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  • Navigating Business Challenges with Strategy360° — A Smarter Approach

    Businesses are the backbone of our economy, yet they continue to face mounting challenges—rising interest rates, inflationary pressures and an unpredictable business landscape. At Collins Hume, we understand that traditional tax and compliance services alone won’t help businesses stay resilient. That’s why Strategy360° takes a proactive, holistic approach to business advice and support, empowering business owners and managers to navigate uncertainty and drive long-term success. Beyond Compliance: the need for strategic business advice While most businesses rely on accountants for tax compliance, financial reporting alone does little to does not support real-time decision-making. Business owners need ongoing, strategic advisory support that provides insights, planning, and financial forecasting to keep their operations on track. At Collins Hume Strategy360°, we go beyond the numbers to help business owners to strengthen their financial health, optimise their operations, and plan for future growth. Building a resilient business Through our Strategy360° methodology, we provide structured, forward-thinking advisory services tailored to business owners. Here’s how: 1. Business Due Diligence: Strengthening Internal Processes business practices A business health check isn’t just about compliance—it’s about uncovering inefficiencies, identifying risks, and ensuring financial controls are robust. Regular due diligence reviews help answer key questions:  Is cash flow  being managed effectively?  Are pricing models sustainable in a changing market? Are sales strategies aligned with business goals ?  By conducting an in-depth assessment, businesses can proactively address weaknesses before they become critical issues. 2. Strategic Business Planning: A Roadmap for Growth A business without a strategic plan is like a ship without a rudder. Collaborative planning sessions help owners and leadership teams set clear goals, define responsibilities and establish key performance indicators (KPIs). At Collins Hume, we facilitate and work with leadership teams to:  Set clear revenue, profitability, and expansion targets  Develop strategies to navigate financial pressures  Align budgets and forecasts with long-term business objectives. By taking ownership of the plan, business leaders gain clarity and confidence in their direction. 3. Predictive Accounting: Seeing the Future Before It Happens Traditional accounting is backward-looking—it tells you where you’ve been, not where you’re going. That’s why our Strategy360° approach includes predictive financial insights, allowing business owners to anticipate trends, avoid cash shortfalls and plan for investment.  We equip business owners with:  Financial forecasts and scenario planning to prepare for market fluctuations  Unit-specific budgets to optimise cost structures  Real-time cash flow analysis to keep operations running smoothly. Having access to these insights ensures businesses make informed, data-driven decisions. 4. Fiscal Management: Controlling Costs and Maximising Cash Flow Managing cash flow is one of the biggest challenges businesses face. Without a proactive approach, late payments, unexpected expenses, and inefficient financial management can put businesses at risk.  Our services focus on:  Improving debtor management systems to accelerate cash inflows  Negotiating better supplier terms to control expenses  Reviewing pricing strategies to maximise profitability. Taking control of financial levers allows business owners to stay ahead of economic pressures. 5. Innovation and Capital Raising: Unlocking Growth Opportunities For business owners looking to scale, funding and innovation play a crucial role. Many businesses miss out on government incentives, R&D tax benefits and alternative funding sources simply because they’re unaware of them.    Through Strategy360°, we guide businesses on:  Accessing Research & Development (R&D) tax incentives Exploring Funding Equity Raising opportunities Preparing investor-ready business plans and financial reports. By capitalising on available opportunities, businesses can fuel innovation, attract investors and scale their operations with confidence. Ready to Take Your Business to the Next Level? With an unpredictable business environment ahead, business owners need more than just compliance support—they need strategic guidance to navigate challenges and capitalise on opportunities. At Collins Hume Strategy360° we’re committed to helping business owners like you strengthen financial resilience, optimise operations, and drive sustainable growth. Contact Nathan McGrath  on 02 6686 3000 for an obligation-free discussion on how we can help you achieve a better performing business and lifestyle.  Visit https://www.collinshume.com/360 to learn more about how Collins Hume can help.

