After an eventful summer of weather extremes, on-again off-again lockdowns and the swearing in of a new US President, many will be hoping that Autumn ushers in a change of more than the season. As the vaccine rollout begins, there are also promising signs that economic recovery may be earlier than expected.

Australia’s economy has improved and the downturn was not as deep as feared. That was the message Reserve Bank Governor Philip Lowe delivered to Parliament on February 5, citing strong employment growth, retail spending and housing. Unemployment fell from 6.6% to 6.4% in January, although annual wage growth remains steady at a record low of 1.4% after a 0.6% increase in the December quarter. Retail trade rose 0.6% in January, 10.7% higher than a year ago. While home lending jumped 8.6% in December. This helped fuel the 3% rise in national home values in the year to January, led by a 7.9% increase in in regional prices.

Business and consumer sentiment is also improving. The NAB Business Confidence Index was up from 4.7 points to 10.0 points in January, although 60% of businesses say they are not interested in borrowing to invest. Halfway through the corporate reporting season, 87% of ASX200 companies reported a profit in the December half year, although earnings were 14% lower in aggregate while dividends were 4% higher. The ANZ-Roy Morgan Consumer Confidence rating eased slightly in February but is still up 67% since last March’s low.

Higher commodity prices lifted the Aussie dollar to a three-year high. It closed the month around US78.7c, on the back of a 31% rise in crude oil prices and an 8.5% lift in iron ore prices in 2021 to date.

Tame your inbox for greater productivity

While the way we work and communicate with each other for business is constantly evolving, one element has remained pretty constant for many years now: email. Our dependence on email and similar messaging apps to run our businesses and carry out our jobs is pretty entrenched. This is even more true of late as working remotely and more flexible working arrangements have become a lot more common.

However, although email remains a critical business tool, it has the potential to be a big drain on our productivity and a source of anxiety if not carefully managed. Just think about how often your train of thought gets interrupted by incoming notifications and the dread in the pit of your stomach when you log back in to see an intimidating number of unread emails sitting in your inbox.

Email and messaging apps are not going away anytime soon, particularly as we move to more flexible working arrangements, so here are a few tips to tame the beast.

Understanding the impact of your inbox

Our inboxes are heaving – it was estimated that in 2019 the average office worker would be dealing with 126 emails every day, a number you’d expect to be even bigger given more of us are working remotely and are expected to be connected beyond the usual 9 – 5.ⁱ

And it’s not just the volume of emails that is the issue, 42% of survey respondents admitted to checking emails in the bathroom, with 50% doing so from their beds. It’s clear that our inboxes are on our minds even away from the office, as they infiltrate other parts of our lives.ⁱⁱ

Setting up a system

Searching for and following up emails is one of the most common inefficiencies associated with email. To make things easier, create labels and rules to direct certain emails into folders – for instance, emails relating to a certain project so they won’t be lost amongst spam or general messages.

You can also send out auto replies so that senders get an instant response acknowledging the receipt of the email, which puts less pressure on you to reply immediately. Templates can also save you time; these are especially handy if you get many of the same type of enquiries.

Create email-free zones

If you’re one of the bedroom email checkers, put boundaries in place as to when and where you view your inbox. Attending to emails during a set period, such as when you start work, after lunch and an hour before you clock off, for example, doesn’t just make you more productive. A study in the Computers in Human Behaviour journal found that checking email less frequently reduced stress.ⁱⁱⁱ

Reconsider what is essential

Not all emails need a response – how often do you reply just with a ‘thanks’ or ‘okay’ when it’d be fine to not reply? Recognise that not every response is urgently needed. Give yourself a realistic timeframe, such as replying within 48 hours to business enquiries, so that you don’t feel pressured to reply straight away.

Call rather than email where possible

While this can be a generational preference (millennials are not the biggest fans of phone calls), it’s fair to say many different generations have got into the habit of emailing rather than speaking with someone directly.^iv Yet a quick phone call can address many points in real time so you’re not left waiting for a response. This will improve your productivity as well as not add to the clutter of your inbox.

Rather than being ruled by your inbox, make email work better for you with a few tweaks to the way you use it. So take back control and revel in your new found sense of accomplishment, while enjoying the additional time you now have for the tasks that really matter.

i https://www.campaignmonitor.com/resources/knowledge-base/how-many-emails-does-the-average-person-receive-per-day/

ii https://www.lifewire.com/how-many-emails-are-sent-every-day-1171210

iii https://www.sciencedirect.com/science/article/abs/pii/S0747563214005810

iv https://www.bankmycell.com/blog/why-millennials-ignore-calls

Tax Alert March 2021

Individuals and small business owners who have taken advantage of the government’s COVID-19 support programs will find themselves increasingly under the tax man’s microscope in coming months. This is just one of the key developments occurring in the world of tax at the moment.

Data matching program expanded

The Tax Commissioner has applied for additional data from Services Australia to allow the ATO to verify the eligibility of applicants for the government’s key COVID-19 support schemes.

The ATO will begin matching the data against eligibility criteria for the JobKeeper, temporary early access to superannuation, Temporary Cash Flow Boost and JobMaker Hiring Credit schemes.

Objectives of the program include “verification of applications and identify compliance issues”, identifying individuals and businesses “failing to meet their registration and/or lodgment obligations”, and ensuring all tax and super reporting obligations have been met.

Expenses shortcut extended again

Employees using the shortcut method to calculate their working from home expenses can continue using this method after the ATO extended the deadline for the scheme to 30 June 2021.

