Should You Be Friends With Your Boss, Work Colleagues and Clients on Facebook

There was an interesting article I this month’s CPA Australia “IN the Black” magazine that talked about navigating social media.

One of the common issues which arises is the question as to whether you should be “friends” with your boss, work colleagues and clients on Facebook.

If you accept the “friend” connect, then these work related people will see your posts and posts you are tagged in.  So, if you like posting nude photos to your family and friends or have a very strong social comment do you really want your boss or close work associates seeing these posts?  What if you have taken a sickie and headed off to the coast on such a beautiful day and in your total enjoyment and excitement posted a photo of you enjoying the beach?  When it comes to linking your Facebook activities to your work environment, you must ensure a professional image which aligns with the values of your employ and your clients.

There are so many situations where the disclosure of information to family and close friends will not have any serious impact while the same disclosure to your boss or clients could seriously jeopardise your working relationship.

If you do connect with work colleagues or business associates on Facebook, then maybe you should look at setting your privacy settings so that friends who tag you need your approval before they appear on your feed.  Often it is not your comments that offend but what the people connected with you say or do.

Remember, if your Facebook posts reflect poorly on the business you work for, then this could lead to disciplinary action and in the worst case your dismissal.

What is the alternative then?

Maybe a face to face chat with that person where you explain that you keep Facebook solely for family and close friends but would love to connect via LikedIn.

In terms of using LinkedIn forget about the humour and social news and focus on such things as industry news, company updates and milestones/celebrations.

David Balwin Tax Accounting CFO Business Advice

How can you tell if a TFN is a real TFN?

So why is a TFN rejected when you enter it in the Australian Taxation Office portal?  Simple you have entered a wrong number so you double check the number and you simply then re-enter the correct number.

But hang on – you did enter it correctly first time and it was rejected.  How can you tell if the TFN is a real TFN?

Embedded in each TFN is a TFN algorithm (also known as a check algorithm).  In the case of TFN’s one of the digits is dependent on the other digits and this digit just happens to be the last digit.

For the algorithm to work each number starting from the left has to have a weighting and the weightings are 1 4 3 7 5 8 6 9 10.  Perhaps it is easier to explain by example.

Let’s use a TFN 185 931 361 and see if it is in fact a true TFN.  Using the weightings mentioned above we have:

1×1, 8×4, 5×3, 9×7, 3×5, 1×8, 3×6, 6×9, 1×10.

When you add these together we come up with 216.

The last key to the puzzle is to divide by 11 and if the number is divisible 11 then what you are looking at is a real TFN.

Don’t ask me why I not a mathematician – I am an accountant – I just know it works!!!

David Balwin Tax Accounting CFO Business Advice

Work related claims are on the ATO’s radar

The Australian Taxation Office (ATO) has created industry average amounts for work related claims.  If you are claiming above the average (by around 10% or more) then you risk facing some sort of ATO review.

As a guide, here are ten occupations/industries and the respective average amounts for work related claims, according to ATO data and Etax:

  1. Real estate agents – $8,634
  2. Lawyers – $7,156
  3. Truck drivers – $5,059
  4. Tradies – $4,871
  5. Farmers – $4,428
  6. Engineers – $4,415
  7. Accountants – $3,224
  8. Teachers – $,3164
  9. Nurses – $2,622
  10. Bankers – $2,223

If you are in one of these industries and If you are unsure as to whether your claims are reasonable and therefore less likely to attract the ATO’s attention call me today on 07 3264 4783.

David Balwin Tax Accounting CFO Business Advice

Home sales above $750K require proof that the seller is not a foreign investor

The recent budget made changes to the Foreign Resident Capital Gains Withholding (FRCGW) regime in two significant areas.

Firstly, the rate of withholding increased from 10% to 12.5%, and secondly, the threshold for real property dropped from $2million to $750,000.

Why this is important is that the withholding regime requires the purchaser to withhold a portion of the sale price and pass it on to the Australian Taxation Office by settlement unless the vendor has a clearance certificate for real property or a vendor declaration in the case of shares, units, rights and options.

While this might seem clear enough, what it in fact means is that all vendors, including Australians, selling real property are considered to be foreign residents unless they have a clearance certificate showing otherwise.

And now that the threshold has dropped to $750,000 a lot more home sales are going to fall under the FRCGW regime.

What is the potential penalty for non-compliance?

The penalty is the 12.5% that should have been withheld and a penalty of $2,500 plus a further penalty equal to the amount of money they should have withheld.

Who can apply for a clearance certificate? the vendor, their lawyer or their accountant.

So, if you are considering selling your place of residence or an investment in property make sure you consult with your solicitor and accountant before you sign any contract.

Call me today on 07 3264 4783 if you wish to discuss further.

David Balwin Tax Accounting CFO Business Advice

Crackdown on Family Trusts by Federal Opposition

Recently, Mr Shorten announced the intended crackdown on Family Trusts should the opposition come into power at the next federal election.  The plan is to simply tax all distributions from Family Trusts at 30 per cent which totally ignores the major reason many small businesses set up a trust.  Trusts are an instrument which enables the protection of assets from potential claims against the assets.  Also, something the Opposition has not thought about or has elected not to bring into play is the capital gains benefits gained through a trust that are not available to a company structure.

There is no denying there can be a potential tax benefit but any crackdown has to take into account the whole package not just a part of the package.

Purely, from an income tax or company tax perspective a company at a reduced tax rate of 27.5% may become appealing as opposed to 30% for family trusts leaving aside asset protection and capital gains.

However, I hold that for the majority of my clients, who have a family trust, will be disadvantaged as their level of income is not excessive and the purpose of asset protection plays a significant role in having the trust and are therefore being punished for having the most effective structure for their business.

I am truly amazed that the Federal Government has effectively remained silent on this issue.  Given the current status of the political polls showing that the Federal Opposition will be our next Government this is not something small business should take lightly if the polls remain as they currently stand heading into the election period.

I would like to strongly state that Balanix is not politically aligned to any party but will support good policy by any party and likewise condemn what is believed to be bad policy by any party.

We will always act solely in the best interest of our clients and speak on their behalf where we think they are being hard done by!

David Balwin Tax Accounting CFO Business Advice