By

Geoff Gartly
Business plan

A Simple Business plan that works

Unveiling the Power of a simple Business Plan for small business is Your Blueprint to Success

A Simple business plan for small business helps you dream big! Are you an entrepreneur or business owner aiming to achieve success in your ventures?

Do you find yourself constantly facing setbacks and challenges that just make it a little harder hinder your growth? The solution is in the power of a well-crafted simple business plan that kicks goals. A small business action plan is a blueprint that outlines your goals, strategies, and tactics to achieve success. It is your roadmap to success and helps you stay on track towards achieving your objectives.

A well-written and EXECUTED business plan not only helps you secure funding but also provides clarity and direction for your team.

So, let’s dive in and discover how a business plan can be your key to unlocking success in your business.

4 reasons Why every small business needs a simple business plan


A simple business plan is essential for every business, no matter how big or small. It provides a clear understanding of your business goals and objectives, outlines the strategies you will use to achieve them, and helps you identify potential obstacles and solutions. Without a plan, you risk losing focus and direction, making it difficult to achieve your goals.
You need a business plan for several reasons:

  1. Setting goals and objectives: A business plan allows a small business to establish clear goals and objectives for the company, including financial targets, growth milestones, and other key performance indicators. This helps the business owner to focus on what needs to be achieved and how to get there.
  2. Attracting funding: If a small business needs external funding, such as a loan or investment, a business plan is essential. It provides potential investors or lenders with a clear understanding of the business’s goals, strategies, and financial projections, which helps them determine whether or not to invest in the company.
  3. Identifying potential challenges: A business plan forces the business owner to think about potential challenges that the company may face and how to address them. This helps the business owner to be prepared and to have contingency plans in place.
  4. Making informed decisions: A business plan helps the business owner to make informed decisions about how to allocate resources, such as time and money. By having a clear understanding of the company’s goals and objectives, the business owner can prioritize tasks and investments more effectively.

You plan is a communication tool that helps share the your vision, mission, and values with employees, customers, suppliers, and other stakeholders.

Its your roadmap for the business future and helps everyone involved to understand their role in achieving the your set goals

The process of planning will help you identify your target audience! For you to know your competition, and develop a comprehensive marketing strategy. It is a tool that provides a roadmap for your team to follow. Action by setting realistic goals, measure your progress, and make adjustments as needed to ensure your success.

In short, a business plan is the foundation of your business. It provides a clear understanding of your business goals, identifies potential obstacles, and outlines the strategies you will use to achieve success.


Different types of business plans

There are several different types of business plans, each with its own purpose and audience.

Traditional Business Plan
A traditional business plan is a comprehensive document that outlines every aspect of your business, from your mission statement to your financial projections. It is typically used to secure funding, but it can also be used as a tool to guide your business operations.

Lean Startup Plan – recommended – keep it simple but actionable
A lean startup plan is a simplified version of a traditional business plan. It focuses on the essential elements of your business, such as your target market, value proposition, and key metrics. It is typically used by startups that are looking to test their business concept quickly and efficiently.

Internal Business Plan
An internal business plan is a document that is used to guide the operations of your business. It is typically not shared with external stakeholders and is used to keep your team focused and aligned with your business goals.

Strategic Business Plan
A strategic business plan is a long-term plan that outlines your business goals and objectives over a period of several years. It is typically used by established businesses that are looking to grow and expand their operations.

Key components of a business plan:

Executive Summary
The executive summary is the first section of your business plan and provides an overview of your business. It should be concise and compelling, outlining your business concept, target market, and competitive advantage.

Company Description
The company description provides a detailed overview of your business, including your mission statement, history, and ownership structure.

Market Analysis
The market analysis section outlines your target market and identifies potential opportunities and challenges. It should include information on your competitors, market size, and trends.

Products and Services
The products and services section provides a detailed description of your offerings, including their features, benefits, and pricing.

Marketing and Sales Strategy
The marketing and sales strategy outlines how you plan to reach and sell to your target market. It should include information on your advertising, sales, and distribution channels.

Financial Projections
The financial projections section provides an overview of your projected revenue, expenses, and profits over a period of several years. It should also include information on your funding needs and sources.

Management and Operations
The management and operations section provides an overview of your team and their roles, as well as your business operations and processes.

Including these key components in your business plan can help you create a comprehensive and effective document that will guide your business towards success.

YOUR marketing plan

A marketing plan is essential for small business It outlines how to reach and sell to your target market,. It provides a roadmap for your marketing activities. A well-crafted marketing plan can help you to identify your target audience, develop compelling messaging, and choose the right marketing channels to reach your audience.

To create a marketing plan start by identifying your target market. This should include a detailed description of your ideal customer, including their demographics, psychographics, and buying behavior.

Developing financial projections and budgets

Financial projections and budgets are essential. They provide an overview of your projected revenue, expenses, and profits over a period of several years, as well as your funding needs and sources.

To develop financial projections and budgets, start by estimating your revenue and expenses for the coming year. This should include a detailed breakdown of your costs, including fixed and variable expenses.

Next, project your revenue growth over a period of several years. This should be based on your market analysis and sales projections.

Finally, identify your funding needs and sources. This may include loans, investments, or crowdfunding.
By developing financial projections and budgets, you can ensure that your business is financially sustainable and that you have the resources you need to achieve your goals.

We help local businesses in surrounding areas of Ormond, Bentleigh and Brighton to action their projections

Common mistakes to avoid when creating a simple business plan

Creating a business plan can be a daunting task, and it’s easy to make mistakes along the way. Some common mistakes to avoid include:

Focusing too much on the product or service

While your product or service is important, it’s not the only factor that will determine your success. Be sure to focus on other key components of your business plan, such as your target market, marketing strategy, and financial projections.

Ignoring your competition

Understanding your competition is essential to developing a successful business. Be sure to include a detailed analysis of your competitors in your market analysis section.

Overestimating your revenue projections

While it’s important to be optimistic about your business’s potential, it’s also important to be realistic. Be sure to base your revenue projections on market research and sales data, rather than wishful thinking

Neglecting to update your business plan

Your business plan should be a living document that evolves and changes as your business grows. Be sure to update it regularly to reflect changes in your market, competition, and business operations.
Avoid common mistakes, you can create a comprehensive and effective business plan that will guide your business towards success.

Resources and tools to help you on your way

Here are some useful resources and tools include:

Small Business Administration (SBA)
The SBA provides a wealth of resources and tools for small business owners, including business plan templates, financial calculators, and market research tools.

SCORE
SCORE is a nonprofit organization that provides free mentoring and coaching services to small business owners. They offer a variety of resources and tools, including business plan templates and financial planning tools.

LivePlan
LivePlan is a cloud-based business planning software that provides a variety of tools and resources to help you create a comprehensive and effective business plan.


By utilizing these resources and tools, you can streamline the process of creating ensuring that your plan is comprehensive and effective. Get out there and follow your dreams

Renovating and flipping your home for profit . The potential Tax Implications

Renovating and flipping your home can be an exciting and rewarding experience as a homeowner. However, before you embark on a renovation project to sell your home for profit, it’s essential to understand the tax implications involved.

After watching TV shows like the Block, are you inspired to become a property flipper?
In this article, I will explore the basics of renovating and flipping your home, the ATO tax implications, and offer tips to help you maximize your profit while avoiding common mistakes.

The Basics: What is Renovation and Flipping your home?

Renovation is improving or updating your home, either for your enjoyment or to increase its value. This can involve anything from cosmetic changes, such as painting and decorating, to more substantial alterations, such as adding an extension or converting a garage.

Flipping, on the other hand, refers to buying a property to renovate it quickly and resell it for a profit. Flipping can be a lucrative business, but it does come with risk and requires careful planning and execution.

Understanding the ATO Tax Implications for Renovating and flipping your Home for Profit

Renovating and flipping your home is something that can be financially rewarding . When renovating your home for profit, there are several tax implications to consider. Firstly, it’s essential to understand the concept of your main residence and how it affects your tax obligations.

Your main residence is the home you live in. In many cases it is exempt from capital gains tax (CGT) when you sell it. However, suppose you renovate your main residence with the intention of selling it for profit systematically. In that case, you may be liable for tax . This is occurs when it was treated as trading stock due to the renovation business. This can be a complex area, so contact Geoff for professional advice.

What is Main Residence and Why it Matters for Tax Purposes?

As mentioned, your main residence is the home you live. It’s important to note that you can only have one main residence at a time. You must use it as your main residence to be eligible for the CGT exemption.

