The BAC Grant - What's The Catch?

On a recent webinar, we invited Michael Dunne, co-founder of Epic Sales Group to talk to us about the 50% Wage Subsidy for Eligible Employees. Here’s what he said about The BAC Grant –

In terms of what’s the catch, there is no catch. Most people don’t know about it and they think it only applies to junior trainees or apprentices. Like all government things, they don’t make things particularly easy in the process, which is why I teamed up with Jas to make sure that we could basically help people to get through that process as easily as possible. And then the last one is not knowing how to use it for the benefit of the company.

Check out these 3 Benefits of The BAC Grant.

Watch the webinar replay, “Accessing the 50% Wage Subsidy for Eligible Employees” on our Facebook Page or Book a FREE Strategy Call with an Inspire Accountant.

The Power Of Your Magic Number

If you have one number that you can work towards, this is the number that makes sure that you pay for yourself, your team, contractors, suppliers, and rent.

You pay for everything including the tax man and on top of that, you also make some profit. If you add all that up, then that is your magic number.

Magic number ensures that your business provides you with everything that you need, and also some on top for your family and the wealth that you create out of it. If you don’t know what it is, find out what your weekly magic number is. Weekly is a good way to do it so that you will have your finger on the pulse with this stuff.

Make sure that the people who are important in your team know about this as well because then everyone’s rowing towards the same direction and working towards one number.

It’s a little bit more in depth in terms of how you can come up with this number and this is something that we do in our Total Financial Control workshop. We help out a little bit on how to get your magic number.

Essentially, every one of your team members might not have a direct link to your sales, revenue, or your profit-making activities.

But how do they contribute to the weekly magic number?

Obviously, a salesperson is the easiest.

What about an Admin Person?

This is a little bit harder but that’s something that you can build towards. If you make sure that you save X amount of time of the founder’s daily schedule, then you’re meeting the target. What does that lead to? The founder being able to work more on their business rather than in the business.

This idea shifts your business to make sure they can make more profit for you. There are actually ways that you can link towards this weekly magic number and it’s just distilling it and breaking it down to more granular levels.

Watch the webinar replay, “Are you doing the best you’ve ever done? What’s next? Get ready for the rush” at our Facebook Page, or Book a FREE Strategy Call with an Inspire Accountant today.

How To Protect What You're Building

You have made some steps this year to move forward, and you’ve gone into this profit phase. How do you ensure that you don’t go backwards?

The problem when you make a profit, you start becoming like an attractive target. If you have a few categories of risk such as employees, competitors, customers, creditors, or suppliers, make sure to protect what you’re building if your business ever gets in trouble.

If there is a target on your back, how do you protect yourself?

Make sure you have an asset protection strategy, and protect the wealth that you’ve built this year because it is for you, your family, your future, and your legacy. It’s not for anyone else to come and take away from you.

Ensure that you have an asset protection strategy by reviewing your:

Business structure – Make sure that there are no leaks in terms of asset protection.
Investment structure – If you’ve made decisions and invested in shares, property, orcrypto, make sure you’re investing in the right structure because it could be at risk.

Insurances – As you increase more in wealth, you might have taken on new liabilities or investment liabilities so make sure that your insurances are protecting you as well.

There are two types of insurances:

There’s obviously the Business insurance, if your business has grown quite a bit and you’re not covering enough of your business right now, but there’s also Life insurance that you want to be looking at.

COVID has shown us that anything can happen. So, we encourage a lot of clients to review at least every two years or so. If your circumstances have changed significantly this year, you may want to review your wills and your power of attorney documents.

Need to speak to an accountant? Book a ZERO cost 20 minute strategy call with an Inspire Accountant at https://inspire.accountants/chat

Make Your Business Stand Out

On a recent webinar, we invited Paul Dunn to talk all things about making your business stand out.

Here’s what he said –

When you become a Standout, people would love to buy from you, you become a magnet for talent, and they would want to work for you. This is a triangle that you should put up on your whiteboard or wherever it is so that you get how important this story is.

