COLUMNIST ARTICLES

Sole Traders – the ATO will now pass information on to Credit providers

ACCOUNTANT

By Warren Strybosch

If you are a sole trader, you have not had to worry too much about any debts owing to the ATO. You would simply be placed on a payment plan and pay off what you can when you can. However, this is has now changed and the ATO is taking a harder stance against those business owners who owe money to the ATO.

The ATO will now inform credit provides of debts larger than $100,000. This will have an impact on sole traders and partners seeking any type of finance e.g., home loan, investment loan or car finance, in the future.

General manager of technical policy at the IPA, Tony Greco, said the move could provide a more even playing field for businesses.

“There are pluses and minuses, the pluses are it makes it more transparent that the market and all credit providers, including trade credit, get to see what level of debt the business has and it provides an extra impetus to that client to engage with the tax office,” said Mr Greco.

“If you’ve got one business compliant and another not compliant then that’s an unfair advantage, so it promotes fairness in the tax system.”

The change applies only to sole traders with ATO debts that meet certain criteria. “The rules are currently that it has to be over $100,000 and has to be related to a business debt and it also has to be when the business is basically not responding to current attempts to put it on the payment plan or to pay it,” said Mr Greco.

The ATO said that a business or sole trader effectively engaging with it would not be subject to CRB referral, even if the debt exceeded $100,000.

The ATO said effective engagement involved having:

• A payment plan and complying with the terms of the arrangement • An application for release from the tax debt • An active objection against a tax decision to which the debt related • An active review with the AAT or an active appeal to the court • An active review with the AAT of a reviewable decision that might affect the amount of a non-complying superannuation fund’s tax debt with the relevant regulator • An active complaint with the IGTO in relation to the tax debt. Mr Greco said the ATO used the ability to disclose tax debt information to CRBs as a tool to influence businesses to take their debt seriously.

“A lot of businesses treat the ATO as the lender of last resort so just don’t pay it,” he said. “When money becomes tight businesses just stop paying one of their creditors, and the easiest one is the ATO.

“A credit rating is very important if you are highly leveraged, therefore this ability to provide this information so all can see is the thing that sometimes gets people to take note of the debt because it starts to impact their ability to finance their operations.”

Mr Greco said the IPA wanted to see the ATO customise its approach for each business.

“Tax debts are a big problem and it has blown out for a good reason, the tax office was giving businesses a bit more leeway during COVID which was understandable,” he said.

“We’ve always asked for a tailored approach so if a business has been caught up in negative COVID scenarios then they [the ATO] should go soft, but if other businesses have thrived during COVID the tax office should go hard.”

Before disclosing a tax debt to CRBs, the ATO said it would send a written notice to the business that included steps that could be taken to avoid the information from being reported.

As a sole trader it is important to work with your accountant and/or tax agent to make sure you can meet your meet your obligations going forward. That might mean setting up separate bank accounts to keep track of your GST, PAGW, and Super owing, so you have enough funds to pay those amounts when they fall due.

At Find Accountant, we provide SMSF tax advice. Our senior accountant is also an award-winning financial advisor. If you require SMSF advice or are considering whether or not to wind up your SMSF, then speak to Warren Strybosch at Find Accountant Pty Ltd.

Warren Strybosch

You can call them on 1300 88 38 30 or email

List Your Aged Care Facilities with Find Aged Care Services Website Today.

Help the local community know you exist and what sets you a part compared to other aged care facilities, Financial Planners and other providers in the local area.

We have developed Find Aged Care Services (www.findagedcare.services) so you can promote your facilities and services to the general public. You can also place any job vacancies on our website that is available in your facilities.

For more information, please contact us at 1300 88 38 30 or email info@findagedcare.services.

WARREN STRYBOSCH

Find Group

The founder of the Find Group of companies draws on his diverse background, which ranges form teaching, to serving in the army, to taxation and accounting, to coach and help clients live their best financial lives. A multiaward winner, Warren’s innovative approach in business means he was a champion of virtual financial advice long before the pandemic. Warren established the Find Foundation, which owns and operates across Victoria.

TOP 50 MOST INFLUENTIAL FINANCIAL ADVISER IN AUSTRALIA

The financial advisers featured in this guide are a diverse group: some specialise in responsible investment advice, some provide financial advise to specific professions, and some focus on addressing market gaps, mwith several finding themselves on the list for the very first time. But they all have one thing in common: they all wield influence that can create the blueprint for the future of financial advice in Australia. Not all of them are faniliar names but just because they are not making a lot of noise doesn't mean they are not making waves. Meet our Power 50.

