• Bookkeepers and Auditing - Can bookkeepers audit??
• The First BAS of the Year - Really, really important 
• Use of the ICB Crest - Who can use the crest on their stationery
• ATO BAS Agent Induction Pack – A MUST for all BAS Agents
• We need your help – We are redeveloping our Resources page
• Upcoming ICB Network Meetings – CAN you afford to miss these??
• NEW – Question of the Month – What do you think?
• Essential Payroll Education - What you need to know
• Still need your Certificate IV?? – Update from Swinburne University

The PDF version of this newsletter is available here

In order to be beyond doubt your entire document flow, correspondence and behaviour must be indicative of being engaged under contract to produce results (not the esoteric management kpi theory results but results as in the practical output that will result from your work): Your engagement letter should describe the result (eg processing for the month &/or bank reconciliations &/or accurate P&L and Balance Sheet reports) that you are being engaged to deliver and your invoices should indicate specifically the results delivered. You may still charge an hourly rate for the result however this should be a by product of generating the result.

If you work; the same number of hours per week at the same times and same days; your invoices simply state hours by $rate; your work is reviewed controlled and instructed by the client; then it is going to be harder to justify that you are not an employee for at least Super Guarantee purposes.

Warning:

The ATO “Employee/Contractor Decision Tool” – are you really an employee or contractor? can yield an incorrect result for individual bookkeeper businesses who are contracted to provide a result but are paid on an hourly basis.

The ATO Superannuation Guarantee eligibility tool found on the ATO website relies on the above decision which maybe incorrect.

It is the ICB view of the superannuation requirements that:

1. an individual can be a Bookkeeper/BAS Agent in business
2. you should be contracted to produce a result for the client. ie your agreement details exactly what tasks you will achieve
3. the agreement may or maynot stipulate a fixed fee for the task and it may or maynot stipulate the agreed hourly rate you will be paid
4. you are a contactor

If your agreement with the client further stipulates that:

1. you are responsible for errors in the work
2. you are able to have the work product performed by others on your behalf then this will assist your position. 

• eg “a” gross wage of $50,000 results in super guarantee of $4,500 therefore total package of $54,500

When the employee chooses to sacrifice part of their gross wage into super (or anything else for that matter) the gross wage then is reduced and the 9% super guarantee amount applies to the reduced gross wage.

• eg “b” if the employee is salary sacrificing $1500 into a Laptop then gross wage would become $48,500 with a compulsory superguarantee amount of $4,365. Total package now is $54,365 ie looks like a loss of $135 to the employee

This may not seem fair so when negotiating the total package ($54,500) the employee should always start from the point of view that their package total is Gross wage + 9% super and any alteration should equal the total of the same amount of cost to the employer

• eg “c” the employee should request the same amount of super be paid ie the $4500 resulting in the same total package, alternatively “d” the $135 loss could be added back into the gross wage $123.85/ super 9% of 123.85 = $11.15 or total alteration add back of $135

Technically the employer is only required to pay 9% of the reduced gross wage

What if the employee is salary sacrificing into superannuation?

The employers contribution to the superfund for an employee, under super guarantee, must only be an amount of 9% of the gross wage. So you have a reduced gross wage and you already have super being paid

• eg “e” employee sacrifices $1500 into their super fund. Gross wage reduces to $48,500 and compulsory super amount of $4,365. However as the employer is paying the $1500 sacrificed as an employer contribution into super then technically they only have the balance an additional $2,865 to pay. The employer has not only paid $48,500 as gross wage and $4,500 as salary hence total package of $53,000 – a saving to the employer of $1500.

As this wasn’t the intention but it was the intention of the employee to have the original 9% contributed $4,500 and then an additional $1,500 sacrificed and contributed, the arrangement should have been to have this total of $6,000 “f” paid into super and the total package amount remains the same.

Payment summary – what goes onto Reportable Employer Superannuation Contribution?

Note the super guarantee amount of 9% of gross wage (in the vast majority of cases). 

• Example “a” above was easy: only 9% super was paid hence $nil reportable super.
• Example “b” the resulting 9% super of $4,365 is NOT reportable hence $nil.
• Example “c” $4,500 was paid however the 9% of gross wage is only $4,365 therefore $135 is reportable
• Example “d” the salary gross wage has been adjusted and therefore 9% is the total super paid and hence nothing reportable
• Example “e” the total amount paid was 9% of gross wage hence $nil reportable
• Example “f” the 9% of gross was $4,365 but a total of $6,000 was paid hence reportable super is $1,635

It is this latter example that is the clearest example of what Reportable super is meant to catch: ie sacrificed remuneration that otherwise wouldn’t be reported.

