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Supporting YOUR Children’s Education

Australian Scholarship Group

It is every parents dream, no matter big or small, to be able to give their child the best chance at life, and the best education.

But kids are EXPENSIVE! They eat food like it’s going out of fashion, they include themselves in every extra curricular activity possible (as if their fear of missing out is too much for them), they grow and they grow fast. As a parent, you’re always buying them the latest toy, the latest gadget, the latest fashion item, but who pays their school fees? You. So what happens if you want to give your child not only the latest gadgets, but the best and most rewarding education as you can, which teaches them to grow and be the newest and most pivotal member of the community? You do it, no matter what.

However, sometimes this just isn’t realistic, not everyone has the money they need for this.

BUT, what if someone told you there was a way?

That it is possible to send your child to that school you’ve always dreamed of sending them to…?That it is possible to give your little human the best gadget, toy, clothing AND the best education as you can…?

Supporting YOUR Children’s Education

The Australian Scholarship Group aims to support our upcoming generations future education by planning ahead, rather than panicking when the time comes. ASG sets up funds for families where by contributions are regularly made directly into the funds by the fund manager. The fund manager works in a way that enables the fund a sustainable and healthy growth economically.

But before choosing ASG, let’s have a closer look at the fine print.

  • Do ASG’s education funds qualify as scholarships plans under Australian Taxation Law. Yes! Does this mean they can achieve favorable tax treatment for educational purposes? Yes!
  • Can you claim a scholarship plan on tax? Yes! Any course expenses charged by the following can be claimed:

– University (Australia or Overseas)
– TAFE College-Registered Training Organisations-       Professional Bodies-Secondary School
– Primary School
– Pre School

  • Along with all of these, could you still claim higher education courses receiving HECS or HELP support from the Australian Government? Yes!
  • Lastly, is there anything else that can be claimed? Of Course! Text books, computers, travel expenses excursions, living away from home and all necessities (calculators, stationery etc)

Once you’ve accessed all of your claims and benefits, fund members also enjoy ongoing support from a range of tools that have been specifically designed to aid the child’s academic, social and emotional development. Even if you don’t need it, parenting information and advice, career planning tools and family planning advice is accessible.

Through ASG, you will gain access to the ‘cost of education calculator’. The calculator aids with costing of education nationally, or more specifically personalized to the state you are living in. The calculator processes all stages of education, beginning from primary, moving all the way through to secondary and university. By selecting the number of children to be calculated, the calculator will then provide a savings guide tailored to that individuals needs.

So now what? It’s time to choose your super fund! Some things to consider before choosing are:

  • What kind of education are you saving for?
  • How disciplined are you with saving?
  • What is your current overall financial situation?

Once you know the answer, you can choose to open one of the following funds:

  • Pathway Education Fund
  • Life Long Education Fund
  • Tertiary Saver Fund
  • Private Saver Fund
  • Extra Saver Fund

We all plan to save for retirement, accidents, houses, holidays. Education shouldn’t be excluded. With the key features of a $0 application fee, interest free funds, your freedom of choice in choosing your payment and controlling your own savings, there really is no way ASG could go wrong. ASG is a fantastic way to set up a prosperous and strong educational future for your children.

Learn the ‘basics’ and be your own SUPER hero

Superannuation, better known as the small amount of funds that are put into an account to support financial needs for retirement, can be confusing for many, but for the every day person, they often don’t even know what a super fund is!

The super fund, the advertisement that is sold to you in many forms, radio, Tv, mail, should be one of the most simple things to understand, yet it isn’t. There are many super funds to choose from, regardless, the super fundis a separate and most of the time, un accessible account that has regular contributions made to it by both the employer and sometimes individual, to set them up for retirement age.

The SG (Superannuation Guarantee is at a rate of 9.5%. This is the minimum amount that employers are obliged to contribute to their employees complying super fund, or a retirement saving account.

Who doesn’t love being paid on time though?

The due dates for the Superannuation Guarantee payments are as follows:

Quarter Period Payment Due Date
1 1st July – 30th September 28th October
2 1st October – 31st December 28th January
3 1st January – 31st March 28th April
4 1st April –30th June 28th July

Clearly, the due date for super to be paid is the 28th of the following month, after each quarter. However, we all love our holidays, and no one wants to be working on their vacation. Super is much the same. So, if the due date falls on a weekend or a public holiday, payment can be made on the next working day.