If you own more than one property, you may choose which one is your main residence. But you must nominate this in writing to the ATO. It’s also worth noting that if you rent out part of your main residence, such as a spare room, you may be liable for CGT on a portion of the sale price.

Renovating and flipping your Home can change you home from tax free to being subject to income tax.

Claiming Tax Deductions for Renovation Expenses

When renovating your home for profit, you may be able to claim tax deductions for certain expenses. These include materials, labour, and professional fees such as architect or engineer costs. However, keeping accurate records of all expenses and seeking professional advice to ensure you are claiming correctly is essential. It’s also worth noting that you cannot claim deductions for expenses that are not directly related to the renovation, such as general maintenance or repairs.

Tax Implications for Selling Your Home After Renovation

When you sell your home after renovation, you may be liable for CGT or income tax on the profit derived. The ATO may treat your activity as a business, and it becomes income of an ordinary nature classified as a business renovation business

Additionally, if you sell your principal residence and meet specific criteria, you may be eligible for the principal residence exemption.

The profit-making activity of property renovations – per ATO
If you’re carrying out a profit-making activity of property renovations, also known as ‘property flipping’, you:
• Must report your net profit or loss from the renovation in your income tax return
• You are entitled to an Australian business number (ABN)
• You may be required to register for GST if the renovations are substantial.

We can assist you here if you unsure what to do next. Call Geoff on 95979966 for a confidential discussion.


You may live in the property as your home for all or part of the ownership period, BUT it does not automatically mean that the profits from the sale are exempt from income tax. The main CGT residence exemption only applies to reduce capital gains; it cannot reduce amounts taxed on the revenue account if the ATO deems you in the property flipping business.

Examples of flipping vs home renos

Jock and Jill buy a house that needs renovation, move in and, over the next six months, renovate it, landscape it and then place it on the market. This is renovating your home to flipping. In the meantime, they acquire their next one and start the same process. The ATO may deem them in the property development business based on the actions and facts.

But on the other hand, the ATO may deem the profit as income as a property flipping business.
Whereas Freddy and his wife buy a house and move in. They slowly renovate and enjoy it as their home. Freddy decides after a few years to sell and buy a bigger one. Provided they meet the CgT exemptions as their principal residence, then the gain on the sale would be exempt

Tips to Maximize Your Profit While Renovating Your Home

To maximize your profit while renovating your home, planning carefully and making informed decisions is essential. Firstly, consider the location and market demand for your property. Renovations well-suited to the local market and adding value to the property are more likely to result in a higher sale price. Setting a realistic budget and sticking to it is essential, as overspending can eat into your profit margin. Finally, consider enlisting the help of real estate agents, builders, and tax experts to ensure you are making the most of your renovation project.

Action – tread carefully when flipping your homes!

Renovating your home for profit can be lucrative, but it’s essential to understand the tax implications involved. By understanding the concept of your principal residence, claiming tax deductions correctly, and seeking professional advice, you can maximize your profit while avoiding common tax mistakes of being a flipper

Is an SMSF setup right for you?

Deciding to implement an SMSF setup is something that needs a plan if undertaken.We are observing that our clients are taking the opportunity to review their Superannuation and retirement goals, The markets are changing, and people are beginning to plan for their retirement strategy.

We are receiving several questions from clients asking whether, given the current market fluctuations of their investment in the superannuation, it is a great time to take charge of your own Superannuation. Some are evaluating if it is a great time to take control by setting up a new Self-Managed Superfund, commonly known as an SMSF.

Investment choices

Clients are considering a range of investments when it comes to their SMSF. These include commercial property, shares, and less conventional investments such as bitcoin as part of their investment strategy. Please do your research for your circumstances and ensure the appropriate Investment Strategy is documented for your Fund.

We can work through with you your strategy to purchase a residential property or commercial property within your SMSF. The key is understanding what restrictions are in place before starting this process.

There are several benefits to being your own Trustee of your SMSF. And hence the ability to run your own Fund. For example, as a Trustee, you can react and manage your superannuation savings. This is because you have greater control and flexibility over your investments. You can take a more hands-on approach to acquire or selling investments within your super fund. This includes responding quickly to opportunities to realign your investment portfolio as the market changes.

But you also need to be aware that being an SMSF comes with the fact that there’s more work for you as a trustee to manage your investments. In doing so, you must ensure you have the expertise and confidence to evaluate your investments. You also need to ensure your SMSF is following its investment strategy. We can certainly assist you here, but you must be prepared to keep records and understand that your SMSF investments are for retirement.

ASIC does not recommend setting up an SMSF with a small balance. Typically a fund should have a combined balance of $200,000 plus to be a viable Fund. You can combine your benefits with other family members, and please discuss with us if this is your option.

Not always easy to be a Trustee

Running an SMSF also takes time and effort. You must ensure that your super fund SMSF is managed properly and that you are achieving returns. As a Trustee, it is also essential to follow the rules there. There are there strict laws within the superfund environment that you, as a trustee, understand. We can help you here to make sure you keep on the right side of the Superannuation laws.

As an SMSF specialist advisor, we can help you to review whether a self-managed super fund is a suitable vehicle for you to establish. We welcome you to make time and discuss your needs in relation to your soft-managed super fund needs and your retirements.

Reach out and contact us:

Our latest PODCAST

For those who may have an SMSF borrowing, our latest podcast may be of interest to you. Join me as we discuss the current landscape for SMSF and borrowing

https://welcome-what-makes-your-business-tick.simplecast.com/episodes/smsf-and-borrowings-the-current-trends-j6judYcO?fbclid=IwAR2E-yPV3fU2Ib-g9gFM7X6LyTslnbAgSQI9orZaIvCNKqx6KWeCNgN8aLE

Cost reduction and Maximizing Profit in Your Business

Cost reduction by reducing expenses means great profits, right or wrong?

What is Cost Reduction & Why Is It Important for Business Owners?

Cost reduction is one of the most important aspects of running a successful business. It can help businesses save money and increase their profits. But doing it correctly will achieve great results for your bottom line. Expenses slashed for the sake of it may be detrimental. As a business owner, you need to be aware of different cost reduction strategies and how they can help you achieve your goals. By understanding the basics of cost reduction, you will be able to make better decisions when it comes to managing your finances. So let’s look at cost reduction and why it is essential for business owners.

Cost reduction must be done systematically. As the saying goes, you need to spend money to make money. Therefore, cost reduction should be evaluated with what the end game is to achieve profit improvement and efficiency.

Easy ways to Reduce Costs in Your Business

Are you looking for ways to reduce costs in your business? Well, look no further! From taking advantage of new technologies and automation to cutting unnecessary expenses! First of all, a cash budget is an important tool to use. This helps you monitor expenses against actual.

Our latest Value Builder email that we have engaged with our business clients this month looked at a simple way to help work out which costs could be reduced. (if you want to join this email list call our office on 95979966)

Let me introduce you to Derek Morin.

Morin founded Tabarnapp to create after-market sales applications for Shopify website owners.

The business was a success, but when his partner, who handled the company finances, left the company, Morin was forced to look closely at his profit & loss (P&L) statement. Morin saw potential improvements, so he made notes in the margin next to each line item he wanted to change as part of his cost reduction strategy.

To save time, he started using a single letter beside each entry to represent the action he wanted to take:

P stood for “Plus,” something profitable, and he wanted more.

U stood for “Unnecessary,” an expense he could eliminate.

R stood for “Replaceable,” a cost that could be replaced with a better or cheaper option.

E = equal no change required

Simply known as the “PURE.” method!

Morin treated the PURE method like a game.

Every month he scrutinized his P&L with the same four-letter system. Morin engaged his team to act on each item that needed improvement. He became obsessed with squeezing out a few more dollars of profit every month.

Tools & Services That Can Help You Reduce Costs

Are you looking for ways to reduce costs without sacrificing quality? Cash budgets and reviewing the cost drivers in your business are essential. Typically wage costs are high ticket cost items. Look how you can get the most out of this resource by increasing productivity.

Look for Profit leaks that are a reality for many small businesses and can significantly impact their bottom line. Therefore, it is crucial to identify and repair these leaks as soon as possible to maximize profits.

Profit leaks can occur from both Revenue and Expenses.

Common Causes of Profit Leaks in Small Businesses, so start reducing unnecessary costs.

