A message from our New Director...

Another year has gone and to say the least, from the bushfires, the trump election, a recession and the pandemic it has been a year we will never forget.

It has been amazing to see how quickly the individuals, businesses and networks we deal with have been able to adapt to change. The resilience and support of each other in such uncertain times has been inspirational and they should all be very proud of what they have achieved. As we move into the new year we encourage and hope to see this continue.

It has been a big year for our team at Milanese & Co. I officially signed on as a Director joining Rob Milanese in July 2020. We also welcomed Deidre as a new staff member. Deidre joined our team at the start of the year as our new Receptionist and has been a great addition to our office. We are on the hunt for at least one new accountant in the new year to ensure we have excess resources to provide our clients with the service they need and deserve.

With the year that it has been this year, the Christmas break gives us all the opportunity to spend additional time with our loved ones and remember those who have left us. Our team plans to use the Christmas break to refresh from the year that has been and come back ready to go in 2021.

The team at Milanese & Co Accountants would like to take this opportunity to wish all of our clients, business networks and local community a safe and very Merry Christmas and a happy and prosperous 2021. We thank each and every one of you for your continued support and remind everyone to stay safe.

Adam Taylor - Director of Milanese & Co Accountants

Festive Season Trading Hours

The Team at Milanese & Co Accountants will be taking a well-deserved break to spend time with their families. Our office will be closed from 12pm Wednesday 23rd December and re-open again at 8:30am on Thursday 7th January.

Tis the Season to FBT

Are you starting to see more blue skies during the day? Feeling the warmth of the sun, and witnessing the lively colourful lights at night? Well, Christmas is coming and it’s definitely a good time to party!

2020 has been a very different year. Everyone deserves to have fun especially after all the hard work this year. This is the season when Christmas party organisation is in full force and employers may choose to give gifts to reward their staff and show their appreciation.
Question - How can we make Christmas events more fun from the business owners’ point of view? Answer - When entertainment and gifts are not subject to Fringe Benefits Tax (FBT).

When holding a Christmas event or providing gifts to your staff, it is important to understand that depending on the circumstances, some events or gifts are subject to FBT whilst others are not. Below are two important points to consider on how you can avoid FBT.
Cost – Christmas parties do not attract FBT if the cost of the party is less than $300 per employee. If employees bring an associate (e.g. partner and friend), the benefit provided to the associate must be less than $300 to also avoid FBT. Gifts provided to each employee will also avoid FBT if the value is less than $300.

Location – If the Christmas party was held on the business premises and only attended by the employees, this event will not attract FBT. If an associate of an employee also attended the party, the benefits provided to the associate will also avoid FBT if the cost limit per associate is under $300. If the Christmas party was held outside of the business premises (e.g. a restaurant), the costs incurred will attract FBT unless the cost per employee and associate is under $300 each.

Please note that although FBT may not apply a tax deduction for a Christmas Show under the cost limit at a restaurant would not be tax deductible.

In addition, if clients are invited to the party, the cost of entertaining them are not subject to FBT, and not deductible to the business.
We hope these handy tips help you have a tax free (as much as possible) Christmas event with your staff without having to worry about FBT.

Please contact our office if you have questions about FBT. Our accountants are happy to assist you.

Facts you probably didn't need to know

Coca-Cola played a part in Santa's image

A crackling log fire is the reason we pull Christmas crackers

Business Planning and Tax Planning!

Looking forward is a major focus of our business. We are half way through the financial year, but June will be here before we know it. With Government grants and wage subsidies still being received by many this financial year, as well as accelerated depreciation rules being extended and tax rate changes, there is a lot to consider. We want you and your business to be in the best possible position. We offer business mentoring with our clients with regular meetings to ensure they are heading in the direction that they want and provide guidance on the best way to achieve this. Some questions we put to you to ponder over the break are:

Are you heading in the direction with your business that will get you to your desired goals both financially and personally?
Are you operating your business in the right structure and with the right resources that will offer what you need including asset protection, flexibility and maximising your wealth creation?
Are you planning for your future or just for today?

Tax planning is another valuable service we offer. To review your situation before the end of the financial year is a fantastic opportunity to look at the year that has been and what options you have available to arrange your affairs with a positive outcome.

