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Does my business need to register for GST?

This is one of the multitude of questions you need to consider and answer when starting up and registering a new small business.  Knowing your obligations and ensuring that you are compliant can be daunting so below is a brief overview.

Disclaimer: below is only meant for general information.  Please feel free to contact us for advice and guidance on your specific circumstances.

 

What is GST?

GST stands for ‘goods and services tax’, which simply put is a 10% tax on most goods and services sold in Australia.

There are a few goods and services deemed by the ATO to be ‘GST free’.  A comprehensive list can be found on the ATO website.

 

Do I need to register and when?

There are 2 circumstances where you are required to register for GST:

  • Threshold: > $75,000 turnover/gross income

You must register for GST if your turnover or gross income in a tax year exceeds $75,000.  You need to register within 21 days of reaching the threshold.  Once registered, you must include the GST portion on all your sales invoices.

  • Rideshare & Taxi Drivers

Any drivers that provide travel for passengers, for example taxi, uber, ola, didi must register for GST regardless of their turnover/gross income.

If you do not meet the above criteria, you can still voluntarily register for GST.  There are several circumstances where this can be beneficial for your business.

If you don’t register for GST and are required to then you may still have to pay the GST portion on any income earned from the date you were required to registered.  This will apply whether or not you included GST in your prices or not.  The ATO may also impose other penalties or interest.

 

Accounting for GST

Once you are registered, you must start to charge your customers the 10% GST.  Things to keep mind when doing this:

  • Label your invoice “Tax Invoice”
  • ABN and your details
  • Brief description of the items sold/service provided
  • Include the GST as a separate line or note that the final figure “includes GST”

You can also claim GST credits for any GST paid by you to other GST registered businesses.  Not all purchases/expenses will have GST so check your receipts and invoices.

ATO Obligations:

You report all GST collected and any GST credits to the ATO via a BAS (Business Activity Statement).  This is prepared and lodged monthly, quarterly, or annually.  The frequency of your BAS returns is determined when you initially register for GST.

Your BAS also needs to be lodged in time to avoid any penalties.

Please feel free to get in touch with us if we can help you with determining if you need to register, walk you through the process, help you in recording the GST on all sales and expenses and prepare/lodge your BAS returns.

Heena Kalyan (Senior Bookkeeper)

AveSol Accounting Tax

www.avesoltax.com.au

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Which bookkeeping software is right for you?

We live in a highly digitised world with ever changing technology.  The way you keep track of your accounts has also changed dramatically over the years.  Therefore, it has become very important to equip ourselves with the right technology that not only assists with compliance but also helps analyse our business data. It is a long-term investment that can support the growth of your business.

So, how to decide which bookkeeping software is right for me and my business? Come step into the world of digital accounting software and let me show you.

  • Purpose – the main factor in deciding the best bookkeeping software is understanding the purpose of having one. Apart from doing the mundane tasks of recording sales and expenses, what else do you need? Do you need to track inventory, analyse different cost centres, payroll management/timesheets or a comprehensive reporting tool?  Do you want only one software that efficiently keeps all your information in one database? Once you understand what you want the software to do for you, it would be easy to decide what features you need.

 

  • Cost – let’s be honest, as a small business owner we are always trying to minimise cost when starting out. However, the cost shouldn’t be the only deciding factor when choosing the right bookkeeping software. There are a lot of bookkeeping software in the market like MYOB, Xero and Quick books that can be catered according to your needs for example you can start with a basic system and then upgrade or add on features as your business grows. The critical thing to understand here is that your costs need to outweigh the benefits you receive and have room to expand on your software as and when your business grows.

 

  • User friendly/features– well in my opinion if you cannot use it properly then you lose the whole purpose of owning it. A bookkeeping software should have an easy-to-use functionality and have an interface that is easy to flow from one function to another. For example, most bookkeeping software have inbuilt bank feeds where all your bank statements are automatically transferred into your software saving you time, paper and reducing potential errors. Some software like XERO enables you add on products that integrates with third party software such as Stripe. Therefore, it is important to test drive and get the feel for it before committing to purchase. Most software provides free 30-day trial option so keep an eye out.

 

  • Mobility of software– do you want a cloud base software that you can access it from anywhere and anytime? Do you want the software to travel with you in your pocket and you can see real time data on the go? Are you a person, who wants the function to close the sale and prepare an invoice on the spot while standing in front of the customer via your phone? Do you want to capture all your expense receipts on the go with your phone and upload it automatically into the software before you forget it or lose it? Think of how you would like to use the software and what features would make your life easier.

