blog post
Planning Strategically for the Future
In the world of big business and corporates, planning, in particular strategic planning, is a key foundation for the business.
Often a strategic plan in large businesses will span multipl ...
Anuraag Agarwal
5 years ago
blog post
Should you ‘divorce’ your accountant?
I’ve often heard people say it’s harder to leave your hairdresser than it is your partner!
While this may be somewhat of an exaggeration, one relationship that can often be very h ...
Anuraag Agarwal
5 years ago
blog post
Starting a business – the early years
Starting your own business is the dream that many people aspire to.
It sounds great right?
You work for yourself, no boss!
You can finally do what you enjoy doing
You c ...
Anuraag Agarwal
5 years ago
answered
Q: There are three partners in the business, it’s a digital media business. I work in the business full time, one partner is part time and the other works a full time job but helps out every now and then. I am wanting to put a shareholders agreement together but the others are assisting on equal share each. I am finding this difficult as I’m doing 80% of the work and generating the little revenue we have and it has become a bit of a disincentive to work harder as the rewards are not commensurate with the effort and contribution. How do I handle the predicament respectfully so everyone feels it has been handled appropriately and we can maximise the opportunity? Thank you
A: Hi Dale,
Unfortunately I don't think their is any right way of doing things in such situations, discussion with the partners is possibly the only way if you want to continue doing business together.
I reckon you need to ask them why they are insisting on equal share holding when you are the one doing 80% of work. Try and understand them first before making any effort to explain your side of things as that will hopefully give you direction as to how to handle the situation.
If their is any merit in having equal shareholding than possibly other angle with which you can approach would be to have some kind of regular salary for your work before the profits get distributed equally.
I would say that it is important that all parties concerned need to understand each others concern and address them in a correct fashion is essential and if this is not giving you an acceptable (if not desired) outcome than walking away from it now would be better off.
Hope this helps.
Best wishes.
Anuraag
blog post
EOFY – what will the ATO focus on this year?
End of financial year AGAIN already!
How quick do 12 months fly.
One could be forgiven for thinking the ATO has nothing better to do but chase small dodgy claims from the little guys rather than goi ...
Anuraag Agarwal
6 years ago
answered
Q: Hi, I’m looking at buying a business where the distribution base is contractors. I’ve had a looking at the contractors existing agreements and there is no mention of super entitlements which is a concern for me if I take it on and find out later that there should be. The contractors aren’t employees but should the business be paying their super?
A: Hi Peter,
Employee vs Contractor is a topic which is quite painful at times. If you can email me directly on anu@apertureaccounting.com.au I can send you a comprehensive fact sheet that you can go through to be sure of your situation.
You need to apply a common law test to decide on this matter. Most important aspect to consider according to me is about the control & exclusivity.
As i mentioned above, i can send you some information in an email if you need which will be helpful for you.
Kind regards,
Anuraag
blog post
Why is there a need to negotiate fees with Accountants?
Price is what you pay and value is what you receive in return.
Let’s say you see a book on How to Achieve Financial Wealth in a shop that costs $50 and it’s only 20 pages long &am ...
Anuraag Agarwal
6 years ago
answered
Q: Does the government tax benefit of 20,000 prior to 30 June 2019 still exist? What happens if we spend $22-23,000, is it the first $20,000 we can claim or none at all?
A: Hi Mario,
I assume you are talking about Small Business Asset Write off - $20K tax deduction is what you are talking about. If so, please note that the thresholds have changed and following is what you need to know:
- Till 28th Jan 2019 the threshold amount is $20K
- From 29th Jan 2019 till 2nd April 2019 (before 7:30 pm AEDT) the new threshold amount is $25K
- From 2nd April 2019 (after 7:30 pm AEDT) till 30th June 2020 it is $30K
Now coming to you question, well if you have spent on single asset under the threshold amount you can claim tax deduction in full but if the single asset is more than the threshold amount that you cannot claim the first $20K deduction and leave rest under standard depreciation rules instead the whole asset (full price) will be subject to general (standard) depreciation rules.
Hope this answers your question.
Kind regards,
Anuraag
blog post
Does DIY Accounting Work?
There is no doubt that with advent of Xero, MYOB and QuickBooks, the process of accounting has been made much simpler.