Much like everyone else again, super can not be considered paid until it reaches the super fund account. If you loaned some money out to your friend over the weekend, and he said he had paid you back, I am sure you wouldn’t consider your debt paid in full until you visibly see that money in the bank account. Superannuation is not valid when the money is sent under any circumstances, but when it is received and accepted by the appointed super fund.

The only difference is when employers are using the Small Business Superannuation Cleaning House. This payment will be counted as paid when it is received by SBSCH by the quarterly due date, and successfully distributed to relevant superfunds afterwards.

TIME TO GET DOWN TO THE KNITTY GRITTY

For super reconciliation purposes, we need to know super contribution break downs:

  • Which contribution was made for which employee(s) and which period(s) were paid.
  • Precis clients: need to breakdown the monthly totals from the cruncher report before checking it with the client.

In order to assist with the dreaded tax everyone has to pay, contributions can be made!

1. SG liabilities must be paid by June 2019 quarter before the 30/06/2019. This will bring the tax deduction to FY2018 if it is paid on time. However, if it is paid after the 01/07/2019, It is still deductible, but it will be in FY2020.

EXTRA SUPER –everyone loves a bit of extra cash, so why not secure some for your retirement?

2. Extra Super? Why wouldn’t you! Extra super is any contribution made to the super account that is above the 9.5% Superannuation Guarantee that each employer is liable to pay. If there is any contribution made above the SG, it must be included in a PAYG summary.

3. From the 01/07/17, anyone can make tax deductible personal contribution, whereas this was previously only available to people that earn less than 10% of their income from their employment. However, a tax deduction for personal contributions is only allowable if the individual has given valid notice to the trustee of the super fund claiming a tax deduction for all or part of the contribution made, and acknowledging that the notice was provided to the trustee.

4. After tax contribution is considered the non-concessional contribution that is made into the super fund from your income after tax. These are then not taxed in the super fund.

How SUPER! The idea of super contributions is set in stone now, so how much can actually be contributed?

  1. Concessional (before tax) Cap

The concessional contributions are the funds that are fed into your super account that the contributor claimed a tax deduction for. These contributions include:

  • Compulsory employer contributions
  • Additional concessional contributions the employer makes
  • Salary sacrifice payments to the super fund
  • Contributions allowed as income tax deduction.

Once these funds are in the super account, they are taxed 15%. A concessional cap is

Financial Year Age Concessional Cap
2018/2019 Any Age $25,000
2017 Below 49 $30,000
49 or Older $35,000

Excess concessional contributions will be included as taxable income, taxed at the marginal tax rate plus an excess concessional contributions charge.

2. Non-concessional (after tax) Cap

Non concessional contributions are normally made from an individuals personal bank account. This aims to save better for retirement.

Financial Year Non –concessional Cap Tax on amounts over cap
2018/2019 $100,000 47%
2017 $180,000 47% (plus 2% budget repair levy)

Excess non-concessional contributions will be included as taxable income, taxed at the marginal tax rate plus an excess concessional contributions charge.

So now you know the KNITTY GRITTY of Superannuation Contribution, why not start the thought process of End of Year Tax Planning and set yourself up for a great year ahead. You WON’T regret it.

Paper and Pen are back again.

Paper and Pen are back again.

Marketing – spend money on the Google “work bidding war”. Complete a number of dollar boosts with Facebook. Get buried in Instagram and Twitter.

All of these seem to me to be dark arts.

There isn’t a day that goes by where a young person who has finished their social media course wants to be “my friend” on LinkedIn and they can take care of all my needs, increase “my reach” and probably cure some disease at the same time.

I spent a lot of money with these experts going nowhere.

There is just so many messages on social media (though I have kept my Facebook to a minimum as I put Ulan Bator as my place of birth). Aren’t we all tired of being stalked when an ad follows us around?

This doesn’t mean that we don’t have a decent website. This doesn’t mean we don’t have Facebook. Lots of our business inquiries come through our website, and we leave the website to be a form of information for a prospect to get to know a bit about us.

That works, and works better since we moved away from landing pages trying to grab someone on one issue. We found giving our prospects a better chance to get to know us worked more efficiently.

We also occasionally use a boost on Facebook. Having spent a lot of money creating likes etc. Facebook wants to charge me to talk to those I paid to reach in the first place. I guess the radio station isn’t going to give me free ads because I have already reached their audience.

But I have found that writing to prospects to be an incredibly powerful tool.

Over the last few years we have been developing an accounting program, and its uniqueness means that we can approach new markets.

One market involves a set number – the 673 insolvency practitioners. We were able to obtain a list from ASIC and while we emailed our message to them, we have really begun to get traction since we created a brochure and started to write and send other mail to this group.