  • Unlock Leadership Success with Business Mentoring

    In today’s constantly evolving business landscape, leaders must pursue ongoing excellence and innovation.  Business mentoring offers a powerful avenue to:  Strengthen your leadership skills  Tackle complex challenges  Enhance personal growth  Drive a culture of innovation  Build resilience and adaptability.  By embracing these benefits, you not only elevate your leadership capability but also contribute to sustainable success for your organisation in the years ahead.  In our fast-paced business world, effective leadership is more critical than ever.   Leaders are confronted with uncertainties, market shifts and rapidly changing consumer expectations. One of the most impactful strategies for leaders seeking to refine their skills and drive organisational growth is business mentoring.  Key Areas Where Mentoring Can Help  Gone are the days of the “know-it-all” leader. Today, successful leaders recognise the importance of continuous learning and seek wisdom from experienced external mentors. A mentor provides valuable insights and a fresh perspective on leadership strategies, industry trends and decision-making.  With business mentoring, leaders gain the ability to stay agile, adapt to new challenges and lead with confidence.  Navigating Complex Challenges  Leaders face a broad array of challenges, from technological advances to geopolitical shifts. A trusted business mentor acts as a valuable sounding board, helping to navigate obstacles, brainstorm solutions and make well-informed decisions. Whether it’s growth strategy, organisational change or personnel issues, a mentor offers critical support and guidance every step of the way.  Fostering Personal Growth  Great leadership starts with self-awareness. A business mentor facilitates personal development by offering constructive feedback and encouraging self-reflection. This process helps leaders recognise their strengths, identify areas for improvement and, ultimately, inspire their team enhancing organisational outcomes.  Driving Innovation  Innovation is essential for any thriving organisation, and leadership is key to fostering a culture that encourages it. Mentors help leaders explore new ideas, challenge conventions and embrace transformative change, ensuring the organisation remains at the forefront of its industry.  Building Resilience and Adaptability  Resilience and adaptability have become essential in today’s uncertain environment. Business mentors can guide leaders in developing these qualities, sharing valuable lessons learned from navigating past crises. Mentorship helps leaders remain composed under pressure and adapt effectively to new challenges.  Mentoring with Collins Hume Strategy360  At Collins Hume, our experienced mentors are committed to supporting and challenging leaders to excel in today’s complex business environment. Reach out today to start your journey to greater leadership success and organisational performance.  Contact us now to secure a mentoring partnership and start the Year ahead of the curve!

  • Cash Flow Management: A Critical Strategy for Business Owners

    In today's unpredictable business environment, cash flow management has become more critical than ever.   As a business owner, one of the most important strategies you can implement is a comprehensive "Cash Flow Strategy." This should include detailed budgets for all business activities and key drivers for essential accounts like debtors, creditors, capital expenditure, inventory, work in progress, and research and development. Your plan should also incorporate cash flow forecasts and projected balance sheets.  These financial documents need to be updated and monitored (minimum) monthly, allowing for adjustments as necessary to maintain realistic and up-to-date forecasts for your business.  Effective Cash Flow Management Involves Monitoring:  Financial performance  Debtors  Work in progress  Inventory  Capital expenditure.  Why Cash Flow is King  Cash flow is the lifeblood of your business. In the current economy, it’s essential to keep a close eye on your cash flow strategy. This means paying particular attention to your debtors, stock investments, work in progress and capital expenditure.   A critical metric to track is Debtor Days Outstanding  — the average time it takes to collect payments from customers — and Australia has one of the longest debtor collection periods in the world. Many business owners assume that invoices will be paid within 30 days, but this is often not the case, leading to significant cash flow difficulties.  3 Key Areas to Monitor  Debtor Management: Ensuring you have an effective system to manage and collect debts is crucial. Without it, you risk cash flow issues that could threaten the survival of your business. Don’t assume that all customers will pay on time.  Creditor Management: It's equally important to manage your payment terms with suppliers. New businesses may find that suppliers require cash in advance or on delivery, and assuming 30-day payment terms could create immediate cash flow issues.  Inventory and Capital Expenditure: Balancing the right level of inventory and planning capital expenditures carefully will prevent cash from being tied up unnecessarily.  Regular Monitoring is Essential  Cash flow management isn’t a once-a-year task. At a minimum, it should be reviewed monthly. By comparing your actual performance to your budget, you can quickly identify emerging problems that could impact your cash flow. Regular monitoring allows you to adjust your strategy and secure additional funding if needed, whether that’s through loans, raising capital or other financial resources.  By staying proactive and keeping a close eye on your cash flow, you can navigate uncertainty with confidence and keep your business on a solid financial footing.  Elevate your business to new heights. Contact Nathan McGrath  on 02 6686 3000 for an obligation-free discussion on how Collins Hume can help you tailor a cash flow strategy to suit your specific requirements.