 

  • Compliance – The ATO consistently puts pressure on businesses to have compliant software. In the unlikely case of an audit, your accounting software can attach an electronic copy of all invoices/receipts/supporting documents to the relevant transaction eliminating the need for any hardcopy folders and making it very easy for anyone, internal or external to the business, to review and audit. Your software also needs to be compliant for BAS, STP and Superannuation.  Some accountants are also very particular which software they would work with and sometimes they prefer the clients to use a software that integrates with they own tax software. So, it is a good idea to involve your accountant in the decision making.

 

So, choosing the right bookkeeping system is very crucial for a successful business, as your data, is your business’s success.

Avenue Accountants is partnered with all major bookkeeping software currently on the market and can assist you with the right choice of software by consulting with you on your current needs and future expected growth of your business.  We are also able to provide training and on-going support.

 

Time and money spent wisely will provide results.

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Federal Budget – Reset and Restart the economy

The Federal Budget delivered on 6th of Oct will support many small to medium business to survive and regrow Post COVID. There were significant tax incentives announced by the Treasurer to support the businesses and put Australia back to recovery. Some of the key incentives that affect SME are:

Tax relief for individuals

The government is bringing forward stage two of its personal income tax plan by two years. From 1 July 2020:

  • the low-income tax offset will increase from $445 to $700;
  • the top threshold of the 19 per cent tax bracket will increase from $37,000 to $45,000; and
  • the top threshold of the 32.5 per cent tax bracket will increase from $90,000 to $120,000

Loss carry-back for businesses

  • The government is allowing companies with turnover up to $5 billion to offset losses against previous profits on which tax has been paid, to generate a refund.
  • Losses incurred up to 2021‑22 can be carried back against profits made in or after 2018‑19. Eligible companies may elect to receive a tax refund when they lodge their 2020‑21 and 2021‑22 tax returns.
  • Normally, businesses would have to return to profit before they can use their losses, however, these measures will enable companies to bring and utilise losses instead of waiting for a profit.
  • This measure is estimated to deliver $4.9 billion in tax relief to businesses over the forward estimates, and $3.9 billion over the medium term.

Full Asset write off (no more threshold)

  • To support new investment and increase business cash flow, any assets purchased from 6th of October 2020 until 20 June 2022, businesses with turnover up to $5 billion will be able to deduct the full cost of eligible depreciable assets of any value in the year they are installed. The cost of improvements to existing eligible depreciable assets made during this period can also be fully deducted.
  • This is the biggest measure for small and big businesses to now write off asset instead of depreciating over the years.

Jobmaker Hiring Credit

  • The government’s new Jobmaker Hiring Credit is expected to help accelerate growth in employment during the recovery by giving businesses incentives to take on additional employees that are young job seekers aged 16 to 35 years old.
  • Under this measure, businesses will receive the Jobmaker hiring credit of $200 per week for every worker aged up to 30 and $100 a week if they hire an eligible young person aged 30 to 35 years, payable for the next 12 months for new hires who work at least 20 hours per week.
  • The Jobmaker Hiring Credit is estimated to support around 450,000 positions for young people and cost $4 billion from 2020-21 to 2022‑23.
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First Australian Recession in three decades set to be confirmed.

JobKeeper 2.0 Extended till March 2021 to support the economy.

Recently announced, the government is extending the Jobkeeper grant till March 2021 to support targeted businesses adversely affected by the COVID.

 

Jobkeeper 28th of September 2020 to 3rd of January 2021

From 28 September 2020, businesses and not-for-profits seeking to claim the Jobkeeper Payment will be required to demonstrate that they have suffered an ongoing significant decline in turnover using actual GST turnover (rather than projected GST turnover).

 

From 28 September 2020, businesses and not-for-profits will be required to reassess their eligibility with reference to their actual GST turnover in the September quarter 2020. They will need to demonstrate that they have met the relevant decline in turnover test in September quarter to be eligible for the Jobkeeper Payment from 28 September 2020 to 3 January 2021.

The Jobkeeper rates for this period are reduced to $1200 per fortnight for full time employees and $750 per fortnight for part time employees.