Question of the month

What is the reportable superannuation amount when the employee salary sacrifices 100% of their salary in to super?

Prize awarded to the best argued most correct answer.

1. The PAYG Instalment method you chose is unchangeable for the year. The Options are:
   1. Instalment Rate method: Each quarter work out the value of T1 (Taxable Income as defined for the BAS) and multiply it by the ATO determined PAYG instalment rate.
   2. Instalment Amount: The ATO will look at the last lodged tax return and the tax amount payable, increase that amount by GDP and then divided by 4 requiring your client to pay that instalment amount each quarter.
   3. Annual Instalment: GDP Adjusted

Therefore, the bookkeepers role, is to review the notional rate provided by ATO on the 1st quarter BAS of the year and check if the business profitability has changed enough to discuss the rate with the client and Accountant. Remember, choosing the Instalment Amount determined by the ATO will lock the client in for the remainder of the year with this value, regardless of the how the business is performing.

1. PAYG Withholding: should your client be paying monthly or quarterly? The threshhold for paying quarterly is the annual PAYG Withholding amount must be less than $25,000. It is an advantage for your client to be on quarterly in terms of timing of the BAS’s as registered BAS. Agents receive a 4 week extension for each BAS that is lodged electronically where all facets of the BAS are quarterly ie no monthly PAYG Withholding

ICB Resources is “UNDER RE-CONSTRUCTION”

• Building/Construction Industry
• Retail Industry
• Pharmacy Industry
• Newsagents Industry 
• Real Estate
• Wine Industry
• Medical Industry
• Agriculture Industry
• Hospitality Industry
• Manufacturing Industry
• Service Industry

1. To lodge your form using the portal, follow the steps below. Save a copy of the completed form to your computer.
2. Log onto the portal and select ‘Mail’ and ‘New message’.
3. Select ‘Lodgement deferral request’.
4. Select ‘My business or practice’ to create your portal message.
5. Select ‘Add’ under attachments to attach your form, check and then send

Remember to include detailed information supporting your request.

Refer to ATO Website: http://ato.gov.au/taxprofessionals/content.asp?doc=/content/00246404.htm&page=8&H8

Annual PAYG instalments are due soon

ATO have sent clients’ annual pay as you go (PAYG) instalment notices in July 2010. The due date for payment of these instalments is 21 October 2010.

Clients must still pay their annual instalment by this due date, even if they or their tax agent have already lodged their income tax return.

ATO NOTE: It is best to pay the annual PAYG instalment amount before you lodge the income tax return. If you wish to vary your PAYG instalment amount, including to zero, do so before the due date and lodge your income tax return for the year.

ATO have extended tax payment obligations for small businesses

For small businesses with a turnover under $2million, have an extension for the following arrangements. The ATO has extended the due date to 30th June 2011.

12 month general interest charge (GIC) free payment arrangements, and deferred activity statement payment due dates.

Note the GIC free payment arrangements must be paid by direct debit.

Refer to ATO Website: Measures to help small business meet their tax obligations. 

Register your company now, using the Standard Application (now option B on the http://tpb.gov.au website) which nominates you as the supervising registered BAS Agent.

When the company registration comes through then you may provide those services by the company in its own right.

Can I use the TPB logo on my stationery to indicate I am a BAS Agent?

We don’t know, there has been no prohibition nor permission: We will seek guidance from the Board.

• contains useful links to sections of our website at www.ato.gov.au
• provides an overview of the registered tax agent and BAS agent (registered agent)
• role within the tax system
• includes procedural and administrative information that applies when acting on behalf of clients.

How to use this package

This package is closely aligned with the Tax Professionals segment of our website, which will help anyone new to a practice familiarise themselves with site navigation and content. 

BAS AGENT ATO phone number

13 72 86

BAS AGENTS proving themselves to the ATO

http://ato.gov.au/taxprofessionals/content.asp?doc=/content/29115.htm

This web page describes the process that every phone call you make to the ato should take to correctly identify yourself and your right to talk to the ato about a particular client

NOTE: That it will always be easier for the ATO to talk to you if the client is listed on your view of the BAS Agent Portal

• IF you lodge their BAS using your BAS Portal or ECI
• IF you have added that client to your view of the portal before 30 September

• Are you providing a BAS Service?