  • Support Year-Round: Why Consistent Business Guidance Matters

    Running a business today is filled with challenges that go beyond tax deadlines. While accountants and bookkeepers are essential allies, business leaders need to be supported all year — not just during year-end tax meetings.   Financial strategy, cash flow and budgeting are key to staying resilient and thriving in today’s competitive landscape. Here’s why continuous support from specialists can make all the difference.  Year-Round Accounting Support is Crucial  Many business leaders wait until the end of the financial year to engage their accountants, primarily to determine their tax liability. However, waiting until then limits the opportunity for proactive planning. Business leaders need actionable insights throughout the year to navigate ongoing financial demands and strategic planning. Let’s delve into the top challenges businesses face and how continuous support can address them.  Key Challenges and How Collins Hume Can Help  1. Managing Debtors  Effective debtor management is essential for cash flow. Businesses benefit from guidance on setting up robust debtor systems that align with their revenue cycles and business needs.  2. Understanding Supplier Terms  Before launching a business, it’s wise to negotiate and understand supplier terms. While some suppliers offer credit terms, others may demand cash on delivery, which can strain cash flow. Accountants can assist in understanding these terms and incorporating them into the business’s financial strategy.  3. Preparing for Tax Payments  It’s not uncommon for some businesses to take a cursory view of their tax obligations, often finding themselves caught off guard by tax liabilities they haven't budgeted for. Planning for these payments through regular cash flow forecasts can help avoid financial stress.  4. Building Budgets and Cash Flow Forecasts  A strong financial plan includes budgets and cash flow forecasts — essentially the “Financial Interpretation of the Business Plan.” These tools can predict potential financial bottlenecks, enabling businesses to take pre-emptive action.  Utilising a Year-Round Business Enhancement System to Optimise Management  For ongoing success, business leaders need a reliable framework that keeps financial insights at their fingertips. Here’s a quick breakdown of how to incorporate a structured reporting system:  Regular Reports  A one-page snapshot of sales, outstanding debtors, upcoming payables, cash on hand and gross profit percentage helps businesses stay on top of their daily financial health. This visibility aids in making quick adjustments and staying agile.  Performance Metrics  A weekly report showcasing Key Performance Indicators (KPIs) and profitability metrics for each business segment can highlight emerging issues. Addressing these weekly prevents minor issues from snowballing into major problems.  Financial Analysis  Monthly reports provide a comprehensive overview, including KPIs, business metrics and budget comparisons. These summaries enable a deeper understanding of the business’s financial standing and highlight areas for improvement before the year-end.  The Bottom Line  By adopting a year-round approach to accounting and financial management, build resilience and stay prepared for whatever comes your way. Collins Hume are more than tax accountants — we’re strategic partners who help businesses forecast cash flow, navigate supplier terms and even have a specialist team of bookkeepers to manage debtor accounts. For business owners and managers, embracing continuous financial support isn’t just beneficial, it’s essential for long-term success.  Collins Hume can help you take the first step toward a stronger, more resilient business with Strategy360. Contact Nathan McGrath on 02 6686 3000 for an obligation-free discussion on how we can help you achieve a better performing business and lifestyle.

  • Payday super: the details

    ‘Payday super’ will overhaul the way in which superannuation guarantee is administered. We look at the first details and the impending obligations on employers.  From 1 July 2026, employers will be obligated to pay superannuation guarantee (SG) on behalf of their employees on the same day as salary and wages instead of the current quarterly payment sequence.  The rationale is that speeding up the payment sequence for SG will not only help reduce the estimated $3.4 billion gap between what is owed to employees and what has been paid, but will also improve outcomes for employees – the Government estimates that a 25‑year‑old median income earner currently receiving super quarterly and wages fortnightly could be around 1.5% better off at retirement.  Announced in the 2023-24 Federal Budget, payday super is not yet law. However, given the structural changes required to administer the new law, Treasury has released a fact sheet to help employers better understand the implications of the impending change.  How will payday super work?  Under payday super, the due date for SG payments will be seven days from when an ordinary times earning* payment is made. That is, employers have seven days from an employee’s payday for their SG to be received by their super fund. The only exceptions are for new employees whose due date will be after their first two weeks of employment, and for small and irregular payments that occur outside the employee’s ordinary pay cycle.  Over the last few years, employers have moved to single touch payroll (STP) reporting for employee salary and wages. It is expected that payday super will fold into the existing electronic systems and some changes will be made to STP to collect ordinary times earning data.  The impact for some employers however will not be the compliance cost of administering the regular SG payments, but the cashflow. Employers will not be holding what will be 12% of their payroll until 28 days after the end of the quarter, but instead paying this amount out on the employee’s payday. The upside is that where an employer has either fallen behind or not paying SG, particularly when the business is insolvent, the damage is contained.   What happens if SG is paid late?  The penalties for underpaying or not paying SG are deliberately punitive and this approach will continue under payday super.  Currently, a super guarantee charge (SGC) applies to late SG payments - comprised of the employee’s superannuation guarantee shortfall amount, interest of 10% per annum from the start of the quarter the SG payment was due, and an administration fee of $20 for each employee with a shortfall per quarter. And, unlike normal superannuation guarantee contributions, SGC amounts are not deductible to the employer, even when the liability has been satisfied.  Under payday super, employees are fully compensated for delays in receiving SG amounts and larger penalties apply for employers that repeatedly fail to comply with their obligations. If you make a payment late, the SGC is made up of:  Outstanding SG shortfall   Calculated based on OTE, rather than total salaries and wages as it is currently.  Notional earnings   Daily interest on the shortfall amount from the day after the due date, calculated at the general interest charge rate on a compounding basis.  Administrative uplift   An additional charge levied to reflect the cost of enforcement and calculated as an uplift of the SG shortfall component of up to 60%, subject to reduction where employers voluntarily disclose their failure to comply.  General interest charge  Interest will accrue on any outstanding SG shortfall and notional earnings amounts, as well as any outstanding administrative uplift penalty.  SG charge penalty   Additional penalties of up to 50% of the outstanding unpaid SG charge, that apply where amounts are not paid in full within 28 days of the notice of assessment.  As you can see, if the proposed SGC becomes law, late SG payments can spiral out of control quickly. This will be a particular issue for employers that pay employees less than their entitlements over time, or have misclassified employees as contractors and have an outstanding SG obligation.  But, unlike the current SGC, the new SGC will be tax deductible (excluding penalties and interest that accrue if the SG charge amount is not paid within 28 days).  Payday super is not yet law. We will keep you up to date as change occurs and work with you to get it right once the details have been confirmed.   *Ordinary time earnings are the gross amount your employees earn for their ordinary hours of work including over-award payments, commissions, shift loading, annual leave loading and some allowances and bonuses.

