Welcome to The Value Add August 2016 edition.
We raised $1,369 for Mater Little Miracles!!
We thank those who supported us in the Stadium Stomp, and particularly those who donated to help Mater Little Miracles. Your money is already going a long way to towards helping those children in need.
Think you know everything about Pokémon Go?
How do you get Pikachu on a bus?
You Pokémon.
Tax Guide to Motor Vehicles
When it comes to claiming tax deductions, cars are one of the biggest deductions available to increase your personal tax refund.
As the rules around claiming deductions for cars can be complex, it is important to make sure you are positioned to claim the most that you can, and that other taxes like GST and FBT don’t catch you out.
The guide includes a one-page checklist to guide you on the questions you need to ask yourself to get the best outcome from your car.
Do You Store Or Collect Your Customer’s Information?
Did you know there are rules around collecting and storing your customers’ personal information? Privacy Laws
There are privacy laws around collecting and storing personal customer information that businesses need to comply with.
As a business owner, you have a responsibility to:
- Protect personal information from misuse, interference, loss, and from unauthorised access, modification or disclosure.
- Take reasonable steps to destroy or de-identify personal information when it’s no longer needed.
What is personal information?
Customers’ personal information is considered any information where you can identify or reasonably identify the individual.
Personal information might include your customers’:
- name
- address
- medical records
- bank account details
- photos
- videos
- where they work or
- information about their opinions.
What do you need to do?
The Australian Privacy Principles contain guidelines about collecting, storing, accessing and correcting your customers’ personal information.
The Office of the Australian Information Commissioner (OAIC) has some tips to protect your customer’s information which include:
- implementing a handling process and policy for personal information
- only collecting the personal information you need
- only using or disclosing personal information for the purpose it was collected
- accessing personal information on a need-to-know basis
- keeping personal information secure.
The Privacy Checklist for Small Business will assist you in working out the privacy obligations of your business. Find out more:
More information is available on the Office of the Australian Information Commissioner (OAIC) website:
- Guide to securing personal information
- 10 tips to protect your customer’s personal information
- the Australian Privacy Principles.
New Small Business Rollover Available
The new small business restructure rollover allows small businesses to transfer active assets (i.e. business assets) from one entity (the transferor) to one or more other entities (transferees), on or after 1 July 2016, without incurring an income tax liability.
This rollover applies to the transfer of active assets that are CGT assets, trading stock, revenue assets or depreciating assets. While the details of the restructure rollover are outlined below, the new rollover is detailed in its application. If you are considering the structure of your business and wondering if you are set up correctly, contact us at Value Beyond to have your structure reviewed and work out if there is any opportunity under these new rules.
Eligible Entities
The rollover applies if each party to the transfer is one of the following in the income year in which the transfer occurs:
- a small business entity
- an entity that has an affiliate that is a small business entity
- an entity that is connected with a small business entity
- a partner in a partnership that is a small business entity.
This means that an entity not carrying on a business, but holding assets for a small business entity, may be able to apply the rollover. For example, where one entity owns a property in which another connected entity is carrying on a business. When the Rollover is Available Part of a genuine restructure
The rollover is available where the transfer of assets forms part of a genuine restructure as opposed to an artificial or inappropriately tax-driven scheme.
Determining whether a restructure is ‘genuine’ depends on all the facts surrounding the restructure.
To provide certainty to small business owners, a safe harbour rule is included that provides an alternative way of satisfying the requirement that a restructure is genuine.
No Change to Ultimate Economic Ownership To be eligible for this rollover, the transaction must not result in a change to the ultimate economic ownership of transferred assets.
The ultimate economic owners of an asset are the individuals who, directly or indirectly own an asset. Where there is more than one individual with ultimate economic ownership, there is an additional requirement that each individual’s share of ultimate economic ownership be maintained. Tax Implications There are a number of tax implications you need to consider if you choose to apply the small business restructure rollover. Generally:
- assets transferred under the rollover will not result in an income tax liability arising for either party at the time of the transfer
- the transferor is taken to have received an amount for the transferred asset equal to the transferor’s cost of the asset for income tax purposes
- the transferee will be taken to have acquired the asset at the time of the transfer for an amount that equals the transferor’s cost just before transfer.
CGT Assets
The following apply to transferred CGT assets:
- Pre-CGT assets will retain their pre-CGT status after the transfer.
- To be eligible to claim the CGT discount for any subsequent sale of the asset, you will need to wait at least 12 months before a CGT event happens to that asset.
- For the purposes of determining eligibility for the 15 year CGT exemption, the transferee is taken as having acquired the asset when the transferor acquired it.
Trading Stock
The rollover cost of an asset that is trading stock is either the:
- cost of the item for the transferor at the time of the transfer, or
- value of the item for the transferor at the start of the income year, if the transferor held the item as trading stock at that time.
Depreciating Assets
The rollover prevents the transferor from having to make a balancing adjustment when assets are transferred. This allows the transferee to deduct the decline in value of the depreciating asset using the same method and effective life as the transferor was using.
Revenue assets
If the asset is a revenue asset, the rollover cost is the amount that would result in the transferor not making a profit or loss on the transfer. The transferee will inherit the same cost attributes as the transferor just before transfer. Other Implications
You may also need to consider the following:
- There may be potential liabilities such as stamp duty or GST consequences to consider prior to restructuring.
Even though a restructure may satisfy the rollover requirements, this does not prevent the general anti-avoidance rule from applying to a scheme involving the application of the rollover.
Collective Bargaining and Collective Boycotts
Small businesses, including farmers, can sometimes be better off negotiating with their suppliers or customers as a group (referred to as collective bargaining).
Working together, you might be able to negotiate better terms and conditions with larger businesses, and create efficiencies, that you would not achieve on your own.
But without ACCC approval, you could risk breaching the Competition and Consumer Act 2010.
About Collective Bargaining
Collective bargaining occurs when two or more competitors get together to negotiate terms, conditions and prices with a supplier or customer. A collective bargaining agreement may rely on the voluntary participation in the negotiations by the supplier or customer.
It could also involve a collective boycott where the group agrees to stop dealing with the supplier or customer unless the terms and conditions offered by the group are accepted.
Without prior ACCC approval, those involved in collective bargaining groups risk breaching the Competition and Consumer Act 2010 which may result in significant penalties.
For further information, various resources are available on the ACCC website.
Protecting Yourself From Scams
The ATO is warning the public to be aware of a phone scam that is again circulating where fraudsters are intimidating people into paying a fake tax debt over the phone.
The aggressive scam attempts to force people to pay a fake tax debt over the phone by threatening arrest if they don’t comply.
The ATO will never contact taxpayers about a debt in this threatening manner and people are urged to protect their personal details.
Statement from the ATO: “We take your privacy seriously. We urge you to be alert to these types of scams and never send money or give your financial details to someone you don’t know and trust,” Assistant Commissioner Thomas Ryan said.
“Generally the ATO would send an SMS or letter to remind you that a payment was due. If we don’t get a response from this we would then call you to discuss payment. If you do have a tax debt we encourage you to contact us early on 1800 008 540 so we can discuss your circumstances,” Mr Ryan said.
If you receive a call from the ATO and are concerned about providing your personal information over the phone, you should ask for the caller’s name and phone them back through the ATO on 1800 008 540 (8.00am–6.00pm, Monday to Friday). You should also contact the ATO via this number if you think they may have fallen victim to a phone scam.