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Donate to HELP save Australian wildlife Byron Bay Wildlife Hospital (BBWH) needs help fundraising for professional vet care for injured, sick and orphaned wildlife. In two years, BBWH built and sustained a state-of-the-art wildlife veterinary hospital from their permanent base in Knockrow and, when required, they can attend natural disasters like bushfires, floods, or disease outbreaks to provide lifesaving triage, treatment and care for critical masses of impacted wildlife via “Matilda”, Australia’s largest mobile wildlife hospital. This financial year BBWH will need $1.5 million to continue its ground-breaking work. Their professional veterinary services save wild lives, yet they provide their expertise for free. BBWH donation drive this November It costs an average of $555 per wildlife patient for an initial consult, anaesthesia, X-rays, pain relief, fluid therapy and hospitalisation, not including the cost of medicines or surgery. BBWH is hoping to generate a groundswell of fundraising in November that will see their philanthropic activities through another financial year. We’re spreading the word to invite you to make a tax-deductible one-time or regular monthly donation that helps get BBWH over the line. All donations over $2 are fully tax-deductible. BBWH holds Deductible Gift Recipient (DGR) status with the Australian Taxation Office. No one owns Australia’s wildlife, so a collective effort is needed to protect our native species. BBWH has treated approximately 3,000 injured, sick and orphaned native animals since opening its doors and hopes to be able to continue their much-needed work. Collins Hume is a proud supporter of Byron Bay Wildlife Hospital. Read more about our Legacy here »

Need help applying for a Director ID? The Australian Business Registry Services have started contacting directors who are required to apply now for a director identification number (director ID). Key points Collins Hume cannot apply for a director ID on a client’s behalf — directors must apply for a director ID themselves Apply for a director ID online at abrs.gov.au/directorIDapply Directors must set up their myGovID with a standard or strong identity strength before they apply for a director ID. Our clients who are currently directors or who are planning to become a director will need to apply for a director ID. Directors appointed under the Corporations Act: before 1 November 2021, must apply by 30 November 2022 between 1 November 2021 and 4 April 2022, must apply within 28 days of being appointed from 5 April 2022, must apply before being appointed. You can find more information about who needs to apply for a director ID at abrs.gov.au/deadlines. Applying for a director ID online Applicants will need at least two of the following Australian identity documents to prove their identity: Driver’s licence or learner’s permit Passport Birth certificate Visa (using a foreign passport) Citizenship certificate ImmiCard Medicare card You can find a list of documents that you can use to prove your identity at www.mygovid.gov.au/verifying-your-identity. Directors will need additional information that the Australian Taxation Office (ATO) knows about you when applying for a director ID online: Tax file number (not essential, but recommended) residential address as held by the ATO, and information from two documents to prove your identity — applicants can use any two of these documents: Bank account details held by the ATO ATO notice of assessment Super account details Dividend statement Centrelink payment summary PAYG payment summary. You can find more information about which documents can be used to prove your identity at abrs.gov.au/verify. Directors who don’t apply online The Australian Securities and Investment Commission (ASIC) is responsible for enforcing director ID offences set out in the Corporations Act 2001. It is a criminal offence if directors do not apply on time, for more information about the penalties that may be applied, visit asic.gov.au/director-id. Source: abrs.gov.au

ATO contacts ‘at risk’ professional services firms New guidelines for professional services firms — lawyers, architects, medical practitioners, etc — came into effect on 1 July 2022. The guidance takes a strong stance on structures designed to divert income in a way that results in principal practitioners receiving relatively small amounts of income personally for their work and reducing their taxable income. The ATO is now contacting professionals who they believe might be at risk. Any structural changes that need to be made to reduce risk, should be completed by the end of the 2022-23 financial year. Where the ATO deems that income has been diverted inappropriately to create a tax benefit, they will remove that benefit and significant penalties may apply. How to contact us We’re available to assist you with tax planning including tax deductions. Contact Collins Hume Accountants & Business Advisers in Ballina or Byron Bay on 02 6686 3000. Read more tax planning topics here »