  • Unlocking international markets

    Investment NSW exporting programs NSW Export Capability Building Program The NSW Export Capability Building Program empowers businesses with essential knowledge and the skills required to pursue opportunities in international markets. Through a series of online and in-person workshops, the program offers foundational sessions that cover the basics of exporting, as well as specialised workshops focused on specific sectors or markets. These targeted workshops are designed to help businesses enhance their performance or successfully enter new export markets, ensuring that NSW businesses are well-equipped to compete and grow on the global stage.  Going Global Export Program The NSW Going Global Export Program is designed to help businesses expand into international markets with confidence and ease. Whether you're new to exporting or looking to deepen your global presence, the program provides the essential tools, resources, and support needed to thrive in the international marketplace.  Over the course of 4-6 months, participants will engage in online workshops, market intelligence briefings and cultural training, ensuring they’re well-prepared for the complexities of global trade. The program also includes potential partner introductions and business matching services, as well as market visit programs, in-market assistance, and logistical support to help you establish a foothold in your target markets.  Applicants need to meet eligibility criteria and be selected to participate in their nominated stream. Selected participants need to agree to the terms and conditions of program participation.    More Austrade information, tools and support to grow your business globally: Contact Nathan McGrath on 02 6686 3000 for an obligation-free discussion on how Collins Hume can help you tailor a program to suit your requirements.

  • The Strategic Power of Mentorship

    Future-proof your business  Mentorship isn’t just a perk; it’s a strategic investment in your team’s growth and your company’s future.   An effective mentoring program signals that your business is committed to developing and retaining talent rather than leaving their success to chance.   By fostering mentorship, you’re actively equipping your team with tools to excel and contribute more meaningfully to your organisation.  A good mentor provides a neutral space where team members can navigate workplace challenges and gain insights into the company’s operations. While not a direct supervisor, a mentor helps mentees understand the broader picture—offering advice on career advancement, navigating office dynamics, and achieving personal growth. Effective mentorship builds trust and offers support beyond day-to-day tasks, cultivating stronger leaders and more engaged employees.  Gone are the days of expecting staff to “figure it out” on their own.  In today’s competitive market, mentorship is essential for retaining talent. High-performing employees now have more career options, and companies can’t afford a passive, wait-and-see approach. By guiding them through meaningful work, offering growth opportunities, and showing them the rewarding aspects of their roles, mentors help make your organisation a place they want to stay.  A successful mentoring program relies on intentional planning and accountability.   The best mentors are experienced, credible, and genuinely invested in their mentees’ success. To create a lasting impact, ensure that mentors and mentees meet regularly and set clear, measurable goals. The program should be flexible yet structured, with evaluations to assess its effectiveness and room for adjustments based on feedback.  For business owners and executives, this investment in mentorship goes beyond individual growth. As your employees become more effective through mentorship, they’re better equipped to deliver exceptional service to customers and collaborate effectively with peers, ultimately enhancing your business performance.   If you’re looking to future-proof your business with a culture that promotes growth, start with a dedicated mentorship initiative. Assign a program champion, select credible mentors, and nurture a collaborative environment where your team feels supported. The return on this investment is a workforce that’s committed, capable, and inspired to help drive your business forward.  Elevate your business to new heights. Contact Nathan McGrath  on 02 6686 3000 for an obligation-free discussion on how Collins Hume can help you tailor a mentoring program to suit your specific requirements.