If you have any questions about our business planning and tax planning services, please contact us.

Post-Christmas Cashflow slow down

Whilst the Christmas and New Year period can be a relaxing time for many people, business owners can find this time of year stressful regarding their cashflow. Without planning, the post-Christmas cashflow slow down can cause issues in new, growing or even established businesses that are not in retail or tourism. The tricks in getting ahead of these issues are getting organised, knowing your numbers, planning and actioning accordingly. Below are some tips to help with managing the dreaded post-Christmas cashflow slowdown.

Prepare a budget and make sure you understand your cash flow.
Review and stay up to date with invoicing. Ensure you can get invoices to your customers before they go away for the Christmas break.
Focus on completing orders and invoicing, rather than starting new orders.
Stay on top of your debtors and make it as easy as possible for them to pay you.
Consider including late fees into your terms of engagement and invoicing.
Consider offering a discount for full fees paid upfront.
Re-evaluate your expenses and only spend on the necessities until the cashflow slowdown has ended.
Continue to review and understand your figures, including planning for Superannuation and BAS payments due in January and February.
If you manage inventory be careful not to bulk buy inventory that may be difficult to move.
If you are going to have trouble paying your suppliers, communicate with them and set up a payment plan.

Government incentives- apprentice rebates, JobMaker schemes

Employee Government Incentives.
Thinking about hiring a new employee or have recently done so? Do you have an apprentice or trainee and you are not receiving any incentives available? Then we can help you.
We have just got through one of the strangest and difficult years ever, so a few of you may be a little tentative to put on another staff member or apprentice. We would like to run through a couple things on offer at the moment that may make your decision a little easier.

Apprentice incentives;
Any employed Australian Apprentice or trainee may be eligible for financial assistance from the Australian Government to help with the hiring and training of an apprentice or trainee.

Boosting Apprenticeship Commencements
This incentive was introduced to support the business recovery cause by COVID-19. Any businesses or Group Training Organisation that engages an Australian Apprentice on or after 5 October, 2020 may be eligible for a subsidy of 50% of wages paid to an apprentice between 5 October, 2020 and 30 September, 2021, to a maximum of $7,000 per quarter.

Supporting Apprentices & Trainees
Supporting Apprentices and Trainees provides a wage subsidy to small businesses to support the retention of their existing apprentices and trainees.
The wage subsidy is also available to employers of any size, if they re-engage an apprentice or trainee that has been displaced from a small business. Eligible employers can apply for a wage subsidy of 50% of the apprentice’s or trainee’s wage for 9 months from 1 July, 2020 to 31 March, 2021. The apprentice or trainee must have been in-training with a small business as at 1 March, 2020 or a small or medium business as at 1 July, 2020.
Other apprentice incentives include supporting rural and regional areas, Assistance for Australian Apprentices with a disability & Support for Adult Australian Apprentices.

Jobactive Wages Subsidy
Jobactive can provide financial incentives of up to $10,000 for employers to help hire new staff. The following incentives are available to employers;

Restart – up to $10,000 for employees 50 years of age and over
Indigenous Australians – up to $10,000 on commencement with an employment services provider
Youth Bonus – up to $10,000 or $6,500 for employees 15 to 24 years of age
Youth – up to $6,500 for employees 25 to 29 years of age
Parents – up to $6,500 for employees who are a principal carer parent
Long Term Unemployed – up to $6,500 for employees who have been registered with an employment services provider for 12 months.

To be eligible for any incentive your new employee must be registered with either:

Jobactive
Transition to Work
ParentsNext (Intensive Stream only)
Disability Employment Services (Restart only)
the Community Development Programme (Restart only)

Restart only: if your new employee is not registered with an employment services provider then he/she must register with a jobactive provider as a volunteer for you to get a wage subsidy.

JobMaker Hiring credit
The JobMaker Hiring Credit will be available to employers for each new job they create over the next 12 months from 7 October, 2020 for when they hire an eligible young job seeker aged 16 to 35 years old.
For each eligible employee, employers will receive for a period up to 12 months:

$200 a week if they hire an eligible young person aged 16 to 29 years; or
$100 a week if they hire an eligible young person aged 30 to 35 years.

