"Make the most of Christmas" by Steve Marsten

We have been handling many questions this week from retailers who are up to their ears with Christmas sales and customers. So I thought I would continue with my previous theme of maximising your profitability over the Christmas period.

One thing we advise our retail clients is to remember what your customers are looking for from your products and services. They want a solution! No joke – this is why it’s crucial to see things through your customers eyes. Many retailers often think that customers are just out to buy socks, diaries or chocolates or whatever nice thing you have on your shelf when really what they are actually buying is a feeling of relief!

As a retailer we want to stack our shelves with all the products that make the AAAARGH-I-DON’T-KNOW-WHAT- TO-BUY! feeling disappear. Great retailers have already been liaising with customers earlier in the year and have been keeping an eye on what’s been selling in other parts of the world over the summer season to gauge the trends. No - there is no guarantee its works in Australia however its worth tracking and filling your store with some of these items. Maybe your customers would like items of a particular colour or a different size. This requires your business to be adaptable. Christmas is the best time to bring out new twists in your best selling items.

I had one client indicate that they hadn’t had time to “dress the store up” for Christmas. Big mistake! You must let some Christmas spirit into your business. Your packaging and your catalogue should have already been prepared with a seasonal look.

Another made the point that they felt that “all the best Christmas products have already been done. So how I do I compete?” Yep that maybe true. Everything has been done before. Everything! But not necessarily by you! Customers don’t necessarily want you to sell incredibly new products however they love seeing new things in YOUR shop.

And finally the classic – “we have been run off our feet – I think we will shut up early this year!” No -this is the time to make hay and maximise your top line. Keep smiling and keep your team smiling and look after each and every customer for as long as you can until you really really have to shut the door on the 24^th December!

At Sothertons, we know December is hard work for retailers however its usually the best time to boost that top line. Call us for more tips on 4972 1300 and we hope you all have a very Merry Christmas and a safe and Happy new Year.

Taking the Short Cut. By Tina Zawila.

In today’s busy world, most of us are on the look out for ways to do things faster, travel quicker, and to make life easier.  You could say we are always looking for short cuts! 

As an example, think about community parks and gardens with beautifully paved paths.  However usually you will also find there is a dirt track where one person took a short cut and then everyone followed until it became a path itself.   The dirt track is what people want, they want the short cut, the path of least resistance. They want the easier option.

So if we think about this in a business sense, when we are developing new products and services for our customers, it’s obvious that we need to think about what people want and how they will use your product or service easily and conveniently.

There are a few ways we can determine what people want:

• We can look at how our customers are using our existing products or services – have they developed their own dirt track?  Are they combining or packaging your products or services in a way that is more convenient or cost effective to them?  If so, can you capitalize on this and modify your offering to suit your customers whilst retaining your margins? 

• If you have an idea for a new product or service, “launch to learn”.  Get the product or idea out there and ask for feedback or watch how your customers interact and use this prototype, and then modify and refine it to suit them.  Let the customer build the dirt track and then pave it.
  

• Finally, listen to your customers and be responsive.  Don’t resist their modifications, embrace them!  Sometimes we try to cover up, or put grass over the dirt track, when in fact we need to pave it.  If your customers want a variation of your product or service, don’t try to continue to sell your version, modify your offering to meet the market.

The world is changing rapidly and our customers’ needs are changing rapidly too.  People will always look for the easiest route to save time and money.

The professional team at Sothertons is always here to listen to your ideas and help you grow your business.  Call us today on 4972 1300.

Retailers – time to dig out the Santa hats…. By Steve Marsten.

Well the Christmas month has arrived – the decorations and tinsel is dusted off and hung, the carols start playing over and over again and get in your head and drive you crazy. People wear colourful clothes and funny hats! Yep - I’m lovin it!!

Christmas is also a time of spending for many and so its time to consider how to make the most of your business shopfront. If you are in retail and you are not seeing increased sales at this time of the year, then its time for a rethink.

Start with staff – it’s never more important then to remind staff to smile especially in front of customers. If they’re struggling with that concept then perhaps early Christmas holidays maybe necessary.

Dress up your store. It doesn’t have to be with too much. It doesn’t have to be with Christmas trees and lights. Think about what decorations go with your style of shop. Decorations need to reflect your brand and personality. Sometimes a little is enough.

