Single Touch Payroll Reporting for Closely Held Payees Mandatory from July

Closely held payees must be reported via Single Touch Payroll from July 2021. Now is the time to get organised.

Does your business make payments to closely held payees? If so, you will need to start reporting these payments via Single Touch Payroll (STP) from July 2021.

Closely held payees include family members, directors or shareholders of a company and beneficiaries of a trust.

If you’re already reporting employees via STP, then it will be easy to include the extra payees from July.

If your business only pays closely held payees then you may not have signed up for Single Touch Payroll. If not, now is the time to establish a reporting solution.

Typically, closely held payees are paid amounts on the advice of the tax agent, and often these amounts are not calculated until they do your tax return. In this situation, the business can report estimated amounts via STP.

Three Ways to Report Payments to Closely Held Payees

Report actual payments on or before the date of payment if you lodge your own STP reports through your ATO business portal.

Report actual payments quarterly when the activity statement is due. This option is available if you have a BAS or tax agent lodge on your behalf and they already have the ATO quarterly reporting concession in place.

Report a reasonable estimate quarterly. Estimates should be based on amounts equal to or greater than 25% of the previous year’s payments.

If you’re reporting quarterly estimates, it’s important not to underestimate amounts to be paid, as the business may later be liable for superannuation guarantee late charge and penalties.

Small employers have until the individual’s tax return due date to submit the STP finalisation declaration. (For all other payees, the finalisation is due by the usual date of 14 July).

If you’d like help with Single Touch Payroll reporting for your closely held payees, talk to us about planning ahead for lodgement and calculating estimates. We’ll help organise your systems so you’re prepared for STP reporting obligations,

Work From Home Shortcut Claim Extended

Good news if you work from home.

The shortcut method* for calculating work from home deductions has now been extended to 30 June 2021. (*Practical compliance guideline PCG 2020/3.)

The guideline covers working from home and incurring additional running expenses in relation to your income-producing activities during the COVID-19 pandemic.

Originally introduced in April 2020, the guideline was first due to expire on 30 June 2020 (which was then extended to September 2020, and then to the end of December 2020). Interestingly, unlike previous extensions, the PCG no longer states whether further consideration will be given to extend the latest end date.

The shortcut method

The shortcut method contained in the PCG provides a rate of 80 cents per hour for running expenses and only requires taxpayers to keep a record of the number of hours worked from home. This could be in the form of timesheets, rosters, a diary or similar document that sets out the dates and hours worked. A notation stating “COVID-hourly rate” will need to be placed next to your deduction for home office expenses in the 2019/20 and 2020-21 return.

All told, the PCG now applies from 1 March 2020 to 30 June 2021. Taxpayers eligible to use this new shortcut method are employees and business owners who:

• work from home to fulfil their employment duties or to run their business during the period from 1 March 2020 to 30 June 2021 and
• incur additional running expenses that are deductible under s 8-1 or Div. 40 of the ITAA 1997.
  Running expenses include: electricity, gas, computer consumable such as printer ink, cleaning expenses, telephone, internet, depreciation on computers and other equipment (e.g. chairs, desks, filing cabinets).

Taxpayers who use this method, cannot claim any other expenses for working from home for that period.

Example

Jay is an employee who is working from home as a result of COVID-19. He purchases a computer on 5 April 2021 for $900. He marks in his diary when he commences and finishes work each day and also the length on any breaks he takes. All told, from his records he calculates that he worked 355 hours through to 30 June 2021.

Provided he retains his diary entries and receipt for the computer purchase, Jay’s 2020-21 deduction under the new shortcut method is $284 (355 hours x 80 cents).

Claims for working from home expenses prior to 1 March 2020 cannot be calculated using the shortcut method, and must use the pre-existing methods as follows:

Method 2 - the fixed rate method. 

Under this method, you claim all of the following:

• a rate of 52 cents per work hour to cover heating, cooling, lighting, cleaning and depreciation of office furniture
• the work-related portion of your actual phone and internet expenses, computer consumables, stationery, etc
• the work-related portion of depreciation on a computer, laptop or similar device.

Method 3 – the actual cost method. 

Under this method, you claim the actual work-related portion of all your running expenses, which need to be calculated on a reasonable basis.

