The Horizon Group of Companies | Accountant

The Horizon Group of Companies

Phone: +61 8 9344 7799

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23.01.2022 In a nutshell, Fringe Benefits Tax (FBT) is a tax employers pay on any benefits provided to their employees or themselves, that is NOT salary or wages. This is separate from income tax! FBT is calculated on the taxable value of the benefits you provide. ... To make it a little more complicated the FBT year is different to the normal tax year. FBT year runs from 1 April to 31 March. Some of the most common examples of benefits provided include cars, entertainment, debt waivers loans & even car parks! Benefits that are exempt include mobiles, laptops, tablets, protective clothing, tools of trade & briefcases...if anyone still uses one. These benefits often help an employee to feel valued, except as a business owner, you might be out of pocket more than you expected. As we have just finished the FBT tax year now is the time to review & complete the appropriate declarations & paperwork to calculate the tax on any benefits provided or reimbursements to offset the FBT. For business owners: What benefits have you provided? Think about the FBT impact of providing these benefits in the future Be aware of your responsibilities for recording & reporting Have some questions? You can book in with me for a 15min chat. https://buff.ly/3mI8wDU Making numbers simple! #FBT #tax #thenumbersqween

20.01.2022 What is GST? Your business works like a bank, charging & collecting duty for the tax office. In Australia, most goods & services have a 10% duty on them (GST). When you issue an invoice, the 10% duty collected on the invoice isn't yours to keep. You are just collecting it for the tax office. ... It does work both ways; when you pay expenses you can claim credits for the GST you've paid. The Business Activity Statement (BAS) is the form used to let the tax office know how much GST you have paid and how much you've collected. For most businesses, this is required to be lodged quarterly with the tax office. When you lodge your BAS, if you report that you have received more GST than paid, you will need to pay the difference to the tax office. Conversely, if you have paid more than you collected you will receive a refund from the tax office. Business owners often get frustrated when they see their bank account going down when they pay their BAS. They feel like it's a second tax. But in fact, it was never yours. You just collect for the tax office. It's easy to get frustrated when you don't fully understand what you're paying. Like David Levithan said, "Ignorance is not bliss. Bliss is knowing the full meaning of what you have been given." One of the best ways we have seen to remove the emotion out of making BAS payments is to keep a separate "bucket" account for GST, so your main bank account doesn't fluctuate wildly along with your emotions! Making numbers simple! #thehorizongroup #makingnumberssimple #GST #BAS

16.01.2022 What expenses are Tax Deductible?!? Every business owner wants to pay less tax or put another way, claim the most deductions possible. Remember that the tax office is a business. They are in the business of collecting tax.... It's like a tug of war; they want to collect as much tax as possible while our aim is to minimise the tax you are paying. Let's be clear, there is a HUGE difference between tax minimisation which is legal & tax avoidance which is not. Minimisation is the goal, avoidance can land you in prison! Expenses are tax-deductible when...they are DIRECTLY related to earning business income. The question to ask yourself is by spending that money (possible tax deduction) did it help to increase or enable the business to earn income? If only maybe, then chances are it is not a tax-deductible expense. For example: if you buy a laptop to use for only your business, you can claim a deduction for it. But, if you use it half for business and the other half for private use, you can only claim half as a tax deduction. As Ben Franklin said, "An investment in knowledge pays the best interest." The 3 golden rules for what is tax-deductible: - The expense MUST be for your business, not for private use. - If the expense is a mix, you can only claim the portion used for the business. - You must have the records to prove it. It's like the card game snap. When the business expense matches with business income - SNAP! Still iffy on whether or not an expense is tax-deductible? Please reach out! Making numbers simple! #thehorizongroup #makingnumberssimple #taxdeductable #expenses

14.01.2022 Are you getting ripped off by your bank? Right now, if you aren't paying 3% or less for your business loan, you are likely being ripped off! Yes, the paperwork can be overwhelming & it can be like jumping through hoops with all the questions about what is being spent or even worse: justifying which razors you are buying (as experienced by a client last month!) ... BUT It can be as simple as asking your accounts manager; what is my current interest rate? My accountant said I should be paying less than 3%...is there a way to reduce it? Often banks spend more time bringing in new business owners, giving them better deals than their existing clients. According to Forbes, in 2018, the share of small & medium-sized enterprises outstanding loans stood at 29.48% of all outstanding business loans. We urge you to check what interest rate you are getting charged for your business loans and take action!! A review may not sound like fun, but a simple phone call may be all you need to make some savings. If you can't or don't want to make the call then delegate. Speak to your finance broker or ask me for the details for my broker who will work with you to check what you are paying & likely get a better deal! Next steps: 1. Find out your current interest rates 2. Talk to your bank about what is a good or better deal (If you don't ask, you don't get!) 3. Talk to a broker who knows the market & works with multiple lenders. Tip: brokers often can get you a better deal than you can negotiate yourself Making numbers simple! #thehorizongroup #makingnumberssimple #businessloan #interestrate

09.01.2022 I'm buying a car & want the business to pay for it...what do I need to know? Stop! Have you considered if it is going to cost you more by being in the business name? We understand the dream. You've worked hard establishing your business, and you want a car in the company's name to reflect your achievements. As good as it feels for the business to own your car, it is not always a good financial decision. ... A car is considered to be a non-wage benefit and attracts a special tax called fringe benefits tax (FBT). You pay fringe benefits tax if it is in the business name. If the car isn't used enough for the business, you'll have to pay more tax than the benefit you are getting from the business expense. As a very general rule, if you use your car for more than 70% business use it is likely to be better financially to be purchased in the business name. This isn't a perfect science, particularly with high priced cars so we always recommend checking with your accountant BEFORE signing the papers. Don't be fooled into thinking that because other business owners have their business buy a car for them that it is also the right financial decision for you. Cashflow is everything, make the choice on what gives you the best financial result. We love this quote by Robert Kiyosaki "Financial Freedom is a mental, emotional & educational process." Questions to consider: Will the car be used for more than 70% for business use? Do you know how much the Fringe Benefits Tax is? Talk to your accountant or book a time for a chat with us. Making numbers simple! #thehorizongroup #makingnumberssimple #companycar #businessname