What are your Christmas deals? As part of the festive spirit offer a special discount. Perhaps only on certain stock items and rotate them through the month. Perhaps 12% off everything for the last 12 days of Christmas. Be innovative. Talk and plan with your staff on how they will operate. This is the busy time so it needs to be “all hands on deck”.

Consider a promo stand in your store to feature a particular stock item or service. Often this attracts people in just to check things out. That can lead to staff engagement and a sale. Consider a “boxing day sale” before Boxing Day! A Super Santa Sale on the Saturday before Christmas or some freebies with every purchase over $50 or $100.

Consider a gift wrapping service – free or otherwise. This can be a drawcard in itself. I have seen it do remarkable things in some businesses. For example a business owner told me that the Gift Wrapping service encourages people to buy more gifts in the one spot. Of course – that’s why Myer and DJ’s do it.

So get the decorations out and up, pump up those Xmas carols, allow the staff to dig out their Christmas T-Shirts and Elf hats and shine up those smiles. Happy staff attract sales! And enjoy the Christmas cheer. At Sothertons it’s one of the busier months however it’s also an enjoyable time of the year. For more information on improving your sales – call us on 4972 1300.

Moving Goal Posts. By Tina Zawila.

As financial advisors we are always encouraging clients to plan for the future, and we give that advice based on what we know today.  Clearly our challenge in providing this advice, is the chance that the “goal posts will be moved” during, or after strategies are implemented.  

Just last week, the Federal Government passed changes to the superannuation system claiming it will save nearly $3 billion and future proof it for decades to come. 

So what are the changes and how will they affect you?

Concessional Contributions into Superannuation

Generally speaking, these are the contributions your employer makes for you under the Superannuation Guarantee scheme plus any contributions you choose to ‘salary sacrifice’, that is, that you contribute from your “before tax” pay.   Right now, those of us aged under 50 can contribute up to $30,000, and the over 50’s, $35,000 in concessional contributions.  However, from 1 July 2017 (just over 7 months away), this limit will fall to $25,000 for everyone.

Non-Concessional Contributions to Superannuation

This is where you contribute to super from your own “after tax money”.  For example, where you make extra contributions from your net pay, or where you may sell an asset and choose to put the cash into super to save for your retirement.  Right now, you can contribute up to $180,000 per year (or bring forward 3 years into one year $540,000), however from 1 July 2017, this limit will fall to $100,000 ($300,000 using the 3 year bring forward rule).  This will significantly reduce your ability to put money into the tax effective investment vehicle we know as superannuation, and also offers an urgent opportunity for anyone wishing to contribute over $100,000 this year, or $300,000 under the bring forward rule, to act before 30 June 2016.

Tax on Superannuation

Most of us pay 15% tax on our superannuation, however, at present if you earn over $300,000 per annum you effectively pay 30% tax on your superannuation investment.  From 1 July 2017 this income level will drop to $250,000. 

Superannuation and financial investing is a complex area, and you should seek professional advice before taking action.  Please call us at Sothertons Gladstone on 4972 1300 if you need assistance planning for your financial future.

The Value of Good Advice by Steve Marsten

We received a new client recently who was advised by their previous accountant when requested to undertake some urgent work that it would take six – eight weeks to complete. The client was also warned by a friend before coming to our firm to “be careful they seem expensive…”

Within a week they were complaining about two accounting fees they had received! Both invoices were from their previous accountant. The fees weren’t huge (total $350) but they were for consultations whereby the accountant advised they “could not help them”. Our fees turned out to be more then this however we turned the job around quickly and our client advised us that it was the best money she had spent in a while due to the valuable advice she had received.

Good advice from a financial professional can have a profound positive impact on your own, and your families, financial future. It can save you a considerable cost especially when buying and selling businesses or strategising over the best way to organise transactions or simply to consider other ways of managing your business or investments.

When you meet with your advisor, you are likely looking for answers or solutions to your financial questions and needs. And there are many trusted advisors who have the knowledge, competence, and desire to keep your best interests in mind so that you can maintain your sense of financial well-being.

When looking for an advisor, it’s OK to ask them questions to help you get comfortable in working with them—in fact, it’s encouraged. The more confident you are that you are working with an expert you trust, the easier it is to have those difficult conversations and make decisions. Don’t be afraid to ask your advisor these questions:

1.       How will you assess my financial security needs?
A good advisor will ask you questions about your life, goals, expectations, income, current assets and liabilities, and your time horizons. This process helps them properly assess your needs and work with you to develop a sound plan. If they don’t ask you a lot of questions, then they may make assumptions that could result in plans that won’t take you to where you want to be.