Even the ATO is rapidly progressing down the track of simplifying accounting for ...
Anuraag Agarwal
6 years ago
answered
Q: Hi, I’m looking at buying a restaurant and have looked at a couple within reasonable proximity to home. I’m a qualified chef but having a difficult time trusting the financial and information the business brokers are providing. Is there a proven strategy on how I may be able to get the true picture on how the business is performing, thank you
A: Hi Michael,
Conducting due diligence is of utmost importance when you buying any business, helps in making sure what you are getting yourself into. You can do so after negotiating your terms of agreement whereby you will be able to see if what was told (claimed by seller) is true or not.
Obvious other thing that you need to do is to get the business valuation done with a qualified accountant. solicitor or a business broker.
Restaurant business is heavily involved with cash transactions and such businesses contribute towards the cash economy which ATO is trying to crack down upon so relying on company / business financials solely would be a big mistake so take into account your industry experience.
Bottom line would be to have someone on your side who knows about the industry and can guide you / help you in making the right decision.
Best of luck.
Anuraag
blog post
The Royal Commission fallout – it’s time take responsibility and accountability for your own self!
The Royal Commission into the banking industry and subsequently financial planning and mortgage broking sectors has been interesting to say the least.
We’ve all been shared into some of the ...
Anuraag Agarwal
6 years ago
answered
Q: I have been operating a business under a company structure with two directors for 5 years and recently started a photography business as a hobby (it is going well too). Do I need to set up another company or can I be a sole trader so it doesn’t affect the other business?
A: Hi Patrick,
Simple straight forward answer with limited information would be to do your photography business as a sole trader on your own ABN considering that it is not a hobby any more but a regular income earning stream for you.
For best outcome and structure you should talk to your accountant who understands your current business setup. In case you don't have one who you trust, find a CPA or CA and discuss your situation.
Hope this helps.
Kind regards,
Anuraag Agarwal
blog post
Have you set your business plan for 2019? If not, let’s do it now!
“Failing to plan is planning on failing”
Welcome back everyone!
Such a true statement – yet, so many businesses fall prey to the same issue ever ...
Anuraag Agarwal
6 years ago
answered
Q: Hi,
I have 2 negative geared investment properties and not doing a very good job in understanding the policy changes the Labour Party is suggesting to negative gearing. Is someone able explain in basic terms what their policy is and how it would impact my investments? thank you
A: Hi Ellie,
Basically what Labour Party is proposing will have the following effects:
- Rental losses will not be claimable against your salary & wages to reduce your taxable income.
- Losses from rental investments will be accumulated and deductible against capital gains when property is sold.
- Capital Gains Tax discount of 50% will be reduced to 25% i.e. tax will be payable on 75% of Net Capital Gains
Hope this helps!
Note that this is all just a proposal, not sure if we will see this happening (at least not is full).
Kind regards,
Anuraag
blog post
The Health of Your Business Is A Reflection Of Your Own Personal Health – stop and ‘sharpen your saw”
Stop for a minute and think about the title of this blog.
It’s not uncommon for us to be reminded that our physical world is just a reflection of our inner world – in other words, ...
Anuraag Agarwal
6 years ago
answered
Q: What rights do I have in my job as I believe I'm getting treated like I'm stealing from work, thing is I've never stolen anything from anyone or taken something that was never mine at all not just in my job but NEVER EVER? Their rude and treat me unkind?
A: If you have an HR department in your organisation, talk to the HR manager or talk to your manager personal to discuss the issue. Otherwise i reckon your best option would be to contact Fairworks Australia to find out about your options.
Last option would be to find a new job.
Hopefully there would be somone else on this platform who would know more and give you some more guidance.
Best wishes,
Anuraag
answered
Q: Hi, my employer is going through a round of redundancies and after 15 years at the company I’m pretty sure I might be on the list.
If so, I’d like to ask about the type of entitlements that would be due. The payment should include annual leave and long service leave, are there any others?
Thanks
A: Hi Jonathan,
Following link will answer all your questions with regards to redundancy.
https://www.fairwork.gov.au/how-we-will-help/templates-and-guides/fact-sheets/minimum-workplace-entitlements/notice-of-termination-and-redundancy-pay
Kind regards,
Anuraag
blog post
As a small business owner - when to engage and what to expect from your accountant?
