On 24th July, Ian and Shanna will be tackling 5,000 steps around the Gabba as part of Stadium Stomp.
You may be wondering “why would you want to do THAT?!”
Well, on top of the challenge of completing that many stairs, the event is a fundraiser for Mater Little Miracles.
We have set a goal to raise $1,000.00 and need your help with a donation, big or small. Simply click on the link below to view my fundraising page and donate. Remember, donations of $2 or more are tax deductible!
http://stadiumstomp2016gabba.gofundraise.com.au/page/IanWood
Our Shout
When: Thursday 23 June 2016, 5:30pm onwards Where: Tippler’s Tap, 5/182 Grey Street, South Brisbane What: Beer and light finger food will be provided Sponsored by Trilogy Funds, the event will be an opportunity to connect, share and enjoy the boutique brewery experience. Secure your spot by sending an email to info@valuebeyond.com.au to let us know if you would like to join us.
Hiring New Staff? Read This First!
Employee or Contractor – does it matter?
The answer is a resounding YES!
Commonly, business owners will get approached by workers who want to get paid the full amount of their salary as a contractor. They will often say they have an ABN and they will invoice the employer, so they are a contractor.
However, just having an ABN or invoicing a business does not make someone a contractor. It comes down to the terms and conditions of their working arrangement that will determine whether they are an employee or contractor.
Why does it matter? There are two main obligations that can be affected depending on whether a worker is an employee or a contractor:
- Tax obligations – including PAYG withholding and superannuation
- Fair work obligations – entitlements to leave, minimum employment standards and rights to redundancy
The General Rule
If you pay an individual primarily for their labour, then they are most likely an employee. It doesn’t matter if they have an ABN, if they invoice you, or the employment is a short-term arrangement and the terms are in a written contract.
If someone is your employee, then you are obligated to withhold tax from their payments (PAYG withholding) and pay superannuation on their behalf. You may also be obligated to calculate leave entitlements for the employee, as well as adhere to rights around termination and redundancy should they not be required by the business any longer.
Warning – If you get it wrong, the employer is the one who is liable to pay the shortfall in superannuation and PAYG withholding, plus penalties and interest. It is not the employee’s responsibility to make sure that the obligations are being met, it is the responsibility of the employer.
Should Fair Work conduct a review of your employment situation and determine that there has been a shortfall in payments or entitlements, penalties of up to $10,8000 for individuals and $54,000 for corporations – per contravention – can be issued, should Fair Work successfully prosecute. This is on top of the amount of back pay, superannuation and leave entitlements that might be required to be paid to the employee.
What should I do to make sure I’m compliant?
There are a number of excellent resources available that can help you determine what your obligations are, as well as templates and tools to assist with hiring, firing and generally dealing with employees.
The ATO has an employee/contractor decision tool, which will help you determine whether a worker is an employee or contractor. Employee/Contractor Decision Tool
The Fair Work Ombudsman has a number of free interactive online courses, and an online learning centre which can help you learn new skills and strategies in dealing with employees, as well as keep you up to date with your obligations as an employer. Fair Work Online Training
Isn’t having employees difficult? Can’t I just pay them as a contractor?
With the developments in accounting software over the past few years, taking care of your tax and super obligations for your employees is easier than it has ever been.
In most cases, using accounting and payroll software such as Xero and Quickbooks Online, and tools such as the ATO’s Small Business Superannuation Clearing House makes keeping track of your obligations simple and hassle free.
If you have any doubts as what your obligations are, or you would like to know more about payroll solutions, please contact us at Value Beyond to discuss.
You Be The Bank – Peer to Peer Lending
by Walter Raspopin, Trilogy Funds Management Limited
One of the fastest-growing forms of investment, both domestically and abroad, is peer-to-peer lending, otherwise known as P2P lending.
Peer-to-peer lending involves individuals, or groups of individuals, pooling their money to lend to individuals or businesses. It allows investors to take advantage of the returns available from investment classes traditionally open only to large financiers and banks.