Stamp duty or an annual property tax for NSW first home buyers? First home buyers purchasing property in NSW of up to $1.5m will have a choice of paying stamp duty or an annual property tax from 16 January 2023. The annual property tax payments will be based on the land value of the purchased property. The property tax rates for 2022-23 are: $400 plus 0.3% of land value for properties whose owners live in them $1,500 plus 1.1% of land value for investment properties. Property tax assessments will be issued annually to home buyers who take the annual property tax option. As an example, a first buyer purchasing a $1.2m NSW property with a land tax value of $720,000, could pay stamp duty of $50,875 or opt to pay the annual property tax ($2,560 for 2022-23). The property tax rates will be indexed annually. Eligible first home buyers who sign a contract of purchase on or after 16 January 2023 will be eligible to opt into the property tax. If the property tax option is selected, first home buyers must move into the property within 12 months of purchase and live in it continuously for at least 6 months. The annual property tax is only applicable to the purchaser. If the property is sold, the property tax does not apply to subsequent purchasers. For eligibility details, see First Home Buyer Choice on the NSW Government website. Legislation enabling the property tax is expected before the NSW Parliament this month. If passed, eligible first home buyers who sign a contract of purchase between the passage of the legislation and 15 January 2023 will be eligible to opt into the property tax. These purchasers will pay land stamp duty but will be able to apply for and receive a refund of that duty if they opt into property tax. Queensland backs down on Australia-wide land tax assessment The Queensland Government has backed away from an amendment that would have seen the land tax rate for investment property in Queensland assessed on the value of the investor’s Australia-wide land holdings from 1 July 2023, not just the value of their Queensland property. The amendment passed the Queensland Parliament and became law on 30 June 2022. The amendment would see the value of all of the landholder’s Australian investment property assessed, the value of Queensland land tax calculated on taxable Australian-wide investments, then apportioned to the Queensland portion of the land. The amendment requires the landholder to declare their interstate landholdings and data from other sources to verify the landholdings. The end result is many investors being tipped into a higher land tax rate. The Bill states, “The land tax reform is intended to make Queensland’s land tax system fairer by addressing an inequity which can result in a landholder with all of their landholdings in Queensland paying more land tax than a landholder with a similar value of landholdings spread across jurisdictions.” Following the National Cabinet Meeting on 30 September, Premier Palaszczuk rescinded the reform as it relied on the “goodwill of other states, and if we can't get that additional information, I will put that aside.” How to contact us We’re available to assist you with tax planning including tax deductions. Contact Collins Hume Accountants & Business Advisers in Ballina or Byron Bay on 02 6686 3000.

We're proud to announce that Collins Hume is officially Climate Neutral Certified! Science says we have just nine years to make the changes needed to tackle climate change. Overwhelming? Yes. But it’s also an opportunity. Collins Hume is now officially one of hundreds of companies committed to leading the way, right now. We've spent the last three months working with Climate Neutral to measure our carbon footprint. We calculated all of the emissions that it takes to do what our business does. We then offset all our carbon footprint by investing in climate change solutions. Collins Hume Partner Peter Fowler said, “Our recent partnership with 1% for the Planet is another crucial piece of our sustainability jigsaw.” “It’s important that we take action on the positive difference we can make as a business. We want to make a living legacy that will be timeless — one that’s about contribution as opposed to consumption.” Climate change requires immediate action There isn't a minute to waste when it comes to removing climate-changing emissions from our global economy. If every business were to measure, offset and reduce their emissions right now, we could accelerate this journey in a serious way. Look for the Climate Neutral Certified label to support the businesses that are taking immediate action on climate change. Tell your favourite ones that you want them to #beclimateneutral too. Together, we can solve the climate challenge. Let's get to work. Collins Hume is thrilled to be in good company with other Climate Neutral Certified brands. We believe in Climate Neutral’s mission of taking action now to solve a problem that we understand to be an urgent threat. Follow us on our journey — and let’s work together to tackle climate change faster. Solutions to climate change exist, they just need funding. If we can drive investment into these projects, we can cut our emissions and get on the right path to a zero-carbon future and a balanced, healthy climate. “We are thrilled that by coming to work every day, we can add value to our clients’ businesses and lifestyle, whilst doing our bit to make the planet a healthier and happier place,” Peter added. Read more at https://www.climateneutral.org/.

