EOFY and NFY tips

EOFY and NFY tips

Some key changes to take note of as we head into the new financial year

  • the $450 monthly income threshold for employers to be eligible to receive super will be removed as of 1st July.
  • superannuation guarantee rate (the minimum percentage an employer needs to pay into their employee super fund) is increasing from 10% to 10.5%.​

Some things to consider

  • Have your costs increased over the last 6- 12 months? I can say with certainty the answer will be a very loud and clear YES. Have you adjusted your pricing to reflect these cost increases? If the answer is no this is the perfect time to review your pricing and advise your customers/clients your new prices will be effective as of the 1st of July.
  • If you are looking to reduce your tax bill check that you have claimed everything you can. Check for any personal spending that you haven’t been reimbursed for.
  • Things to claim
    • motor vehicle expenses.
    • home-based business.
    • business travel expenses.
    • workers' salaries, wages, and super contributions.
    • repairs, maintenance, and replacement expenses.
    • other operating expenses, don’t forget things like Zoom, Canva, Calendar/Booking subscriptions, business books, and training courses.
    • depreciating assets and other capital expenses.

For more info check out the ATO website

  • Recovering Bad debts - before writing off bad debts check with a debt collector to see if there is a possibility of recovering the debt. Financial Rights Legal Centre fact sheets says… In most cases a creditor or a debt collector must recover the debt, or commence court action to recover the debt, within 6 years of: the date on which the debt first arose or. the date you last made a payment or. the date you acknowledged the debt in writing. Connect with one of our trusted experts Jeanine Purdie at Repaid Collections to see where you stand with recovering your outstanding debts
  • Make sure you have invoiced all work completed to date
  • If you carry stock this is the time to do a stock take and write off any damaged items to start the new financial year with an accurate account of your holdings. To reduce your tax bill, it may be a good time to purchase or update equipment remember to check your cash flow before rushing in and spending big!
  • Update your Worksafe certificate of currency and send it to any of your customers that require it.
  • Ask your accountant for advice on anything you should address before 30th June.

Prepare for the new financial year

  • Reflect on what worked well this year and what could have gone better. Meet with your team and gather the different perspectives making sure you minute what is uncovered and assign actions where needed and who will be responsible.
  • What systems can you put in place now to be even more prepared for the end of the next financial year? Perhaps it's diarising key dates into your google or outlook calendar for paying super, reviewing costs, reviewing licensing requirements, team performance reviews, team member’s work anniversary, and birthdays.
  • Create a budget
  • Update your cash flow spreadsheet considering potential price increases or project delays.
  • Celebrate what you have achieved in the last 12 months the most important thing is to acknowledge your own and the team’s achievements whether it’s a personal showing of gratitude or a team celebration.

A few ideas to show your gratitude…

  • A thank you card with a personal message acknowledging performance or achievement.
  • Acknowledgment in your company newsletter
  • Spotlights on team achievements in your social feeds
  • Shout the team smoko or lunch
  • If you are office-based decorate the desks and scatter chocolates before the team arrives
  • Have a social night playing mini-golf, xgolf, or ten-pin bowling

 


Everything you need to know about PPSR

Everything you need to know about PPSR

The PPSR is a national register of claims to security interests in personal property.  It is vital to know your rights and obligations in relation to PPSR registrations to ensure your interests are registered against personal property you hold interests in, as well as being aware when others can (and can’t) register their interests in your personal property.

  • National Register

PPSR (Personal Property Securities Register) is a national register governed by the Personal Property Securities Act 2009 (Cth) of claims to security interests.

  • Personal Property

Personal property is essentially any property, whether tangible or intangible including intellectual property but excluding land or fixtures to land.  Some examples of personal property include:

    • goods;
    • motor vehicles;
    • industrial machinery or equipment;
    • intellectual property (such as copyright, patents and designs);
    • debts;
    • shares and other financial property.
  • Security Interests

Importantly, a registration on the PPSR itself does not create a security interest.  An interest in personal property provided for by a transaction that, in substance, secures payment or performance of an obligation.

A security interest can only arise when there is agreement between the grantor and the secured party.  Note, this ‘agreement’ can often be found in small print in supply agreements and commercial leases.

Once personal property has a security interest attached to it as a result of this agreement, it is known as collateral and, depending on the agreement, can be taken by the secured party.  For example, machinery may be repossessed by the grantor should payment due dates not be met.

  • Registrations

Registrations of security interests can be lodged on the PPSR website but don’t need to be lodged by the secured party.  An accountant or lawyer can lodge your interest on your behalf.

The lodger must believe on reasonable grounds that the person is or will become a secured party in relation to collateral.  There are significant penalties that apply to false and fraudulent lodgements.

  • Checking the PPSR Register

It is cheap and easy to check the PPSR register for any registrations against assets and is prudent to do so to ensure a third party doesn’t claim to have an interest in an asset you may be looking to purchase.

  • Removal of PPSR Registrations

Should you no longer hold an interest you have an obligation to remove the PPSR registration you previously lodged.  For example, a finance provider needs to remove a PPSR registration over a car once the loan has been repaid and they no longer hold an interest.

More importantly, if you have a PPSR registration registered against you that is no longer valid, it is in your best interests to have it removed.  PPSR registrations against your assets can frustrate, delay or prevent the sale of a business or the sale of individual assets and can potentially impact your access to credit.

There are also administrative and legal avenues (including court proceedings) one can pursue if the other party does not agree to the removal of the registration.

If you would like assistance with the PPSR, registering your interests, or removing other’s registrations of interests from your business’ assets, get in touch for some practical, commercial legal guidance.