Small businesses often face a lot of challenges when it comes to managing their finances. For example, profit leaks can be a huge source of lost income and can cause severe damage to the company’s bottom line.

Cost reduction strategies are essential for small businesses to remain competitive and increase their profits. Implementing cost-saving measures can help companies reduce expenses, increase efficiency, and maximize profits. In this article, we will discuss various strategies that can be used to reduce costs and increase profits for small businesses. These strategies include streamlining processes, lowering overhead costs, outsourcing non-core activities, leveraging technology and automation, improving employee productivity, and taking advantage of tax incentives.

As the economy faces a potential recession or, at the very least, interest rates bite, now is the time to take proactive action on those costs that may now not be adding value to the bottom line.

5 Steps to Make Your Business Sale Ready and Increase Its Value

Is your business sale ready for that next opportunity? Selling a business is a complex process, but it doesn’t have to be overwhelming. With the right strategies and preparation, you can maximize the value of your business and make it sale ready.

Selling a small business can be a daunting task, but with the right exit plan and growth strategies, you can make sure that you get the best deal possible. Retirement may seem like a distant goal, but with careful planning and the right resources, it can become a reality.

Let’s explore how to get your small business sale ready by understanding the basics of exit planning, growth strategies, and retirement options. With this knowledge, you can start your exit plan strategy today.

Here are five steps to help you do just that. By following these steps, you will be able to increase your business’s value and attract potential buyers with ease.

Introduction: What Does it Mean for a Business to be Sale Ready?

Being sale ready is an important step for businesses that are planning to enter the market. It involves preparing the company and its assets to be attractive to potential buyers. This includes creating a clear financial structure, developing a business plan, and ensuring that all legal items are met. It also means having an understanding of the company’s value. But where you may have an opportunity to improve on that value before going to the market. You need a good understanding of the business value and being able to communicate it effectively to potential buyers. Being sale ready is essential for businesses that want to maximize their return on investment. Ultimately it also ensures a successful sale transaction.

Step 1: Analyze Your Current Financials & Identify Areas of Opportunity

Financial analysis is an important part of any business strategy. It helps identify areas of opportunity and improvement to make the most of available resources. By analyzing your current financials, it is possible to identify areas where changes can be made . This can maximize profits and look at reduce costs. This Analysis also helps measure the performance of the company in terms of its financial health.

We offer a ValueBuilder Asssessment that can provide valuable insights into potential future strategies to work on your business value.

Step 2: Review & Update Your Internal Processes

Keeping your internal processes up to date is essential for any business. It helps ensure that your team is working efficiently and effectively and that tasks are completed on time. Regularly improving your internal processes can help you stay ahead of the competition, save money, and improve customer satisfaction. In this article, we will discuss the importance of reviewing and updating your internal processes, as well as some tips on how to do it effectively.

Step 3: Invest in New Technology & Innovations

As businesses move towards digitization, investing in new technology and innovations is becoming increasingly important. Investing in the right technology can help businesses stay competitive and increase their productivity. It can also help them save time and money, as well as improve customer experience.

In this step, we will explore how businesses can use the latest technology and innovations to their advantage. We will look at different types of technologies. And how they can help businesses streamline their operations, automate tasks, and generate more revenue. We will also discuss how to evaluate the potential of new technologies before investing in them.

Step 4: Build Strong Relationships with Strategic Partners

Building strong relationships with strategic partners is an essential part of any successful business. By forming strategic partnerships, businesses can leverage the resources and expertise of other organizations. The aim is to create more value for their customers. Through collaboration, businesses can gain access to new markets. From here thet can develop innovative products and services, and increase their competitive advantage in the marketplace. Strategic partnerships also provide an opportunity for businesses to share knowledge and expertise, helping them stay ahead of the competition.

The next step for getting your business sale ready.

There are many areas in which you can improve your business to make it sale ready. We offer you the opportunity to complete a detailed review of your business. Let us help you find those hidden gems. You can undertake a free Valuebuilder assessment here,

Being sale-ready means you can be ready to for any potential offers and be confident in selling at the maximum value achievable. This is called business freedom and allows you to be ready for Mr. Right who will love your business as much as you do.

Sales tools for small business

Effective Sales Tools for the small business smart checklist

Do you use tools that help grow sales in your business? Sales are the lifeblood of any business. Yet how many of us have had training in closing a sales deal as small business owner? With a new year about to start, it’s time to review your sales process and help your business grow.

Set a budget that you and the team can aim for in 2023

Working with your customer

The art of selling is to focus on the prosperity and happiness of your customers!

Don’t bother telling the world you are ready. Show it. Do it.” – Peter Dinklage

Setting up an effective CRM system lets you manage your customers and their relationship with you. Are your customers frequent users of your business that need weekly or monthly sales follow-ups? Not only about purchasing but post-sale follow-ups. These measures all drive sales. You can plan as sales intelligence allows you to understand your customer’s future needs.

For more information about factors like occupancy rates etc, see our other article keeping customers coming back.

The more touch points you have with a customer, the more chances they will remain with you. The longer they remain with you, the more valuable they become, leading to business value. Business value is what will deliver you business freedom


Take a moment and ask yourself how much in terms of revenue my business has done:
– For This week
– For This year
– Compared to this time last year

Are you having the best year ever? Are you monitoring these vital statistics?

After you have addressed these vital questions, now look at the trends. Data in your accounting system is your friend. Look at:
– Trends of turnover
– Forward orders
– What sells when, how and why
– What doesn’t generate a large margin
– What stock gathers dust, and why

So your XERO, Quickbooks or MYOB will be able to produce some of these valuable sales reports. Accountants like us can help you work out what is profitable and what should become a runt or no longer stocked product or service.

Your sales department should be focused machine on the yearly budget. What I hear you say “ I don’t have a sales department “ If you don’t, then adopt one, even if is you.


Your sales checklist to create effective sales tools

Check if any of the statements apply to you.

  • I do not waste time training people who are not trainable in sales.
  • I manage the company’s daily sales quota.
  • I always keep sales brochures available for potential customers.
  • I keep a written copy on just in case.
  • I know how to close a sale so that the customer benefits and I make money.
  • The company supports my sales effort wholeheartedly from concept to close.
  • I have a multifaceted system of referrals and word-of-mouth.
  • I am fully aware of what customers need and want and adapt to them.
  • I keep sales and marketing costs low, even if it means lost sales from time to time.
  • I make my appearance, company, and product as attractive as possible.
  • I create focus groups and record responses and reactions for my evolving action plan.
  • I involve every staff member in various aspects of strategy development, allowing each the opportunity to contribute.

Look at where you are taking your business’s sales.

In small businesses, effort = reward. Small leads to large, and smart sales plans lead to profit and adding value to your business.

Ignore your accounting system at your own peril. Make sure you monitor your sales, follow the trends and focus on the end game. A healthy sales result for 2023!

business partnerships

Should I be running my business as a partnership

Running my business as a Partnership or as a sole trader you need to tread carefully.

These simple entities are popular, as they are easy to set up. They are also simple to manage and have fewer complications than that of a company or a family trust, making reporting easy to prepare.
However, they are most suited to businesses operated by family members, individuals or those working on a small scale.

Partners in crime – mates dont always make good business partners


It’s worth noting that a partnership can be between people, trusts or companies. A sole trader is just you.
The danger lies in where the partners are individuals. This joins them at the hip, and they have the same legal liability as sole traders. This means that “YOU” can become personally liable for all partnership debts. Yours and your partner’s.

For simple arrangements, there are minimal partners needed to form a partnership. Husbands and wives are easy . They often have no need for a partnership agreement. A bank statement in joint name will be sufficient evidence for the tax office to recognize that a partnership is trading. This is further evidenced by the ABN details recorded.

Friends and unrelated parties often start partnerships. While it is crucial that a partnership agreement is executed, in our experience, it usually isn’t. In fact no one even thinks about the partnserhip rules as they are so keen to make the business happen.

Sometime its not a great idea to be in partnership at all . Take John Dutton from Yellowstone . When you like to make your own decisions, being in partnership wont work. He is a strong willed man and what he says goes. If your a John Dutton then dont go into business with anyone as it wont work.

When a dispute often arises over money, happier times and past friendships go out the door. All handshake agreements are forgotten, and conflict resolution often becomes protracted if no formal agreement exists.

In summary, a partnership agreement should indicate what each partner contributes to the business, either in the form of intellectual, equipment, capital or time. It should also outline how the profits will be split.