• Are you currently operating under the BAS registration transitional arrangements?

• Still need to get your Certificate IV in Financial Services – Bookkeeping?

If you answered yes to the above questions, then Swinburne has the answer for you We offer Certificate IV in Financial Services-Bookkeeping in various modes too suit your lifestyle. 

• Fast track workshop delivery model
• Online
• Recognition of Prior Learning. (RPL)
  (Take advantage of our special RPL deals for 2010 only. RPL the full qualification for only $120.00 – if gap training is required additional enrolment fees will apply)

Enquire now at ptattersall@swin.edu.au or call 03 9210 1193 

• Set a sales limit for each customer and stick to it. This way you will limit the risk of non payment to the total limit you have set for each customer. If you have sales staff, make sure they are aware of the limits.
• Agree payment terms before the order. Some customers will have standard payment terms; however, it is important to negotiate the payment terms before you start to transact with the customer.
• Invoice early: send the invoice with the goods or service once the order is completed (and delivered). Don’t wait until the end of the week or month as this will add to the days outstanding for payment.
• Where commission is paid to sales staff, pay commission on amounts collected, rather than on total sales amount booked.
• Run regular reports to identify when payments are due – e.g. an aged debtors report. This will identify slow paying customers and allow you to make contact early to discuss any issues – faulty goods, inadequate service, inability to pay, etc.
• Make arrangements for non-paying customers: offer a payment plan to clear the debt – it is much better to get paid in instalments than not to get paid at all.

Don’t be hesitant to sack a customer. Remember a good customer is only one that pays. If you are not collecting the cash from your customer, then your business is funding your customer’s business as well as your own.

This article is by Jan Barned is reprinted with permission from Financial Management Trainer (fmtrainer.com.au) 

1. Fair Work Act
2. Superannuation
3. Terminations
4. Expats
5. Excel Masterclass
6. Compliance Case Study

Conference sessions are an excellent way to learn from the experience and knowledge of our speakers, but networking and interactive sessions also complement formal learning. Go to www.payroll.com.au and book now!

ICB members – pay the member rate.

That would be a $400 discount on the 2 day conference rate for non-members and a $100 discount for 1 day

Put your ICB membership number on the application form that you can download from the Workplace Review website (e.g. ICB xxxxxx)

Attend just one course – or both!

You can choose to attend and complete just one course – or both. But you’ll only receive the special ICB QuickBooks Proficient Bookkeeper Certificate of Achievement upon completion of both courses. And for just $398 – there’s never been a better reason to invest in training for your business!

Click here to register and secure your seat today!

1. This crest is the property of The Institute of Certified Bookkeepers under copyright law.
2. Improper or unauthorised use of the ICB crest is strictly forbidden.

If you need any further details regarding the ICB Crest please do not hesitate in contacting us.

When this occurs, you will receive the following message:

‘Portal under maintenance’ – appears when attempting to login to the portal when maintenance is being undertaken and the portal is unavailable.

Very important update from the ATO – “BAS Agents ARE NOT allowed to work Saturday nights!!. 

• Accessing the BAS Agent Portal
• Requests for additional time to lodge
• Annual PAYG instalments are due soon
• Varying GST instalments correctly
• Measures to assist small businesses extended
• BAS agent seminar program is underway
• Data matching detects online businesses running ‘off the books’
• Targeting tax crime e-magazine – issue 3 out now
• BAS agents – home
• What’s new? 

• Apply for ICB Membership here
• Renew your ICB Membership here
• BAS Agent updates and information

• IMPORTANT & URGENT & VITAL & IMPORTANT - Really, really important 
• What now for Transitional BAS Agents - Moving Forward (pinched that from somewhere – hmmmmmm cannot remember where)
• Supervisory arrangements for BAS Agents- What you must do
• BAS Service Provider Portal – do you still want access?
• Changes to GST – For EVERY Bookkeeper
• What does your client and their account need now – What is needed at EOFY

The PDF version of this newsletter is available here

• Registered your billing entity (maybe yourself or your company or your partnership) with the Tax Practitioners Board before Midnight 31 August

Notify the Board using “Option A Transitional Notification” if at all possible

Why? Because then you have always remained legally able to provide BAS Services

• Register yourself personally in any case

Also Notify the Board personally even if you work in your entity – ie that is definitely two registrations

Why? Because we believe the law says that if you Notify then you are taken to be a real Registered BAS Agent. Then in 2 years time you prove your 1000 hours (as an ICB Voting Member or 1400 hours if you are not a member of an RBAA) by signing your “Relevant Experience” declaration yourself and you don’t need another agent to declare you have done the work.