Stacey Brennan

Lawyer

Rankin Business Lawyers

 

Phone: 0477 004 437

Email: stacey.brennan@rankinandco.com

LinkedIn: https://bit.ly/3pmwYxf

Website: www.rankinbusinesslawyers.com

Image via: Link Australia Group


How to set up your Director ID

Directors are now required to register for a unique identification number that they will keep for life.

What is a director ID?

A director ID is a 15 digit identification number that, once issued, will remain with that director for life regardless of whether they stop being a director, change companies, change their name, or move overseas.

The introduction of the Director Identification Number (DIN) is part of the Government’s Modernisation of Business Registers (MBR) Program creating greater transparency, and preventing the potential for fraud and phoenix company activity. The MBR will unify the Australian Business Register and 31 ASIC business registers, including the register of companies. In effect, the system will create one source of truth across Government agencies for individuals and entities and will be managed by the Australian Taxation Office (ATO).

For those concerned about their privacy, the director ID will not be searchable by the public and will not be disclosed without the consent of the Director.

Who needs a director ID?

All directors of a company, registered Australian body, registered foreign company or Aboriginal and Torres Strait Islander corporation will need a director ID. This includes directors of a corporate trustee of self-managed super funds (SMSF).

You do not need a director ID if you are running a business as a sole trader or partnership, or you are a director in your job title but have not been appointed as a director under the Corporations Act or Corporations (Aboriginal and Torres Strait Islander) Act (CATSI).

The company secretary or officeholder should keep a register of the IDs of their directors in a secure place - director IDs are governed by the same privacy rules that apply to Tax File Numbers (TFNs) and should not be disclosed unless required.

Timeframes for registration

For Corporation Act directors:

Date you become a director Date you must apply
On or before 31 October 2021 By 30 November 2022
Between 1 November 2021 and 4 April 2022 Within 28 days of appointment
From 5 April 2022 Before appointment

For CATSI directors:

Date you become a director Date you must apply
On or before 31 October 2022 By 30 November 2023
From 1 November 2022 Before appointment

If the company intends to appoint new directors, it will be important to ensure that they are aware of the requirements and timeframes to establish their director ID if they do not already have one.

How to set up a director ID

If you are an Australian resident director, you will need to complete a number of steps and have a number of identification documents available and ready (for non-resident directors see Foreign directors and the director ID system below).

1 - Verify your identify
If you establish your director ID online, and you have not already set up myGovID, you will need to download the app onto your phone or device and create an account.

The myGovID does not create your director ID - the app’s only purpose is to validate your identity, and once validated, issue a code that can be used to identify you on government online services without going through the same verification process.

myGovID uses your phone/device’s camera to scan your forms of ID such as your passport, driver’s license and/ or VISA (check the documentation requirements here), to validate who you say you are. Be careful when you are scanning your documentation as the system does not always read the scan correctly.

2 - Apply for your director ID through Australian Business Registry Services
Once you have set up your myGovID, you need to apply to the Australian Business Registry Services (ABRS) for your director ID. Use the email you used to create your myGovID to start the process.

In addition to your myGovID, you will need to have on hand documentation that matches the information held by the ATO. If you have a myGov account linked to the ATO, you can find the details on your profile. You will need:

  • Your tax file number
  • The residential address held on file by the ATO; and
  • Two documents that verify your identify such as:
    • Your bank account details held by the ATO (on your myGov ATO account, see ‘my profile/financial institution details’).
    • Dividend statement investment reference number
    • Notice of assessment (NOA) – date of issue and the reference number (on your myGov ATO account, see Tax/lodgements/income tax/history).
    • The gross amount from your PAYG payment summary
    • Superannuation details including your super fund’s ABN and your member account number

The final stage requests your personal contact details (not the company’s).

Once complete, your director ID will be issued immediately on screen. This information should be provided to your company secretary or office holder.

If any of your details change, for example a change of residential address or phone number, you will need to update your details through the ABR. You will also need to notify your company within seven days (14 days for CATSI Act directors) and the company will then need to notify the Australian Securities and Investments Commission (ASIC) within 28 days.

Applying by phone or using paper forms
You can choose to verify your identify and apply for your director ID by phone (13 62 50) or on paper. You will need to have your identification documents available. If you are applying using the paper form, your identify documentation will need to be certified by an authorised certifier such as a Barrister, Justice of the Peace etc.

Foreign directors and the director ID system

Foreign directors of Australian companies have the same requirements and deadlines as Australian resident directors, however, the verification process is only accessible in paper form.

One primary and two secondary forms of identification are required to accompany the application that have been certified by a notary publics or by staff at the nearest Australian embassy, high commission or consulate, including consulates headed by Austrade honorary consuls. Primary forms of identification include a birth certificate or passport, and secondary include driver’s licence, foreign government identifier, or national photo identification card.

In the presence of the applicant, the authorised certifier must certify that each copy is a true and correct copy of the original document by sighting the original document, stamping, signing and annotating the copy of the identity document to state, ‘I have sighted the original document and certify this to be a true and correct copy of the original document sighted'. initialling each page listing their name, date of certification, phone number and position.

The form and the accompanying documents will need to be sent by mail to Australian Business Registry Services using the details provided.

Directors in name only

It’s important that anyone agreeing to be a director understands the implications. Being a director is not just a title; it is a responsibility. At a financial level, directors are responsible for ensuring that the company does not trade while insolvent. The by-product of this is that the directors may be held personally liable for the debt incurred. The director penalty regime has also tightened up in recent years to ensure that directors are personally liable for PAYG withholding, net GST, and superannuation guarantee charge liabilities if the company fails to meet its obligations by the due date. For many small businesses, the directors are also often personally responsible for company loans secured against property such as the family home.

Failing to perform your duties as a director is a criminal offence with fines of up to $200,000 and five years in prison.

Ignorance is not a legal defence. Don’t sign anything unless you understand the consequences.