  • Business Exit Planning Essentials

    4 Essentials for Business Exit Planning  Do you have a clear succession plan for your own business? Do you know how you will ensure that customers and employees are looked after when you've moved on from the business?  Exit planning is not merely a matter of “leaving the business” but a proactive approach to maximising the business’s value, safeguarding financial security and ensuring a smooth transition for all stakeholders.   The ideal exit plan is initiated years before the anticipated sale or transfer, allowing business owners to strengthen their position and prepare for an optimal outcome.  The Exit Planning Process: What Steps Should Business Owners Take?  Business owners are encouraged to adopt a structured approach using these key steps in the exit planning process:  Define Personal and Business Goals:  Setting clear objectives for both the business’s future and personal financial needs is crucial. A well-thought-out exit plan starts with identifying goals that guide decision-making throughout the process.  Assess Business Value:  Understanding the current market value of the business allows owners to set realistic expectations and identify areas that can increase its attractiveness to potential buyers.  Enhance Business Value:  By optimising operations, reducing dependencies and addressing potential risks, owners can enhance value, making the business more appealing to prospective buyers.  Consider Exit Options:  Explore various options, including selling to a third party, transferring ownership to family members or considering employee buyouts. Each option has implications for business continuity and financial security.  How Does Collins Hume Create a Successful Exit Strategy?  Working with business owners day in and day out, we know better than anyone that the necessity of planning and documenting their plans is often overlooked.  Do you have a clear succession plan for your own business? Do you know how you will ensure that your customers and employees are looked after when you've moved on from the business?  The strategy you begin with, or planned to use 10 years ago, does not have to be the strategy you use when the time comes to transition. Your exit strategy can be a flexible, moving process that can be updated and reworked as your business grows.  The best exit strategy is the one that works for your current situation and that you've clearly thought out and written down.  If you’d like to chat about your exit strategy, please don't hesitate to reach out, and we can organise to grab a coffee. With these essential steps, we equip business owners with the knowledge to navigate the complex exit planning process confidently.

  • What’s ahead in 2025?

