header-social

Is my client performing R&D?

Posted on: February 15th, 2024

Identifying Research and Development (R&D) opportunities within your clients’ businesses involves a strategic approach that includes understanding your clients’ industries, their business operations, and their growth objectives.

1. Understand Industry Trends and Innovations:

Stay updated on the latest trends, technologies, and innovations within the industries of your clients. For instance, if a client is in the manufacturing sector, advancements in automation or sustainable materials may present R&D opportunities.

2. Analyse Business Operations and Products/Services:

Look for areas where improvements can be made, whether it’s in product development, cost reduction, efficiency enhancement, or entering new markets. These areas could benefit from R&D initiatives.

3. Engage in Strategic Conversations:

Have regular, strategic conversations with your clients about their business goals, challenges, and areas where they seek improvement or growth. Listening carefully can uncover potential opportunities for R&D that align with their objectives.

4. Review Financial Performance:

Analyse your clients’ financial statements to identify areas where R&D could improve profitability or reduce costs. High costs in certain areas may indicate inefficiencies that R&D could address.

5. Assess the Competitive Landscape:

Help your clients assess their position relative to competitors and identify areas where R&D could provide a competitive advantage. This might involve developing new products, enhancing existing offerings, or adopting new technologies to outpace competitors.

6. Identify Funding Opportunities:

Be knowledgeable about government grants, tax incentives, and other funding opportunities available for R&D activities.

7. Promote Collaboration and Partnerships:

Encourage clients to explore partnerships with universities, research institutions, or other companies for R&D projects. These collaborations can provide access to expertise, technologies, and additional resources.

8. Leverage Data and Analytics:

Use data analytics to identify trends, customer needs, and market gaps that R&D can address. Data-driven insights can provide a strong foundation for justifying R&D investments.

By employing these strategies, you can play a crucial role in identifying and fostering R&D opportunities within your clients’ businesses, helping them to innovate, grow, and stay competitive.

Posted in Uncategorized | Comments Off on Is my client performing R&D?

R&D Mid Year Review

Posted on: December 28th, 2023

Hey there, innovative minds! 🚀

As we hit the halfway mark of the year, it’s the perfect time for businesses to pause and reflect on their Research & Development (R&D) journey. Here’s why a mid-year review of your R&D activities is not just good practice, but essential for staying ahead in the game:

🎯 Align with Goals: Ensure your R&D efforts are in sync with your business objectives. Are we on the right path to innovation? Let’s make sure!

💰 Budget Smart: Keep a close eye on your R&D spending. Are we optimizing our resources? This check-in can save you from budgetary surprises down the line.

📈 Track Performance: Assess the progress of your R&D projects. Celebrate the milestones, learn from the setbacks, and keep steering towards success.

🛡️ Risk Management: Identify and mitigate risks early. Stay proactive and be prepared for the unexpected turns in the R&D journey.

🔍 Adapt and Innovate: The world is constantly changing, and so should our R&D strategies. Adaptability is key to staying relevant and competitive.

🤝 Team Spirit: Engage your team in these reviews. Their insights are invaluable, and this collaboration can boost morale and drive towards common goals.

Remember, R&D is the heartbeat of innovation and progress. A mid-year review is not just a checkpoint; it’s a launchpad for the next phase of your groundbreaking work.

Let’s innovate, evaluate, and accelerate! 🌈✨

www.business.gov.au/grants-and-programs/research-and-development-tax-incentive/how-we-check-compliance.

#InnovationLeaders #RDStrategy #MidYearReview #BusinessGrowth #StayAhead #TeamworkMakesTheDreamWork

Posted in Uncategorized | Comments Off on R&D Mid Year Review

The benefits of a foreign business registering a local company in Australia

Posted on: August 12th, 2023

A USA client asked what are the benefit of a USA company registering a local Australian company.

