Blog

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.

Double check your deductions

Date posted: Thursday, October 23, 2014

For many, tax time is just a painful reminder of why the word ‘taxing’ exists. The looming BAS deadlines are often a source of frantic stress and for others it’s a veritable bonanza.  Working out what you can and can’t claim and how much is deductable can be the difference between getting a great refund or not. A common question we field at Pakenham Taxation and Accounting is…

How do some people manage to get such great refunds when others don’t?

Mainly, they know exactly what kind of tax deductions they’re eligible for and understand how to work the system to their advantage.

While you always need to keep personal and work expenses separate (and the ATO is currently cracking down on suspicious returns), you’d be surprised what you can claim, depending on the kind of job you have.

For example,

• Journalists can claim on sunglasses if they work outside
• Performers can claim stage make up and tinted contact lenses
• Workers in the adult industry can claim back on lingerie
• Policemen can claim bulletproof vests and
• If you work from home you can even claim on energy bills.

Even if you have a stock standard office job, it’s definitely worth checking out the ATO’s full list of deductible expenses, separated into the needs of each industry.

And remember, keep all your receipts in one place so next year isn’t the stressful scramble is usually is!

Contact us for support on how to get the biggest refund within your entitlements and to manage your tax accounting better.

3 things you didn’t know about GST

Date posted: Tuesday, October 7, 2014

After nearly 15 years since its implementation, you probably think you’re a pro at navigating the complex world of our Goods and Services Tax, but we’re here to remind you that there’s almost always something new to learn. We know this because all the changes and adjustments over the years means we’re still learning it ourselves!

We put together a few key facts about the GST we find many people don’t even know about, to give you a head start and ensure you don’t get caught out.

GST is actually optional for businesses with an annual turnover less than $75,000.

Great news! Well, not quite – as always in tax, it’s not always that black and white. On one hand, having 10% lower prices can really put you at a competitive advantage, but not being GST registered keeps you from claiming input credits and some people don’t deal with business that are un-registered.

Basic goods are always GST-free, but only sometimes.

We all know that goods and services seen as essentials are exempt from the GST for example raw foods, various education courses etc.

When these same goods are put into a commercial setting however, this can change. For example, water is GST free, but when served at a restaurant or café, it’s not. It pays to be careful of these ‘hybrid’ products, especially if you’re in the food or beverage industry.

It can be better to split expenses annually.

If you’re a small business, dividing expenses between personal and professional for tax purposes is a constant headache. Most people do this split when they lodge their Business Activity Statement monthly or quarterly, but did you know you can do it annually? Year-end adjustments can prove to be more accurate, not to mention the savings in time and stress!

For more information, don’t hesitate to contact Pakenham Tax, your local Accounting specialists. We can arm you with a myriad of tricks and tips that could help you better navigate GST for you or your business.

Cons to doing your own tax

Date posted: Friday, August 15, 2014

We encounter quite a few go-getters who take on doing their own tax and then wind up on a tax rebate mis-adventure. And by this time, often it’s too late to avoid incorrect deduction fines.

Sure, you can save money by not paying for an accountant and sometimes it might be a faster way to process your refund, however here are some cons to doing your own tax you should probably know about;

• You might overlook or not be aware of expenses you can deduct

• Tax returns can take a considerable amount of time if you don’t know what you’re doing (who has spare time to crunch numbers!)

• You might deduct costs of doing this year’s tax in next year’s tax return

• You might experience fines if you don’t lodge your return in time and in the right way

• You may get randomly audited, which could unearth incorrect claims and result in hefty fines

Go easy on yourself and let us get your tax records organised. We can help you understand what you can and can’t claim and do all the hard-work for you.

Superannuation concessional contributions cap 2014/2015

Date posted: Thursday, April 24, 2014

Some employers may be a bit confused by the recent changes made by the ATO to the superannuation rates and caps for 2014/15.

The amount contributed to super each financial year, is capped for tax purposes. Contributions above these caps are at risk of having to pay extra tax.

Factors impacting on the cap amount include:

• The superannuation holder’s age
• Whether the contributions are concessional or non-concessional contributions.

Concessional contributions are from before-tax income and are most commonly made up of employer contributions. Non-concessional contributions are from after-tax income and come from personal contributions.

To find out the current threshold on the superannuation concessional contributions cap then be sure to visit this link via the Australian Tax Office. This web page highlights the changes for the 2014/15 financial year.

Do you have more super questions? You can find out more by giving us a call, sending us an email or booking in for a visit. We specialise in servicing individuals and businesses in the South Eastern Suburbs including Pakenham, Lakeside, Berwick, Nar Nar Goon, Garfield, Tynong and Koo Wee Rup.

Xero Accounting x Pakenham Taxation + Accounting

Date posted: Wednesday, March 19, 2014

Via Xero Accounting we can work with you, no matter where you’re located. Thanks to “the cloud”, Xero easily connects Pakenham Taxation + Accounting to your business – making it easy for us to assist you with a range of accounting and bookkeeping needs.

