There is a simple step that many businesses can take to better manage the risk that can attach to certain assets.

Not so many years ago, a new scheme was introduced, which also established a national register, that could affect anyone who answers “yes” to any of the following scenarios — are you in business, and do you:

• sell goods on retention of title terms?
• hire, rent or lease out goods?
• buy or sell valuable second-hand goods or assets?
• want to raise finance using stock or other assets as collateral?
• work as an adviser to clients who conduct these activities?

As you will gather from the very wide-ranging scenarios listed above, the scheme (the Personal Property Security Register, or PPSR) can potentially cover a significant proportion of Australian business.

Continue reading “If you’re in business, you need to know about the PPSR” →

Tax invoices are an essential element of Australia’s taxation system, and serve both to collect taxation revenue related to the goods and services on which GST is levied as well as record the credits that are claimable by eligible businesses.

A business registered for GST will generally be required to hold a tax invoice for any transaction in order for an input tax credit to be claimed. The tax invoice can usually only be issued by the entity that made the taxable supply, which generally must issue a tax invoice as a normal incident of transactions, or within 28 days of a request to do so.

Tax invoices are not required where the GST-exclusive value of the transaction does not exceed $75 (that is, a GST-inclusive price of $82.50) or if the goods or services supplied are GST-free, such as many food items. (And if you are wondering why $75, it’s merely a reflection, in miniature, of the turnover threshold of $75,000 at which a business must be registered for GST.)

To qualify as a bone fide tax invoice, it generally must include certain details, such as the seller’s identity (name, ABN), date, the form of supply, the price, the GST amount and so on.

Suppliers who fail to issue a tax invoice or adjustment note as required are liable to an administrative penalty from the ATO. If a tax invoice or adjustment note is not provided, it is generally expected that the recipient will make genuine reasonable attempts to request one. The emphasis however is on “genuine reasonable attempts”, as the ATO does not generally require anyone to go to extraordinary lengths to pursue a supplier for the tax invoice.

Continue reading “Alternatives to a tax invoice for certain GST credit claims” →

Being a director of a company, as with any elevation of status, is a role that also brings with it added responsibilities and duties.

Company directors need to keep in mind that the Corporations Act holds directors personally liable for many of the legal and financial obligations expected from a company. These include, but are not limited to, any debts incurred if the company becomes insolvent and losses arising from a director’s lapse of duty.

The corporate regulator, the Australian Securities and Investments Commission (ASIC), says failing to perform your duties as a director can, in the more extreme cases, lead to being found guilty of a criminal offence with a penalty of up to a maximum of $200,000, or imprisonment for up to five years, or both.

Continue reading “What you need to know about the beefed-up director penalty regime” →

A major change in the way employers report the tax and super information for their employees to the ATO has been on the way for a while now. The single touch payroll (STP) system started to be rolled out gradually from 1 July 2018 for what the ATO refers to as “substantial” employers (those with 20 or more staff). Recently passed legislation extends STP to all employers, regardless of the number of staff, from 1 July this year.

Continue reading “Single touch payroll rollout for smaller employers” →

It’s not mandatory for a business to have an Australian business number (ABN), but there are a few good reasons why you should. Foremost among them will be that without one, your business will probably feel a whole lot poorer than it should.How to get an Australian business number

Other businesses that deal with you are legally bound to withhold tax from any payments they make to you if your business does not quote an ABN on invoices – and they must withhold it at a rate of 47%.

Having an ABN also gives your business the ability to claim back goods and services tax (GST) credits, claim fuel tax credits you quality for, register to use the pay-as-you-go withholding system, be able to offer fringe benefits to employees, and just generally make dealing with other businesses much smoother.
Continue reading “How to Apply for an Australian Business Number (ABN)” →