Registering a local company in Australia can offer several benefits for foreign businesses looking to establish a presence in the country. Here are five advantages:

  1. Market Access and Credibility: Registering a local company demonstrates a commitment to the Australian market, which can enhance your credibility and reputation among local customers, partners, and investors. It also allows you to tap into the Australian market’s potential, giving you better access to customers and clients.
  2. Legal and Regulatory Compliance: Operating as a local company ensures that you comply with Australian business laws and regulations. This can help you avoid legal issues, penalties, and complications that might arise from operating as a foreign entity in the country. Registering a local company ensures that you follow all necessary protocols and meet local requirements.
  3. Tax Benefits and Incentives: Registering a local company can offer various tax benefits and incentives that might not be available to foreign entities. Australia has a competitive tax regime with several tax deductions and credits available to local companies. Additionally, you can take advantage of the country’s network of double taxation agreements to potentially reduce the tax burden on international transactions.
  4. Access to Government Support: Many governments provide support and incentives to local businesses, and Australia is no exception. By registering a local company, you can access various government programs, grants, and initiatives aimed at promoting business growth, innovation, and investment.
  5. Ease of Doing Business: Operating as a local company can streamline business operations by eliminating certain bureaucratic hurdles associated with being a foreign entity. Local companies often have smoother interactions with local banks, suppliers, and customers, making it easier to conduct day-to-day business activities.

It’s important to note that while there are numerous benefits to registering a local company, it also comes with responsibilities and costs. Setting up a local entity involves legal procedures, ongoing compliance requirements, and administrative tasks. Before making a decision, it’s advisable to consult with legal and financial experts who can provide tailored advice based on your specific business goals and circumstances.

Posted in Uncategorized | Comments Off on The benefits of a foreign business registering a local company in Australia

ATO STIMULUS

Posted on: March 25th, 2020

Hi All,

There has finally been some clarity put forward by the ATO so I have included a few points below. When we lodge your quarterly BAS for March 2020, June 2020 and September 2020 we can review everything in more detail.

The ATO will provide tax-free cash flow boosts of between $20,000 and $100,000 to eligible businesses, delivered through credits in the activity statement system, when eligible businesses lodge their activity statements. If you are eligible, you do not need to separately apply and upon lodgement of your activity statement, your first amount will automatically be credited to your account but no earlier than 28 April 2020.

Eligible entities who received initial cash flow boosts will receive additional cash flow boosts, for the periods June to September 2020, equal to the total amount of initial cash flow boosts received. This will be delivered in either two or four instalments depending on your reporting period.

Eligible businesses must have held an ABN on 12 March 2020 and lodge your activity statement to receive the credit.

Eligible payments include: salary and wages, director fees, voluntary withholding from payments to contractors etc.

In addition, you must also have either:

  • Derived business income in the 2018–19 income year and lodged your 2019 tax return on or before 12 March 2020.
  • Made GST taxable, GST-free or input-taxed sales in a previous tax period (since 1 July 2018) and lodged the relevant activity statement on or before 12 March 2020.
  • However, you may still be eligible where you don’t have any income tax assessment for prior year.

Initial cash flow boost

Eligible businesses that withhold tax on their employees’ salary and wages will receive a credit equal to 100% of the amount withheld, up to a maximum of $50,000. The minimum credit will be $10,000, even if the amount required to be withheld is zero. However you will not be eligible to receive any more cash flow boosts until your PAYG withholding exceeds $10,000 over the relevant periods.

Monthly lodgers will receive a credit that is calculated at three times the rate (300 per cent) in the March 2020 activity statement, to align with quarterly lodgers.

The total of all initial cash flow boosts across all of the relevant periods cannot exceed the maximum limit of $50,000. This is a little vague but it looks like the ATO will do a second payment up to $50,000 which will then equal the total of $100,000 overall (as above).

Examples

  1. If you pay a salary of $1,000 for the March 2020 Quarter with $0 withholding on the BAS. The ATO will still provide a credit to you on $10,000 as the minimum payment.
  2. If you pay a salary of $160,000 for the March 2020 Quarter with $50,000 withholding on the BAS. The ATO will provide a credit to you on $50,000 as the maximum payment. There would be no additional tax payable when you lodge your personal tax return with a salary of $160,000 as the company would have withheld the $50,000 PAYG. You can therefore take money out of the company tax free.

Other Considerations

  • Superannuation would still be payable on all salaries made.
  • Business still need to report the salaries through STP.
  • Paying a salary can be more tax effective then paying a dividend (to get the credit).
  • If the salary generate a tax loss, that loss would carry forward to FY2020 which would also be beneficial for the 2020 tax returns.