2.       How do you protect my privacy?
The information an advisor collects from you is personal and possibly sensitive. A good advisor will be aware of their privacy obligations.

3.       How does your business operate and how do you get paid?
Advisors should be able to articulate the way they conduct business.

When you work with an advisor you trust, it’s more likely they will add value to you and your business and provide you with peace of mind and confidence about your future. Speak to your advisor often.

At Sothertons, building trust and value is the key to our service. Call us today on 4972 1300.

Global Trends Decreasing Your Pension. By Tina Zawila.

If you are an aged pensioner I'm sure you have heard that there will be changes to the asset test limits next year which may impact on your entitlement to the aged pension.  Even if you are not currently receiving a pension, but intend to apply next year, you should seek professional advice in the next few weeks.  If you are receiving a pension before 1st January 2017, but as a result of the asset test changes will lose your pension next year, you will be able to retain your Seniors Health Care Card for life, even if you never receive a pension in the future.  So it might be worthwhile to apply for a pension (or part pension) before the new year rolls around. 

       

So why is the Government tweaking with aged pensions?  Quite simply, it's because of demographics.  We are an aging population with life expectancies increasing and falling birth rates.  This increasing proportion of elderly people challenges the solvency of social welfare systems including pensions and healthcare.  This is not just a problem in Australia, the world's population of people older than 65 is expected to double to 1 billion by 2030.   

Our changing demographics represents one of the top "Global Trends" in the world today, and governments will need to implement bold policies to cope with these demographic changes.

However, there are other changes happening to our world population.  Seemingly on the other side of the coin, there is also a youth "explosion" happening in developing countries.  Nigeria's population is expected to exceed America's by 2045 and Africa's population will double by 2050.  These young people will need jobs and so these regions will face the challenge of integrating their youth into saturated labour markets.  

Add to this the way technology is changing the way that people work, and the increasing levels of education available in emerging markets, the face of our global workforce will change significantly with physical borders almost becoming irrelevant.

There is an underlying theme that connects all of the demographic trends we're seeing - the world is becoming a more diverse place.  

If you need help interpreting how future global trends will impact on your business or your financial investments, call our professional team at Sothertons Gladstone on 4972 1300.

                         

Can your data be held to ransom?

By Steve Marsten

It was recently brought to my attention of a case whereby a businessman arrived at work and logged onto his system to start the day only to find that he had received an email (and a Text message) letting him know that his data was taken hostage and for a price it would be released. Now its one thing for your business data to be temporarily offline, yet its quite another for it to be criminally corrupted.

The cost associated with data breaches and damage to customer and client confidence may have the most severe consequences for an organisation which can lead to a significant loss of business and negative publicity.

Cybercrime is the fastest growing cause of data service interruptions. In 2014 the Australian Governments cybercrime division CERT dealt with 11,073 cyber security incidents affecting Australian businesses. Its fair to say that the real figure maybe twice that many given that many businesses are reluctant to notify bodies or prefer to deal with it in house.

So what is Cybercrime exactly? Cybercrime involves viruses, hackers, malware, distributed denial-of-service attacks (which are intended to take websites offline) and of course ransomware which was the issue with the case above.

Cryptolocker, which is a form of ransomware, and is spread via seemingly innocuous emails that appear to come from trusted sources such as postal services and government agencies impacted more then 1 million organisations globally last year. In respect of Australia’s numbers, the figure for Cryptoware is 60% of all local cybercrime.

I know we have received about 20-30 dodgy emails a week that are picked up in our security software. In The US they estimate the cost of Cryptolocker alone is more than $100million US dollars! The costs in terms of lost business however would drive that figure up considerably.

To properly protect your data there are a few things to consider:

1. Never assume your business is not big enough to be attacked. Hackers don’t differentiate between business sizes;
2. Back the system up daily – without fail;
3. Consider a disaster recovery plan before the disaster. What’s the plan if your entire IT environment was offline?
4. Copy your data to a site that’s designed for optimal security and shielded from hardware failures.
5. At Sothertons we are always discussing risk with clients to ensure that they have the necessary protection in place. Call us on 4972 1300.

Is Digital Disruption really TRUST disruption? By Tina Zawila.