How often are partners paid profits, and who does what? There are no wages paid to partners in a partnership; therefore, this often is one reason other entity structures work better.

Does a business as a partnership pay tax?


Partnerships as an entity and therefore do not pay tax.
The profits the business makes are distributed to the partners.
The partners pay tax at their applicable tax rate. The good thing is that losses get distributed directly to the partner and, in many cases, can be offset against other income.


Likewise, the amount of loss that can be offset against a partner’s other sources of income is their share of the partnership loss and not the amount of money they contributed to the Partnership. The ability to distribute losses can be a tax benefit in the set-up stage of a business. Likewise for those who act a sole trader.

Joint debts – DANGER

Like a marriage, Under partnership law, each partner is jointly liable for the Partnership’s debts.

This is where danger can strike as if one partner is financially unable to pay their share of the partnership debt; then creditors look to the other partners to make good. In the event of the business failing or a claim for damages against the business not being covered by the business’s assets, each partner’s personal assets are available to meet the debts.

There are no disadvantages to a partnership relating to Capital Gains Tax. Partners can claim small business tax relief on the sale of a business.CGT tax liability. This can be split when a partnership with more than two owners is involved in a business.

What are my business structure options

Most business owners are conscious of putting a fence around their business and protecting themselves from legal action for negligence, debt and the ATO. It is why acting as a sole trader or in a partnership has personal exposure and could be likened to walking on a tip rope over a high cliff.


For some starting out as a sole trader or Partnership is a cheap and easy option to put a toe in the water. However, if the business is successful, it is beneficial to stop and reconsider. I am using the most tax-effective and protective structure for me moving forward.

Reach out if we can help you further help on 95979966

SMSF and commercial property

SMSF and commercial property is an investment often held by an SMSF and is a good strategy. Is holding your business premises, Factory or shop in an SMSF a good strategy?

Allowing your SMSF to hold your business real property is a fantastic opportunity for the small business owner to isolate its business asset from the main trading company. It also means you can become a long-term tenant of your SMSF.

There are some distinct advantages for both estate planning and long-term protection strategies of your asset in an SMSF. Any property strategy it must be done properly and there are a few items that you need to address before undertaking this measure in your self-managed fund.


SMSF advantages holding business real property

It is the only opportunity that you have under superannuation law to transfer a business real property from yourself into the Fund. Normally it is not possible to transfer property however your business premises is one exception.

Holding your business real property allows your super fund to grow organically and means that instead of paying rent to a landlord you are paying yourself via your SMSF and growing your retirement funds.

It’s a clever way to pay off your assets and at the end of the day when you retire you can then rent the property to others or have your family be part of your SMSF and they take over the asset
Before purchasing the property or transferring the property with a commercial property take time to work through your Funds investment strategy and how the asset will be acquired by your Fund.

How your Fund can acquire property:

Your fund can acquire the property in a number of ways and these include:
1. Establishing a borrowing in relation to the acquisition of the property however needs to be done in connection with using a bare trust arrangement it is essential that we need a separate bare trust from the SMSF assets If you’re borrowing to buy a commercial property, it needs to be under a limited recourse borrowing arrangement (LRBA). involved.

per the CPA – Borrowing – who can lend the SMSF the money?

There are no restrictions on who can provide the finance for the SMSF, meaning it could include any financial institution, a related entity or a member of the fund.
An LRBA is not a regulated financial product. However, as discussed earlier ASIC has stated that an adviser cannot recommend an SMSF trustee invest in property through their SMSF unless the adviser is appropriately licensed under the AFSL regime. Geoff Gartly has an ASFL and can appropriately advise you in this area.

2. If your Fund has sufficient monies, it can buy in your SMSF and commercial property outright

Or we can arrange for additional contributions to be contributed to help ensure there are sufficient funds.

3. The fund can in some circumstances acquire a commercial property in partnership with yourself or others providing there is no borrowing attached.

Arm’s length dealings

Once you have purchased or transferred the property into the Fund, then you must ensure that you put a commercial lease in place. This is important for both external parties or yourself if you’re running to get back to yourself at a market rental. Importantly once in place, you must ensure rental payments are made per the lease agreement. Failure to do so may make the Fund non-complying.

The property holding Strategy

It comes down to strategy when working out if SMSF and commercial property is the right mix.

Often overlooked is the fact that property and improvements can only be done from cash from the Fund and cannot be done from borrowing, and this should be factored in from the outset
Your SMSF Property strategy should include a :

  • Vision for the long-term use of the property
  • How the Fund will pay any shortfall if monies borrowed
  • What happens if the business owner dies
  • If your business is sold, do you rent out or sell the property

Any property sold in a retirement strategy may result in low or no tax payable depending upon the strategy adopted.


We recommend you seek proper advice and the information we have provided is of general nature only

Negotiating an ATO Payment Plan

Defaulting on  ATO payment plans

If you have an ATO debt you can’t pay upfront, you can arrange an ATO payment plan. This is an agreement between you and the ATO where you agree to pay off your tax debt over time in instalments. In return, the ATO agrees not to use its debt collection powers against you.

Getting into a payment arrangement with the ATO is one thing. Keeping the payment arrangement on track is a different story. We have listed just some of the ways your payment plan can default.

Payment not being received on time

This might seem very obvious, but payment arrangements often default because of late payment. Usually, the payment is made on the due date and time isn’t allowed for the payment to clear into the ATO’s system.

It’s important to remember that the due date for payment is when the payment should be received by the ATO. This keeps your ATO payment plan in check

Make sure to check how long your payment type takes to clear to know your payment will be processed on time.

Paying into the wrong account


If you’re running a business, you will usually have more than one account with the ATO.

You will usually have an income tax account and an integrated client account (which is for your GST, pay-as-you-go withholding, etc.). You might also have other accounts, such as:

  • A legal action account – you will have this if the ATO has initiated debt recovery proceedings against you for unpaid tax.
  • A superannuation guarantee account – you will have this if you have missed payments for your employees’ superannuation.
  • It can be challenging to keep track of all these accounts. But it is essential that you do – especially when you’re in a ato payment plan or arrangement.
  • Let’s say you have two tax debts (for different types of tax). These debts might be owed on your integrated client and income tax accounts. When you enter into a payment arrangement with the ATO for these accounts, the ATO views these as two separate arrangements that require separate monthly payments.
  • So, you may have a payment arrangement of $1,000 per month in your integrated client account and $400 per month in your income tax account. The payment details for each of these accounts will be different. This means you must be careful when making your monthly payments. Make sure that each payment goes into the correct account. If you accidentally make both payments to the same account, one of your ATO payment plan arrangements will default.
  • Unfortunately, the ATO doesn’t monitor your accounts to ensure your payments are going into the right place – this is up to you! So be careful – you don’t want a simple mistake to trigger a default.
  • Your ignore the payment all together

Your ato payment is less than expected!

The ATO’s system looks at each payment it receives and matches it up against what it expects. If one payment is less than expected, it will flag a default. For example, a default happens if the ATO expects $1,000 per month, and you pay $1,200 monthly and $800 the next month. Your agreement with the ATO is to pay $1,000 monthly; anything less means a default.

Your extra $200 payment from the month before is voluntary. It doesn’t apply as a pre-payment toward next month’s payment.

Similarly, getting a tax credit or refund (for example, a GST credit) does not affect your payment plan. However, it won’t replace your regular required instalment payment, so you must keep paying your usual monthly amount.

  • Not keeping up with all future obligations

If you’re in a payment arrangement, you must ensure you meet all your future tax obligations. This means that you must submit all your future lodgements on time and pay any new tax debts by the due date. These new debts aren’t part of the payment arrangement – if you don’t pay them, you will default.

What to do if you think you’re going to default

If you can’t pay your instalment by the due date, the best thing to do is contact the ATO. You should do this as soon as you realise you have a problem. You may be able to renegotiate the arrangement so that it doesn’t default. It’s much better to do this than wait until a default has happened.

Your payment and default history influence the ATO’s decision about whether you can enter into a new arrangement and what the terms of that arrangement should be. For example, if you have a terrible compliance history, the ATO may ask you to pay a large upfront payment or pay by direct debit.

A poor compliance history can also mean that the ATO will only agree to a temporary payment arrangement – e.g. 6 months instead of a year.

Because your payment history influences the terms of future payment arrangements, it’s best to keep in contact with the ATO. Try to renegotiate your payment arrangement before a default happens.