We’ve always been keen to write to people, and where possible hand write the envelope. If you put a bit of thought into how the envelope looks, a message on the outside that is put there with a hand stamp, then you create curiosity and there is a good chance it could be opened.

Compare this with how many emails you may delete in day. How many Facebook ads you flick by.

So in our campaign we have written twice to this group. The second time we had a lovely brochure that had a message that directly talked to a problem we could solve. We cannot be happier with the business that has begun.

Our efforts will be followed by an invitation to trial our system for free (nothing like a test drive). Then after that we will send this group a highlighter and a pencil – which are things they still need if they aren’t using our new Fintech product.

Like all marketing – the “Pen and Ink” plan needs a plan, and it needs to be well implemented.

  1. Choose who you want to talk to
  2. Get their mail address and make sure you are sending it to the right person
  3. Plan for the envelop to be something that isn’t typical and could be passed to who you want to speak to and not considered just junk.
  4. If you are creating a brochure, make it relevant and easy to read in 3 minutes – be careful of using pictures that are a cliché.
  5. Plan a letter the takes about 90 seconds to read, or if longer, have the message and benefit of what you are offering in the readers head, so that they will read on.
  6. Have an invitation where possible.
  7. Plan about 5 to 7 mail outs with a different presentation and story as you go. Our experience in radio is that it works if you never stop advertising.
  8. Make everything you do something that represents your business and you. Do it all with pride.

There is a lot of work to get this going, so make time. You may discover some of those old fashion advertising methods still work.

https://yourbusinessangels.com.au/paper-and-pen-are-back-again/

Income tax sucks and doesn’t work anymore.

Income tax sucks and doesn’t work anymore.

There is a 21st century problem that cannot be solved by a 19thand 20thcentury process. Income tax for companies and individuals have served us well, but no longer represent a fair way for businesses and individuals working in Australia to pay tax.

Well it works fine for multinationals. Here is an example:

Netflix –know them, well we are being ripped off by this multinational and nothing is getting done about it.

From the Australian Financial Review
Netflix is making hundreds of millions of dollars from Australian Consumers but the revenue is booked by a Netherlands Basedcompany, this raises questions about how multinational corporations classify revenue locally and highlights the tax challenges of the global digital economy. Netflix customers and not billed by a local entity but are instead paying Netflix International BV, a subsidiary of the US-Listed Netflix Inc, based in Amsterdam.

It’s quite common for a parent company multinational to lend the Australian subsidiary “on the books” a large amount of money, and extract any income that could have been taxed in interest.

We have worked with struggling Australian Businesses for 25 years. By far the majority of SME’s in Australia want to do the right thing in paying taxes (different from that fact we all think we pay far too much for what we get) and have a gigantic stupid piece of legislation. The guide to the Australian Tax Act is over 3,000 pages, hell that’s just the index.

Yet, these greedy multinationals, that can be called to task if they fall behind in tax, (and I guess quite rightly so), have gone too far.

Income tax can be beaten every time –or they extract the money from Australia like Netflix.

There are a number of finance writers and commentators that are now talking about financial transaction taxes. If money moves, our tax law would skin a percentage off the top. Rates could vary for those multinationals who have subsidiaries here and trade here (not much of a scrape) to massive scrapes when the funds are directly taken out of Australia without any trade or representation in Australia.

It’s time to start making real noises about this. We’ve never written a blog that would be considered political, but it’s now time to start talking about this regularly.

My clients are paying taxes, and often struggle to do so, but they get there. I pay taxes, so I want the multinationals to pay tax as well.

https://yourbusinessangels.com.au/income-tax-sucks-and-doesnt-work-anymore/

"Howls of protest sometimes only work once."

“Howls of protest sometimes only work once.”

It’s back!

It’s back on the table. The Federal Government is introducing a rule designed to encourage the repayment of tax debt. Introduced in parliament by Minister for Housing and Assistant Treasurer, Michael Sukkar, the debt that a business has with the ATO could be disclosed to credit reporting agencies.

When this was first suggested before the election there where howls of protest, but this time around, and after a convincing election, assume it will go through.

This is for debt of over $100k and due in90 days, and quite frankly when this is your debt you do have a few problems, especially if you are planning to pay the debt from the profit of the business. Staying compliant with BAS etc. by lodging and paying on time will be a challenge.