And what happens is, when you are that, people look to you because you’re standing out, you stand for, people will respect and recommend you. When more people love to buy from you, then profit and growth would generally be the result.

When people love to work for you because of where you are in your story, They are getting engaged and connected in a way that they’ve not been engaged and connected before, because you’re standing for something more than the dollars that come in the door.

When people respect and recommend you, there will be more profit and growth. So, when you do this, it is good for business.

Watch the full webinar replay, “It’s Not What You Sell, It’s What You Stand For” on our Facebook Page or Book a FREE Strategy Call with an Inspire Accountant.

FBT Exemptions For Work Christmas Parties

The costs of food and drink associated with Christmas parties are exempt for FBT if they are provided on a working day on your business premises and consumed by current employees. The property benefit is only available for employees and not associates of the employees, or family and friends.

Note: Even though there’s no FBT on this, this is not a tax-deductible expense.

If you’ve got a training session at work, but not a Christmas party, and you are training them on something that your business does. And if you provide sandwiches on the lunch for them, then that would be a tax-deductible expense and not entertainment. It will cost you about a third less in profit before tax.

Watch the full webinar recording on our Facebook Page or Book a FREE 20-minute Strategy Call with an Inspire Accountant today.

Fringe Benefit

A fringe benefit is a payment to an employee but in a different form to salary and wages.

Examples include:

Allowing an employee to use a work car for private purposes
Generally, there are exemptions and reductions for this stuff
Giving an employee a discounted loan
Paying an employee’s gym membership
Providing entertainment by way of free tickets to concerts
Reimbursing an expense incurred by an employee, such as school fees
Giving benefits under salary sacrifice arrangement with an employee.
There are certain salary sacrifice things that you have to pay fringe benefits on, but there’s a lot that you don’t as well,

If they aren’t exempt fringe benefits and you end up paying fringe benefits tax, it’s the equivalent to paying the highest marginal tax rate on the expenses anyway before you give the benefit to the employee.

Imagine you had a situation where you’ve got a good employee, and you want to give them, not a cash bonus, but to say thanks in a different way. And you end up buying them a Lamborghini – then that could be a fringe benefit.

If they didn’t have these rules to stop that, you could give that fringe benefit to them. Because they’re an employee, you could kind of argue that it was to do with their employment at work so you should be able to claim a tax deduction for it. Since it’s not salary and wages, why should they get taxed on the Lambo?

So what they’ve said is, If you’re going to do and structure that sort of arrangement, we’ve got this thing called FBT or fringe benefits tax. It’s going to tax you on the value of that asset or whatever you’re giving to your employees.

Watch the webinar replay, ‘Christmas Parties & Tax – How wine is tax deductible’ on our Facebook Page

Explore & Learn

Work Christmas Parties and FBT - What You Need To Know

The differences between staff and their family and friends versus clients. If you choose to invite clients to your Christmas party, the rules change. Regardless of the cost of the party, entertaining clients is not subject to FBT because FBT is for employees, their family, and friends. And the cost is not tax deductible. So you can spend more than $300/head on clients’ lunches and you’ll be exempt from FBT. And it’s not tax deductible and no GST credits claimable. Note: Even though there’s no FBT, this is NOT a tax deductible expense. Christmas Party held on business premises An example is a small marketing firm decides to have a party on its business premises on a working day, the company provides food, beer and wine. The implications for the employer in this situation would be as follows: Current employees only attend

There are no FBT implications as it is an exempt property benefit

Current employees and their associates attend at a cost of $180 per head

For employees – there are no FBT implications as it is an exempt property benefit, and the minor benefit exemption could also apply
For associates – there are no FBT implications as the minor benefit exemption applies

Current employees, their associates and some clients attend at a cost of $365 per head

For employees – there are no FBT implications as it is an exempt property benefit
For associates – a taxable fringe benefit will arise as the value is equal to or more than $300
For clients – there is no FBT payable and no income tax deduction

Christmas Party held off business premises An example is another company that decides to hold its Christmas function at a restaurant on a working day before Christmas and provides meals, drinks and entertainment. The implications for the employer in this situation would be as follows: Current employees only attend at a cost of $195 per head

There are no FBT implications as the minor benefits exemption applies

Current employees and their associates attend at a cost of $180 per head

There are no FBT implications as the minor benefits exemption applies

Current employees, their associates and clients attend at a cost of $365 per head

For employees – a taxable fringe benefit will arise
For associates – a taxable fringe benefit will arise, nd

If you are holding a Christmas party for employees and their plus one or spouses, just make it under $300/head. Watch the webinar replay, ‘Christmas Parties & Tax – How wine is tax deductible’ at https://www.facebook.com/InspireCA/videos/1544736652557674

Are Christmas Gifts FBT?