What happens if you default

If you are on an Australian Taxation Office ATO payment plan and you default on your payments, there are several steps that may be taken by the ATO:

Payment Default Notice: The ATO will typically send you a payment default notice if you miss a payment on your payment plan. This notice will inform you that you are in default and will usually provide instructions on what you need to do to rectify the situation.

Contact from ATO: The ATO may contact you via phone, email, or mail to discuss the default and try to work out a solution. They may be willing to modify your payment plan or negotiate a new arrangement based on your financial circumstances.

Additional Penalties and Interest: When you default on your payment plan, the ATO may impose additional penalties and interest charges on the outstanding amount. These can increase the total amount you owe.

Debt Collection: If you continue to default on your payments and do not respond to the ATO’s attempts to contact you or make arrangements, the ATO may escalate the matter to a debt collection agency.

Legal Action: In extreme cases, if you consistently fail to make payments and do not respond to the ATO’s attempts to resolve the issue, the ATO may take legal action to recover the debt. This could include obtaining a court judgment against you.

To avoid defaulting on your ATO payment plan, it’s essential to communicate with the ATO as soon as you encounter financial difficulties.

If your payment arrangement defaults, the ATO can use one of its many debt collection powers against you. This can include issuing a garnishee notice to your bank or serving you with papers to try to wind up your company or make you bankrupt.

You should make every effort to ensure you don’t default as it is getting more difficult to renegotiate with the ATO. The ATO is getting tougher to deal with and can ask for lots more information about your finances and assets to ensure you won’t default again.

Contact us for assistance and allow us to negotiate on your behalf . Contact Michelle at our Office on 95979966

Reminder: new .au domain names – have you got yours register your business now!

.Au domain names are here. On 24 March 2022, anyone with a local connection to Australia (including businesses, associations, and individuals) has been able to register a new category of domain name known as au

These shorter, more straightforward domain names end in .au  NOT, com.au and effectively create 2 domain names These will than .com.au, .net.au, .org.au, .gov.au or .edu.au.

Do you have a “.com.au” domain name?

Existing domain name.com.au license holders have been provided priority to register the .au direct equivalent of their domain name until 20 September 2022,

After this date, any domain names that have not been allocated will become available to the general public.

This new option for domain names creates opportunities for businesses, organizations and individuals; however, it could also provide another opportunity for cybercriminals to utilise your name for a fraudulent activity like business email scams and the like.

Choosing not to register your name as yourname.au and just keeping your name.com,au opens your business up to fraudsters and possibly unethical behaviour by competitors

Check with your domain provider or go to a reputable Australia domain name seller and register your name before the due date.

A domain name ending in .au signifies that the person or organization using it has a connection to Australia.

Many small businesses haven’t registered their domain name and use the standard xxx.gmail.com which is not great branding. Therefore its a great opportunity to look at your branding and improve your online presence.

In .au we have several different namespaces serving different sectors and purposes and with different rules for who can register them and what name they can have.- see auda website for an explanation

‘Open’ .au namespaces

The open namespaces are those in which the public can register names, provided they are eligible.

Each namespace serves a specific type of enterprise or purpose and rules for who can register in them, and what names they can register to vary between them.

The rules for who can register what names in these open namespaces can be found in the .au Domain Administration Rules: Licensing.

https://www.auda.org.au/au-domain-names/au-domain-names

small business

Small business specialist advice pathways grants to help you build your business!

If you are a business in Victoria, you may be eligible for the newly opened Small Business Specialist Advice Pathways Program.

This grants $2,000 to “employing small businesses to access professional advice and services to help them make informed business decisions and plan for the future.”

Eligible projects include:

a) Advice and analysis regarding the management of cash flow, preparation of cash flow budgets and projections,

b) Profitability analysis and formulation of financial management and/or operational business strategies,

c) Strategic analysis to revise business planning and/or governance arrangements,

d) Advice regarding the management of debts and liabilities, or

e) Advice and/or representation regarding commercial agreement contract terms (i.e. commercial leases or commercial supply contracts).

Applications close on 30th September so jump on this offer fast.

It’s a great time to join our Valuebuilder business program and plan your business for the future.

Contact Michelle on 9597 9966, and we can send you the link to apply for the grant and tell you more about how you can join the short-track Valuebuilder program.

Our Valuebuilder program will identify areas where we can help your business improve cash flow and growth and strategically plan your future.

In the meantime, if you would like to get your value builder score, follow the link here:

https://score.valuebuildersystem.com/gartly-advisory-pty-ltd/geoff-gartly

Downsizer contribution eligibility to be lowered to age 55

The downsizer contribution is an after-tax contribution. Therefore when it hits your SMSF or super fund, no tax is payable on the way in. It also means upon retirement, and it can be paid as a benefit. A benefit that is returned tax-free when you withdraw the funds from your SMSF

Legislation passed

Last week parliament passed legislation, resulting in the downsizer contribution to allow house owners over the age of 55 to access this strategy. The lowering to age 55 is expected date for the enactment would be later this year (2022)

Downsizer contributions help you to increase your super balance. The downsized strategy a great way to catch up on lost retirement savings and grow your retirement nest.

Do you qualify to meet the downsized contribution strategy?


Per the ATO there are some of the eligibility criteria you must satisfy are:
• The home must be in Australia, have been owned by you or your spouse for at least ten years, and the disposal must be exempt or partially exempt from capital gains tax (CGT).
• You have not previously made a downsizer contribution to your super from selling another home or from the part sale of your home.
• Before (or at the same time) making your contribution, you must provide your fund with the ‘Downsizer contributions into super form.’

The downsizer contribution strategy can work for many who meet the downsizer criteria. It means your investments can grow in a protected environment at a low or upon retirement in the pension phase with no tax environment. This, together with other strategies, can form part of your retirement strategies.


Talk to Geoff, who specialises in SMSF advice and small business exit strategies to help businesses transition from business to enjoyment by unlocking their wealth from large family homes and businesses.

What to do when a loved one dies?

Join Geoff as he explains in simple terms what to do to finalise the taxation affairs of a loved one after they have died. Our youtube video outlines some of the steps that you as the executor may need to undertake. We welcome you to contact us further on 95979966 if we can assist you.

Small business cashflow

Small business cashflow is so important. This is highlighted in this week’s Accoutantsdaily article about cash flow. What’s highlighted is an enormous gap for many small businesses.

The last 2 years have highlighted major issues for small businesses and cash flow is one on top of the list.

Small businesses have been plagued by closures and staff absenteeism due to Covid. This can account for why some businesses’ cash flow is facing an uphill battle in recovery. But there is also a fundament lack of planning by some small businesses. Not knowing where you going is like a hose that you turn on it flicks and turns and you have no control.

Cash flow when it trickles it is painful!

Typically when cash flow impacts things blow out. Our friendly ATO becomes the bank of last resort. Changes in Debt reporting on CRA reports of tax debt may make it harder for some small businesses to recover. It’s a tool the ATO now can use to be recognised as a Creditor in the public domain like any other supplier. Don’t ignore the ATO as they won’t don’t like taxpayers that don’t engage with them. Better to open up to them about your situation than ignore them and shovel your way out of a hole later on.

Nether the less positive cash flow is an opportunity that every business can undertake.

Don’t be like an emu with its head in the sand. Take a positive stand. Start with predicting when the cash will come in. Fundamentally 80% of the hard work is done if you know that the cash is coming in the door. Struggling to predict cash in the door . Start with Sales Budget . Look at last year’s monthly turnover and then replicate that into the coming year. Then don’t forget to invoice your customer. It’s surprising how many people forget or delay the invoicing process

Slash costs but make sure it is for the right reason

When it comes to costs, slash where appropriate but don’t slash costs that are fundamental to the business or costs that help you make money. As a small business accountant Gartly Advisory can help you.

When you’ve worked out your budget put it straight into your cloud software and each month see if the actuals are close to or better than what you predicted. So when the cash starts rolling in remember the golden goose 10% for the ATO, 10% for investment and 10% for you.

shares and cgt

Am I a share trader for tax purposes?

A Share trader is regarded by the ATO as conducting a share trading business when it comes to reporting your tax, based on factors around how you and how often you invest. An investor is looking long term and will not frequently undertake a systematic approach.

Tax law regards Share trading is assessed as income on a Revenue Account, and no Capital Gains Discount can be claimed.

Share traders and tax

However good news for share traders is, share losses are allowed as a tax deduction un S8-1 of the ITA997. A share trader can recognize unrealized losses and gains as the change value in the share process can be reflected. Whereas a Share Investor will only recognize losses and gains when they are realized. An investor can access the cgt 50% tax discount concession if shares are held for 12 months.