The October 2022 Federal Budget and what it means for business Last month the Treasurer, Dr Jim Chalmers, handed down Labor’s first Federal Budget (an updated Budget for the 2022/23 financial year). The good news is there were virtually no tax or superannuation changes that affect small or medium size businesses. This is very much welcomed. The bad news is with interest rates and labour costs rising, as well as high inflation, businesses looking for assistance from the Government will be very disappointed by this interim Budget. Based on our analysis, the big winners appear to be: Families – Childcare subsidies extended, increased benefits with the Paid Parental Leave scheme Pensioners – Deeming rates are frozen at current rates until 30 June 2024, new measures to incentivise pensioners to downsize their homes, and income levels lifted significantly for eligibility for the Commonwealth Seniors Health Card Retirees – Downsizer superannuation contribution eligibility age is reduced from 60 to 55 years, starting from first quarter after this legislation is passed. This allows each eligible person to contribute up to $300,000 into their super at a much earlier age, benefiting from super’s low tax rates. Our concerns for future years This wasn’t the usual Federal Budget held in May where tax, super and other changes that affect business owners are announced. Instead, it was a Budget to wind back what the previous Government said they would do and to “fix” things and put in place new policies from the new Government. Based on the negative economic expectations discussed by the Government after releasing this Budget, it appears highly likely that significant tax increases will occur in the 2023 or future Budgets. Additionally, the ATO is clamping down further on business owners and ramping up audit activity in an attempt to raise tax revenue to support the new Government’s spending. We need to start planning for this now. 1. New ATO Ruling affects “Professionals” and profit allocations New ATO guidance changes the way that professional firm profits can be allocated (or split) among a family group from 1 July 2022 onwards. As a result, most professionals will end up paying larger amounts of tax from the 2023 financial year onwards. A professional firm is one that offers customised, knowledge-based services to clients which include medicine (doctors, dentists, medical specialists, etc), lawyers, architects, engineers, accountants, financial advisors and consultants. 2. Business cash flow may be “crunched” With inflation running the highest it has been in decades, interest rates rising, labour costs increasing and power costs exploding, you need to closely monitor your profit margins and ensure your prices are set at a level that keeps your business profitable. We believe it is ESSENTIAL for you to plan for the next 18 months by preparing a monthly Profit and Cash Flow Forecasts to prove to yourself that your business model (i.e. your way of running your business to succeed) is sustainable, or to alert you to the fact that you need to consider immediate changes to your pricing and operations to keep your cash flow positive. Collins Hume can help you with this essential work. 3. Big changes affecting Family Trusts (also known as Discretionary Trusts) We need to alert you to two key changes that will affect people using Family Trust in this 2023 financial year: This process will take time and will need to start taking place from the beginning of May 2023. Next steps For peace of mind, let’s meet for an initial review of how these key changes may affect you: 1. Professional Firm Profit Allocations 2. Cash Flow “Crunch” 3. Family Trusts – S100A and Distributions to Family Members 4. Family Trusts – “Owies” Case and Consideration of Beneficiaries When are you available to meet with us? Make a time with us here and let’s get started.