So, you’ve set up your business and it’s now up and running.
Hopefully, you’re steadily and surely growing your customer base and you’re doing all the right ma ...
Anuraag Agarwal
6 years ago
answered
Q: I’m 46 and been in sales and business development for 20 years. I have had an idea in my mind for many years and would love the freedom of running my own business but the fear factor and financial commitments have always held me back. I’d like to ask other people’s opinion on how they took the first step, how hard they found it – the good and bad, thanks?
A: Hi Peter,
First step is never easy, some might have seen the perfect opportunity and others might get forced due to circumstances. As for me, it was more of a forced situation but since I wanted to setup my own firm for sometime probably my circumstances made me take that first step.
As for fear factor and financial commitments, well they are always going to be around you till the time you reach a point where you feel settled. As for me, it is 3rd year of our business and still not reached a comfortable position but at least i get the pleasure of doing something i wanted to do and in a way i wanted to do.
Not sure if this answers your question but surely it can be start towards finding some answers.
Happy to catch up and chat if you need.
Best wishes.
Anuraag
blog post
How Important is Insurance in Business?
There are 2 answers to this question – the long version and the short version.
The short version is – absolutely YES you need insurance both for business and personal.
When you r ...
Anuraag Agarwal
6 years ago
answered
Q: Hi,
I work in the media and have a number of different contracts. I’m trying the get more funds into my super but in my line of work I need to be careful. If I make more super contributions is there any considerations to being able to access funds if needed?
Thank you
A: Totally agree with what Todd has mentioned, only thing that i would like to add is even the exception of 'significant financial hardship' some industry super-funds might not have the option to be able to withdraw funds for example REST as their rules / laws don't have a provision for such withdrawals so please be mind full and check with your super-fund.
In general, I would recommend that to put more money in your super fund or now is a decision that you can take closer to the end of financial year which will give you time to assess your position, speaking to a financial adviser or your accountant who understands your financial position would be the best thing.
Best wishes.
Anuraag
blog post
The Home Office – is it as good as it sounds?
Working from home!
In the eyes of many, the prospect of being able to work from home sounds heavenly.
Whether your home office is your principal place of work or a secondary office, you need to thin ...
Anuraag Agarwal
6 years ago
answered
Q: Hello
I recently became an Australian citizen and have a full time employment in I.T software. If I do some freelancing work for overseas companies do I have to pay tax on the money I get paid
A: Hi Vlad,
Yes, you will be required to pay tax on the freelancing work that you do for overseas companies. Note that as an Australian Citizen, your world wide income is going to be taxed in Australia.
Though against your freelancing work, you could be eligible for some deductions against that work.
Hope this helps.
Kind regards,
Anuraag
answered
Q: Hi All,
I hope you're all winning!
I have a tax question for the accountants here.
If someone has held a company for over 12 months and is now selling the business, will they be up for full CGT? Or do they get a similar concession to a real estate asset?
The business has been held by 2 directors and shareholders and will each have an equal share of the proceeds from the sale.
Cheers,
Frank
A: In addition to my earlier response, yes i totally agree with Todd --- if they are just selling shares and have held those shares for more than 12 months, individually the share holder will be able to apply 50% discount.
Cheers.
Anuraag
answered
Q: Hi All,
I hope you're all winning!
I have a tax question for the accountants here.
If someone has held a company for over 12 months and is now selling the business, will they be up for full CGT? Or do they get a similar concession to a real estate asset?
The business has been held by 2 directors and shareholders and will each have an equal share of the proceeds from the sale.
Cheers,
Frank
A: Hi Frank,
Please note that companies don't get 50% discount as individuals for holding on assets for more than 12 months. There can be other things that could be looked at in terms of finding the best outcome for your client depending on what is being done and how.
This will need to be discussed in detail to get more specific information to find the best outcome.
But from what i understand from your question, simple answer is NO, they don't get similar concessions to a real estate asset.
Kind regards,
Anuraag
blog post
Should you change your accountant?
The client-accountant relationship is said to be one of the most ‘stickiest’ of all relationships.
And by ‘stickiest’, I mean very strong and often very diffic ...
Anuraag Agarwal
6 years ago
answered
Q: Hi there
Got some great responses last time I posted here so hoping for a similar result!