Your shares held as a share trader are considered trading stock and must be included as part of your year-end income statement. Your share stock can be valued at either cost, market, or replacement value, enabling you to determine the best tax result for you. If your records are in order, you can choose which suits your taxation circumstances for each parcel of shares

Factors that may classify you as a share trader

A share trader is considered in business if

  • There is a system
  • Operating to a plan
  • Maintains regular trading in a systematic way
  • Record system to track transactions and revenue earned
  • The volume of the equity trading
  • The reliance on share trading to earn a regular income

Determining if you are a trader will always be a matter of fact, and based on the above, your actions will determine whether the ATO would consider you a trader. Repetition – the frequency of transactions or the number of similar transactions – is a crucial characteristic of business activities as a share trader.

The higher the volume of your share transactions, the more likely it is that you are carrying on a business.

Changing from trader to investor

If your activities change from trader to investor, your shares are no longer trading stock.

At the time of the change, you treat your shares as if:

  1. just before they stopped being trading stock, you sold them to someone else (at arm’s length and in the ordinary course of business) for their cost
  2. you immediately bought the shares back for the same amount.

Take the time to consider your position. Look at your facts and consider what has been outlined above.

The information provided above is of general nature and not specific to circumstances. Please contact us if you would like to discuss your specific situation.

local manufacturing accountant

Local manufacturing

Local manufacturing businesses based in the South East area in Melbourne such as Moorabbin and areas such as Currum Downes and Seaford can take advantage of bringing forward tax incentives to help their manufacturing business.

Helping local manufacturing businesses

Gartly Advisory are Melbourne Accountants based in Ormond. We love servicing manufacturing businesses. Our advice to the manufacturing businesses is that we help is to take advantage of these incentives. Modernise your systems and save tax!

Manufacturing, like every business experiences growth and also tough times. We have seen that those businesses that chose to invest in new equipment and technology thrive ahead of those that don’t.

Technology can save labour costs and also the accuracy of delivery of the product. One of our small businesses was able to almost replace one staff member by investing in the latest machine that delivers quicker and more accurate production of materials.

We work in interesting times but in saying that we encourage our clients to stick to their goals and vision.

As small business accountants, we work with our clients to strategically plan their futures. A successful manufacturing business will understand its metrics. They know how many widgets to produce that result in a healthy gross profit result.

Understand your numbers

Understand your numbers, your capacity and your opportunities. Knowing this data allows for careful planning as your business grows.

Over the next month take the time to analyse three key products that you make and sell. Understand the costs and time components. The next step is to look at your Gross Profit margin and see how this impacts the bottom line? Are you making enough from manufacturing

Understanding your market and pricing gives you a competitive advantage when it comes to growing your customer base. Businesses will be forced to look at price increases moving forward. The cost of manufacturing will increase and therefore price rises will need to be factored in to maintain profits. Make sure you have the data to do so.

Gartly Advisory are Chartered Accountants in Ormond. We love helping manufacturing businesses. Reach out and see if we can help you to make your manufacturing business shine in the local Melbourne market.

builders and construction

Builders and developers face uncertain times

Tread carefully in the coming months when planning your property development or if you are a supplier in the building construction industry

Property development is rewarding except in times of uncertainty. Unfortunately, we are now facing one of those uncertain times. The last two years of working through Covid and lockdowns are impacting the construction industry. We are now seeing significant building players over the last few months into liquidation or closing. This indicates that it is the start of what may well be a tough few years ahead.

Many of our clients are commenting on what they feel is happening out there:

Supply of materials and labour availability

Builders are commenting on how the price of materials is increasing. Some have reported that more price rises are on the way. Others say that it’s not only wood it’s also other raw materials etc that are unavailable or prices have rapidly risen. Coupled with this is a lack of labour, higher prices demanded by workers and the labour drain towards the Government infrastructure projects are impacting works being completed on time.

Committing to building contracts

Customers are requesting fixed quotes for their new houses or developments. As a builder, be careful locking in a contract without a contingency. Otherwise, this may leave you with no or negative margin. This equally applies if you are building for development. Some builders advise clients that they will invoke and increase the contract if prices rise, and others are doing cost plus. Some are just not taking on new customers and waiting it out. Residential customers are getting cranky and frustrated as delays often occur well beyond the builder’s control. Worst still, if you did manage to sign what you considered a reasonably priced contract, make sure your builder will see it through and doesn’t default part way through.

Cashed up

There are customers out there that are cashed up. During covid, they managed to save and now want their building proh]ject has done. There is also lots of old money surfacing from inheritances, fueling demand for builders. But they are disappointed as they find delays beyond what they would like or quotes that are well out of the ball park of what was once expected.

 Property development

The intelligent property developers are holding off as the market is highly overheated. Prices paid for old houses and potential development sites can impact the profit potential. Those still keen to develop are looking at regional or outer Melbourne until prices stabilise.

First home loan Grants  and other Governments subsidies help the economy

These have helped stimulate the construction industry. However, these are slowly being rewound, impacting consumer spending. Coupled with interest rate increases and availability of money will impact greatly over the next two years. Banks are already starting to tighten lending criteria for builders and developers. Associated with the ATO ramping up tax debt recovery and audit, this will affect as we see more builders being forced into liquidation. ATO tax planning and debt management will again come to the forefront of the construction industry!

Be strong, plan and look for the pot holes

If you are contemplating development or operating in the construction industry, plan for contingencies. There is a lack of supply and labour, and the predictions are that the next 2 years ahead will be tough. Take care of yourself, and your business and come out the other side with a stronger business. Reach out if you think the road ahead looks too rocky to conquer.

CGT home exemption

When is a home exempt from CGT

Your home can be exempt from CGT providing it is your castle. You need to do a few things to make sure it meets the ATO

The ATO considers several factors when determining if a dwelling is considered a client’s main residence. Various tests in relation to different factors to determine to see if you meet this test as your home. This may vary depending on the circumstances and it may be several factors.

What makes a home regarded as your home and makes your home exempt from CGT?

The main residence test for a dwelling is based on facts and takes into factors such as:

▪ whether they / their family live there

▪ how long they have lived there

▪ their intention to occupy the dwelling

▪ is the mail delivered to your home?

▪ are your personal belongings there ie have you physically moved in

▪ is it your house address officially on the electoral roll,

 ▪ whether they have connected utilities such as electricity and gas etc

If you acquire a dwelling and move in ‘as soon as practicable, it will be treated as your main residence from the acquisition date.

Change of circumstances

Of course, if your circumstances change, you may nominate another dwelling or take advantage of the six-year absence rule in relation to your existing home. This can continue to make home exempt from CGT.

Many people often purchase a house move in and then find after several months that the mortgage repayments are impacted due to a change of circumstances. They rent out the property and then wonder if they will then have to pay CGT on their home?

The good news in certain circumstances your house will still remain exempt

To make sure you meet the six-year rule you need to ensure it is your main residence before it was used to produce assessable income; and that you haven’t nominated another property as your main residence for the same time period. 

After establishing the property as your main residence, it is possible to move out and rent the property out for up to six years.   

Per the ATO (summary)

Your property stops being your main residence when you stop living in it.

However, for CGT purposes you can continue treating the property as your main residence:

  • for up to 6 years if it is used to produce income, such as rent (sometimes called the ‘six-year rule’)
  • indefinitely if it is not used to produce income.

During the time that you treat the property as your main residence:

  • Your home continues to be exempt from CGT to the same extent that it was exempt when you stopped living in it, even if you start renting it out after you leave
  • you cannot treat any other property as your main residence (except for up to 6 months if you are moving house).
  • If you do not use your former home to produce income (for example, you leave it vacant or use it as a holiday house) you can treat it as your main residence for an unlimited period after you stop living in it.

The good news is if you move back into your home and then down the track you move back out the six-year rule is reset, and the exemption applies for another six years. Of course, if you only have one home and you leave it empty or for the kids to use it then as long as it does not earn an income it remains exempt indefinitely.

However, if you acquire a new home then the above exemption ceases. Make sure if you are renting your property out then please don’t hesitate to contact us and discuss your circumstances. We welcome you to contact us if you need some advice phone 95979966

SMSF Trustee

Acting as an SMSF Trustee and incapacity!

