News

“Building a Better Tax system” What does this mean for you?

By February 14, 2019 Tax

The Australian government has launched the Better Tax campaign in order to help inform the public of tax reforms coming into effect. Designed to “better Australia”, here is a look at what this plan is and its meaning for you.

What it is:
The Better Tax initiative is designed to help prevent big business and multinational corporations from evading their tax obligations. The revenue collected then goes into funding Australian public service efforts. The plan is working in conjunction with the ATOs Tax Avoidance Taskforce, which in the last two years collected $5.6 billion in extra tax from large corporations, multinationals, and wealthy individuals.

Individual Tax:
For individuals, Better Tax has introduced a revised Personal Income Tax Plan which aims to reduce 95% of peoples tax. They are also introducing,

  • New low to middle-income tax offset: Offering immediate relief of up to $530 after an individual lodges their tax return for each income year from 2018-19 until 2021-22.
  • Increase to income tax rate thresholds: Changing over the next seven years so less tax is paid by Australian taxpayers. The first change took effect on 1 July 2018 with future changes in 2022-23 and 2024-25.
  • Reduction in the number of tax brackets: In order to simplify the system, in 2024-25 the tax system will move from five tax brackets to four.

Business Tax:
This plan is aimed at reducing the strain on more than three million small to medium-sized businesses. Changes include,

  • Tax cuts for incorporated small and medium businesses, with a turnover of less than $50 million per annum. These companies will move to a 25 per cent tax rate by 2021-22.
  • The small business income tax offset; increasing the rate of the tax discount for unincorporated small businesses with a turnover below $5 million
  • Increasing the instant asset write-off threshold from $20,000 to $25,000 and extending it until 30 June 2020. The increased threshold will apply from 29 January 2019, with legislation to be introduced.
  • Increasing the small business entity turnover threshold from $2 million to $10 million per annum, extending access to a range of tax concessions.

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Payday loan apps and websites; the pros and cons

By February 14, 2019 Money

Personal loans have become a fast-growing financing option for consumers, with payday apps and websites gaining popularity. For aid between paychecks, payday loans can be very helpful for the pay cycle lull. Taking out a loan is not something to enter into lightly though, there are many variables that should go into your decision-making process. Here are a few pros and cons you should consider before taking out a payday loan

Pros:
Payday loans are named as such because they are basically instant. Once applied, your loan is usually processed and paid out on the same day. This is very helpful if you are in need of money urgently between pay, like a fine or surprise bill for example. For this reason, the loan amounts can often be quite high. Like any other loan provider, the quicker you pay the amount back, the more likely you are to receive a higher loan the next time around. These services track your repayments and can increase funds based on your credit history. Application for payday loans is extremely easy as they are based online. The process is very quick and many payday loan services have app options so you can apply on the go.

Cons:
Any loan you take out will affect your credit rating so it is important to really think about why you need the loan before applying. Frivolous loans can greatly harm your credit score which could make life difficult down the track. With the loan process on these sites, if you are unable to make a full repayment by the agreed deadline, further fees may be charged to you but will not be revealed until you are required to pay. These payday loans often have a high-interest rate due to their instant nature and repayment period.

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Creating a positive business culture

By February 14, 2019 Business

Business culture is a reflection of what your company stands for, it’s your voice. Employee relations are what establishes this voice and can always be improved. A work environment that everyone enjoys can help to improve performance and productivity. Here are some ways you can help better the culture of your business

Vision:
For a business culture to be established, as the employer you must first decide what that voice will be. Having a clear direction for your business practices is common but for community in the office, a vision for your business culture will help the process. It should also be of note that not everyone will automatically feel and relate to work the way you do, a culture isn’t formed overnight. It is your job to help guide your company toward your vision in every aspect of the business.

Lead by example:
Often business owners can be separated from the general culture of the workplace. It is important to show you adopt the values and productivity levels you are expecting of your employees. Integration on this level helps to establish what you expect out of the business and its everyday processes.

Communication:
One of the most obvious points is communication, it is essential in running a business. Good communication is not only needed for basic tasks and management but also key to creating your business culture. If your vision for the business is not effectively communicated then the culture will reflect that.

Feedback:
If you foster an environment that encourages feedback, you get an everyday look into how the culture of your business is or has formed. Feedback to employees is important for their personal growth in the company and practices but when there is a mutual level of communication and trust, their feedback to you can help better your own idea of your business culture.

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Superannuation tips for each stage of your working life

By February 14, 2019 Super

A 2018 study revealed that almost 40% of Australians think they won’t have enough money to retire on – and that number is on the rise. Managing your superannuation fund can be confusing but it was found that 50% of us do not consult a financial planner. As we face different financial challenges at different points in our lives, how do you ensure you have enough to retire on?

20s to 30s:
It is not uncommon for many people in their 20s and 30s to have multiple superannuation fund accounts accumulated through years of youth part-time work or otherwise meaning you may have to chase up on lost super. With one superannuation account, you not only can save on fees but it may also give you better investment returns. When combining and comparing your active accounts, be mindful of any termination fees, insurance policies, investment options, and ongoing service fees.

At this age, you are able to take bigger risks on the type of investment you choose as you have time to recover from any losses. If your investments prove successful, the returns will be even greater. Now is the time to review your investment strategy to maximise the returns. For those in a financial position to do so, you can consider salary sacrifice options or voluntary contributions.

40s to 50s:
You may find yourself earning more than you’ve ever earned before, but it is also a time where you may be juggling more living costs – from your mortgage to your growing family’s fees. Experts advise against decreasing your mortgage payments and encourage voluntary payments to your superannuation fund.

If you have a partner, he or she may be able to help grow your super by making a ‘Spouse Contribution’ to your super account or consider if contribution splitting is viable for you. You may also be thinking about your retirement plan at this stage, and now is a good time to review your superannuation insurance and beneficiary policies.

60+:
This is the time many consider leaving the workforce but this decision doesn’t have to be as daunting or finite as it may seem. An alternative to this is the Transition to Retirement (TTR) income stream, where you can concurrently decrease your working hours while withdrawing money from your super once you reach your preservation age. There are a few regulations on how you can access your super and how you will be taxed so it is best to seek financial advice for your situation.

In your 60s, you may be eligible to apply for a government age pension or withdraw a tax-free lump sum from your super fund. Your 60s might also be a period where you can consider your estate planning strategies.

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