National Cabinet agreed to end the mandatory isolation requirements for COVID-19 effective from 14 October 2022 Each state and territory has, or will, implement the end of the isolation rules. The Pandemic Leave Disaster Payment, the payment to workers who have lost income they needed to self-isolate or care for someone with COVID-19, also end on 14 October. The Pandemic Leave Disaster Payment was extended beyond its 30 June end date but restricting the number of times claims can be made in a 6-month period. While the Pandemic Leave Disaster Payment will end, National Cabinet agreed to continue targeted financial support for casual workers, on the same basis as the disaster payment, for workers in aged care, disability care, aboriginal healthcare and hospital care sectors. Final details of this new payment are yet to be released. How to contact us We’re available to assist you with tax planning including tax deductions. Contact Collins Hume Accountants & Business Advisers in Ballina or Byron Bay on 02 6686 3000.

Executive Assistant Lucy Flanagan When Executive Assistant Lucy Flanagan (then Alcock) joined Collins Hume in 2020 little did we know how much of a positive impact she’d make on our business! According to Lucy, though, she fell into the accountancy profession. Having grown up and spent all her working time in the Northern Rivers, a friend mentioned that a position had opened up and she took on her first role as an accounting firm receptionist. When the office manager left, she quickly filled those shoes. While she was there she also managed to get two traineeships done and dusted (one as a TAFE Award Recipient). Wanting to get back into a more specialised role, Collins Hume was a great fit for Lucy and she changed firms. Lucy revels in routine, order and helping others to have her organisation skills rub off on them. Two different styles; two different hats In her role as one of only two Executive Assistants at Collins Hume, Lucy rolls with everything Partner Chris Atkinson sends her way in his fast-paced manner. However, she also loves being able to support Partner Kelly Crethar in order to free up capacity and make room in her busy client schedule. And Lucy has no problem understanding the nuances of accounting jargon. On any given day, she can find herself making appointments, helping clients, or liaising, communicating and preparing to make Kelly’s and Chris’ working lives easier. “I’m very comfortable relating to people just as much as I love ticking things off and getting stuff done,” says Lucy. “I enjoy being at Collins Hume. Everyone cares about the next person and the Partners look after us and take an interest in our professional and personal lives.” Outside the office, Lucy and her husband love nothing more than packing up their 4WD and going camping. Being in the middle of a major house renovation, the times they get to do that are precious, but there is light at the end of the tunnel. “COVID-19 has put us in the right mindset and reminded us of our priorities,” Lucy added. “We have some big travel plans on the horizon which we hope will broaden our minds and allow us to gain some perspective and balance.” She is also an avid reader adding, “I’ve always got my head shoved in a book. I love getting lost in the stories and different worlds.” Lucy Flanagan holds a Cert III (TAFE Award Recipient) and also a Cert IV Business Admin. She is also a Justice of the Peace. Copyright 2022. Collins Hume Accountants and Business Advisers. Ballina and Byron Bay NSW

Shuffling the Deck — 2022-23 Budget 2.0 There is nothing in the 2022-23 Federal Budget 2.0 that will create a UK-style crisis: the stage 3 tax cuts legislated to commence on 1 July 2024 are not mentioned, and most funding initiatives appear to be a reallocation of previous Government initiatives. With seven months before the 2023-24 Budget released in May 2023, this Budget is a shuffling of the deck, not a new set of cards. Key measures include: Childcare subsidy increase Added flexibility and an expansion of Paid Parental Leave Aged care reforms Change to the taxation of off-market share buy-back by listed companies The scrapping of the initiative to self-assess the effective life of intangible assets Scrapping of the announced but not legislated 3-year audit cycle for SMSFs Energy grants for SMEs (but no detail yet) Read our full summary: Cost of living pressures will continue. While some initiatives such as the increase to childcare subsidies will help, the Budget flags some fairly bracing economic expectations. Tight labour market conditions are expected to see annual wage growth pick up to 3.75% by June 2023. Even so, high inflation is expected to see real wages fall over 2022-23 before rising slightly over 2023-24. That is, your wages might increase but the gains will be eaten away by the increasing cost of living. The ATO gets an extra $80m to extend its personal income tax compliance program, with $674m anticipated in increased receipts and over $80m in increased payments as a result. Tax deductions will be looked at closely. As expected, multinationals are a target. New measures will limit opportunities to shift taxable profits offshore. And, the ATO’s Tax Avoidance Taskforce is expected to deliver a whopping $2.8bn in additional tax receipts and $1.1bn in payments over the 4 year period. How to contact us If we can assist you to take advantage of any of the Budget measures, or to risk protect your position, please let us know. Contact Collins Hume Accountants & Business Advisers in Ballina or Byron Bay on 02 6686 3000.