I am a beneficiary of a deceased estate split into 3. We recently put the property up on Airbnb for some rental income whilst we wait for the property to be sold.
We did some work to the property readying it for lease such as painting walls, purchase of linen, crockery etc.
1) Can these expenses be claimed? Obviously it's work done prior to being leased but integral to be able to do so. Or does any receipt need to show that the date of purchase was AFTER the commencement date of lease?
For our tax returns, we will be splitting income/expenses between the 3. The property had no TV or Vacuum and so one party paid for these items out of their own personal money as they will take these items as soon as the property sells.
2) Will their be any red flags if one party claims higher expenses despite splitting income by 3?
Looking at it now, I guess if the answer to question 1 is 'NO' then question 2 is probably void as these items were obviously purchased before our first tenant.
Thanks so much for assistance. Great community of help!
Steph
A: Totally agree with what Brendan has mentioned, I don't think their is anything else I can add which could be of any help.
Cheers.
answered
Q: I have an abn and just registered for GST, how long can I expect to wait before it shows up on my abn search?
A: It can take up to 24 to 48 hrs.
Regards.
answered
Q: Hi team
My wife is a teacher that has just finished up mat leave but yet to return to any full time employment.
Whilst on mat leave, she undertook a makeup course. The course has assignments that require you to purchase makeup supplies but they advise to buy significant more to build up the kit once she starts working as a makeup artist. Currently, she hasn't got an ABN though will do as soon as the course is complete.
In her tax return, can she claim these significant expenses as either educational or work expenses? Reallistically they are both but not sure if recognised by ATO. How can we best structure this?
Thanks in advance.
Daniel
A: Hi Daniel,
Simple way that I can think of answering your question is as follows:
1. When i was studying accounting degree, all education expenses I incurred were my personal expenses to get ready to be able to find a job / work. This is because of the fact that I was not working in the accounting industry to be able to relate these education expenses as anything to do with my income earning activity.
Coming to your case, I would be dealing with the expenses in similar fashion.
2. I believe this point is something that you would be thinking about ---- You might come across someone who interpret's ATO laws differently and would recommend that you can have an ABN and claim these as business expenses which will help reducing your future taxable business income but this is something that I would not recommend.
Hope this answers your question and can help you make the best decision.
Best regards,
Anuraag
blog post
How lenient is the ATO with tax claims?
Contrary to belief, the ATO is not our enemy!
Every year though, businesses & individuals try their luck with tax claims that they ‘believe’ either don&rsq ...
Anuraag Agarwal
6 years ago
answered
Q: Hello, I use my car for work as a business development manager in the finance industry. Are there any grounds for my employer to limit the expenses I can claim each month. I own my car and only claim petrol and tolls but it is a struggle getting paid each month?
A: Hi Bianca,
From how I understand, when it comes to limiting the expense claim -- it depends on the agreement between employer and the employee. Note that claims being made need to be legitimate and work related only (unless agreed otherwise, which might raise other related issues for the employer).
If you are submitting a report which clearly states how you have worked out eligibility of your work claims, I don't see any issue for the employer to reimburse the same. But in case expense claims are not worked out properly it could be an issue for the employer as he/she would not want to get into FBT area.
Only suggestion that I can give you is to work out a new salary package which provides you motor vehicle allowance (only if getting reimbursed is a problem) which will add to your Income and in order to claim expenses against Motor Vehicle Allowance, you will be required to keep a log book for the Car that you use for work and claim them in your personal tax return.
NOTE: Getting reimbursed for expenses are always preferable according to me.
Hope it helps.
answered
Q: I am intending to purchase a commercial property - what advice can you offer to not pay GST and reduce stamp duty?
A: Hi Lina,
Apologies if i have offended you in anyway.
The way you had mentioned in your question - what advice can you offer to not pay GST and reduce stamp duty?, it came across as if you didn't want to pay GST. My answer was purely to that fact, as in cases of commercial property I have not come across anyone who is not registered for GST.
If you could have been more clearer about what your intention is, response to your query would have been different.
As an accountant, I purely go on facts given and provided to me and on this platform I don't have any intention to put anyone down.
I try and do my best to let the other party know about what i feel about the topic and my interpretation of the question asked.
On this platform based on limited information provided in most cases, no answer can be 100% correct or incorrect and possibly you should also factor in those things.
