The new Australian Financial Complaints Authority (AFCA) will make it easier for individuals and small businesses to make complaints about their superannuation financial firms.
The Coalition government has responded to criticisms of previous dispute resolution bodies by creating a new financial disputes framework. AFCA has been described as a “one-stop shop” that will improve outcomes for consumers and increase the efficiency of the dispute resolution process.
AFCA’s jurisdiction AFCA has been given authority over a range of complaint areas including:
Superannuation annuities
Corporate, industry and retail super funds
SMSFs (handled under investments and advice jurisdiction)
Approved deposit funds
Small funds
Retirement savings accounts
Trustees, insurers and decision makers of relevant super bodies
What you can make complaints about Your super complaint to AFCA must adhere to its governing rules. AFCA has specific time limits for complaints but no monetary limits.
You can make complaints about:
The advice you were given about a superannuation product
Fees or costs that were incorrectly charged or calculated
Information you weren’t given about the product including fees or costs
Errors in the information provided to you; for example, if your benefit statements are incorrect
Unwanted attention and penalties from the ATO can jeopardise your small business.
Protect your business by avoiding these common small business tax errors.
Not using an accountant Tax laws frequently change, and compliance requirements can be time-consuming and demanding. A registered tax agent will streamline your financial processes, provide advice on maximising your finances and keep you compliant.
Inaccurate tax returns Small businesses that do not declare their income and deductions accurately will attract the ATO’s attention and financial penalties. All foreign income, capital gains tax, business sales and bank interest must be declared. You must also have legitimate evidence supporting your tax deduction claims.
Poor record keeping Businesses that fail to keep accurate records will struggle to remain compliant. It is vital to keep:
Cash, online, EFTPOS, bank statements, credit and debit card transactions
Records showing when you use business purchases for private purposes to provide evidence for tax deduction claims
Incorrect superannuation payments The ATO will sanction employers that fail to pay their employees’ superannuation correctly and on time. Make your mandatory quarterly payments are paid at the correct rate of 9.5 per cent of your employee’s pay. The cash-flow benefits of delaying super payments and missing deadlines are not worth the financial and criminal punishments incurred by frequent breaches.
Small businesses should not feel intimidated by their corporate competitors as they have many unique advantages that can help them gain a sizeable market share.
Small business owners should focus on specific areas, so they can go head-to-head with large companies with more resources.
Customer service Small businesses have the opportunity to build a stronger relationship with their customers through the delivery of friendly and personal customer service. Businesses that provide superior customer service to their corporate competitors will build a loyal customer base and grow their business through word of mouth.
Tap into niche markets Small business owners are directly involved with their customers, which means they have a greater insight into what their customer base values. Take advantage of this by innovating more quickly than corporations, whose decision-making processes are slower. You may provide a service that corporations cannot feasibly implement.
Build a strong staff The expansive corporate chain of command is far more likely to have a weak link than a small business. Small businesses have greater quality control over the selection of their staff and the standards and expectations of performance. Build a competent team that outperforms your corporate competitors.
Employers must make superannuation contributions on behalf of their employees. SuperStream is the ATO’s electronic and standardised solution that streamlines the super payment process.
Using SuperStream for employers means:
You can use one online channel to pay multiple funds
Less room for error during data entry, due to fewer steps
Transactions reach funds faster
Obligations You must make contributions to a super fund through a SuperStream solution unless you are eligible for the following exemptions:
Personal contributions if you are self-employed or a sole trader and make after-tax contributions to a super fund for yourself
Contributions to your SMSF where you’re a related party employer. For example, if you are an employee of your family business and your super guarantee contributions go to your SMSF.
Step-by-step guide Once you have decided that SuperStream is right for you, the following steps will help you stay compliant:
Choose an option: you can choose from a payroll system, your super fund’s online system, a super clearing house and a messaging portal
Collect information and update your records: refer to the ATO for an exhaustive list of the information you will need from your employees
Pay the SuperStream way: pay as soon as possible so you can get used to the system
The ATO has introduced the Business Portal to allow small business owners to manage their tax affairs online at their convenience.
Connect your ABN to your myGov account or a compatible AUSkey so you can access the business portal. The portal is accessible 24 hours a day, seven days a week.
The portal can be used for the following services:
Registering for GST or PAYG withholding
Lodging, revising or viewing activity statements
Requesting refunds or transfers between accounts
Updating your business details
Tracking the progress of refunds or transfer requests
Communicating with us through a secure mailbox
Refer to the ATO for direct links that will step you through how to use these services successfully. If you still have trouble with technology it may be worth consulting a registered tax agent to help you fulfil the ATO’s compliance requirements.
Credit cards are useful financial tools that can help you manage cash flow but can run you into debt if you are not careful. Before you swipe your first credit card consider the following do’s and don’ts, so you gain all the advantages without the headache of a tarnished credit rating.