There is further information here:  https://www.ato.gov.au/Business/Business-activity-statements-(BAS)/In-detail/Boosting-cash-flow-for-employers/

In the meantime please let me know if you have any questions.

Posted in Uncategorized | Comments Off on ATO STIMULUS

Research and Development (R&D).

Posted on: March 10th, 2020

Who is R&D For?

Many company developing novel products or services will spend hundreds of thousands of dollars, without realising they might be able to get government assistance in the form of an R&D subsidiary through AusIndustry and the ATO.

Who is Eligible?

If you have a company and you are researching and developing a novel product or service, that is you are creating new knowledge, then you should consider applying for the R&D Tax Incentive.

Applicants need to self-assess their eligibility for the R&D Tax Incentive. As a self-assessment program, companies assess for themselves whether their activities satisfy the definition.

What Can You Get?

If you are eligible, you can get a 45% refundable tax offset for eligible companies with an aggregated turnover of less than $20 million per annum.

What Activities are Eligible?

Activities are eligible if they meet the definition of R&D activities. This includes activities whose outcome cannot be known or determined in advance on the basis of current knowledge, information or experience, but can only be determined by applying a systematic progression of work that: a) is based on principles of established science; and b) proceeds from hypothesis to experiment, observation and evaluation, and leads to logical conclusions.

Could the Outcomes Have Been Known in Advance?

The definition requires that the outcome of the experiments could not have been known or determined in advance on the basis of current knowledge, information or experience. This requirement will not be satisfied if: a) experiments merely confirm what is already known; or b) the outcome of the experiments could be deduced or determined by a competent professional in the field on the basis of current knowledge, information or experience.

Please also see:

https://www.industry.gov.au/data-and-publications/ausindustry-rd-tax-form-0

Tags: , ,
Posted in Uncategorized | Comments Off on Research and Development (R&D).

Cryptocurrency Business & Tax

Posted on: February 13th, 2020

Brief Background

Following its establishment in 2013, the Cryptocurrency Exchanges industry has become one of the fastest growing industry in Australia because it caters to rising interest in cryptocurrencies as a form of payment. These opportunities are expected to contribute to growth in enterprise and employee numbers over the next five years.

Cryptocurrency Business

I have worked with Cryptocurrency businesses since they first emerged. While most businesses tend to operate at a loss for the first few years, the ATO allows small businesses operators to offset their businesses losses against their other salary income. This is very advantageous as it enables you to get a tax refund during the early Start-Up state of your business.

There are a few conditions that need to be assessed. For instance if your salary is less than $250,000 and your Cryptocurrency business income is more than $20,000 then any net business loss can be tax deductible resulting in an income tax refund.

Determining if you operating a Cryptocurrency Business can depend on a number of factors. The main one to consider are:

  1. Are you operating for the purpose of making a profit?
  2. Do you have significant and regular transactions?
  3. Are you keeping proper records?
  4. How much capital has been invested?

Cryptocurrency Investor

If you are buying Cryptocurrency with the intention of holding them long-term, then you would usually be an investor and not a business operator. This means than the net proceeds you make from the sale of the Cryptocurrency is treated as a net capital gain instead of ordinary business income.  

A significant difference is that a net capital loss from investing cannot be used to offset other salary income. These net capital losses must be carried forward and offset against future capital gains only.

What To Do?

Make contact with me because I can help you!

Tags:
Posted in Uncategorized | Comments Off on Cryptocurrency Business & Tax

Business Start-Up

Posted on: February 9th, 2020

Do you have a business idea?

The hardest, but more rewarding part of any business is thinking of your idea to pursue. Luckily, the internet and working from home has enabled many people to start a new business that offers an improvement on a current idea. This can include improvements such as offering a cheaper cost alternative or offering a more customer focused approach.

Think about the current offerings and focus on how you can create something better, cheaper or faster.

What do you need to get started?

If you’re starting a new business is very important to keep your costs low. In some instances it can take a few years before the business generates enough income to pay for itself and to provide you with a wage. Therefore I recommend having enough savings so that you can support yourself for a year if needed.