Employers Responsibility – Staff Working From Home

GENERAL INSURANCE

By Craig Anderson

Working from home was unexpectedly thrust upon many employees and employers due to COVID – 19 and due to the unplanned nature of the circumstances, both parties have had to rapidly adjust their thinking. Employers are still responsible, from a duty of care perspective, for staff safety while working from their own home, which is to put it mildly, “challenging”.

If you try to imagine a standard office space, you probably don’t consider the lighting level, the testing and tagging of equipment, the ergonomic furniture, the ambient temperature, the hands free phone head set, and a host of other things like the boiling water tap with safety features. You probably won’t imagine the planning it took to eliminate trip hazards, eye and ear strain, back strain, mental stress and fatigue and other stressors. Now look at a home work environment. Possibly no ergonomic furniture, trip hazards galore, cords If this is a situation currently causing you concern, and you’d like to explore. Management Liability Insurance to protect you and your assets, please contact us for a preliminary no obligation discussion. Please also consider engaging an OH&S Consultant to ensure all due diligence is exercised, as this may help insurers to view your business as a “good risk”.

For a health check of your business insurance, contact Small Business Insurance Brokers via email sales@ smallbusinessinsurancebrokers.com.au

everywhere, low lighting, no testing and tagging, noisy pre-schoolers interrupting, dogs barking and a whole host of other potential issues. Having said that, how employees spend their free time is up to them, however the environment in which they spend work hours is really important for their wellbeing, and the employer is still responsible for any injuries they suffer, even when they work from home.

The connection to insurance is straightforward. Following a serious injury “at work” like an electrocution, slip and fall, serious burn, or laceration for example, an employer may be prosecuted by WorkSafe after an investigation if they have contributed due to lack of care or failure of due dilligence. However; if the employer has audited the home work environment and made every attempt to eliminate wherever possible all of the hazards, and if the employer has Management Liability Insurance including Statutory Liability, the insurer may legally defend the claim or pay fines where appropriate and avert a possible conviction where unwaranted.

Any advice in this article has been prepared without taking into account your objectives, financial situation or needs. Because of that, before acting on the above advice, you should consider its appropriateness (having regard to your objectives, needs and financial situation).

Craig Anderson

GENERAL INSURANCE

Small Business Insurance Brokers

www. heightsafetyinsurancebrokers.com.au 0418 300 096

Reserve Bank lifts cash rate to 1.85pct

The Reserve Bank has lifted the official cash rate by 50 basis points to 1.85 per cent – its highest level in over six years.

For someone with a $500,000 mortgage at the start of May, with 25 years remaining, the total increase across the four hikes would be $472 a month, according to RateCity.

RBA governor Philip Lowe said in a statement after the board meeting the rate rises in recent months were required “to bring inflation back to target and to create a more sustainable balance of demand and supply in the Australian economy”.

“The board expects to take further steps in the process of normalising monetary conditions over the months ahead, but it is not on a pre-set path,” he said.

“The size and timing of future interest rate increases will be guided by the incoming data and the board’s assessment of the outlook for inflation and the labour market.”

The RBA is seeking to return inflation to its target band of two to three per cent from its current level of 6.1 per cent – the highest it has been since the early 1990s.

Dr Lowe said inflation was expected to peak later this year and decline back to the target range.

The bank’s central forecast is for CPI inflation to be around 7.75 per cent over 2022, a little above four per cent over 2023, and around three per cent over 2024, he said.

He said higher inflation and higher interest rates were putting pressure on household budgets, with consumer confidence falling and housing prices declining in some markets after large increases in recent years.

“Working in the other direction, people are finding jobs and obtaining more hours of work,” he said.

“Many households have also built up large financial buffers and the saving rate remains higher than it was before the pandemic.

“The board will be paying close attention to how these various factors balance out as it assesses the appropriate setting of monetary policy.” Treasurer Jim Chalmers told parliament it was “another difficult day” for Australian homeowners.

“It’s not a shock to anybody, but it will still sting,” he said.

“Families will now have to make more hard decisions about how to balance the household budget in the face of other pressures like higher grocery prices and higher power prices and the costs of other essentials.”

He said the new government would “focus on what we can responsibly influence”.