The ATO has updated its guidance to enable employees and business owners working from home between 1 March 2020 and 30 June 2021 to claim a flat 80 cents per work hour for running expenses during this period.

Clock runs down on STP exemption

The ATO has reminded small employers (with 19 or less staff) exemptions from the single touch payroll (STP) system end on 30 June 2021.

From 1 July 2021, employers who are currently exempt from reporting closely held payees will need to report them through STP. (Closely held payees include family members, directors or shareholders of the business and beneficiaries of a trust). They will, however, have the option to report the information on a quarterly basis.

Super choice expanded for employees

On 1 January 2021, the rules relating to choice of super fund changed and the ATO is warning employers they must comply.

Any new workplace determination or enterprise agreement made on or after 1 January 2021 must now offer employees the right to choose the super fund into which their employer pays their compulsory Super Guarantee (SG) contributions. This applies to both existing and new hires.

Once an employee has nominated a fund using the ATO’s Standard Choice Form, the employer must pay their SG contributions into that fund. Employers who fail to comply risk being audited and penalised by the ATO.

JobMaker Hiring Credit

Businesses considering hiring new employees aged 35 and under may be eligible for a government payment through the new JobMaker Hiring Credit scheme.

Employers will receive payments of up to $200 a week for each eligible employee aged 16 to 29, or $100 a week for an employee aged 30 to 35. Eligibility criteria include holding an ABN, being registered for PAYG withholding tax, reporting through STP, and being current with your income tax and GST lodgment obligations.

Businesses can register for JobMaker on the ATO website at any time until the program closes.

Business concessions start

Small to medium-sized businesses with an annual turnover of $10 to $50 million are eligible for several new tax concessions from 1 April 2021.

The concessions were announced and legislated late in 2020. Under the new rules, eligible businesses are exempt from 47% FBT when they provide employees with car parking or work-related portable devices (such as phones and laptops).

Eligible businesses are also able to access simplified trading stock rules and remit their PAYG instalments based on GDP adjusted notional tax. From 1 July, they will have up to two years to seek an amendment to a tax assessment.

Claiming GST credits

The ATO is reminding businesses about the rules relating to claiming GST credits for business purchases.

Although a credit is available for most business purchases, valid claims cannot be made if the supplier is not registered for GST, even if their tax invoice lists an ABN and GST amount. The ATO recommends businesses use the ABN Lookup tool to check their suppliers prior to making a claim.

If a purchase is used for both personal and business use, you need to work out the business use portion of the GST and only claim that portion.

Avoid the rush: Prepare your business for June 30

As the economy begins to get back on its feet, it’s time to get your business back on track and start preparing for this year’s tax time.

Although 30 June may seem a long way off, there have been so many changes and government initiatives announced during the current financial year, you are likely to need extra information and paperwork to lodge your business’ return.

Here’s a list of things to consider and/or seek advice on.

Reporting JobKeeper support

JobKeeper payments are assessable income, so they need to be included in your business’ tax return if you operate through a company structure. Entities operating as a partnership or trust also need to report JobKeeper payments as business income in their partnership or trust return.

If you are a sole trader who received JobKeeper payments, you need to include your payments as business income in your individual tax return.

Cash Flow Boost credits

On the other hand, the government’s Cash Flow Boost payments to employers with a turnover of less than $50 million are classed as non-assessable income. This means your business won’t pay tax or GST on them.

How these credits are reported in your tax return or financial statements depends on your business structure, so contact us for more advice.

Budget tax changes and incentives

It’s also sensible to consider whether or not you plan to take advantage of the government’s temporary full expensing measure in this financial year. This measure applies from 6 October 2020 to 30 June 2022 for businesses with turnover of up to $5 billion. The initiative allows you to deduct the full cost of eligible depreciable assets of any value in the year they are first used or installed ready for use.

Another tax decision to start mulling over is whether to use the new temporary loss carry-back measures. These allow you to offset tax losses against previous business profits on which tax has been paid to generate a tax refund. Losses incurred in 2019-20 and 2020-21 can be carried back against profits made in or after 2018-19. If you are eligible, you can elect to receive a refund when you lodge your 2020-21 return.

Extended tax concessions

Businesses with turnover of up to $50 million (up from $10 million) can now take advantage of tax concessions allowing an immediate deduction for eligible start-up expenses (such as professional fees and accounting advice) and prepaid expenditure incurred after 1 July 2020.

From 1 April 2021, you can also claim an exemption from the 47 per cent FBT on any car parking or multiple work-related portable electronic devices (such as phones and laptops) provided to your employees.

Defer assessable income

Despite the difficult trading conditions, some businesses may need to consider deferring assessable income. Businesses wishing to delay paying tax on their income could review the potential benefits of deferring invoicing until after 30 June to ensure income from any payments is not assessable until the following financial year.

Do a stocktake

Over the next few months, identify and dispose of any obsolete, slow-moving or damaged stock so you can claim a tax deduction for the write-off.

Employee super contributions

Consider your personal tax

Now is also a great time to review your personal tax preparations for 30 June. Look at personal tax decisions such as implementing a salary sacrifice arrangement for the remainder of the tax year, making personal super contributions and collecting the necessary paperwork to substantiate work related deductions.

Contact the ATO

If you are struggling to stay on top of your tax obligations due to the pandemic, consider contacting the ATO to discuss deferring your tax payments or varying your quarterly PAYG instalments. You can also apply to move your GST reporting cycle from quarterly to monthly to gain faster access to GST refunds.

If you would like help getting your business ready for tax time, call our office today.