We’re often asked about the best way to sell a business There are two key components at play in the sale of a business: structuring the transaction; and positioning the business to the market. Both elements are important and can significantly impact your result. Structuring the transaction covers areas such as pricing the business, the terms and conditions attaching to the sale, key terms in the contract, and ensuring the transaction structure is as tax effective as possible. Much of the structuring is about ensuring the vendors secure the most efficient and effective outcome from the sale. It is about maximising the vendor’s position. Positioning the business for sale is all about ensuring that you achieve a sale and maximise your price. It covers areas such as ensuring there are no hurdles within the business that will limit its saleability, identifying the competitive position of the business within its market segment, ensuring that operating performance is as good as it can be, and that the business benchmarks well in its market. Positioning also includes identifying the best time to take the business to the market, how to take it to the market, and who the most likely buyers will be. Positioning is about doing everything needed to maximise the probability of a sale occurring, whereas structuring is about getting the best outcome from a transaction once it has occurred. A lot of people make the mistake of spending most of their energy on the structuring of the transaction. It is important but only becomes important if the sale is achieved. Structuring should be addressed first to help identify any key decisions that need to be made but put most of your effort into positioning the business for sale. To do this, you need an objective assessment of how the business compares in its market, its competitive position, and what if any impediments to sale exist – all the things a buyer will look at and look for when they assess your business. Most buyers believe that we are currently in a buyer’s market and will try to drive down price expectations. Whether or not you are in a buyer’s market depends on your industry segment but regardless of this, you are in a competitive market. Buyers may be comparing your business to similar businesses but also opportunities in other industry segments. Securing a sale at the best possible price is about having your business positioned for sale. Preparation time is needed to achieve this well in advance of putting your business on the market. Thinking of selling your business? Talk with Collins Hume in Ballina or Byron Bay today about preparing your business for sale.