SMSF Trustee role needs to be considered in your Estate planning

Your role as an SMSF Trustee and incapacity are crucial to consider in running an SMSF. Have you thought about what happens when something goes wrong, and you run an SMSF?

Control is one of the main reasons many establish an SMSF. As an SMSF Trustee, you can control your own SMSF. You can control how the Funds investments and the strategy on how and where. What happens if you can’t do it anymore?

What happens if things go wrong?

One day, you may not be able to meet your SMSF Trustee responsibilities. This can happen due to a loss of control or incapacity might be due to an accident, illness or death. But, in most cases, it will unexpectedly leave you with ongoing financial matters for your that need resolving unless you have done some forward planning.

Under the SMSF legislation, a person with a legal disability (including mental incapacity) cannot be a trustee or an SMSF.

Incapacity as an SMSF Trustee

When you are not able to act as a Trustee, someone else must step in on your behalf. They basically act as an SMSF Trustee in your capacity. Your incapacity results in you having to relinquish control of your Trustee role. When appointing someone to act on your behalf make sure the decision is based on Trust. Trust that the person who steps in understands and acts on your wishes and needs.

We also point out that for ease of SMSF Trustee appointment, we recommend that the structure of your SMSF includes a Corporate Trustee rather than individual trustees.

Seek legal help that gets it right!

Your health and financial welfare are paramount for more information read our blog on Estate Planning.

It’s a great reason you need an adequately prepared and executed Will. Have you made an Enduring Power of Attorney( EPOA)? Preparing an EPOA (enduring power of attorney )will assist you in both ensuring someone can step in and continue sorting out your financial affairs. They can then step in and manage your SMSF.

 If you become incapacitated, they will undoubtedly have to set up in your shoes as an SMSF Trustee. Therefore choosing the wrong person or no person can result in your wishes not being adhered to. Or worst still, someone appointed as your replacement  SMSF  Trustee with the wrong intentions.

It’s essential that you choose wisely and that this person is someone you trust and has the financial ability to make the right decisions. Make sure you discuss their role and support this by considering executing Binding Death Nominations in the SMSF.

Reversionary pensions for those in pension mode are a great tool to enable the pension to be transferred to your partner upon death.

Now is the time to Act – not when incapacity strikes

 Implementing tools in the case of incapacity as an SMSF Trustee will also issue some clarity of your estate planning wishes.

Thinking ahead and planning means if and when things don’t go as planned, you have a well-thought-out plan that will ensure your estate and any assets are dealt with your wishes.

newsletter

Weekly Newsletter April 7th

Super Guarantee Charge reminder.

This is just a reminder that employers must meet their SGC obligations by the due date for the last quarter, which is  Thursday 28th April 2022.

The date super has been paid is when the payment hits the employee’s super account, not the date that an employer pays the super to the clearing account.

In some circumstances, It can take several days for the employer’s super contributions to clear through a super clearinghouse. Then it will be processed and recorded against the employee’s account. We, therefore, recommend paying the employee super guarantee at least 5 working days before the ATO due date. This will allow enough time for your payments to be processed before the quarterly due dates. Your cloud accounting software provider may state that the super has to be paid even earlier than this for processing times. . This is especially around the end of the financial year.

We also recommend making monthly or fortnightly super payments to reduce any risk of late payment. If you are going to do this, make sure the total SG obligation for the quarter is received into your employee’s super fund by the ATO due date.

The ATO is watching. STP reporting and information provided by Super Funds means that the ATO can see if you have met your obligations. If you are having trouble meeting your obligations, don’t hesitate to get in touch with us to discuss your situation, and we can work with you to find a solution.

Most search easter eggs according to google in 2021.

This is what Australians were searching for when it came to Easter Eggs and chocolates in 2021.

  1. Cadbury Creme Egg
  2. Mini Eggs
  3. Kinder Surprise
  4. Cadbury Caramilk
  5. Kit Kat Bunny
  6. Lindt Gold Bunny
  7. Violet Crumble Bunny
  8. Kinder Mini Eggs
  9. Ferrero Rocher Squirrel
  10. Smarties Easter Egg

What’s your favourite?

Customer Discounting for a trade business leads to profit leaks

Customer Discounting in your trade business is a quick race to the Bottom

Some tradies will start customer discounting to land enough renovation or trade jobs to just survive in the current building market downward trend or to keep their sales pipeline busy. So right they have work, they will survive?

WRONG – don’t do customer discounting!

Right about the “just survive” bit because survival is all you derive when you discount.

Discounting really is a race to the Bottom. The bottom line and an empty bank account is what hits you with this stragey!

Geoff Gartly has been looking after small business trade clients for many years. He has seen what works and what doesn’t. We know that discounting is NOT a recommended business strategy.

Profit can be tight sometimes when you are quoting but don’t discount to get the job!

We got your back – our tips on how not to dig a hole with customer discounting!

So here are a few tips to help you quit discounting in your trade business.

Decide that you can’t afford to discount

Unless you have heaps of spare $$$ in the bank you can draw on to tide you over several years make the decision that you cannot afford to customer discount anymore.
It’s a bad habit to get into at the best of times. But, if you do it for too long, it can become a hard habit to break. Sure, you may need to adjust your prices to meet market conditions, but that is quite different from getting into a discount war against another builder or tradie. Do that, and you both lose?

We help our tradies get the pricing right so that the hourly rate allows for GP, admin , mistakes and anything else that can impact.

Re-evaluate your service.

Make a (long) list of all the things you provide for your customers and make customer discounting not one of them. List things that are not in a typical estimate. If you are a good builder or tradie, you actually provide your client with many things that they don’t pay for. So, increase the value of your estimate by letting them know all the other things you provide. Improve your sales delivery and your customers will feel like they are getting a fair price!

Determine to walk through the fear (of missing the sale).

This is the hard part because it’s so personal. Yet it is an absolute requirement if you are going to rise above the discount mentality because facing fear head-on is the only way to overcome it. Sometimes you just need to talk to someone who has done it before to know it is OK

It takes courage to stick to your prices, but if it ensures you retain decent margins and make decent money, then it’s worth learning to do. Right?

To do it right, you need to add value to your trade business by marketing quality and service, not cheapness and discounting. Set your trade companies vision and start marketing this to your customers

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Weekly Newsletter March 31st

The Federal Budget 2022


Here is our quick summary of the Federal Budget handed down on Tuesday. The Budget focused on keeping business and the economy going during uncertain times. It would be also be drafted with a focus on the following Federal Elellection due soon. Media reports indicate that if there is a change of Government, the ALP will publish a newly revised budget in July or August this year, which may not result in all initiatives etc., being fulfilled or modified.


Here are the critical points that we believe will impact our clients:
• 120 % tax deductions for small and medium business spending on Training and new technology
• No further extending the temporary full expensing of equipment investments
• $1.3 billion to businesses to fund apprenticeships
• ATO will be allocated more money to chase tax cheats
• PAYG system to better match a business trading result
• TPAR reporting changes to make it easier for businesses to report
• Super pension drawdown rates halved till the start of July 2023
• As previously announced before the Budget, the work-related COVID 19 test expenses incurred by individuals will be tax-deductible.


Small Business Full Expensing is finishing up!


The full expensing instant tax deduction has not been extended, meaning businesses will have to install or use the new equipment by June 30, 2023, to claim full expensing provisions.

In replacing full expensing, we have a New Technology & Training Tax Break


The new temporary tax break is for businesses that invest in either new technology or employee training and skills development.

Employee Training
As of Tuesday night, for every hundred dollars a small business spends on training their employees, they will get a $120 tax deduction,

Technology incentive

As of Tuesday night, every hundred dollars small businesses spend on digital technologies — such as cloud computing, e-invoicing, cyber security and web design — results in 120% tax deduction.
Limited to Investments of up to $100,000 per year will be supported by this new measure; however, if you are spending more, please see us as the existing immediate write off provisions still apply till 2023

How it works in real life, reducing the cost of Training or technology!