So what exactly is “the cloud”? Well to put it simply it can be software, a platform or infrastructure, which is run remotely via the Internet.  This means files, programs and applications can be used by a number of people over the net – without the need to download or update software on each individual’s computer.

As a Xero certified accountant, Pakenham Taxation + Accounting provide businesses with an online accounting and payroll management system. We can manage your Xero account for you, work collaboratively with you via remote access or coach you to use Xero – it’s up to you and the needs of your business.

What else can we do through Xero? Xero makes it easy to pay bills, keep track of expenses and invoices, create up-to-date reports and stay on top of spending through the use of easy-to-use budgeting tools.

If you want to know more about Xero, give us a call, send us an email or book in for a visit. We specialise in servicing individuals and businesses in the South Eastern Suburbs including Pakenham, Lakeside, Berwick, Nar Nar Goon, Garfield, Tynong and Koo Wee Rup.

Recent Changes to Parental Leave Pay

Date posted: Wednesday, March 5, 2014

If you’re expecting a baby or if you’ve already recently welcomed that new addition to your family you might be asking yourself …

Can I still claim the baby bonus?

On the 1^st of March 2014, the distribution of the Baby Bonus officially ended. Parents who have a newborn baby or adopt a child after this date are now eligible for Parental Leave Pay or the Newborn Upfront Payment.

How do the changes to the Baby Bonus effect Parental Leave Pay?

Despite the scrapping of the Baby Bonus, no changes have been made to Parental Leave Pay. This payment will continue to be calculated based on the National Minimum Wage and equates to $622.10 a week, before tax.

Payments are made by employers or by the department of Human Services for self-employed new parents. For a maximum of 18 weeks, payments are deposited to parents on a fortnightly basis.

What does the government now offer instead of the baby bonus?

If you are ineligible or choose not to claim Parental Leave Pay for your newborn or adopted child, you may be eligible for the Newborn Upfront Payment and Newborn Supplement. Unfortunately, you cannot claim both payments.

The Newborn Upfront Payment and Newborn Supplement rate and eligibility is based on an income test as well as other factors. For those who qualify, the maximum amount paid is $2001.50 for a first child and $1000.50 for following children.

Still have questions? You can find out more by giving us a call, sending us an email or booking in for a visit. We specialise in servicing individuals and businesses in the South Eastern Suburbs including Pakenham, Lakeside, Berwick, Nar Nar Goon, Garfield, Tynong and Koo Wee Rup.

 

What Can I Claim on Tax?

Date posted: Thursday, January 2, 2014

Are you planning on claiming your new iPad as a tax deduction? Thinking you’ll claim your latest shoe splurge on your next tax return? Or are you just too confused to try and claim anything at all? We don’t blame you.

Tax return time can be overwhelming. Questions of what you can and cannot claim are endless. Here are just a few, we get asked daily…

• Can I claim my new dress as a deduction on tax if I bought it for a work event?
• Can I claim my work shoes on tax if they are work boots only?
• Can I claim tools and equipment I bought for work on tax?
• Can I claim my holiday on tax if I had to do some work while I was there?

…and the answers can sometimes seem even more confusing.

Save yourself the iPad/shoes/family getaway post-purchase regret and read Pakenham Taxation’s list of what you can and cannot claim on your tax.

What you CAN claim:

• Work travel expenses. This includes meals and accommodation while on a business trip, the cost of travelling between two workplaces and the cost of transportation of tools or equipment used for work.
• Occupation-specific clothing. The cost of uniforms, protective clothing and other items only worn for work purposes are all included. The costs associated with cleaning and maintaining ALL work clothes are also tax deductable.
• Tools, equipment, trade books or journals and other items required to fulfil a job or earn income. Calculators, Computers (this includes iPads!), filing cabinets and technical equipment are all included. Even better news; the costs of repairing or insuring these items can also be claimed!

What you CANNOT claim:

• Private travel. This includes costs associated with travelling to and from work as well as family holidays. This means if you’re planning on claiming your Hawaiian getaway as a tax deduction by slipping into a Waikiki conference for a few days, think again.
• Most clothing items. Unfortunately, if your employer requires you wear clothing of a certain brand, style or colour this is not tax deductable. The rule of thumb when it comes to claimable clothing is if your outfit makes your profession easily distinguishable (i.e. a chef’s uniform) then you can most likely claim it, otherwise it’s a no-go.

Still have questions? You can find out more by giving us a call, sending us an email or booking in for a visit. We specialise in servicing individuals and businesses within the Cardinia Shire and outer south-east suburbs including Pakenham, Berwick, Cranbourne, Officer, Beaconsfield, Garfield, and Drouin.

Get Pakenham Taxation to Track Your Lost Super

Date posted: Thursday, May 23, 2013

Here is a little fun fact for you all. Did you know that there is $17 billion in lost or unclaimed super in Australia? Are you one of many Aussies who has no clue where your super is? There could be money out there that belongs to you and you don’t even realise it. At Pakenham Taxation + Accounting we’re happy to help you track it down and we know how. So if you think you’re one of those people who has lost or unclaimed superannuation, then give a holler and we’ll get our Sherlock Holmes on.