Technically you don’t “HAVE” to but we believe there are problems coming if you don’t.

If you registered using the Transitional Application (option B) or Standard Application (option C) then you are not legal until the Board approves your registration. ie you MUST have stopped doing BAS Service work on 1 March and not start again until the Board have approved you.

• If you registered this way and haven’t heard back yet then you should NOTIFY (Option A) before midnight 31 August to make yourself legal since last 1 March.

How do you check what you have done?

If you are on the BAS Agent Register ( http://www.tpb.gov.au/tpb/agent_register.aspx ) already or been issued your certificate by the Board then:

1. If your registration date is 1 March 2010 then you did notify and all is good and you have always been legal
2. if your registration date is later than 1 March then your renewal date will be showing as 3 years later and you have been legal since your registration date

If you arent on the register:

1. Did you receive the email from the Boards computer “Notification Acknowledgement” that says they have received your submission

• if YES then you are ok and you should follow it up say 4 months after your submission date
• if NO then we recommend you notify again.

If you work in an entity and only you have a registration:

Then you MUST register the billing entity before midnight 31 August.

Check out the full details at www.tpb.gov.au and or www.icb.org.au/BAS_Agent 

It is the new security system to allow your computer to talk to the government computers.
 

• Superannuation contributions made to numerous funds will be electronically paid to a single location (the clearing house) which will process the transactions;
• Small businesses that choose to use the clearing house service will have their legal obligation to make superannuation contributions discharged when payment of the correct amount is made to the clearing house;
• The clearing house facility will be offered free of charge to small businesses with less than 20 employees; and
• The clearing house will manage employers’ choice of fund obligations.

The service will be available to eligible small businesses from 1 July 2010. An announcement will be made shortly about the commencement date for registration for the service.

Further information on the small business clearing house service is available at www.medicareaustralia.gov.au/super. 

1. Profit and Loss Last Year Analysis YTD – This shows comparison between years 
2. Balance Sheet defining Cash on Hand, GST, PAYG, Superannuation and Holiday and Long Service Leave Obligations and Outstanding Debtors and Creditors with prepaid deposits if applicable. 
3. Debtors and Creditors Reports showing individual supplier and customers 
4. Stock on Hand Value by item
    
5. Report of Project/Job Profitability

Accountant 

1. Notes to the Accountant over the year 
2. Backup of file including login details
    
3. Copy of BAS’s lodged in the year
    
4. Copy Finance, Hire Purchase and Lease documents taken out of the year
    
5. Documentation of Shares Bought, Sold and Dividends received
    
6. Documentation to support Prepayments and Accruals
    
7. Detail of Assets purchased and sold over the year
    
8. Bank Reconciliation of ALL Banks (Including Petty Cash) and Credit Cards
    
9. Detail of Customer and Supplier Deposits at 30th June

There is varying views on the Thresholds of Assets for NON STS businesses. ICB recent reference guide defines that the ATO allows assets costing less than $100 (GST inclusive) to be written off immediately.

Under the simplified depreciation rules you can claim an immediate deduction for most depreciating assets which cost less than $1,000 (GST Exclusive) and pool most other depreciating assets.

The threshold of less than $300 (GST Exclusive) is used at time of depreciating the asset. Choice of prime cost or diminishing value method can offer an immediate deduction for certain non-business depreciating assets costing less than $300.

In summary, ICB recommend to use the less than $100unless STS or the bookkeeper is guided by the accountant to use the less than $300 for certain assets.

ATO Reference:http://www.ato.gov.au/businesses/content.asp?doc=/content/36431.htm

Note: An amendment will be made to the ICB Reference guide to change the GST Inclusive for $300 and $1000 threshold to GST Exclusive

• help these organisations understand how to treat mutual dealings with their members
• provide guidance on various taxes, including GST
• explain registering for GST, mutual receipts and GST turnover, and the GST treatment of gambling sales, the ‘GST rebate’ on gaming machines, vouchers, tips and gratuities.