The new rules allow that when a business is effectively engaged with the tax office, and where taking action in accordance with the law, it would not form part of the threshold in these proposed new rules. We’ve seen instances in the construction industry where a compliant business struggles against a non-compliant business when competing for work.

We’ve seen companies with considerable debt (well over $500k), not be chased by the ATO and wonder sometimes, what is the logic of the ATO in collection of debt?

While this new rule may be a concern to struggling businesses, perhaps it will also begin the journey to a level playing field where businesses not paying their tax no longer have a commercial advantage.

Somethings to think about…

  1. While you may have a tax debt, (and there seems to be nothing but a stream of different coloured, computer generated letters from the Australian Taxation Office), they will eventually become robust and will soon have the options of destroying your credit in the process. You need to make a plan and make changes in your business to deal with the debt.
  2. The best way to manage tax debt is to pay it as you bank money, or every week, on a percentage that can cover GST and payroll.

If you really want to start the journey–contact us.

For Fresh Numbers clients –please give your client co-ordinator a call and make a plan.

For YBA website and Facebookprospects–please give Your Business Angels a call on ph.1300 982559 and let’s put a plan together.

Finance and the colour of your underpants

Finance and the colour of your underpants

In a post Royal Commission world, lenders are now asking about all your costs and are crossing into areas of health as well as anything you may spend your money on.

The Australian Financial Review reported on Monday 12th August, that the broker Tom Caesar was asked why a client was spending money($120)at radiology. Clearly lenders are “struggling” to come to grips with what is responsible lending in a post Royal Commission world.

The radiology cost was because the potential borrower, a mother, had had her son’s broken arm x-rayed. What if the lender was asking about something that was truly personal in relation to health or anything else?

What is also happening is that we are all reading the writing on the wall, (well not on the wall but we have a keen sense that something is not right in our economy) where house prices are falling and retail spending is going down and lenders are now thinking that they need to be more secure in a changing economy.

Finance and the colour of your underpants

So it’s time to get a few new habits.

  1. Draw your budget out in cash each week and stay on budget. Draw the same amount each week and declare income and expenses on the forms from any lender.
  2. Be able to prove your income and outgoings. In the case of a business, make sure your accounts are up to date in a way that a lender would believe you. (If your accounts are propped up by debtors and other accrual transactions, then you will start to have difficulties.)
  3. “And”, the big “AND”…Do you really need to buy what you are looking at? In business there should never be a question of want. It’s always a need to run the business and make a profit. In your personal life you can have desires and needs that can be planned for.

Also, when you apply for a loan, be prepared to have the lender dig deep. Who knows, you could be asked for the colour of your underpants.

https://yourbusinessangels.com.au/finance-and-the-colour-of-your-underpants/

The Australian Tax Office and the Art of Cooking Fish

The Australian Tax Office and the Art of Cooking Fish

Or may be the title should read “The ATO is chasing and cooking the bigger fish and will get to the smaller ones from time to time, or eventually.”

We know the term “bigger fish to fry”. In the case of the resource poor ATO, it’s about focusing on major tax fraud, and making sure that those overseas companies that don’t want to make any contribution are chased. Large corporations can employ lawyers and barristers by the truck load and can afford to stand outside court and tear up bundles of money –because more likely, they aren’t paying much tax.

So the good folk at the ATO have a lot on their plate –which could be the reason why they are slow at chasing smaller businesses that are a sole trader with an ABN to even small businesses that employ people.
So you could, if you are a few years behind in your lodgements of BAS and returns and haven’t been chased lately, think “they are not coming for me” but…and here is the big BUT, they will get there even if in the end they chase your estate. And when they do, you could get cooked or should I say fried.

We were asked by a taxi driver to clear up his 19 years of tax returns. The end result was that as well as having an $800k tax debt, he also had $1.3 million in fines. No matter how humble your business, the debt will mount, and if they are in a mood, remittance is hard.

Usually the years we clean-up for clients is less and we are able to negotiate quite well if we have a plan. Being sensible and being clear on how our clients will pay can go a long way when we negotiate.

The Australian Tax Office can start with a phone call or a letter. Then they have a lot of options to come after you. We can pick it up from there, keep communication lines open and complete lodgement with a plan. All before the tax man turns the fryers on –so to speak.

If you know you are behind, are wondering what to do, are worried when the ATO will call, or the ATO have started to rattle the chains, or it is starting to smell like Friday Night Fish and Chips… give us a call on 1300 982559, or go to our website and make an inquiry. We are here to help you through this.

https://yourbusinessangels.com.au/the-australian-tax-office-and-the-art-of-cooking-fish/