Employers must demonstrate that they have increased their overall employment to receive the JobMaker Hiring Credit for a period up to 12 months for each position created.
Eligible employees must have worked an average of at least 20 hours per week over the quarter for the employer to qualify for the payment. Employees that start and/or stop employment during a quarter must meet a similar test based on the length of time in employment.
For the employer to be eligible, new employees must:

be in receipt of income support payments (such as JobSeeker Payment, Youth Allowance (Other), or Parenting Payment) for at least one of the three months before they were hired.

If you have any questions regarding these incentives or that they apply to you. Please contact our office so we can guide you through it.

Buying or selling a business

Each year many of us will have a New Year resolution. Some are small and some are life changing, like starting a business for the first time.

At Milanese & Co Accountants, our staff are highly experienced and ready to help you with starting a new business. To get you started, the Australian Government have prepared a guide to starting a business which we have summarised for you below:

Check if you’re ready (financially, mentally & physically)
Make key business decisions about the business
Plan for success
Register your Business
Prepare for taxation
Know the laws that apply to you
Prepare your finances
Protect your Business
Set up operations

Some of these steps are easier than others, some require professional assistance (like establishing a company or trust, or deciding which accounting software is right for you). The full guide is available at https://business.gov.au/Guide/Starting
If you’re interested in starting a business in 2021, please get in contact with us to see how we can help you.

Options regarding renting your holiday home

How could we have predicted the year we have had! Since the partial lockdown our state incurred in March/April this year the accommodation and property markets have been booming. If you haven’t booked a place to get away over the Xmas holidays or before the kids go back to school, likelihood is everywhere is already fully booked, and the waitlist could be for months!

So, do you have a property or have you been thinking of buying a holiday home that could generate you some additional income whilst the demand is so high? Maybe you have a getaway shack on the Yorke Peninsula, a house on the doorstep to all the wineries and the beauty in the Barossa Valley or a retreat on the coastline further South of Adelaide? If you are or planning to generate an income stream for part of the year from any of these, there could be expenses associated with generating this income you can claim.

We are here to help you determine what you can and can’t claim from the outset to ensure you are maximising your deductions legitimately with a holiday rental. We note this is a hotspot for the ATO with audits so it’s important you get it right!

Firstly, if you have any of the above which you use for several weeks a year, you need to advise us so we can determine a private use percentage. For example if your property was available to be rented for 48 weeks of the year and you used the property privately for 4 weeks of the year (providing all of these 4 weeks weren’t peak period) you may be able to claim approximately 92% of the running costs of the property.

These costs include council rates, lawnmowing, insurance, interest, general repairs, water rates, emergency services levy, property agent fees, pest inspections, electricity, Netflix, guest treats such as wines and food and the list continues.
It may even be beneficial to get a quantity surveyor such as BMT to inspect the property and provide a report which may allow certain claims for capital works or depreciation deductions.

Then there is the income you receive from the property which you also need to include in your tax return. In short, if the income exceeds your deductible expenses, you may have a tax shortfall at the end of the year. If your expenses exceed your income, it may mean you stand to receive additional tax refunds at tax time.

Renting out your holiday home isn’t for everyone but if it is something you have been considering and want to know how this may impact your cashflows and, tax feel free to give us a call. One of our accountants will be more than happy to provide you with what you need to assist with your decision making.

Happy holidays 😊

Christmas Recipe

A simple & easy to make recipe for your Christmas table that our staff enjoy! YUM!

Caramel TimTam Cheesecake Balls
Ingredients

300 g Caramel Tim Tam biscuits or any caramel filled chocolate biscuit you like
250 g cream cheese softened
250 g milk chocolate

Method

Crush Tim Tams in a blender, then mix crumbs with the cream cheese
Roll mixture into balls
Melt chocolate & then use two forks to roll the balls around until complete coated.
Remove balls and place onto a tray lined with baking paper.
Place into the fridge to set for 1 hour.

*You could use any TimTam Flavour, Mint Slice or any other favourite flavour biscuit of yours
*if you are feeling adventurous you could decorate you with choice of sprinkles, extra drizzled chocolate or biscuit crumb.

Christmas Jokes

♦ What is Father Christmas’s tax status?
Elf-employed.

♦ How does Santa’s tax accountant value his sleigh?
Net PRESENT Value.

December 2020 Newsletter