To read the guide, refer to Mutuality and taxable income (NAT 73436).

1. TAX Invoices – don’t have to be in the right period

The basic principle has always been you cant claim GST back from the ATO until the client has in their possession the tax invoice.

The ATO has now clarified further that you may claim the input tax credit in a following GST period even though the date relates to the previous period.

ie: you don’t have to go back and adjust a previous BAS

This is not considered a GST mistake that requires notification   

1. Tax invoices – they might not need to be correct

The ATO has issued guidelines indicating that Tax Invoices may not need to be 100% correct in order to be considered valid. However they must contain sufficient information to enable the following key items to be readily identified:

1.  
   • the supplier’s identity and
   • Australian business number (ABN)
   • the nature of the sale
   • the amount of GST payable. 
      
2. GST input tax credit must be claimed within 4 years
    
3. If private use changes – then alter the amount of GST claimed

The thresholds are changing so that for purchases of less than $100,000 there is a two year time limit to change the portion of GST Input Tax credit.

Over $100,000 - it is five years 

1. Self assessment and alterations

It has been a principle in Income Tax matters since self assessment came in that there is a time limit to self assess changes or make amendments to what was originally lodged.

The concept is that to simplify matters for GST, WET, LCT & FTX is that the self assessment system that applies to them will also have the same adjustment deadlines as income tax. 

1. Adjustment Notes

Adjustment notes must now be issued has been increased to transactions only over $75 (instead of $50 previously)  

1. Business to Business transactions for GST treatment

ATO has confirmed that where there are mixed transactions for GST purposes or debate over the GST applicability of a transaction, that as long as both the supplier business and the purchasing business treat the transaction as including GST then that will be acceptable. This does not apply to Input Taxed Purchases.

• products and services
• lodgment due dates and concessions
• common BAS errors
• correcting GST mistakes
• Standard Business Reporting
• reportable employer super contributions
• assistance for small business
• safe-harbour provisions

These seminars will not cover issues relating to the registration of BAS agents. For matters regarding registration go to the Tax Practitioners Board website at www.tpb.gov.au

You will find all the details and registrations are now open, and people can register online at Speakers and seminars, or alternatively, you can phone 1300 661 104.

Courses are scheduled to be held in both Sydney and Melbourne initially. However, Reckon will consider scheduling additional course dates and locations subject to demand. To register your interest for an additional date or location, click here

Attend just one course – or both!

You can choose to attend and complete just one course – or both. But you’ll only receive the special ICB QuickBooks Proficient Bookkeeper Certificate of Achievement upon completion of both courses. And for just $398 – there’s never been a better reason to invest in training for your business!

Click here to register and secure your seat today!

• Have been absent from education, accredited training* and the workforce while caring for children
• Are currently unemployed and wish to return to work, preferably in the next 12 months **
• Have not worked for more than 4 months full time, or equivalent part-time, in the last 2 years
• Are Australian residents living in Victoria***
• Will enrol in training to improve their workforce skills and/or earning potential
• Have not received a grant under the program Victoriaworks for parents returning to work or previous versions of the Program
• Were unable to activate a grant previously allocated under the Program due to unforseen circumstances.

* Accredited English Language training is an exception to this condition

** For the purposes of the Victoriaworks for parents returning to work program, ‘unemployed’ is deemed to include paid employment for less than 6.5 hours per week.

*** TPV holders are deemed as eligible residents  

Training with Australian College QED (an ICB Accredited Trainer)

If you are an eligible parent you may be able to claim the grant (up to $1,000) to cover the costs of a training course through Australian College QED (ACQ).

What’s more, Australian College will subsidise up to $200 off course fees if your chosen course is over $1,000. For example, If your course is $1,200 the grant will cover $1,000 and Australian College will subsidise the remaining $200. This means your entire course is FREE. If your fees are higher than this we will break them into easy installment payments for you that you can pay off over your course.

Apply for a $1,000 grant online www.returningtoearning.com.au

Or discuss your eligibility and study options with Leonie or Luke at Australian College QED on Freecall 1800 790 490

www.australiancollege.edu.au

• Incorrect amounts at RESC on payment summaries
• Your small business tax calendar
• DO NOT INCLUDE 9% super in RESC – ATO says so….. 
• ICB is “On The Road” 
• BAS Agents get extension for Payment Summaries

• Apply for ICB Membership here
• Renew your ICB Membership here
• BAS Agent updates and information