Having a separate part time job can be a great source of supplement income and also provide a necessary distraction from the loneliness that can accompany being self-employed. I also found a part time job can lead you to more customers and be a great source of marketing material (if the secondary job is in a complementary field).

You also need to address any licensing or regulatory requirements for your industry. For example, do you need a degree or additional licensing or industry memberships?

Get some independent feedback.

It’s good to get started so that people can interact with your product or service and see what they think of it. A fresh set of eyes can help point out a problem you might have missed. Plus, these people can become your first customers, especially if you listen to their feedback and adapt your offering accordingly.

You need to be open to both positive and negative feedback and be able to incorporate it back into your business effectively.

Register your business

You need to ensure you select the correct business structure from the onset. If you are starting a small business it can be good to simply register an Australian Business Number (ABN) in your personal name because this is a cheaper and easier approach during start-up.  

Once your business has signs of growth then you should consider registering a private company (Pty Ltd) or setting up a family trust. This is a more expensive option but it will provide considerable income tax advantages and provide the necessary asset protection. For example, if you own your own home then a company structure can help protect that home in the event that anything goes wrong with your business.

You should also consider registering a business name, trademark and website.

Grow your business.

Whether your buy an existing business or start a small business you will need to expand the sales base and make it more profitable.  

As an accountant I have found that working with people in key industries can be great. For example, I found and made friends with a business bankers, a good financial planner, and commercial lawyers as we can refer each other customers. Building personal relationships alongside business relationship meant that people will always think of you and be happy to refer you customers.

Using social media effectively through organic, influencer or paid campaigns can also help build your business and retain customers. You need to provide useful information in a format that people will want to read.

Tags: , ,
Posted in Uncategorized | Comments Off on Business Start-Up

Selling goods without a physical presence in Australia

Posted on: November 21st, 2017

If you are looking to sell goods or services into Australia then you need to consider the taxation consequences, particularly where you are selling from a treaty country such as the USA, UK etc.

Selling from a treaty country without a physical presence in Australia

This section applies to you if:

  • you are a resident entity of a country that has a tax treaty with Australia
  • you export goods to Australia without having a physical presence in Australia, such as an agent, subsidiary or permanent establishment, and
  • you don’t employ staff in Australia.

Under these circumstances you will have the following tax obligations:

  • Income tax – You will not be liable to pay Australian income tax. Income tax only applies if you have an Australian permanent establishment.
  • Capital gains tax (CGT) – You will not be liable to pay CGT. CGT only applies to assets that are taxable Australian assets.
  • Goods and services tax (GST) – You may be liable for GST. GST is a broad-based tax of 10% on most goods, services and other items sold or consumed in Australia.
  • Superannuation, PAYG withholding and fringe benefits tax (FBT) – As you don’t have employees, you won’t have any of these obligations.
  • Other tax obligations – If you are exporting goods to Australia by selling to an Australian resident entity on a free on board (FOB) basis, this may be considered an importation by the Australian entity. This means you may not have any Australian tax obligations – rather, your Australian customer will have tax obligations relating to the importation.

You will need to register for an Australian Business number (ABN).

Selling from a non-treaty country without a physical presence in Australia

This section applies to you if:

  • you are a resident entity of a country that does not have a tax treaty with Australia
  • you export goods to Australia without having a physical presence in Australia, such as an agent, subsidiary or permanent establishment
  • you don’t employ staff in Australia.

Under these circumstances, you will have the following tax obligations:

  • Income tax – You may be liable to pay income tax. You need to work out the source of your income, as this will determined how you are taxed.
  • Goods and services tax (GST) – You may be liable for GST. GST is a broad-based tax of 10% on most goods, services and other items sold or consumed in Australia.
  • Superannuation, PAYG withholding and fringe benefits tax (FBT) – As you don’t have employees, you won’t have any of these obligations.
  • Other tax obligations – If you are exporting goods to Australia by selling to an Australian resident entity on a FOB basis, this may be considered an importation by the Australian entity. This means you may not have Australian tax obligations – rather, your Australian customer will have tax obligations relating to the importation.

You will need to register for an Australian Business number (ABN).