As accountants and business advisors we often say that potential clients need to "know you, like you, trust you" before they will choose to do business with you.  Quite simply, our profession puts us in a position of trust with our clients, often knowing their most intimate financial details.                      

However, the way trust flows through society is undergoing a significant change and it's causing a big shift. Technology is creating trust between people (strangers) on a scale never seen before.  All around the world we are getting into cars with complete strangers (Uber), opening our homes to complete strangers (AirBnB) and going on dates with people we have never met (Tinder).  And while we often talk about the growth of the sharing economy as part of the "digital disruption" of traditional services, the real disruption happening isn't just technological it is a TRUST shift.

It seems that as consumers we have stopped trusting institutions and started trusting strangers.  Instead of using taxis (regulated commercial operators) we prefer an Uber driver who drives part-time, instead of staying at a Best Western we are staying in a stranger's home when we travel.  We are prepared to do this, because, using technology, information is openly shared via reviews and ratings.  We are prepared to put our trust in systems that are transparent, inclusive and accountable.

What is also interesting is the way we behave as consumers often changes when we are interacting within the sharing economy, because we recognise that trust is a two-way street, and as a consumer you are also subject to transparent reviews and ratings.  I also believe that we feel more connected to the individual providing the service in the sharing economy than the “faceless” organisation or institution.

So as business owners what do we need to do to manage this trust disruption?  

How can we build trust with our clients and customers using technology and systems that are transparent, inclusive and accountable?  

Remember as Charles Darwin infamously said "it is not the strongest of the species that survives, nor the most intelligent that survives.  It is the one that is most adaptable to change."  

If you need help adapting your business model and strategies to the changes in the "trust" economy, call our professional team at Sothertons Gladstone on 4972 1300.

Prepare for Single Touch Payroll

By Steven Marsten

Have you heard of the Single Touch Payroll (STP) system initiative? If not – you soon will. It received Royal Assent recently. So it’s not if, but when. Small Business - hold on to your hats! The ATO has come up with an initiative to create “real time” payroll data and superannuation payment efficiency.

Currently many employers manually report Pay As You Go (PAYG) withholdings to the ATO. Under the new STP this information will be automatically reported to the ATO through Standard Business Reporting (SBR) software.

Employers will have the option to pay their PAYG withholding tax at the same time they pay their staff.

From 1 July 2017, all businesses will be able to commence STP reporting, with the option to make voluntary payments. In addition, the ATO will transition employers with 20 or more employees to STP. From 1 July 2018, employers with 20 or more employees will be required to use STP enabled software for reporting to the ATO. The Government has yet to fully decide on the full rollout of STP for employers of less then 20 employees. This will take place after a pilot has been completed.

Interestingly the Government is going to offer a $100 non-refundable tax offset for SBR Software upgrades. Your business will have to have a turnover of less than $2million to obtain the benefit with the offset being made available in the 2018 financial year.

It appears the Government is seriously looking at the option of real-time superannuation payments as well. It will have the benefit of boosting employee’s retirement savings.

This initiative will have some seriously good benefits such as reducing the incidence of non-compliance of payment. There is some $3 billion in superannuation payments that are currently not being paid by either businesses in severe hardship; or with cashflow problems or those simply run by rogue operators.

Small business need to start giving consideration to this as it will impact on the way some businesses currently manage cashflows. Consideration may also be given to changing payroll systems from weekly to fortnightly or even monthly! If it’s to be the latter, then six months notice maybe a good idea.

To ensure that you stay abreast of these change be sure to call the experienced team at Sothertons on 4972 1300.

Start your Engines! By Tina Zawila.

I know Bathurst is done and dusted for another year, and I have to confess I know next to nothing about car racing, but my article this week isn’t really about fast cars. 

As business advisors we often talk about setting goals and targets, knowing your key performance indicators (KPIs), measuring your results and all that other seemingly “boring accounting” stuff that you are supposed to do to make your business run like a well-tuned V8 engine.  Well have you thought about how you can make that stuff FUN?

At Sothertons, we share our goals and targets with our team, report our results to them on a quarterly basis and regularly get them involved in strategic decisions.  After all, they have a vested interest in our business and they are integral to our success! 

Recently, we had a team meeting to discuss our targets for the December 2016 quarter and we identified the KPIs we need to track to measure our success.  We  then came up with an idea on how to keep us focused on our quarterly goal over then next 90 days and how we can make it fun.