“Australians know that we are in for a difficult time ahead when it comes to the storm clouds in our economy, but we are confident that we will emerge on the other side of this stronger than before.”

PropTrack senior economist, Eleanor Creagh, said it had been the fastest increase in rates since 1994.

Treasurer Jim Chalmers told parliament it was “another difficult day” for Australian homeowners. “Families will now have to make more hard decisions about how to balance the household budget in the face of other pressures like higher grocery prices and higher power prices and the costs of other essentials.”

Anneke Thompson, chief economist at CreditorWatch, said the rate of default by small businesses was expected to rise by a percentage point over the next year.

The likes of Surfers Paradise in Queensland and Auburn in NSW are likely hotspots for mortgage defaults, flowing on to debt problems for local businesses.

The rate rise came as the value of new loan commitments for housing fell 4.4 per cent in June, but remained at a historically elevated level of $31 billion, according to the Australian Bureau of Statistics.

The value of new owner-occupier loan commitments fell 3.3 per cent in June, while new investor loan commitments fell 6.3 per cent.

The total number of dwellings approved fell 0.7 per cent in June, following a 11.2 per cent rise in May.

Paul Osborne (Australian Associated Press)

Personal Insurance: Types of Cover

FINANCIAL PLANNING

By Warren Strybosch

Last month we discussed how much personal insurance you should consider having in place. It was a starting point and seeking professional financial advice is important to determine the right amount of cover for your needs.

This month we are going to review the different types of personal insurances you can obtain. It is important to note that that not every insurer offers the below type of cover but they are available through different insurers. Again, seeking appropriate financial planning advice is important. Talk to a licenced financial planner and they can discuss with you what types of cover you should consider. Please do not go to a mortgage broker, the bank or a general insurance broker and ask them to provide you with personal insurance. That is akin to asking a masseur to perform surgery on you…they could do it but they are likely to botch it up. Go to the professionals if you want a professional job done right.

Why life insurance is important

We insure our cars, home, pet and even our health. But many of us neglect to insure our most important asset – our lives. Whether you need to take time off work to recover from a sickness or injury; change your lifestyle due to a permanent disability, or you die unexpectedly, without your income, it can have a huge impact on you and your family’s quality of life.

That’s where life insurance can help. Our range of life insurance covers can help you and your family financially if something bad happens to you. The right cover can help with:

• Paying the mortgage or rent • Paying for your children’s education • Covering your day to day bills, and • Covering out-of-pocket medical expenses

How life insurance works

Life insurance is there to pay you and your family when you need it the most. This could be anything from a temporary sickness or injury, through to a permanent disability or death. • Events covered: Covers typically protects financially against sickness, injuries or death (or a combination of these) • Causes: Some types of cover are limited to accidents only, while others cover you for sickness and accident

• Lump sum benefit vs daily benefit:

Some types of cover pay the benefit as a one off lump sum, while others pay as an ongoing benefit amount.

Insurance that makes regular payments typically cover you for the period that you’re out of action

You choose the type of cover and the benefit amount you need. To keep your cover in place, you need to pay your premiums. If you suffer an insured event while your cover is in place, you (or your beneficiaries if you’ve died) can claim the benefit amount, subject to satisfying the relevant terms and conditions.

If the unfortunate happens, we will pay out on genuine claims. The conditions on which we pay out depend on the type of cover. Remember to consider this carefully before taking out cover and read the relevant PDS.

What’s covered?

Cover for your family when you’re gone...

Life Cover

Life Cover can help ease the financial burden for your family if you’re terminally ill or die. With a lump sum benefit, your family can use the money to pay off the mortgage or other debts and maintain their current standard of living. You choose an amount of cover that’s right for you.

Cover for you while you’re living

Total and Permanent Disability (TPD) Cover

Some sickness and injuries may end up leaving you totally and permanently disabled and unlikely to ever work again. TPD Cover pays a lump sum benefit that can be used to make modifications to the family home, access the best rehabilitation or simply provide money to live on. Income Protection Cover only covers up to 70% of your income, so TPD Cover can be used to top up the shortfall. If you suffer from a specified serious illness such as cancer, heart attack or stroke, a lump sum benefit paid upon diagnosis may help you access the best medical treatment, or pay down some of your debt. You can choose a benefit amount of up to $2 million, and you are covered for more than 40 specified conditions.