Peer-to-peer lending is not a new concept. In Australia fund managers, like Trilogy Funds, have been acting as intermediaries between investors and borrowers for many years.
What is new is the use of online systems and services – much like online investment shopping lists – that allow investors to browse potential loans. This online innovation is leading to an exponential increase in the number of peer-to-peer loans.
Investment bank, Morgan Stanley, forecasts that peer-to-peer lending in Australia will reach a staggering $22 billion within the next five years. $10.4 billion of that forecast is attributed to consumer lending, and the other $11.4 billion to small businesses[1].
The growing popularity of peer-to-peer lending is not limited to Australia – America, the United Kingdom, and China are also early adopters. Globally, lending via peer-to-peer platforms reached US$50 billion in 2015. This is predicted to grow to approximately US$290 billion by 2020.
Two of the big players in America, Lending Club and Prosper, have already issued over US$20 billion in loans between them[2][3]. Even the public sector is dipping its toes in the P2P water.
In the United Kingdom, the federal government have thrown their weight behind peer-to-peer lending, having lent £80 million of their own funds to peer-to-peer lending platforms prior to October 2015[4]. They are also putting the final touches on the Innovative Finance Individual Savings Account scheme, allowing U.K. citizens to invest through peer-to-peer lending platforms tax-free via their Individual Saving Accounts[5].
Despite their growing popularity and public sector endorsement, not all peer-to-peer loans are created equal. It is important for investors to investigate what the loan is for, how it is secured and to balance these factors with their risk profile.
However, regulation of the industry in Australia is a great deal more stringent than in many other countries. All loan intermediaries, or lenders, must hold an Australian financial services licence, and must meet a number of requirements and thresholds in order to hold a licence[6]. They must also satisfy responsible lending obligations in order to maintain their Australian credit licence[7].
Trilogy Funds currently has two peer-to-peer investment options open to investors, the Trilogy Monthly Income Trust and uSelect Mortgage Investments. To find out more download an information pack or call Walter Raspopin on 0427 355 909.
[1] http://www.smh.com.au/business/banking-and-finance/morgan-stanley-says-peertopeer-loans-will-soar-to-22b-in-australia-by-2020-20150522-gh787e.html
[2] https://www.lendingclub.com/info/statistics.action
[3] https://www.prosper.com/plp/about/
[4] https://www.gov.uk/government/speeches/economic-secretary-we-want-to-see-peer-to-peer-lending-continue-to-grow-and-evolve
[5] http://www.ashurst.com/financehub/uk-government-promoting-p2p-lending-through-changes-in-tax/
[6] http://asic.gov.au/for-finance-professionals/afs-licensees/your-ongoing-afs-licence-obligations/your-afs-licence-obligations-explained/
[7] http://asic.gov.au/regulatory-resources/credit/responsible-lending/
Do you have a valid will?
The recent death of performing artist Prince and the news that he has no known will, has highlighted the issues that arise when dealing with a person’s estate with no guidance on how it should be managed.
If you die without a will, you are said to have died intestate. If this happens, then your estate will be dealt with according to the rules set out in the Succession Act 1981. This Act sets out the entitlements of the next of kin of an intestate person.
If you die intestate, then your estate will be distributed to:
- your spouse or defacto
- children and grandchildren (otherwise called “issue”)
- if no spouse or issue exist, then parents, brothers, sisters, nephews, nieces, then grandparents, then uncles, aunts and cousins
There is no provision for distribution of your estate further than your first cousins – in that event, your estate will go to the government. In-laws are not classified as next of kin and are not included in the rules for the distribution of your estate.
How is the estate distributed if I die intestate?
If there are children involved, then the spouse receives $150,000 plus the household chattels, and 1/2 of the remaining estate if there is one child, and 1/3 of the remaining estate if there is more than one child
Example
Take an example of a husband or wife passing, there are two children, and there is no valid will in place. Assuming that the couple own a house worth $600,000 and there is no mortgage and no other assets, then the estate will be worth $300,000 (half share of the house). According to the rules of intestacy, the spouse will receive $150,000 plus the household chattels, and because there are two children, 1/3 of the remaining $150,000. This gives the spouse $200,000 from the estate.