The methods are not mutually exclusive across the financial year. It may be the case that you use more than one method during 2019-20 and 2020-21.

For example, you could choose methods 2 or 3 for the period July 2020 through to February 2021, and then choose the shortcut method for the period from March through to the end of June 2021.

Feel free to talk to us if you need more information.

Leadership Lessons

JUST FOR ME

There are thousands of books written about leadership. We’ve distilled some lessons from some of them into the acronym JUST FOR ME. Nine things within your control to help you become a more effective leader.

1. Just do it

So often we get in our own way of implementing our ideas. Stop limiting the business’s potential and prioritise your time to ensure the important things get done.

2. United vision and values

Your vision is where you want the business to be in the future; your values are the compass that drive your behaviour to get there. Clarify and articulate these ASAP.

3. Safety

It’s a leader’s job to ensure physical and emotional safety for their team at work. This goes beyond legal obligations; the safer employees feel at work, the more productive, innovative and loyal they’ll be.

4. Teamwork and Trust

Form a team of people who are smarter than you in different ways, using your collective expertise to achieve results impossible to achieve alone. Build a culture of trust so your team know they can rely on you and that the feeling is mutual.

5. Focus

Bring focus to each team member’s individual contribution towards achieving the business goals and vision. Provide clear key performance indicators to ensure everyone knows what to focus on.

6. Opportunity

Look for the opportunity in every mistake, challenge and difficult situation. These are key sources of learning.

7. Resilience and Resourcefulness

Resilience helps you recover quickly from difficult situations; resourcefulness helps you find quick and clever ways to overcome difficulties. Build resilience and resourcefulness in your team and yourself.

8. Mindset

This is the attitude you bring to your role as leader. Do you have an abundance mindset or scarcity mindset? Do you take ownership, accountability and responsibility for your actions? Your mindset has a huge impact on how you and your team feel about coming to work each day.

9. Empathy and Energy

Empathy is the ability to see things from another’s perspective. For example, instead of disciplining a team member for struggling, first seek to understand why they’re struggling, then offer support and training. Increased empathy increases energy across the team and the business and improves results.

Take these nine factors and make a plan for how you can develop your leadership skills. Which one will you focus on first? 

“Success is neither magical nor mysterious. Success is the natural consequence of consistently applying fundamentals.” - Jim Rohn

Strategic Alliances: the benefits of working together

Your business may compete head-to-head with a number of other companies, but this doesn’t mean you have to treat ALL other businesses as if they are the competition. In fact, there are real benefits in creating strategic alliances with other like-minded organisations.

When you look at the wider marketplace, you’ll see that there are businesses out there that may well compliment your offering. And by working together (rather than against each other) it’s possible to become valued strategic partners. Collaborating to serve your joint customers, improve brand awareness and, ultimately, expand your target market.

If this sounds like a positive strategy, now’s the time to do your homework and start hunting down the best strategic partners for your business.

Working to serve a shared customer base

Strategic alliances are all about finding the common ground between you and your intended partner. This means finding the best ways to combine your efforts.

If you can share the same customer audience, and create a complementary way of meeting their needs, that creates a broader, more connected way of growing both companies.

Finding a company that’s interested in forming a strategic alliance

Find partners in complementary sectors

If you’re an professional services business, like us, it makes sense to partner with solicitors, lawyers, accountants, marketers, and other professional services providers who can help your clients.

If you're a manufacturer, find a shared audience or customer need, and to create some real synergy between your two businesses. For example, if you're a maker of shoes it makes sense to partner with a clothing manufacturer that shares your same sense of style and purpose. 

Take part in business networking and events

To get a wider understanding of your local, or industry specific, business network, it’s worth taking part in plenty of online and offline business events. You’ll meet new people, hear about new brands and will find it easier to find your ideal strategic partner. The wider your business network, the more choices you have for an alliance.

Look at crossover between your target audiences

Once you’ve found a potential strategic partner, it’s important to take a detailed look at the crossover between your partner’s audience and your audience. Do they shop through the same channels? Do they fit a certain age group or social demographic? Are these customers local? Or are they part of a national or global online customer base? How large is their database?