One of our goals this quarter is to connect with, and help as many start-up and growing businesses as we can. So with that aim in mind we came up with a theme of “Start Your Engines” and we have decorated the office and our work spaces with racing cars.  It does liven up our office space, and I know a couple of clients have looked twice as they have walked through the office.  But this bit of fun, actually reminds us everyday of our quarterly goal and keeps us focused on what we need to do to work towards achieving our target.  At the end of the quarter, once we have achieved our goal we will celebrate together.

So how do you get your team involved in your targets and goals?
How do you stay focused?
How can you make it fun?

If you need help with setting goals and targets for your business, call the professional team at Sothertons Gladstone.  If you are a start up or growing business we would love to talk to you! Call us today on 4972 1300.

The Meaning of Business Collaboration. By Steve Marsten.

There is a lot of talk around Gladstone at the moment of Business Networks for small and micro businesses. There is also some confusion about the aims and goals of these networks as well understanding some of the jargon that academics and even accountants tend to overuse.

So I want to clarify a few points raised by clients this week. There is plenty said about collaborations in business networks. I am always cautious about Business Groups that provide business to business services within the group or network without addressing the issues of quality and value.

Collaborations and strategic brand partnerships are the most effective budget-friendly and valuable tools to tap into, provided they have businesses (or existing communities of relevant people) that are connected to your target market.

A real collaboration is where two or more businesses determine how to reach end goals for both businesses. Maybe it's building a joint email list or valuable content or just selling tickets to a jointly sponsored event. Either way both need to be committed to quality of product or service and adding real value to their clients.

Another way of collaborating is to identify a well known local brand that already holds an engaged audience or following, that fits within your target market. This is a particularly valuable resource for small and micro businesses. Collaborative marketing is not about money but about leveraging a targeted exposure for your business within an existing client base.

Finally, think about what you can offer your audience and that of your collaborator that will encourage your new and existing customers to engage or re-engage with you and provide a return to you and your collaborator.

At Sothertons we continue to help and assist micro and start up businesses to reach their potential by assisting them to get creative with some brand collaborations. Call us on 07 4972 1300.

Reach out, connect, create. By Tina Zawila.

One of the ways I like to start my day is to watch a TED talk.   TED is a non profit organization devoted to ”ideas worth spreading”, so you can watch/listen to talks from the world’s most inspired thinkers and curious souls.

Last week I listened to a talk by Courtney Martin, about the “American Dream” and how the way we live in the 21^st century is changing.  She talks about intergenerational living and “revolutionary parenting” where people of all ages live together to raise families, share stories and support each other. 

Whilst the talk was focused on family and lifestyle, I did pick up a few gems that I believe are relevant to businesses and entrepreneurs.

I’ve always been a believer that “it takes a tribe to raise a child (not just two parents)” and I also believe, that a great business idea or budding entrepreneur also needs a network of people to grow and develop the idea into an operational business.

As business advisors, supporting and empowering people to achieve in business and life is what gets us out of bed in the morning!  We love to share the passion, excitement, opportunities, and challenges faced by business owners, and offer our professional advice, support and encouragement along their journey.   As a business owner or entrepreneur, you should never feel alone.

In her TED talk, Courtney said “The most reliable wealth is found in relationships” and I couldn’t agree more.  A community that fosters and supports creativity and ingenuity and encourages people to ‘have a go’ is one that I want to live in, and one that I want my children to live in.  We are fortunate here in Gladstone to have access to many networks and resources to support, educate and encourage you to pursue your dreams.

So reach out, connect and create. 

Live a life that is as connected and courageous as possible.

We would love to share your journey in business and life. Call the professional team at Sothertons on 4972 1300 and let’s connect and create together.  

Is your accounting software old hat? By Steve Marsten.

A few clients have been chewing my ear about the drudgery of accounting software and the time it takes them to deal with paperwork but seriously – small business needs to take its collective head out of the sand and check out the cloud!

Small business accounting software that’s not available via the cloud can be tedious. Traditionally, it  sucks up far too much of your business’ time and effort. This doesn't add value, and takes the fun out of being in business. Cloud software can save your company time and money. Most of all – cloud software has allowed our clients to actually spend more time on and in their business and less time on the drudgery of doing paperwork. It means less time dealing with bookkeepers and more time on strategy, sales and marketing.