    The last few years have been a rollercoaster ride of instability. Next year, 2025 holds hope but not a guarantee of greater stability or certainty. We explore some of the key changes and challenges.  An election  Welcome to political advertising slipping into your social media, voicemail, and television viewing - most likely with messages from the opposition asking if you are better off, and from the incumbents telling you all the reasons why you are.  The 2025-26 Federal Budget has been brought forward to 25 March 2025. This suggests an election will be held in either March or May 2025 but no later than 17 May 2025.   Legislation in limbo  The Senate pushed through 32 Bills on the final sitting day of parliament for 2024 including seven of direct relevance to business and to the financial interests of some Australians. However, two key announcements remain in limbo:  $3m tax on earnings in a superannuation fund  The proposed Division 296 tax, which imposes a 30% tax rate on future earnings for superannuation balances above $3 million, is proposed to commence from 1 July 2025. The Bill enabling the new tax is stalled in the Senate. It’s unlikely that this tax will pass parliament prior to the election; at which point, the Bill lapses. It then becomes a question of whether the elected Government chooses to rectify the concept or let it fade into oblivion as a bad idea.  $20,000 instant asset write-off for small business  In the 2024-25 Federal Budget, the government announced the extension of the $20,000 instant asset write-off threshold for small business for a further year to 2024-25. The concession enables businesses with an aggregated turnover of less than $10 million to immediately deduct the full cost of eligible depreciating assets costing less than $20,000. Without this measure, the threshold returns to $1,000. This concession was removed by amendment from the enabling legislation at the last minute in the final sitting of Parliament of 2024. The removal of this measure is unfortunate, as once again, SMEs now have no confidence about the tax treatment of investments in assets that they might be looking to make, or have made, in the current financial year.  Tax and super changes  Foreign resident capital gains withholding changes on sale of property  One of the Bills pushed through Parliament at the end of 2024 changes how capital gains withholding applies to foreign residents from 1 January 2025.   Currently, residents selling taxable Australian property must provide a clearance certificate to the purchaser at or before settlement to avoid having 12.5% withheld from a property sale where the value of the property is $750,000 or more. If applicable, the withholding is then made available as a credit against any tax liability. The vendor only receives any refund due after their next income tax return is processed at tax time.  From 1 January 2025 however, the threshold will be removed and the withholding rate increased so that:   The withholding is increased from 12.5% to 15%; and   The withholding applies to the sale of all Australian land and buildings by foreign residents, regardless of the value of the assets.  The reforms apply to acquisitions made on or after 1 January 2025.  Superannuation rate increases to 12%  The Superannuation Guarantee (SG) rate will rise from 11.5% to 12% on 1 July 2025 - the final legislated increase.  Super on Paid Parental Leave  From 1 July 2025, superannuation will be paid on Paid Parental Leave payments. Eligible parents will receive an additional payment based on the superannuation guarantee (i.e. 12% of their PPL payments), as a contribution to their superannuation fund.  Interest rates  At the last Reserve Bank Board (RBA) meeting, RBA governor Michele Bullock recognised the easing of headline inflation from 5.4% to 2.8% over the year to September 2024 but suggested that the economy still has some way to go before inflation is sustainably  within the 2% to 3% target range. The RBA appears wary of volatility and wants to see inflation sustainably trending down before making any move. Commbank is predicting a February 2025 rate cut, ANZ and Westpac May 2025, and NAB June 2025.  Cost of living pressures  The National Accounts released in early December took economists by surprise with living standards growing by a mere 0.2% in the September quarter – the expectation was much higher. Discretionary spending only increased by 0.1%.   The personal income tax cuts that came into effect from 1 July 2024 helped households, as did energy subsidies, but the impact is still working its way through the system. At the same time, mortgage costs continue to rise as past increases continue to impact.  Through the year, Australia’s economy grew 0.8%, the lowest rate since the COVID-19 affected December quarter 2020. Economic activity in the Australian economy right now is heavily dependent on Government spending.  Slow and steady is the expectation for 2025.  The ‘Trump effect’  President-elect Trump will recite his oath of office on 20 January 2025. The Trump administration will hold the presidency, Senate and the House.   For Australia, the question is the likely impact of some of President-elect Trump’s stated policy objectives including the imposition of tariffs. On social media, Trump has said:  “…as one of my many first Executive Orders, I will sign all necessary documents to charge Mexico and Canada a 25% Tariff on ALL products coming into the United States, and its ridiculous Open Borders.”  “…we will be charging China an additional 10% Tariff, above any additional Tariffs, on all of their many products coming into the United States of America.” This in response to claims that China is responsible for massive amounts of drugs, in particular Fentanyl being sent into the US.  The issue for Australia is the secondary impact of a trade war. China is Australia's largest two-way trading partner, accounting for 26% of our goods and services trade with the world in 2023. A slowdown in the Chinese economy impacts Australia and the region generally.   An immediate impact of the idea of a trade war has been the decline of the AUD/USD, currently sitting at around 64c.   Fuel efficient cars  New standards for vehicle manufacturers come into effect from 1 January 2025. Vehicle manufacturers will have a set average CO2 target for all new cars they produce, which they must meet or beat. The target will be reduced over time and car companies must provide more choices of fuel-efficient, low or zero emissions vehicles.   Suppliers can still sell any type of vehicle they choose but with more fuel-efficient models offsetting any less efficient models. If suppliers meet or beat their target, they'll receive credits. If they don’t, they will have two years to either trade credits with a different supplier, or generate credits themselves, before a penalty becomes payable.  Wage theft criminalised  As of 1 January 2025, the intentional underpayment of workers will be criminalised.   Employers will commit an offence if:  they’re required to pay an amount to an employee (such as wages), or on behalf of or for the benefit of an employee (such as superannuation) under the Fair Work Act, or an industrial instrument; and  they intentionally engage in conduct that results in their failure to pay those amounts to or for the employee on or before the day they’re due to be paid.  Employers convicted of wage theft face fines of up to 3 times the amount of the underpayment and $7.825 million. Happy Christmas! From all of the team, we want to take this opportunity to wish you a safe and happy Christmas. The year has gone quickly and has no doubt had some challenges. The Christmas holidays are an opportunity to take stock and revel in the spirit of the season.  We look forward to working with you again in 2025 making it the best possible year for you and wish you and your family the warmest of Christmas wishes.