Cross-reference your customer databases

By sharing and comparing your client relationship management (CRM) data, you can cross-reference both sets of customer data. Then see where there’s overlap, or where you may already share some of the same customers. The better you understand each other’s customers, the more likely it is that you’ll find some common ground for shared marketing and promotion.

Run joint events and promotions

Present joint webinars with your strategic partner, or run joint promotions. By finding a common theme, you bring both audiences together and reinforce the alliance between your two brands. You also reduce the expenditure by sharing the costs and reach a wider audience.

Combine your R&D efforts

To move your alliance forward, you can also try combining your research and development (R&D) activity. Find new products, new services and new ways of keeping your joint customers happy. By sharing the time, costs and effort of developing new offerings, both companies will benefit. And you keep your businesses at the cutting edge of their respective sectors or specialisms.

Strategic alliances are all about finding the common ground. If you share the same customer audience and create a complementary way of meeting their needs, you can significantly expand your target market.

Social distancing: Running effective online meetings

In unprecedented times, businesses must adapt to remain productive. If face-to-face meetings are a key part of your daily business operation, here are some tips to take your meetings online with minimal disruption.

Find the best system for you

There's a range of free or low-cost platforms, including GoToMeeting, ezTalks, Join.me, Zoom, Google Hangouts, and TeamViewer.

Before you choose one, consider:

• How many people generally attend your meetings?
• Do you require screen share functionality?
• How many meetings do you run? (If it’s a lot, a small monthly subscription may pay off due to better functionality)

Schedule your meeting

Depending on your chosen system, consider how you schedule your online meetings. It may be that you include a link generated by your system into an email calendar invitation. However you do it, make it easy for your meeting attendees to be reminded of the meeting and access the meeting at the time.

Check your tech

Do you need a webcam (usually built into laptops) or an audio headset? These are a must for any online meeting. Communicate the need for this technology to your meeting attendees, and if required consider completing a quick online tech-check before the first meeting.

Set a clear agenda

Like any face-to-face meeting, you’ll need a well-structured agenda to follow. You’ll also need to specify the time a length of the meeting, and respect this. Decide who will take minutes, define the next steps, and if appropriate - BAMFAM (Book a meeting, from a meeting).

Does it need a meeting?

These unfortunate times act as a friendly reminder that some meetings can be emails. Consider using free tools such as Loom to document a longer and more engaging message in a video to send via email. The recipient can view the video multiple times before responding, resulting in a more considered reply.

Online meetings have been a great tool for global businesses for some time; maybe it’s time for your business to adopt online meetings as part of social distancing. They also create capacity for you to do other, more productive, things through reduced time spent travelling to face-to-face meetings.

We can help you.

Talk to us about which apps will best suit your team.

Gift cards and vouchers now have three year expiry

Gift vouchers can be a great way to attract customers, maximise marketing campaigns and increase sales - so long as you don’t get caught out by the new rules.

Does your business offer gift cards or vouchers? If so, new laws came into effect on 1 November 2019, which you'll need to adopt. Gift cards and vouchers issued on or after 1 November 2019 must meet the new requirements of the Australian Consumer Law (ACL).

New Gift Card Laws

• Mandatory minimum expiry period of three years from the date of issue.
• The actual expiry date must be listed on the card; alternatively, the supply date and expiry period, for example, “Valid for 3 years from 11/02/2020”.
• Post-purchase fees are no longer allowed. Payment processing fees may be allowed, however activation, top-up, account keeping or balance enquiry fees are not.

There are some situations in which the new requirements don’t apply, for example if the card can be topped up, if it is part of a temporary marketing promotion or if it is donated free of charge for promotions. Visit ACL New Gift Card Laws webpage for full details.

If you have not met the new requirements on vouchers issued since 1 November, the new laws will still apply even if the actual voucher does not. Customers will be able to redeem the voucher within the three-year expiry regardless of what is stated on the voucher. Gift cards and vouchers issued before 1 November 2019 have the same expiry period and conditions of purchase as at the time of purchase.

What Next?

1. Review your gift voucher terms and conditions.
2. Update your printed and online vouchers and related marketing material.
3. Check the information published on your website and social media.
4. Make sure your internal processes and point-of-sale systems are brought up to date and remember to tell your staff of the changes.

We can help you.

​Talk to us about how the changes affect your business operations and cashflow, or how to implement gift cards in your business.