Anyways, thanks for your response and I reckon it is in my best interest to answer to questions that are absolutely clear.
All the Best.
answered
Q: I am intending to purchase a commercial property - what advice can you offer to not pay GST and reduce stamp duty?
A: Commercial Property and NO GST ---- they don't go together, as per my understanding. If you find someone who thinks otherwise, I would be interested to know about that as well.
What you are asking for is more like tax avoidance than a tax planning question from how I would see this.
blog post
How to get the most out of your accountant
Traditionally accountants have been seen as ‘bean counters’ who saw the world in numbers and tax legislation.
In reality, though, accountants have always had more expert ...
Anuraag Agarwal
6 years ago
blog post
Cash-Flow Trumps Profits - here's why
Profits are nice, but Cash Flow will always rule.
Remember the saying; Cash Flow is king!
When it comes to financial accounts, the vast number of small-medium businesses tend to ...
Anuraag Agarwal
6 years ago
answered
Q: Setting up an online fashion business with three partners and looking for a tax specialist to help structure the business as we hope to have a number of overseas customers. What else do we need to be considering in regards to insurance, shareholders agreements, thank you
A: Totally agree with Brendan,
There is no straight forward answer when it comes to structuring your business, get the right advice by finding the right accountant. Don't go shopping for a cheap accountant.
Best of luck.
answered
Q: Hi,
I have a mix of direct shares and managed funds in my super. The return for last year was 15% which was good, but our financial advisers has shared some concerns about the market and the potential for volatility. They’ve made a suggestion to consider a cash out strategy into a diversified portfolio of managed funds. The return may not be as high but there’s less risk. Is this considered a good strategy at this point of time?
A: Hi James,
Since I am not a financial adviser cannot give you an advise on the strategy itself but what I would like to say is this:
- What is your risk profile i.e. your risk taking appetite should derive your strategy and not just market fluctuations.
- If you are unsure of your current financial advisers always good to have a second opinion or a 3rd as mentioned by Scott.
- Depending on your risk taking capacity and what are your goals for future (short term or long term) should be the key factor.
Note that their is no right or wrong for your question.
Best of luck.
answered
Q: if i rent my house out and there is a short fall of 1000 buck a month can i claim it all back at tax time?
A: Hi Andy,
What has been mentioned above is correct but from an accountants perspective, what is important is how are you reaching that number of $1,000 short fall per month?
As Colin said, you need to work out the negative gearing. Important factor when you are working out the short fall from taxation point of view is what is your repayment in terms of investment loan -- are you making interest plus principal payment or interest only payments? Secondly, you would have heard the term 'depreciation' which is not a real expense but tax deductible and contributed towards your negative gearing.
Finally simple answer to your question is that what you get back in your tax return considering your property is negatively geared is only a portion of $1,000.
If you pay tax at a marginal tax rate of say 30% what you expect to get back out of $1000 negative gearing is $300.
Hope this helps.
If you need more specific numbers and understanding, we will need to talk and get more information to find out what you have included and what you haven't when working your $1,000 shortfall.
answered
Q: Hi, I am 53 and recently divorced and under financial pressure owing $30k on credit cards. Current superannuation is around $220,000 and would like to ask if I can apply for financial hardship and use some of my super to pay off the cards?
A: Check with your superannuation fund to find out under what circumstances you can claim financial hardship to withdraw money.
As far as I am aware some industry super funds like REST don't give you an option to be able to withdraw under financial hardship as they don't have that provision in their deed.
Best would be to check with your Superfund directly.
Hope it helps.
answered
Q: What's the best thing you can do when negotiating with someone who clearly is a better negotiator?
A: Hi Joel,
I myself is not much of a negotiator but I work with 2 main principles when negotiating:
- How important the deal is for me? Is it adding value to me and at the same time I don't have to compromise my ideology and work ethics.
- And most importantly need to know when to walk away from the table as fear of losing is what makes us compromise.
Most likely if you are able to pass on this fear to the other party, you would be in a better place.
Hope it helps.
Cheers.
blog post
5 key financial strategies to keep your business moving forward
A business succeeds because the business owner is doing what they know best – their business.
Years of passion, toil and dedication go into building a strong, sustainable and a su ...
Anuraag Agarwal
6 years ago