For example, Smith Co Pty Ltd has engaged an RTA business in Australia to provide Training staff to its employees online. The total cost of Training was $10,000. Smith & Co Pty Ltd will be able to claim 120% (i.e. $12,000, as a tax deduction concerning these expenses)

The True Cost of the Training from a cash point of view


Cost of training $10,000, payable now when you buy it
Claim tax deduction of $12,000 (still to be clarified – 2023 year )?
Real cash tax-saving @ company tax rate $ 3120
Net cost of training $6,880

A reminder that Loss carryback rules still apply for the next two years

Loss carryback provides a refundable tax offset that eligible corporate entities can claim:
• after the end of their 2020–21, 2021–22 and 2022–23 income years
• in their 2020–21, 2021–22 and 2022–23 company tax returns.
Eligible Companies can obtain the offset by choosing to carry back losses to earlier years in which there were income tax liabilities. The offset effectively represents the tax the eligible entity would save if it could deduct the loss in the earlier year using the loss year tax rate. As it is a refundable tax offset, it may result in a cash refund, a reduced tax liability or a reduction of a debt you owe us.
Loss carry back tax offset – Australian Taxation Office. https://www.ato.gov.au/Business/Loss-carry-back-tax-offset/?=redirected_losscarryback

Fuel costs temporary relief

Petrol and diesel excise will be reduced by half for six months, saving 22 cents for next six months. Hoping this is passed on to the small business at the petrol bowser

Tax Bonus when you lodge your 2022 return

Low Middle-income tax offset (LMITO) — in 2022 can put up to another $1,500 against your tax refund once you’ve done a tax return in 2022

Draw down rates for Self Funded Retiree Pensions – 50% reduction till June 2023

Estate planning and documenting your future.

Estate planning for the living!

Many of us go through life not thinking about the end.

Many often think do I need a will? Many don’t bother! We start life naked with nothing and we end up leaving an imprint on this earth that others must follow.

Telling others how you want what you have accumulated in life is important

Wills establish wishes after death and are essential for estate planning

The chances are that you may have wishes about who gets the large loot of assets and possessions. These assets you have accumulated in your lifetime. Or you may have a young family and provision needs to be made to provide for their welfare and education.

No matter what your situation is you need a plan! A plan to look after your loved ones.

Start planning now for your estate wishes.

Leaving this earth without instructions to your executor can mean that you will leave headaches for others. Do I need a will? YES  Take time as to what instructions you would leave for things such as :

  • Your business – what is your desire and are others capable of taking it over? 
  • Your car 
  • Your children and wife from the first or second marriage
  • If you die with young kids who will look after them?
  • How will you deal with your superannuation?
  • Who gets what?
  • Is their tax and capital gains tax to be addressed?
  • Any favourite charities that are important to you
  • Have you documented your life achievements?
  • Passwords for eBay, Facebook and Instagram?

Leaving a will allows those you love can be financially rewarded or cared for. A Will that has been created well will address issues of taxation and division of property.

No will – dont leave a problem to someone else

Not leaving a Will can result in an executor being appointed that must follow the standard formula for those without a will.  When a person dies without leaving a valid will, their property, etc. must be distributed according to certain rules called the rules of intestacy. A person who dies without leaving a will is classified as an intestate person. You may need to apply for probate and if this is the case seek legal advice.

Many of our clients have businesses. If not dealt with a mess can be left and on some occasions, any value in the business is wittered away due to inaction after death.

Many fights start due to greed and expectations. Many of us will accumulate wealth during our lifetime but it is your wish as to how it will be distributed. We encourage clients to tell others so it should not be something of a complete surprise. Eliminate those self-focused beneficiaries who think that they have a sense of entitlement by controlling the conversation about why you are living.

It can pay to start dealing out assets early before death and enjoy the process. Some assets such as the property will have tax and stamp duty implications for you if sold early or transferred not under will. You can and you may enjoy giving cash away (as long as you are on no Government Benefits) and slowly depleting the estate. 

If you have lent others money, make sure it’s documented so your estate can recover if necessary or even out the distribution amongst family if needed. Finally, there are those who hide money in the walls and the garden. Make sure you let someone know what to look for. 

Make a confidential appointment if you wish to explore some of our discussion points. Best wishes Geoff

Initial Repair

Initial repair for my rental property- can i claim it?

An Initial repair occurs when you acquire a new rental property with existing known repairs. The old house might need fixing before it can be rented. Initial repairs may include such things as plumbing, painting, new carpet or appliance repairs, to name a few.

Initial Repair must be capitalised!

Though Initial repair cannot be claimed outright in the first tax year, there is some tax relief. These repairs should be treated as a capital expense. Treating them as a capital expense will add them to the property’s cost base.

We are often asked what the tax treatment of an initial property repair is. Can you claim a tax deduction for repairs to a newly acquired rental property investment? Will the ATO allow it!

Why won’t the ATO treat all repair claims as an expense?

What is the Government thinking about initial repairs legislation? Why did they decide you can’t claim the repair outright when you buy the property?

In looking at the intent of the legislation, the lawmakers said if you haven’t yet rented the property out there is no right to claim an expense on revenue account. Furthermore, the ability for some taxpayers to buy a rundown property and then claim all the expenses in fixing that property up would mean the ATO would be inundated with excessive claims. Hence, the initial repairs must be capitalized.

A repair claim should be evaluated on merits. You may find it may not be classified as an” initial repair” simply because it’s the first repair made after you acquired a rental property. The ATO has designed a tool kit, which can be accessed here. Also, you can refer to taxation ruling TR 93/23 where you can read more. The ruling outlines a repair is not an ‘initial repair’ simply because it is the first repair made after the property is acquired. The ATO has numerous examples within these two resources.

Examples of an initial repair

Here are some initial repair examples:

Fixing a Damaged Roof: If the rental property’s roof was damaged or leaking at the time of purchase.

Replacing Broken Windows: If any windows were broken or dysfunctional when the property was bought, their replacement is categorized as an initial repair.

Repairing Electrical Systems: If the electrical systems, like wiring or electrical appliances, were not functioning correctly at the time of purchase. Therefore, any repairs to make them operational would be considered initial.

Plumbing Repairs: Fixing any pre-existing issues with the plumbing system, such as leaking pipes or faulty plumbing fixtures, is classified as an initial repair.

Restoring Damaged Flooring: This includes repairing or replacing floorboards, tiles, or carpets that were in poor condition when the property was acquired.

Repairs that are regarded as initial cannot be claimed outright and must be capitalized. The capitalized repairs are added to the cost base of the Asset. This will assist when calculating the capital gain upon sale as a cost. This means you can reduce your capital gain at the sale of the property but not claim it against your tax when you acquire the property in the first year.

Here is an example of an ongoing repair that is tax-deductible!

If the dishwasher worked perfectly when you started renting the property but needed repairing a couple of months thereafter. This would be considered an ongoing repair and tax-deductible.

Repair vs Improvement need help?

Gartly Advisory looks after many happy clients who own rental properties. Plan carefully and do your homework. The ATO is looking closely at rental property claims as more Australians love to acquire property for investment purposes.

Unsure what can be claimed upon purchasing your new rental property, reach out to us, and we can assist!

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Weekly newsletter

Insolvency – Worrells Liquidation observations

Despite the last 2 years being a rocky road for small businesses in Australia, liquidations and actions by the ATO have been very low. Yesterday I attended the Worrells Solvency seminar on the current state of play. Here is a quick summary:

  • The ATO has been quiet over the last 2 years about debt recovery, but soon the sleeping giant will awake!
  • Jobkeeper forced many taxpayers  to get their lodgments up to date, so the ATO is aware of who owes what,
  • ATO debt is sitting at $61 billion outstanding. That’s a lot to collect expected that $20 Billion might never get collected
  • ATO has been kind regarding payment plans, but now it is likely that things will tighten up.
  • Last 2 years, there has been a drop off insolvency appointments, but soon the ATO will start,
  • The prediction is that corporate insolvency appointments will rise with higher interest rates, lack of supply and labour, and more excellent ATO activity.
  • Directors changes in terms of appointment and debt

Small Business needs to start managing their debt. To avoid becoming personally liable for ATO Debt in an insolvency situation, make sure you ensure that all returns are lodged on time or within three months of the date of lodgment.

If you need advice on how to manage your debt, please call us, and we can assist you in exploring your options

Like Real Estate, then listen to our client Sue

and her podcast Real Estate Right

The podcast is designed to educate, inform and better prepare the public with expert information about how to maximise their real estate transactions and dealings

PODCAST! – go to her website or search on Spotify etc

https://www.podbean.com/ew/pb-uupcs-11d0846

TOP EXPERTS TALK ABOUT HOW TO BUY, SELL, RENT AND INVEST… RIGHT!

New date for online “Freedom Discovery Workshop.”

Join us as we explore what business freedom means to you and your business

New date Monday, April 4th 7:30 pm online – rsvp admin@gartly advisory.com.au

https://www.eventbrite.com.au/e/276167834427

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