Newsletter – February 2011

Morris Accounting News

• February happenings
• Financial support if you have been disaster affected
• From the Tax Office – paying your employees super
• Self managed super funds – why you should have one
• What we do

February happenings

Well, it’s been an adventurous few weeks thanks to Mother Nature! You are probably all aware that we were flooded out of our office in January (luckily only about 6 inches of water covered the floorboards), but I’m happy to report we are now back to business as usual.

I’d like to thank everyone who helped us move all the client files, office equipment and the carpet so it wasn’t damaged – a special thanks to the Morris family, the Herberts and the Suters. Thank you also to everyone who has contacted us over the last few weeks to enquire about our wellbeing.

While we were lucky with the floods and are back in business (apart from Nathan’s office needing some extra TLC thanks to severe water damage), many other businesses are finding that cashflow has dried up. If you are in this situation, the following ideas might help:

• ramp up your marketing, and in particular, make sure your clients and suppliers all know you are back in business
• increase your workflow and/or production (assuming you are able to)
• ask your creditors for extensions on terms so you can postpone paying invoices by a few weeks
• chase up your debtors via phone, email and post with reminder statements – if they can’t pay the full statement, encourage part payment arrangements
• ask your bank or finance broker for additional funding options such as loans, extensions on over drafts etc.

If you are looking for ways to help other businesses and individuals now that the mud has mostly gone, here are a few ideas:

• Register to help with organisations such as www.floodaid.com.au and www.volunteeringqld.org.au
• Donate tinned food before Friday 18 February to Brisbane City Council libraries
• Look at what business services you can offer (or talk to your employer) to help get disaster affected businesses back on their feet – register at www.flooddiscounts.com.au
• Support local disaster affected businesses – many restaurants and retailers are doing it tough
• Support our local farmers eg Lockyer Valley by buying local produce. You can do this through supporting organisations such as Food Connect (www.foodconnect.com.au). This can be an ongoing commitment.
• Don’t let this fade from view – for many the crisis is just starting.

Don’t forget that BAS is due on 28 February (if you were affected by the floods or Cyclone Yasi you may be eligible for an extension – contact us if you are not sure). If you haven’t yet submitted your 2009-10 tax return details, time is running out! They are due to the tax office on 15 May and we need 3-4 weeks to process it – please send it to us by the end of March at the latest!

‘Til next time
Nathan Morris
Director

Financial support if you have been disaster affected

If you have been affected by the floods or Cyclone Yasi, you may be eligible for one or more of the financial relief packages that are being put in place to help business owners and residents. Some of these are:

• Australian Tax Office – paying the taxman doesn’t stop just because of a some water! However the ATO recognises that it’s probably the LAST thing on your mind right now. The ATO has a dedicated emergency support number (1800 806 218) and they can provide advice on the best way they can help you sort things out. This includes fast tracking refunds, giving you extra time to pay debts and giving you more time to meet activity statement, income tax and other lodgment obligations. For more information go towww.ato.gov.au or contact us.
• Queensland Government – There is a range of financial relief available from the Queensland Government to flood and cyclone affected Queenslanders. The Department of Communities website outlines these .
• Banks and other lenders – most of the major banks in Australia are offering relief packages to business and personal customers. These may include deferring loan repayments, emergency credit limit increases, waiver of any interest penalties on withdrawals from term deposits, fee free loan restructuring and equipment finance. Contact your bank for more information.

From the Tax Office – paying your employees super

The ATO has identified that some employers may not be paying superannuation to their eligible employes.

Can I just remind you that if you have employees, then BY LAW you have to pay them super, and within the required timeframe. There are serious consequences if you do not – including interest, administration fees and hefty fines of up to 200% of the amount of the charge payable.

If your employees fit all three of the following criteria, you are required to pay 9% of their ordinary time earnings to a complying super fund by the quarterly cut-off dates:

• they are between 18 and 69 years old (inclusive)
• there are also opportunities for increased financial gains in short and long term
• if you set up the fund with up to three other people you can to pool money together to increase investment and diversification.

You may also need to pay super for contractors you pay under a contract – if you are not sure talk to us and we can help you work it out.

If you are late paying or don’t pay enough you must lodge a superannuation guarantee charge statement with the Tax Office.

You need to be budgeting to pay your employees super by the 21st of the month after the quarter end.

For more information on your responsibilities on paying your employee super, contact Morris Accounting or check the Employee Superannuation section of the ATO’s website.

Self managed super funds – why you should have one

I talk a lot about the benefit of having a self managed super fund (SMSF) (here you go again I can hear you say!). But I really believe it is a great way to invest for your future in a way that will help you achieve your financial goals.

While anyone can set up a SMSF, I do admit they are not for everyone. And this is because they ARE self managed. This means you need to do some work. Such as sitting down with your accountant and the other trustees and working out an investment strategy that will grow in value to meet your investment goals. As you will be a trustee of your own fund, you will also be legally responsible for the decisions made, regardless of the professional advice you may seek. It will be your responsibility to ensure the fund is correctly structured, keeps thorough records, and meets all reporting requirements (such as income tax and regulatory returns).

But we can help you understand all the legislative requirements and administrative responsibilities of running a fund.

The benefits are these:

• you get to control what you invest in
• there are also opportunities for increased financial gains in short and long term
• if you set up the fund with up to three other people you can to pool money together to increase investment and diversification.

Did you know that as a business owner you can make a weekly super contribution? This is often easier to manage than a large lump sum amount prior to 30 June each year. Individuals can salary sacrifice up to $200 a week – this means you would be contributing $250k every ten years – add to this the earnings and capital growth and you have the start of a good nest egg.

And did you know that you can now buy property using your super? And get a bank loan to help?

If this sounds exciting to you then talk to us. As well as being accountants, Morris Accounting also has staff qualified to discuss financial matters and therefore we are authorized to help you set up a self-managed super fund AND advise you on what your fund should invest in.

Basically, we can do a lot of the hard work for you!