So naturally the next question that comes up is - what is this thing called the cloud? Think about when you use internet banking. Every time you access this data, you’re using the cloud. The cloud is a platform to make data and software accessible online anytime, anywhere, from any device. Your hard drive is no longer the central hub. You have the control provided you have access to the internet.

But where is my data kept? For some reason we are more concerned about where our data is kept when using cloud based accounting software then where our banking details are kept. Truth is most of our data is spread around the globe. Yes much of it is in Australia however depending on the companies you deal with, many of us maybe surprised to find that our data is being accessed by call centers from around the world regardless of where it is stored. Much is in highly securitised servers - and no one can give an iron clad guarantee that it will always be safe.

Problems with traditional accounting software

• The data in the system isn’t up to date and neither is the software.
• It only works on one computer and data bounces from place to place. For example, on a USB drive. This is not always secure or reliable.
• Only one person has user access. Key people can't access financial and customer details.
• It's costly and complicated to keep backups (if done at all).
• It's expensive, difficult and time consuming to upgrade the software. Cloud updates overnight usually and doesn’t have any downtime.
• Customer support is expensive and slow.

Xero is a breath of fresh air to cloud accounting; Reckon and MYOB are quickly trying to catch up. At Sothertons we assist all businesses in assessing the best and most cost effective software to make the bookkeeping less of a chore and more of a value add. Call the experienced team for more information on 4972 1300.

What are you leaving on the table for the tax man? By Steve Marsten.

Tax season is well and truly underway and its refreshing to see plenty of new clients. Now many taxpayers have had their tax prepared in prior years by non tax accountants or they have chosen to prepare the returns themselves online. Seems so easy! However we note that many taxpayers are missing out on some critical tax deductions as a result. They are leaving plenty on the table for the Tax man!

Tax Professionals with experience tend to ask much better quality questions to flesh out the many unthought-of deductions that do not get claimed yet they are incurred in carrying out ones income producing roles.

We feel it’s vital that you claim deductions for everything that you’re entitled to. Based on our recent start to the season we have noted that many taxpayers have overlooked several claims in the past.

These include:

1.    Professional memberships and subscriptions.  If you’re a member of a professional or trade association as part of your work, you can claim a deduction for the amount you pay in subscriptions. This also covers union fees if you’re a member of a trade union, as well as subscriptions to trade or professional magazines or – if you’re an investor – subscriptions to key publications like Money magazine.

Another key deduction that taxpayers should be conscious of is to consider prepaying your fees or subscriptions for next year before June 30, you can claim a deduction this year, which can be a useful timing benefit.

2.    Tax advice and preparation. If you paid for a tax professional to complete last year’s tax return, you can claim a deduction for the cost in this year’s return. What’s even more beneficial is, you can also claim a deduction for any travel costs you incurred getting to and from your agent. Also don’t forget that if you’ve paid for any tax advice during the year, that too is usually deductible.

3.    Income protection insurance. This one is often forgotten by taxpayers at tax time. If you pay for insurance premiums for a policy covering the loss of income, those amounts are tax deductible. But be careful; that doesn’t include life insurance, TPD or trauma insurance. It also excludes policies paid from your superannuation fund.

These are just some of many expenses that do get overlooked often. Feel free to speak to one of the experienced team at Sothertons and make sure no claim is missed. Call us on 4972 1300.

The more we Share, the more we Have. By Tina Zawila

In my last article I discussed the “Sharing Economy” with a focus on becoming an Uber driver and I cautioned new entrants into this market to be aware of their taxation obligations.   

This “peer-to-peer economy” or “collaborative consumption economy” as it’s also known, is not limited to ridesharing, and is growing at a rapid rate with the improvements and access to technology, and the growth in the number of participants. 

And whilst most of us are familiar with the likes of Uber, Airbnb and eBay, there is almost no limit on the products or services you can access via this shared economy, including peer-to-peer loans, shared office space for businesses, knowledge and talent sharing (freelancing), crowd-funding, and even pet-sitting!

It is suggested that the advantages of the sharing economy include:

• New and Better Opportunities – providing access to things that might not be practical to own or obtain, for example obtaining a peer loan when you cannot access finance via traditional means.
• Cheaper goods and services – on the basis that it can ‘cut out the middle man’ and that you only use (and pay for) something, or someone, as necessary, rather than deal with the cost of ownership or employment.
• Extra income for providers – by allowing them to unlock the potential of unused assets by sharing it when it is not in use, or to exploit a talent that isn’t used in their day job.

