For a lot of people, this is the first week back at work after a 2 week break which also signals the start of a new year for work and business. Hopefully this new start sees you energised and refocused to put in the effort to make it your best year yet.
If you are still on holidays, then continue to enjoy it and use it as an opportunity to unwind from the past year and re-energise.
So what goals have you set for this year? Have you written them down and shared them to keep yourself accountable to those goals?
Regardless of the time of year, you can always make new goals and put new plans into place. You don’t have to wait until the beginning of a new year to make resolutions – but seeing as it is a new year, now is as good a time as any!
The 3 business functions
When you deal with customers and other people connected to your business, there are three main ways in which they will perceive your business:
- Quality product or service
- Good value pricing
- Excellent customer experience
How each of these components are measured and what determines if the outcome is good or bad will be different for every business.
Quality product
What someone identifies as a quality product or service may differ widely from person to person and even the situation it is used in. Quality might be perceived by function, longevity, look and feel, speed of delivery, and that perception will be in the eye of the beholder.
Good Value Pricing
What is seen as good value is again as varied as the person perceiving it. Value is not always cheapest, but includes intangible factors such as convenience, cost versus benefits and again is a factor of the perception of the customer.
Excellent Customer Experience
In some circumstances, an excellent customer experience will overcome a less than perfect product or service or higher pricing. In all cases, excellent customer experience will enhance a quality product or service and good value pricing.
Do you know where your business sits in each of these areas? Improving in even just one of these areas could provide the difference you have been searching for within your business. Improve in all three and who knows what results you could achieve.
GST and Property
When it comes to buying or selling property, the GST outcomes can be quite complicated and vary from property to property.
When you throw in terms such as “margin scheme”, “going concern”, “input taxed supply” and whether a property is or isn’t “new residential premises”, then it can get quite complicated.
The GST on the transfer of a property can be $30,000 for a small property and up to $100,000’s for larger commercial premises, so the cost of getting it wrong can be quite significant.
The ATO have prepared a short checklist of issues to consider when signing a property contract, and have a range of resources which provide more detail on the issues that can be faced when buying or selling property.
The best action is to get advice before entering the contract – in these situations being prepared is far better than the cost of trying to fix something after the contract is signed.
ATO Compliance Focus 2013-2014
The Australian Taxation Office (ATO) have updated the results of their audit activity for 2012-2013 and their focus for 2013-2014.
In the 2012-2013 financial year, the ATO undertook nearly 750,000 activities which raised an additional $12 billion in tax liabilities and $7.9 billion in additional cash.
Small to medium enterprises and micro enterprises comprised 218,865 of these audit activities and this raised $7.5 billion – i.e. a third of the activity raised 62% of the additional revenue.
This highlights that micro, small and medium businesses are a high priority target for the ATO, and as a result, those businesses should be ensuring that they focus on remaining compliant with their tax obligations.
Individuals
In the current year, the ATO will be focusing on:
- failing to declare income or make incorrect claims for deductions
- tax risks associate with complex business structures
- correct reporting of taxable income by wealth individuals
- participation in tax planning schemes
Employers
The ATO will be focusing on:
- Reporting of PAYG withholding
- identifying and reporting fringe benefits provided to employees
Business
For businesses, the ATO will be focusing on:
- profit shifting by multinational entities
- use of trusts to exploit legal boundaries to reduce tax payable
- Capital Gains Tax (CGT) – complex restructuring to artificially reduce CGT liabilities
The key message from the ATO is that they encourage people to ‘do the right thing’. Where people are willing to do the right thing, but may have made some innocent mistakes, the ATO will help to make it easier for those taxpayers.
Where taxpayers have deliberately decided to not comply with the tax law, and have engaged in risky tax behaviour, then the full force of the law is applied.