 

Jobkeeper 4th of January 2021 to 28th March 2021

From 4 January 2021, businesses and not-for-profits will need to further reassess their turnover to be eligible for the Jobkeeper Payment. They will need to demonstrate that they have met the relevant decline in turnover test with reference to their actual GST turnover in December quarter 2020 to remain eligible for the Jobkeeper Payment from 4 January 2021 to 28 March 2021.

The Jobkeeper rates for this period have been further reduced to $1000 per fortnight for full time employees and $650 per fortnight for part time employees.

 

Definition of Full time and Part time employees

To determine which employees are eligible for the different rates, the basic rule applied by ATO is:

  • Fulltime- Four weeks of pay periods prior to 1 March 2020 worked on average more than 20 hours / week. Active Business participant in the month of February 2020 worked more than 20 hours / week
  • Partime – Four weeks of pay periods prior to 1 March 2020 worked on average less than 20 hours/week. Active Business participant in the month of February 2020 worked less than 20 hours / week.

 

 

Eligibility tests to be passed:

Eligibility Tests

PeriodActual GST turnover decline (15%/30%/50%)
28 September 2020 to January 2021September 2020 quarter (July, August and September 2020) (Compared to 2019)
4 January 2021 – 28 March 2021• December 2020 quarter (October, November and December 2020) (Compared to 2019)

Amount

The amount of the JOBKEEPER payment from the two tiers are:

PeriodFull Time*Part Time
28 September 2020 to 3 January 2021$1,200$750
4 January 2021 – 28 March 2021$1,000$650
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Small Business Advisor Finalists

Finalists in top finance industry awards

MEDIA RELEASE:

Melbourne entrepreneur Arpana Patel named as finalist for Small Business Advisor of the year 2020

Melbourne business woman and overnight entrepreneur Arpana Patel of Avenue Accounting Services, has been named a finalist in the Small Business Advisor category of the AMP Women in Finance Awards, announced on August 3rd. The Awards are dedicated to recognising the outstanding women shaping and influencing the financial services industry.

“This really is a huge honour for me, as I never expected to be recognised for an award like this,” explains Ms Patel. “My choice to become an entrepreneur and start my own Accounting and Taxation business was really made for me and it happened overnight.  My marriage had ended and with two young children to care for, I had to act fast. I had to shift my mindset and take a leap of faith and start my own business.”

Arpana wants to help lead change and be an example to others who may be facing similar challenges in their lives, she faced some individual challenges including having to care for her child with special needs whilst establishing and managing her business.

“There are a lot of barriers and stereotypes that women experience. I want to help change that. I want to show others who may be facing adversity that you can turn things around, you can create new possibilities and achieve great things if you set your mind to it.”

Although Australia has made significant strides towards equality, women still continue to experience inequality in many aspects of their lives.  Women and mothers who experienced hardship due to marriage breakdown, job loss or health issues are often at a higher risk of financial insecurity and more likely to experience financial distress.  When asked about the importance of financial security, Ms Patel explains that her services help to ensure small business owners can improve their financial literacy and achieve their financial goals.

“Great client service, transparent pricing and tailoring a solution to the unique needs of our small business clients are some of the reasons our business has grown since it was established in 2014,” says Ms Patel. In recent times with the rise of the global pandemic Avenue Accounting Services have continued prosper despite a difficult business environment.

AMP Women in Finance Award Winners will be announced via a live broadcast on Thursday 10th of September 2020 at 6pm.

For more about the AMP Women in Finance Awards, visit: https://www.womeninfinanceawards.com.au/

 

Media Enquiries:  Please contact Small Chilli Marketing

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We have been awarded the ATO lodgement certificate for 3 years in a row.

As a registered tax agent, AveSol Accounting plays an important role in helping taxpayers
meet their tax and superannuation lodgment obligations. To help us manage this workload,
ATO provides a lodgement program that accommodates progressive document lodgment over
a 12-month period.

The lodgment program framework promotes a level playing field among registered agents by
benchmarking lodgment performance.

The framework recognises agents who:

  • have good practice management
  • lodge electronically
  • are consistently on time.

AveSol Accounting Services is proud to be meeting the 85% on-time lodgment performance benchmark for the last 3 years in a row. We are proud that our firm is maintaining the integrity of our clients and actively engaging them with the tax system through education, advice, and assistance.

AveSol accounting services is determined in future to maintain the same level of achievement and assist small businesses in meeting their tax and super obligations.

View Our certificate here

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