Tags: , , , ,
Posted in Accounting | Comments Off on Selling goods without a physical presence in Australia

Am I Running a Direct Selling / MLM Business?

Posted on: June 24th, 2017

With the ATO reviewing a number of direct selling / MLM business to access whether their independent contractors/associates are entitled to an Australian Business Number (ABN), our firm has compiled some general information to help explain the criteria in determining ABN entitlements. That is, am I running a business?

The intention of the taxpayer in engaging in the activity is a relevant indicator. However, there needs to also be an activity. (see Brennan J in Inglis v. FC of T 80 ATC 4001 at 4004-4005; (1979) 10 ATR 493 at 496-497).

“The extent of activity determines whether a business is being carried on”

Factors which are relevant to demonstrating whether you are running a business include:

  • You have consulted with an accountant or business advisor;
  • You are advertising through social media or a webpage;
  • You have obtained the required business insurance (such as public liability);
  • You are undertaking activities of significant size and scale;
  • You have a business plan which demonstrates an intention to make a profit;
  • Your activities are systematic, repetitive and organised;
  • You are keeping records of activities and receipts of expenses;
  • You have the relevant knowledge or skill to operate the business.

Table 1 below can help determine if you are running a business or whether the activity can better be described as a hobby (which is a form of recreation or a sporting activity).

Table 1: Am I Operating a Business?

Indicators which suggest a business exists Indicators which suggest a business doesn’t exist
A significant commercial activity Not a significant commercial activity
Intention to carry on a business activity No intention to carry on a business activity
Intention to make a profit from the activity No intention to make a profit from the activity
The activity is or will be profitable The activity is inherently unprofitable
Repetition and regularity of activity Little repetition or regularity of activity
The activity is organised and carried on in a businesslike manner and records are kept The activity is not organised or carried on in a businesslike manner and no records are kept
Significant size and scale of the activity Small size and scale of activity
Not a hobby, recreation or sporting activity Is a hobby, recreation or sporting activity
A business plan exists There is no business plan
Commercial sales of product Sale of products to relatives and friends
You have the relevant knowledge or skill You lack the relevant knowledge or skill

It is a question of overall impression, rather than how many of the factors exist.

see http://law.ato.gov.au/atolaw/view.htm?DocID=TXR/TR9711/NAT/ATO/00001

Tags: , , , ,
Posted in Accounting | Comments Off on Am I Running a Direct Selling / MLM Business?

Superannuation Changes 2017

Posted on: April 11th, 2017

The superannuation changes coming into effect on 1 July 2017 are the most significant in a decade.

We have summarised the main changes that may affect you.

The key changes are:

  • $100,000 annual cap on non-concessional contributions
  • Concessional contributions limit for everyone reduced to $25,000
  • Non-concessional contributions restricted to those with less than $1.6m in superannuation
  • Amounts held in pension accounts will be limited to $1.6m
  • Investment earnings of transition to retirement pensions to be taxed at 15%, the same as super accumulation accounts.

Three things to do now:

  1. Maximise concessional contributions before July 1, 2017

From 01 July the maximum amount of contributions will be $25,000. Currently you can put in $30,000 if under 50 or $35,000 if over 50. Take advantage of the higher amounts and put the maximum contributions amount in this year.

  1. Maximise non-concessional contributions before July 1, 2017

The cap for 2016-17 is $180,000. For people under age 65 (at July 1, 2016), they can bring forward a further two years contributions, totalling up to $540,000 before June 30, 2017.

From July 1, 2017, the non-concessional (after-tax) contribution cap will reduce to $100,000, with a maximum of $300,000 being able to be contributed under the three year bring-forward rule. As well, the ability to make non-concessional contributions will be limited to those with less than $1.6m in superannuation.

  1. Review Pensions before June 30, 2017

The $1.6m limit on the amount held in the retirement (pension) phase is retrospective. That is, it applies to existing pensions as well as those established in future.

This means that the excess over $1.6m will need to be retained in an accumulation account where the investment earnings are taxed at 15%. Alternatively, all or a part of the excess may be withdrawn from super.

If you need any more information feel to contact us.

Posted in Accounting | Comments Off on Superannuation Changes 2017