Do’s There are several actions you can take that will help you manage your credit card. Follow these rules:
Try to repay the whole amount owing by the due date to avoid interest mounting up
Switch up your payment methods with debit cards to keep your credit owing manageable
Be selective about the credit card you apply for
Arrange your money so you can reap credit card benefits like frequent flyer points by paying on your credit card and then transfer the money across to your credit account
Don’ts Credit cards can accumulate debt with ramifications for your credit score and loan applications down the track. Avoid these standard blunders, so you do not end up regretting your credit card:
Do not pay the minimum repayment amount as you will incur interest which can become unmanageable if it compounds weekly or even daily
Do not have multiple credit cards if you are new to credit as managing accounts and deadline dates can be difficult
Small business owners are constantly under stress and pressure, which is why it is important they look after their mental health.
The following tips will help you manage your mental health as a small business owner.
Have a reliable support network Friends and family are vital to anyone’s functioning; however the unique challenges small business owners face means they may benefit from connecting with like-minded thinkers. Consider joining a small business owners groups on Facebook or LinkedIn. These networks are helpful as the members can relate to your problems on a deeper level. Both business groups and your nearest and dearest can provide a sympathetic ear, realistic solutions to your problems and tell you to get help.
Allocate personal time When you are running a small business, it can feel like your life is consumed by it. An unhealthy work-life balance will harm your mental health and productivity. Schedule time off from work. Taking up a hobby or joining a sports team may be a great way to have structured breaks from your business.
Know the warning signs Knowledge is key to prevention. Get educated on mental health and know the warning signs and symptoms. If you catch your problem early, you can avoid jeopardising your health and your business by taking a hiatus, relinquishing some responsibility or seeking help.
The ATO has issued a warning to the public regarding illegal early release of super schemes, which are subject to severe penalties.
There are strict rules around when you can access your super so your current decisions do not jeopardise your quality of life in retirement. The ATO has reminded the public you may only access your super early if you have experienced severe financial hardship or you have reached the preservation age and have stopped working.
How these schemes work The promoters of these schemes:
Encourage you to transfer or rollover your super from your existing super fund to an SMSF to access your super before you are legally entitled to
Target people under financial pressure or those who do not understand super laws
Claim you can access your super and put the money towards anything you want which is not true
Charge high fees and commissions, presenting the risk of losing some or all of your super to them
May request your identification documents which can result in identity theft
Penalties: Penalties apply to promoters and individuals who illegally access their super early. If you illegally obtain your super early, it is included in your assessable income even if you return the super to the fund later. If you are an SMSF trustee, you may be fined up to $420,000 and liable for jail terms of up to five years. Civil and criminal penalties apply to promoters.
The ATO has enforced strict guidelines on tax deductions for rental property owner’s travel expenses.
As a rental property owner you are not able to claim deductions for travel expenses relating to inspecting, maintaining or collecting rent. If you have already claimed a tax deduction for the cost of travel to and from your property in your 2018 return, you will need to request an amendment. The law change came into effect on 1 July 2017 and affects tax returns from 2017-18 onwards.
Exclusions You may claim these travel expenses on your tax return if you are carrying on a rental property business or are an excluded entity.
An excluded entity is a:
Corporate tax entity
Superannuation plan that is not an SMSF
Public unit trust
Managed investment trust
A unit trust or a partnership, all of the members of which are entities of a type listed above
Business owners thinking about specialising their products and services to target a niche market should know the benefits and risks of this business strategy. Niche marketing is the business strategy of targeting a specific subset of a market.
Here are some benefits and problems of niche marketing that will help you build a business strategy right for you.
Benefits Niche marketing can provide the following benefits:
Less competition as the base of interested customers is narrowed
Increase brand loyalty as you are providing goods or services difficult to find and customers are more likely to return to invest
Gain a higher profile among the interested customer base as the target market and competition is small, more people are likely to know your business name
Problems However, niche marketing has its pitfalls you should know before you specialise:
The smaller market makes growth difficult as there is not a large customer demand
You increase the risk of your business failing if there is a disruption to your niche market, for example, if a larger company joins the competition or the good or service you provide becomes obsolete due to innovation
Winduss & Associates is an accounting firm which is fast becoming a leader in the Osborne Park area through outstanding service to our clients, both business and individuals alike.
Winduss & Associates offers a range of accounting services and bookkeeping services, including business advice, taxation and MYOB consulting. In addition, Winduss & Associates also works with clients in relation to the establishment and management of their self managed super funds.
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Winduss & Associates was founded in 2001 by Alan Winduss. Since establishment the firm has enjoyed significant growth and success due to its ability to retain clients and deliver consistently superior services. Winduss & Associates clients are located throughout Australia and Asia, preferring to stay with the firm when they relocate.
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