The remaining $100,000 will be split equally between the two children. If the children are under the age of 18, these funds may have to be held in trust for the children until they turn 18. There are provisions for the spouse to purchase the other half share of the house, however this is to be done at market value. This raises important questions about how this will be funded and increases stress factors at an already stressful time.
What can I do to stop the Intestacy Rules applying?
If you want to make sure your estate ends up with the people you wish to have it, then you need to ensure that you have a valid will in place. Keep in mind that a will is revoked by the following occurring:
- marriage
- civil partnership
- divorce – revokes a disposition to the former spouse
Other life changes that may affect what you want contained in your will include having children, moving house, building significant assets, and owning a business/businesses and entities such as trusts and companies.
What other things should I consider when preparing a will?
Other matters that you should consider when you are preparing a will and dealing with your estate:
- General and Enduring Powers of Attorney – these will help others deal with your assets in times of emergency
- Medical directives
- Insurance – make sure you have appropriate insurances in place to allow surviving family to financially deal with any unfortunate circumstances
If you have any doubts about whether you are adequately covered, contact us at Value Beyond so we can discuss your needs and ensure the appropriate professionals can assist you.
Tax Incentives for Early Stage Investors
From 1 July 2016, if you invest in a qualifying early stage innovation company (ESIC), you may be eligible for tax incentives. The tax incentives provide eligible investors who purchase new shares with:
- A non-refundable carry forward tax offset equal to 20% of the amount paid for their qualifying investments. This is capped at a maximum offset amount of $200,000 for the investor and their affiliates combined for the investments in each income year
- A modified Capital Gains Tax (CGT) treatment, under which qualifying shares that are continuously held for at least 12 months and less than ten years are exempt from CGT. Capital losses on shares held less than 10 years must be disregarded
An investor that does not meet the ‘sophisticated investor’ test under the Corporations Act 2001 (more than $250k gross income per year, or greater than $2.5 million in net assets) will not be eligible for any tax incentives if their total investment in qualifying ESICs in an income year is more than $50,000.
Those investors won’t receive the tax offset or the modified CGT treatment for any of the share purchased in that income year. To qualify, investors must have purchased new shares in a company that qualifies as an ESIC at the time of purchasing the shares. The shares must be purchased after 1 July 2016.
If you hold more than 30% of the share in the ESIC, or you acquire the shares under an employee share scheme you won’t qualify for the tax incentive.
If you are considering making an investment and are unsure whether you will qualify for the tax incentive or have questions about how the tax incentive works, contact us at Value Beyond to discuss the details.
Operating a Trust
Now that you know what a trust is and why you might use one, how do you go about running a trust?
Watch the video below to find out more!
In conjunction with our downloadable e-book, we have put together a series of videos to explain the basics and help give you a better understanding of trusts.
As always, if you have any questions around trusts and how they might benefit you, call us at Value Beyond.
Updated Consumer Law Guides For Businesses
Five guides for business and legal practitioners on the Australian Consumer Law (ACL) have been recently updated. These guides are now easier to read and feature case studies. The ACL applies to all Australian businesses, and these guides were produced to help businesses learn about their rights and obligations under the law. Updated editions are now available on the ACCC website:
- Consumer guarantees: Covers what consumer guarantees apply to goods and services, who is responsible for those guarantees and when a remedy, such as a repair, replacement or refund, may be available.
- Sales practices: Discusses unsolicited supplies, unsolicited consumer agreements, pyramid schemes, multiple pricing, lay-by agreements, referral selling, and harassment and coercion.
- Avoiding unfair business practices: Deals with misleading or deceptive conduct, unconscionable conduct, false or misleading representations and related offences, information standards and country of origin representations.
- Product safety: This guide covers the national product safety and recall regime.
Unfair (consumer) contract terms: Explains how unfair contract terms apply to consumers. (Note: This guide does not cover the new business-to-business unfair contract terms law which will take effect on 12 November 2016. You can find information about this law at www.accc.gov.au/uct).