For tax purposes, a Christmas gift may also be considered as an entertainment.

There are two kinds of gifts:

Entertainment gifts

Items such as movie tickets, concert, airline, theatre tickets may be subject to FBT and not deductible for tax purposes.

Gifts that are more than $300 are subject to FBT. It is likely tax deductible if you are paying an FBT and you can claim the GST. Keep in mind that you will be paying the equivalent of 47% tax on it. If gifts are less than $300, then it’s not subject to FBT and we can’t claim the GST either.

Examples of entertainment:

Theme park tickets
Sport/golf
Leisure activities
Dinner/drinks
Movie/concert tickets
Cruise
Gift cards for the above things

Non-entertainment gifts

If your business sends chocolate, gift vouchers, pens, or Christmas hampers, this stuff falls outside of the entertainment criteria and you won’t have FBT on it, and it’s most likely tax deductible.

Gifts for employees or clients under $300 are tax deductible without FBT.

Examples of non-entertainment:

Gift voucher (groceries, health & wellness, books etc)
Wine or champagne
Flowers
Hamper
Skincare/beauty products
Perfume
Computer/TV equipment

Watch the webinar replay, ‘Christmas Parties & Tax – How wine is tax deductible’ at https://www.facebook.com/InspireCA/videos/1544736652557674

It's Not What You Sell, It's What You Stand For

Paul Dunn, Co-founder of B1G1 recently joined us on a webinar and he said, “It’s Not What You Sell, It’s What You Stand For” If the pandemic has taught us anything, it is that we are all connected. And so, this division that comes from thinking, “It’s all about me,” is really causing lots of issues. We need to move to the reality that it is all about we. We need to move from focusing on self, to focusing on something bigger than self. When we do that, the story becomes incredibly compelling. In a binary sense, there are two types of companies: Standard, and those that Standout. And this standout thing becomes your new story. A nice alliteration is, we are moving from standard to stand out because you stand for something bigger than yourself. Watch the full webinar replay, “It’s Not What You Sell, It’s What You Stand For” at https://www.facebook.com/InspireCA/videos/309210634055483

What To Watch Out For With Family Funds

In SMSF, it used to have up to 4 members but now it’s gone up to 6 members in the Superfund.

6 people’s balances are better than 1. If you have an average of 100 grand per person and you have 2 people in it, then you’ll have a 200 grand in your fund. And since you got 6, then that would be 600 grand in total. So it’s a lot more money to play with so to speak.

You need to be careful of a few things here:

Death – What if someone dies and there are 5 members in the fund? How are they going to manage that dead person’s assets and estate when it comes to their superannuation?

Disability – Are they going to be working together constructively to manage that self-managed super?
Divorce – If you have two people in the fund like a husband and wife, and they get divorced, they have to act in the best interest of the fund and each other. What if you invited your son or your daughter into your fund and they got divorced but whoever they were with was also in the fund. You need to be very careful when dealing with that situation. You can have up to 6 members but there’s a reason why there’s an average of 2members per fund.

If there are more people, then it equals to more decision-makers or people with their own opinions, and that is another layer of complexity.

You can reduce this risk by a leading member fund and we’ve seen this thing that we can set up called a ‘Leading member fund’ where there is an overall decision maker if people can’t agree. It’s kind of a cool thing to lock in if you want to take better control and you’ve got a few more members than just yourself, and your spouse. And you can convert an existing SMSF to a leading member fund as well so if you’ve already got one, we can change that and set that up to a leading member.