
• attending conferences or meetings
• delivering items or collecting supplies
• traveling between two separate places of employment (for example, when you have a second job)
• travelling from your home to an alternative workplace and then to your normal workplace or directly home (for example, if you travel to a client’s premises)
• perform itinerant work.

For businesses

As a business, there’s a federal tax placed on all fuel you purchase (not nice). To help you out, the government has in place a fuel tax credit scheme that allows you to claim back that tax (nice).

Usually included as part of your usual Business Activity Statement (BAS) – much the same way other taxes like GST are claimed – the fuel tax credit scheme applies to most fuel used in the course of carrying on trade, including driving machinery and running plant, equipment and heavy vehicles.

To be eligible, your business needs to be registered for GST, registered separately again for fuel tax credits, undertaking an eligible activity. It also needs to meet several environmental criteria – for example, emission standards for heavy diesel vehicles.

At Pakenham Taxation + Accounting we’re experts in all the details of personal and business taxation. Make this end-of-financial year easier for yourself and contact our team for further questions about what you can and can’t claim on tax.

What’s the difference between a company name, a trading name and a business name?

Date posted: Saturday, March 21, 2015

We’re going to navigate murky waters today by clearing up some common misunderstandings about what it means to operate under a business, trading or company name. Namely, what they mean, which ones you need and how they can affect your business.

First and foremost: since a change in the legislation circa May 2012, there is no longer such a thing as a ‘trading name’. The term is now fully interchangeable with ‘business name’.

Now that we’ve got that out of the way, we can get down to the nitty gritty details.

A company name (also called a legal name) is an official legal entity – whether an organisation or an individual – that must be registered with the Australian Securities and Investments Commission (ASIC). Because it’s a legal name, often organisations’ names are required to have the right terms or abbreviations as part of the name, like Proprietary (Pty.) or Limited (Ltd.).

From here, a company can go on to register a business name if they don’t want to trade under their precise legal name (very few people want to go around calling themselves Pty Ltd!).

A business name then is simply what you do your business under – the words or phrase your customers and suppliers know you as. If it’s different from the legal company name, it must be registered under the Business Names Register – also managed by ASIC.

So, for example: Bob built up a mechanics business, and had to register the legal company name of Bob’s Mechanics Pty Ltd. But since he didn’t want to use that name to trade, he also registered the business name ‘Bob’s Mechanics’.

Got any questions? At Pakenham Taxation we know all about how to register business names, create companies and turn businesses into legal companies. For any further details, contact our team and we’ll be more than happy to help you out or clear anything up.

The difference between Accounting and Bookkeeping

Date posted: Wednesday, February 18, 2015

We find that all businesses are the same: they want to get on with what they do best: serving their customers and making money. Managing their finances and doing tax is the last thing on their mind.

So while outsourcing these kinds of services is usually necessary, there’s often some confusion about what the business actually needs – Bookkeeping or Accounting? Neither? Both?

Bookkeeping is more about the day-to-day of a business’ financials, keeping records of transactions efficiently and consistently. In a lot of ways, good Bookkeeping prepares relevant documents for an Accountant, and for tax time. Their tasks can include:

• Recording financial transactions
• Posting debits and credits
• Managing accounting software and keeping it up to date
• Maintaining and balancing legers and historical accounts
• Completing payroll
• Sending out, paying and chasing up invoices

On the other hand, Accounting is a higher-level process that uses the compiled information to make financial models and look at the business with a wider, strategic perspective. Within Accounting itself there are additional specialisations but in broad terms Accounting includes:

• Preparing financial statements
• Analysing cost of operations
• Completing tax returns
• Working with the business to help them understand financial decisions

Often, a small to medium-sized business (SME) will actually need services from both professions – but you’d be surprised how few people can help. Bookkeepers, while important, only really do half the work you need done, while Accountants require your financials to be at least somewhat organised before they can get to work.

Luckily, our team at Pakenham Tax + Accounting can do both, all under the one roof. We’re experts at both the nitty gritty of Bookkeeping as well as all Accounting and Tax services you might need.

If you need help with managing your personal or business bookkeeping and accounting, don’t hesitate to get in touch.

How to register a trademark for your business

Date posted: Friday, January 23, 2015

 

A trademark is a kind of intellectual property (IP) and is the public, legal identity for your product or service. It’s mostly used in a marketing context to distinguish your business and what you do from your competitors.

While most people think of a trademark as a brand name or logo, it can actually include a symbol, image, sound, scent, colour or even a type of packaging – almost anything that’s integral to your brand and how you market it can be a trademark.

Trademark laws are also the reason those “Prado” bags on the street are illegal, why you can’t use an apple as your logo and how Cadbury literally owns that exact shade of purple.

In the same way, many businesses, big or small, look to establish their own trademarks to set them apart.

Registering a trademark when you set up a business is quite a long and complicated process – not to mention setting it up internationally so your branding is unique the world over.

The Federal Government’s IP Australia website is a good place to get some further information but if you’re seriously looking to register your own trademark, getting some professional help is the way to go.

Our team at Pakenham Tax + Accounting are experts in setting up your business, including registering for a trademark, patent or design. Make the process as easy as possible and contact us for all your intellectual property needs.

At Pakenham Tax + Accounting we’re experts in all the details of personal and business tax. Make this end-of-financial year easier for yourself and contact our team for further questions about what you can and can’t claim on tax.

What happens if your BAS is late?

Date posted: Tuesday, December 9, 2014

Ah, your Business Activity Statement. It’s no one’s favourite, but it is a necessary part of running a successful business in Australia.

Before we get into what happens if you lodge yours late, here’s a quick reminder of the quarterly due dates:

Quarter	Due date
1 – July, August and September	28 October
2 – October, November and December	28 February
3 – January, February and March	28 April
4 – April, May and June	28 July

So if you miss a date for whatever reason, what happens? The straightforward answer is that you’ll likely be hit with a Failure To Lodge penalty (FTL).

As of next financial year (July 2015), the penalty is $180 for each 28 days your BAS is late. And this is only for small businesses (less than $1million annual turnover) – for larger companies, the penalty is much greater.

As with most things, prevention is the best policy! To keep your BAS stress levels to an absolute minimum, keep these in mind when doing your day-to-day accounting:

• Lodge your BAS online
• If you don’t think you’ll make the due date, let the ATO or your BAS agent know in advance
• If you do miss the date, call the ATO anyway – they can help you develop a payment plan
• Keep the GST you collect in a separate bank account
• Make a cash flow budget
• Keep your records electronically
• Check your business systems regularly

Even better: take the weight off completely and talk to our team at Pakenham Tax + Accounting, the local expert BAS agents. Your business keeps you busy enough, so get in touch with us for any questions about lodging your BAS, what to do if it’s late or even about handing over the reigns completely.