Balanix Solutions

New super step when employing new staff

From 1 November 2021, an employer may be required to add an extra employment step, in relation to Superannuation, so as to comply with “the choice of funds” rules.

Under the existing rules, where a new employee does not choose a specific super fund, an employer can pay the super contributions to their (employer’s) default fund.

However, from 1 November 2021, an employer may be required to request a new employee “stapled super fund” detail if the new employee does not nominate a specific super fund of their choice. 

What is a “stapled super fund?  It is an existing account which is linked (stapled) to an individual employee, and as a result follows the employee from job to job.

This will help reduce the number of super funds employees accumulate over time particularly those who regularly change jobs.

How do employers’ access super fund details for new employees?  Employers will be able to request stapled super fund details for new employees using the ATO’s Online Services for Business www.ato.gov.au/general/online-services/businesses/ .

If you need any assistance or guidance, please contact Balanix Solutions 07 32644783.

How would a cashless society affect your business

With COVID being around for over12 months now, we have seen many changes in the way we do business.  Recently, I went to a rugby game which was a card only event, so without a credit/debit card or a digital wallet attendees could not purchase a ticket, buy a drink or food or any merchandise.

So, what would a cashless society look like and how would your business cope?  Do you know how many of your customers/clients would be directly affected?

There have been some projections that a cashless society could occur by 2022.  It is interesting that the Commonwealth Bank in its’ article “Turning Point: calling time on cash” stated that the percentage of payments made by cash dropped from 69% in 2007 to 37% in 2016.

As the demand for cash decreases so will the number of suburban bank branches and ATMs.  Merchants, according to research by market analysis East and Partners, saw a drop of some 46% in cash payments between 2010 and 2016.

While research by MyState Bank shows cash being used less, there is still not a large support for a completely cashless society.  It is interesting that Woolworths recently stopped it trials for cashless stores due to consumer backlash and resumed cash payments by 10 March 2021.

Also, there is a significant issue in relation to indigenous people who have limited access to the internet and this number is even less in remote areas.  Therefore, such a move would severely restrict their ability to deal with a cashless society.  While there have been trials of card only transactions in some communities, this has been more targeted at specific social activities.

Another significant group within our society who struggle with the internet are the aging population who either don’t have computers or lack the financial knowledge to understand how a cashless world would work for them.

From the government’s perspective having regard to its desire to limit the black/cash economy it might appear a good strategy.   It has already shown its desire to limit by legislation cash payments over $10,000 and there has been talk at various times at reducing or eliminating $100 notes.  One could also argue that the government has sufficient powers to severely restrict the black/cash economy if it chose to, without further restriction on society rights as a cashless society brings with it significant privacy issues.

So, if you are in business what does this all mean for you as a business owner?  How would it affect your clients?  Do you have a large percentage of clients who are elderly or indigenous and may not have a card of any description or even have a computer to use to transfer a payment?

What do you do if your terminal goes down or worse becomes damaged and you are a small business and you are not able to replace it quickly?  Recent problems with Tyro terminals highlight this point.

All these points need to be considered now, if you have not already thought of them, in order to remain on trend and contemporary within your industry.

Will COVID Have a Lasting Impact on the Way We Do Things?

I was listening to a podcast recently where a discussion developed over whether COVID would have a lasting impact on the way society/business does things.

What was interesting was that an event even as large as World War II did not lead to a significant lasting change in the way people did business.  Despite one of the most significant changes to industry in World War II, being women entering in the workforce to replace men fighting in the war, this was not sustained.  The women learnt many news skills for the first time and at the same time gained freedom to undertake work previously not available to them. However, after the war, to a large degree, women left the workforce and returned to their homes.  So, all the training and skills acquired were mainly lost to industry.

Having said this, the fuel crisis in the later part of the 20th century did see a significant change in industry use of resources e.g. power to drive industry.  Prior to the crisis, many industries relied on oil and petroleum to drive their machines but were forced to look to alternative sources of power with the shortage of traditional fuel.  Electricity was the major alternative which required significant investment that once made became a sunk cost from which there was no turning back.

So, what about COVID? One of the most significant changes that has occurred in COVID has been the move to working from home.  After a year of change, the questions to be asked are “Will this be a long-term change?”  and “Has industry and commerce made significant investment (sunk costs) in this area that would make it prohibitive to change back?”