  • Xero changes to classic invoicing

    Extension of ‘classic’ invoicing to 27 feb 2025 Xero has announced an update to its invoicing system: the classic invoicing product, initially set to retire, will now remain available until 27 February 2025 to allow a smoother transition to the new invoicing platform. Registering for e-invoicing does not mean you automatically have to send e-invoices. Sending e-invoices is a choice you make for each invoice. Useful points for Xero users:  Tip:  If you have Dext  connected to your Xero file, it's worth holding off  on registering for e-invoicing as the two are currently incompatible (if you get stuck, contact our Bookkeeping team on 02 6686 3000 and we can help you) Bug:  If you're not registered for e-invoicing but another Xero user else is and sends you an e-invoice, you won’t receive it and there is currently no way to locate or recover it from the interweb Transition Support:  A dedicated education hub is available to guide users through the new workflows, ensuring an easier adjustment to the updated system Resources & Updates:  The new invoicing hub on Xero Central  provides the latest information and tools to help users stay updated. To date, over 30 updates have been delivered to the new invoicing system, integrating many features from the classic version and incorporating user feedback. Related Xero resources ·       General overview of e-invoicing, and some info around e-invoicing in Xero ·       Register to receive e-invoices (also instructions for how to deregister) ·       How to send an e-invoice in Xero Books360 by Collins Hume – Simplifying Small Business Bookkeeping Managing the books can be overwhelming and time-consuming for businesses owners. Books360 by Collins Hume takes the stress out of staying on top of your ATO obligations. Whether it’s BAS lodgement, payroll or one-off bookkeeping expertise, our specialist team ensures accuracy and compliance, allowing you to focus on growing your business. Work with us today to streamline your bookkeeping and ensure you keep up with the ATO’s relentless deadlines. We help simplify your operations and provide real-time financial insights. Being efficient and adopting technology not only saves you time but also reduces costly errors and improves cash flow, directly benefiting your bottom line. With the expertise of our experienced bookkeepers, including Certified Xero Professionals, you’ll have peace of mind knowing your books are in order. Let Books360 by Collins Hume keep your business running smoothly.

  • Tax and tinsel Q&As

    Can you avoid giving the Australian Tax Office a gift this Christmas?  The top Christmas party questions  What can I do to make the staff Christmas party tax deductible or tax-free?  Not have one? Ok, seriously, it’s likely that you will pay tax one way or another; it’s just a question of how. If you structure your celebrations to avoid fringe benefits tax (FBT), then you normally can’t claim a tax deduction for the expense or goods and services tax (GST) credits.  No FBT   If you host your Christmas party in the office on a working day, then FBT is unlikely to apply to the food and drink. Taxi travel that starts or finishes at an employee’s place of work is also exempt from FBT - helpful if you have a few team members that need to be loaded into a taxi after overindulging in Christmas cheer.  If you host your Christmas party outside of the office and keep the cost per head under $300 (the FBT minor benefit limit) then FBT often won’t apply to the cost of entertaining your employees.   But, if you do not incur FBT, you cannot claim GST credits or a tax deduction for the Christmas party expense.   Tax deductible  If your business hosts slightly more extravagant parties away from the business premises and the cost goes above the $300 per person minor benefit limit, you will pay FBT but you can also claim a tax deduction and GST credits for the cost of the event.   Are the costs of client gifts deductible?  It depends on the gift and why you’re giving it. If you send a client a gift, the gift is tax deductible if you have an expectation that the business will benefit; it’s marketing. While this seems like a mercenary way to look at Christmas giving, it is the business giving the gift, not you personally. This assumes that the gift is not a gift of entertainment like golf, or restaurants, which would not be deductible.  What about gifts for staff? Are they tax deductible?  The key to Christmas presents for your team is to keep the gift spontaneous, ad hoc, and from a tax perspective, below the $300 FBT minor benefit limit. So, no ongoing gym memberships or giving the same person several of the same gift that adds up to $300 or more unless you want to give a gift to the ATO at the same time. But, you can give gifts at different times throughout the year without triggering FBT as these are counted separately for the minor benefit limit.  A cash bonus will be treated as income in much the same way as salary and wages.   I like to catch up with clients for lunch or a drink (or two) at Christmas. These expenses are deductible, right?  Regardless of whether it’s for Christmas or at any other time of the year, the cost of entertaining your clients – food, drink or other entertainment – is not deductible. The ATO is keen to ensure that taxpayers are not picking up part of the cost of your long lunches or special events while you’re bonding with clients.  Happy Christmas! From all of the team, we want to take this opportunity to wish you a safe and happy Christmas. The year has gone quickly and has no doubt had some challenges. The Christmas holidays are an opportunity to take stock and revel in the spirit of the season.  We look forward to working with you again in 2025 making it the best possible year for you and wish you and your family the warmest of Christmas wishes.