Of course there are disadvantages too:

• Privacy and Safety Concerns – people on both sides of the transaction have to forfeit some privacy.  If you rent out your house on Airbnb, you are inviting strangers into your home!
• No, or few, Guarantees – when you share with others you assume the risk that you won’t get paid or that your assets are damaged.

As I have mentioned previously, it is also very important that you understand the tax implications of your activities in the sharing economy.  In Australia, you need to consider whether you need an ABN, if you need to register for GST and what you need to declare in your income tax return and what you may be able to claim.

If you are interested in the sharing economy, make sure you seek professional advice.  Call the team at Sothertons on 07 4972 1300 today.

 

Bring on the entrepreneurs. There has never been a better time. By Steve Marsten

If there is one thing we love hearing – its success stories, especially if they come from people who have to stick their necks out. Recently I read about an Australian Start up called Atlassian. It was started by two guys in their early 30’s who developed software that was basically a “bug tracking tool”. They called it JIRA. Their company operated on a $10,000 credit card! They have customers ranging from NASA to eBay and the company is now worth $3.3billion dollars. What was interesting is – they had just one base value in their company – “Don’t sh*t on the customer.”

How the story progressed is fairly standard, though saddening as well – they left Australia because most of the customers are in the USA or Europe. They listed on the US stock market and they moved their head office to London because England has more business incentives - both innovation, tax and compliance than Australia.

Economists and policymakers have been adamant that Australia really needs to take a good look at other sectors for future job creation. It needs significant changes. Now CSIRO are set to launch a $200million dollar Innovation Fund. It includes $70m in new government funding as well as private section investment. There is a further $20m set aside to commercialise research outcomes – often the most difficult thing to do with new ideas and concepts.

As a further aside but definitely connected – Australia is one of the few countries to announce an Entrepreneurs Visa whereby they provide visa’s for people with the proven talent and skill to come to Australia. The aim is to attract the best and brightest minds with the view of developing Australia into a Pacific Silicon valley.

What’s more interesting is Malcolm Turnbull’s promise of a $1.1Billion plan to boost innovation in Australia. That is a more serious attempt to commit to supporting the types of innovative start-ups we need in this country.

Now the thing is we have amazing innovative people right here in Gladstone and its time for these people to look around and see what support is available and start considering how to get their idea off the ground. There are plenty of business support groups that can assist. At Sothertons we are ready to guide and support innovative businesses and entrepreneurs bring their plans to fruition. Call us on 4972 1300.

'Uber Rides into Queensland' by Tina Zawilla

Most of us by now have heard of “Uber” the ridesharing organisation revolutionising the taxi industry overseas and now here in Australia.   Uber Technologies Inc is an American multinational online transportation network company that develops, markets and operates the Uber mobile app, which allows consumers with smartphones to submit a trip request which is then routed to Uber drivers who use their own cars.  

As of August 2016, the service was available in over 66 countries and 507 cities worldwide.  And the Queensland Government recently announced it’s plan to regulate ridesharing in Queensland, in their words, in “recognition of the positive impact ridesharing is having in our State” and “it means more people right across Queensland will now stand to benefit from more choice to safe, reliable and affordable transport.”

While the Queensland Government may have only recently made this announcement, the Australian Taxation Office has been well aware of the “Sharing Economy” for some time, acknowledging a broad range of sharing economy websites and apps operating in Australia.  And of course, noting that people who provide goods or services via the sharing economy should be aware of how GST and income tax applies to their earnings.

In today’s article I am going to focus on providing taxi travel services (ride-sourcing or ridesharing), however, other sharing economy services include; renting a room or a whole house or unit, providing personal services such as graphic design, odd jobs, deliveries and renting out a car parking space.

So what do you need to consider regarding tax before you sign up to be an Uber driver?

•  If you are ‘carrying on an enterprise’ in Australia you will need an Australian Business Number (ABN).
• If you are providing ride-sourcing services, under the GST law you must be registered for GST and you need to account for GST on the full amount of every fare regardless of how much you earn.  The GST registration threshold does not apply to ride-sourcing services.
• You will need to declare your income in your tax return (and claim any associated expenses), so you will need to keep records of your activities to meet your tax obligations.

If you are currently Uber driving or are considering signing up, please make sure you seek professional tax advice as soon as possible to avoid any nasty surprises at tax time.  Call our professional team at Sothertons on 4972 1300.