Adopting working from home, in some areas, has been out of necessity and in doing so, businesses have taken a short-term view due to many still having long-term leases in CBD and other areas which will keep them, at least in the short-term, committed to those places.

Also, working from home attracts workplace, safe and healthy issues, which by some, have been ignore during the crisis. Long term commitment to working from home arrangements will require the workplace in the home to meet all the requirements in relation to workplace legislation.  For example, does the home lighting or working environment meet workplace standards? and, similarly, does the IT infrastructure meet standards? just for starters.

Consideration also needs to be given to the worker’s mental health due to isolation, the lack of face to face/social meeting with fellow workers and the work/family balance. 

This leads to the critical question of what is the employer’s responsibility for providing an adequate working environment (lighting, diskspace etc), insurance for accidents in the workplace at home (as the public liability clauses in a home insurance more than likely won’t cover a work related injury/accident) and the employer’s obligation to ensure the physical and mental well being of workers.

So, the question is will employers be willing to incur the cost to undertake the upgrades to employees’ homes if they are to comply with appropriate workplace standards and how will they deal with employees moving house or staff who rent moving house?

If they do, will there be a capital gains tax issue going forward when the employer eventually sells the property?  And what about Fringe Benefit costs which may apply?

Generally, at present, employers have not made significant outlays during COVID that would make going back to the office unviable so it will be interesting whether greater working from home will continue or whether industries will go back to business as usual.

David Balwin FCPA Registered Tax Agent

Confidence of Consumers in the Tax Practitioner Profession Remains High

The latest bi-annual survey of the Australian Tax Practitioners Board, conducted in November 2020, found that (amongst other things):

  • Confidence of consumers in the Tax Practitioner Profession remains very high.
  • There is a high trust level by consumers in their tax practitioner (88%) and 66% surveyed rated their experience with their tax practitioner as excellent.
  • 58% surveyed advised they have been with the same tax practitioner for more than five years.

Given the hardships many faced in 2020, it is pleasing to see that tax practitioners were there to support business owners and individuals to navigate the COVID impacts and the governments’ support provided.

Like all industries, the accounting is ever evolving. Clients are looking for more from their tax practitioner noting they still want them across the ever complexities of compliance. Call Balanix’s team today to see how we can help you 07 32644783.

Claiming Home Office Expenses for the 2019-2020 Financial Year

The first half of 2020 saw many employees, for the first time in their working lives, working from home for an extended period of time.  Given the uniqueness of this situation, the Government made an additional way for employees to calculate home office expenses.

This means that for the 2019-2020 financial year employees working from home actually have three ways of calculating home office expenses, as opposed to the normal two.

The new additional method of calculating home office expenses is appropriately recording the number of hours worked between 1 March 2020 and 30 June 2020 and claiming 80 cents per hour.

You can use this method where you are working from home so as to be able to fulfill your employment duties and secondly you have incurred additional running expenses as a result of working from home.

This method is intended to cover the additional costs in relation to phone expenses, internet expenses, the decline in value of equipment and furniture and the cost of electricity and gas for heating, cooling and lighting.

Should you choose this method then you can’t claim any other costs for working from home.  Note, this method does not require the employee to have a dedicated work area in the home.

How do you appropriately record the hours you worked?  The recording of hours worked through a diary, timesheet, roster or some other form of documentation that sets out hours of work is satisfactory for this purpose.

Note, as has already been stated, if you claim this method you can claim no other costs.  Therefore, if you were already working form home prior to 1 March 2020 this is not an appropriate method for calculating your costs of working from home.  In that case, you would need to use one of the two other methods for calculating working from home costs.

Note, the following types of expenses cannot be claimed when working from home :-

  • Coffee, tea milk and other general household items even if they were normally provided at work;
  • Costs incurred in relation to setting children up at home for home schooling; and
  • Costs that you are directly reimbursed for by your employer, paid for by your employer or the decline in value of items provided by an employer.

Please note that this is the simplest way to calculate deductible costs but this does not mean it will give an employee the best outcome for tax purposes.  If you are in doubt contact the friendly staff at Balanix Solutions for professional advice as to the other two methods and which one of the three methods would best suit your individual circumstances.