Income Protection Cover

Income Protection Cover pays an ongoing monthly income for as long as you’re unable to work or until the end of the benefit period, whichever happens first. You can cover up to 70% of your income. Select from a range of benefit periods, from 2 years, 5 years or to age 65.

Business Expense Cover

You can’t afford to be sick if you’re selfemployed or running a small business. Business Expense Cover helps cover the fixed operating expenses of your business if you are unable to work due to sickness or injury. Similar to Income Protection Cover, you receive an ongoing monthly income (for a maximum of 1 year), but instead of replacing your salary, it covers your business expenses. This can help keep your business afloat while you’re on the road to recovery.

Child Cover

No one wants to see their child sick. But if it happened to your child, you’d want the best medical treatment available, and that can be expensive. Child Cover allows you to take up to $200,000 cover for kids aged between 2 and 18 and will pay a lump sum benefit if they suffer from a specified serious illness or in the event of their death.

Helpful little extras (provided by some insurers)

Some insurers provide the following quality features:

• Provision for continuing cover:

Once we issue your policy, we won’t change the terms and conditions or the premium you pay because of a change in your personal circumstances

• Indexation: We will automatically increase your cover each year to ensure your benefit amount keeps up with inflation (premiums will increase in line with increased cover)

• Worldwide cover: You are covered 24/7 anywhere in the world

• Provision for upgrades: If we make changes or introduce new benefits to our products, we will pass this on to you

What’s not covered?

There are some situations where you’re not covered and when we won’t pay a claim. This includes not telling us the truth about your health or financial situation when applying for cover.

Read the Product Disclosure Document (PDS)

Before accepting the cover that is being recommended to you, take time to read the PDS that should be provided to you prior to filling in an application for insurance. The PDS will go into great detail about each type of insurance and what you are covered for. Given not all insurers cover the same things, it is important you understand what your insurance is going to cover.

Who should you talk to?

If you are requiring a review of your personal insurances or wish to get some cover in place, then book a time with Warren Strybosch from Find Wealth Pty Ltd t/as Find Insurance. Warren has been helping clients for the past 20 years with their personal insurance needs. He has been a finalist for many financial planning awards, won a few awards of the years, and has been recognised as one of Australian’s top 50 most influential advisors. You are in safe hands with Warren.

Booking link:

https://calendly.com/findgroup/15minute-phone-conversation

After the meeting you will be provided with a FREE Insurance Report so you can make an informed decision about your personal insurance needs.

This information is current as at August 2022. This article is intended to provide general information only and has been prepared without taking into account any particular person’s objectives, financial situation or needs (‘circumstances’). Before acting on such information, you should consider its appropriateness, taking into account your circumstances and obtain your own independent financial, legal or tax advice. You should read the relevant Product Disclosure Statement (PDS) before making any decision about a product. While all care has been taken to ensure the information is accurate and reliable, to the maximum extent the law permits, Alliance Wealth and its related bodies corporate, or each of their directors, officers, employees, contractors or agents, will not assume liability to any person for any error or omission in this material however caused, nor be responsible for any loss or damage suffered, sustained or incurred by any person who either does, or omits to do, anything in reliance on the information contained herein.

Warren Strybosch

You can call them on 1300 88 38 30 or email info@findinsurance.com.au www.findinsurance.com.au

General Insurance

We specialise in the following:

• Business Pack Insurance • Professional Indemnity • Public Liability - Business related only • Landlord Insurance • Height Safety Insurance

We DO NOT provide advice or quotes for the following (you need to go direct and save):

• Car Insurance • Home & Contents • Caravan • eBikes

We work with only the most reputable insurers to bring you a range of insurance options for you to choose from:

When it comes to General Insurance, Find Insurance provides a referral service to Find Business Insurance. Find Insurance provides general information only and we do not offer general insurance advice. We refer all general insurance enquiries to Craig, a licensed Authorised Representative (No. 001248230) of Focus Insurance Brokers AFSL 426797. Craig is able to provide general insurance advice to you. You should always seek professional advice before making financial decisions. This material is not intended to constitute personal advice and must not be relied on as such. This material is of a general nature only and has been prepared without taking into account your individual objectives, financial situation or needs. You should consider the appropriateness of this material having regard to your objectives, financial situation and needs and consider obtaining independent advice. We endeavour to ensure that the information on this site is current and accurate but you should confirm any information with the product or service provider and read the information they can provide. If you are unsure you should get independent advice before you apply for any product or commit to any plan.