To cut tax or not to cut? In September, amid a climate of startling interest rates, UK Chancellor Kwasi Kwarteng announced a series of tax cuts, including the reduction of the top personal income tax rate that applies to those earning more than £150,000 from 45% to 40%. Just ten days later, following market turmoil that saw the British Pound drop at one point to a low of $1.035 USD, its lowest level since 1985, the decision was reversed calling the cuts “a massive distraction.” Heading into the 2022-23 Federal Budget on 25 October, the question for the Australian Government is different. It is not whether to introduce personal income tax cuts but whether to keep, amend or repeal the cuts legislated to commence on 1 July 2024. In Australia, the 2018-19 Budget introduced the Personal Income Tax Plan. The plan implemented three stages of income tax cuts over seven years that will, by 2024-25, simplify the tax brackets and enable taxpayers to earn up to $200,000 before paying a new top marginal tax rate of 45%. Stages of the plan, bringing relief for low and middle-income earners, were brought forward in the 2019-20 Budget and again in 2020-21. Labor’s pre-election Lower Taxes policy states, “An Albanese Labor Government will deliver tax relief for more than 9 million Australians through the legislated tax cuts that benefit everyone with incomes above $45,000.” But this month, the Treasurer has subtly changed the narrative from simply “our policy has not changed on stage three tax cuts” to “We do need to ensure that spending in the Budget, particularly in these uncertain global times, is geared toward what's affordable and sustainable and responsible and sufficiently targeted. I think that's one of the lessons from the UK.” The public appeal of repealing the final stage three tax cuts is understandable. Back in 2018-19 when the plan was first introduced, the economy was in surplus and Australia was yet to feel the effects of a global pandemic, environmental extremities, and the Russian invasion of Ukraine. The tax cuts forego around $240bn of tax revenue over the next 10 years, and because it is percentage based, favours high-income earners. The public policy think tank, the Grattan Institute, previously warned that if the government progressed with the stage three cuts “Australia’s income tax system will be less progressive than it’s been since the 1950s”. Conversely, the rationale for reforming the current personal income tax regime where the highest marginal tax rate applies from around 2.5 times average full-time earnings (compared to around 4 times in Canada and 8 times in the US), is also understandable. When it comes to international competitiveness, New Zealand’s top marginal tax rate is 33% (from $180,000) and Singapore’s is 22%, increasing to 24% in 2023-24. If implemented, stage 3 of the income tax plan would see around 95% of taxpayers paying a marginal tax rate of 30% or less. The 1 July 2024 tax cuts Stage three of the Personal Income Tax Plan is legislated to take effect from 1 July 2024. What the tax stats say Personal income and withholding tax represents around 48% of the annual Commonwealth tax collections. Company tax, by comparison, is around 16%, and the goods and services tax (GST) just under 15% of total tax revenue collected. Australia has a progressive personal tax system. That is, those with higher incomes pay not only a higher amount of tax, but a higher proportion of their income in tax. As a result, the 3.6% of taxpayers with taxable incomes of over $180,000 pay 31.6% of the total. Where to from here? The second 2022-23 Federal Budget will be announced on 25 October 2022. If the Government make no mention of the stage three tax cuts, they have another opportunity to refine their position in the 2023-24 Federal Budget released in May 2023, more than a year before the 1 July 2024 tax cuts come into effect. Our best guess? The Government will announce a review of the stage three tax cuts, then open the issue to consultation, locking in the position, whatever it is, in the 2023-24 Federal Budget. We’ll keep you posted! Look out for our 2022-23 Federal Budget update on 26 October!

Do you think you can spot a cyber threat? Cyber security is more important than ever. Protecting your and your customers’ data from cybercriminals should be one of your top business priorities. Now is the time to ensure you know how to identify and respond to cyber threats. Increasing your knowledge and awareness is the best way to protect your business. Luckily, you don't have to be an IT expert to step up your cybersecurity. Protect your business now with these five ways to increase your online account security: 1. Make 2 Factor-Authentication Mandatory 2 Factor-Authentication (2FA) helps prevent a hacker from getting into your account, even if they steal your password. To avoid common phishing techniques associated with text message codes, choose to apply 2-Factor Authentication. Alongside the traditional password, 2FA enabled users are required to enter a one-time security code that they receive via text which is the best way to authenticate the user. You don’t have to make 2FA mandatory in your business, but we strongly recommend it as do most good cloud computing platforms. Related reading: Changes to multi-factor authentication are coming for Xero customers » 2. Close shared login accounts Shared logins mean multiple people in your business know a password and can make it harder to track any work or issues you may have. 3. Remove risky access to your data Consider removing account access for any staff who are no longer with you. 4. Update your software If your browser operating system or apps are out-of-date, the software might no longer be safe from hackers. Keep your software updated to help protect your account. 5. Use unique, strong passwords It’s risky to use the same password on multiple sites. If your password for one site is hacked, it could be used to access your accounts on multiple sites. Instead, consider using a password manager. If you’re ever unsure about a phone caller, SMS, voicemail or email claiming to be genuine but seems suss, do not reply. You can also follow the latest scams and advice on how to protect yourself on the ATO website or at Scamwatch. Contact Collins Hume in Ballina or Byron Bay »