  • Succession and a new perspective on transferring property

    A look at the tax consequences of inheriting property.  Beyond the difficult task of dividing up your assets and determining who should get what, it’s essential to look at the tax consequences of how your assets will flow through to your beneficiaries.   When assets pass from a deceased individual to a beneficiary of the estate, the tax impact will generally depend on the nature of the asset and the tax characteristics of the beneficiary, such as their residency status.  Inheriting cash  When cash passes from a deceased individual to their estate and then to a beneficiary, generally, there should not be any direct tax issues to deal with, assuming that the cash is denominated in AUD.  Inheriting assets  Death is a taxing event. When a change of ownership of an asset occurs, generally, a capital gains tax event (CGT) is triggered. However, the tax rules provide some relief from CGT when someone dies. The basic rule is that a capital gain or loss triggered by a death is disregarded unless the asset is transferred to one of the following:  An exempt entity (although there are some exceptions to this where the entity is a charity with deductible gift recipient status);  The trustee of a complying superannuation fund; or  A foreign entity and the asset is not classified as taxable Australian property.  The exemption applies if the asset passes to the deceased’s legal personal representative (i.e., executor) or to a beneficiary of the estate, which is not one of the entities listed above.   Once the asset has been transferred to the beneficiary, the beneficiary will need to manage the tax impact when they sell the asset.   Inheriting shares  Let’s assume you inherit an ASX listed share portfolio under your mother’s will. The tax outcome will depend on whether your mother was an Australian resident for tax purposes when she died, and whether the shares were acquired by your mother before or after 20 September 1985 (i.e., pre-CGT or post-CGT).   If your mother was an Australian resident for tax purposes when she died, and the shares were acquired post-CGT, then the cost base of the shares is normally based on the original purchase price. That is, the tax rules treat the inherited shares as if you purchased them. For example, if your mother purchased BHP shares for $17.82 on 2 January 1997, when you sell the shares, the gain is calculated based on your mother’s purchase price of $17.82.  If your mother was a resident of Australia when she died, and the shares were acquired pre-CGT, then the cost base of the shares is normally reset to their market value at the date of death. That is, if your mother passed away on 1 October 2024, the share price at close was $45.96. If you subsequently sold the shares in three years, the gain or loss is calculated using this value.  If your mother was a non-resident when she died, then the cost base of the shares is normally based on their market value at the date of death.  But it’s not all about the tax. Managing shares in your will can be difficult as prices and allocations change over time, and the companies you are invested in evolve. A portfolio that was once worth a small amount 20 years ago, might be worth significantly more when you die.   Inheriting property  Let’s assume you inherit an Australian residential property from your father under his will. For certain tax purposes, you are taken to have acquired the property at the date of his death.  The general rule is that the executor and/or beneficiaries of the estate inherit the cost base and reduced cost base of the CGT assets (the house) owned by the deceased just before their death, but this isn’t always the case, especially when it comes to pre-CGT properties and a property that was the main residence of the deceased individual just before they died.   Special rules exist that enable some beneficiaries or estates to access a full or partial main residence exemption on the inherited property. If the house was your father’s main residence before he died, he did not use the home to produce income (did not rent it out or use it as a place of business) and he was a resident of Australia for tax purposes, then a full CGT exemption might be available to the executor or beneficiary if either (or both) of the following conditions are met:  The house is disposed of within two years of the date of death; or  The dwelling was the main residence of one or more of the following people from the date of death until the dwelling has been disposed of:  The spouse of the deceased (unless they were separated);  An individual who had a right to occupy the dwelling under the deceased’s will; or  The beneficiary who is disposing of the dwelling.  For example, if the house was your father’s main residence and was eligible for the full main residence exemption when he died, if you sell the house within the 2 year period, no CGT will apply. However, if you sell the house 10 years later, the CGT impact will depend on how the property has been used since the date of your father’s death.  An extension to the two year period can apply in limited certain circumstances, for example when the will is contested or is complex.  If your father did not live in the property just before he died, it still might be possible to apply the full exemption if your father chose to continue treating the home as his main residence under the ‘absence rule’. For example, if he was living in a retirement village for a few years but maintained the property as his main residence for CGT purposes (even if it was rented out).  If your father was not an Australian resident for tax purposes when he died, the cost base for CGT purposes will normally be based on the purchase price paid by your father if he acquired it post-CGT.  Inheriting foreign property  If you are an Australian resident who has inherited a foreign property or asset from an individual who was a non-resident just before they died, the cost base is normally taken to be the market value at the time of death. For example, if you inherited a house from your uncle in the UK, the cost base is likely to be the value of the house at the date of his death.  If a taxable gain arises on sale, then it is necessary to consider whether the CGT discount can apply, but the discount will sometimes be less than 50%. If the gain is also taxed overseas, then a tax offset can sometimes apply to reduce the amount of tax payable in Australia.   Managing an inheritance can become complex. For assistance with estate planning, or to understand the tax implications of an inheritance, please contact Collins Hume in Ballina on 02 6686 3000.

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