6 factors that will define 2022 for business

From tackling risk to growing your employee value proposition, 2022 is going to throw your business plenty of opportunities. Here’s our expert take on what they’ll look like and how to respond.

By Business View

If there’s one thing we can say about business with some certainty, it’s that 2022 is going to be bursting with opportunity. Where that opportunity will lie and how to embrace it is answered here by these leading business experts. Read on to discover their six key areas of focus and insights on future-proofing your business.

1.Be strategic about growth

Businesses have an opportunity to accelerate their growth in the year ahead, particularly through mergers and acquisitions (M&A), says Bruce Sweeney, partner and Financial Services National Lead, Enterprise, at KPMG.

“For businesses that are confident about their growth, there is an opening to seize opportunities caused by disruption,” he says. “There might be attractively priced acquisitions available, which represent good value.”

On the other hand, businesses may also consider a sale themselves, as it is a good market and many are “getting tapped on the shoulder” about mergers, Sweeney says. This might not begin as an outright sale, but a joint venture or other alliance that can eventually end up as more.

According to a recent report from accounting and advisory firm HLB Mann Judd, M&A activity has not slowed down at all despite lockdowns, and the outlook for 2022 continues to be strong.

2.Have a risk-management plan

At the same time, Sweeney says businesses need to continue to invest in addressing key risks.

Firstly, stabilising supply chains is critical. Many businesses were “not set up for global disruption” as seen since the onset of the pandemic. Supply chain disruption has impacted a diverse range of areas including hard and soft commodities and retail products.

Meanwhile, digital disruption, while not a new concept, has been “greatly accelerated” by the pandemic, Sweeney says.

“COVID-19 restrictions and working from home have massively increased online use of services and products.” To keep up and avoid being “disrupted” themselves, businesses need to make sure digital assets such as their website are up to scratch, and that they have a strong plan for distribution and supply.

Finally, businesses need to invest in solutions that protect their information from cyberattacks.

According to the Australian Cyber Security Centre’s Threat Report 2020-21, reports of cybercrime were up nearly 13 per cent year on year, as criminals took advantage of Australia’s dependence upon the internet, particularly in relation to the pandemic and the resulting rise in remote working.

“In Australia a cybercrime is reported every eight minutes,” warns Ana Marinkovic, Executive, Business Direct and Small Business, NAB. “Any business, large or small, can find themselves under threat from cyberattack at any time, and cyber criminals are continually raising the bar.”

3.Nurture your future workforce

There’s been much discussion around the future of the workplace, including flexibility and hybrid home/office working models. A recent report from the Productivity Commission called the pandemic “one of the biggest changes to work in 50 years”.

Social analyst and founder of McCrindle Research Mark McCrindle says as millions return to the office, we also need to think about deeper implications for social cohesion – because without it, you can end up with workplace toxicity.

“The process of going back to work will be a re-orientation and a re-gathering,” he says. “We will need to look after our wellbeing and our community.”

As well as this, there needs to be a focus on company culture. As the famous saying attributed to management guru Peter Drucker goes, “culture eats strategy for breakfast” – in other words, a workforce that fails to share the company culture can undo the strongest strategic plan.

“Normally, culture changes are organic, but now we’re coming from a standing start,” McCrindle says. “Everything needs to be rebuilt.”

There are other social considerations too, he adds, including the growing prominence of Generation Z (those born from the mid-90s onwards). “We’ve been talking about millennials for so long, but a new generation is moving into leadership now,” McCrindle says. And this shift will have a substantial impact, as Generation Z’s management style is quite different. They are technologically savvy but also social, valuing wellbeing, purpose and inclusivity.

4.Make yourself a skills magnet

The skills shortage is a very real issue. Many industries are already struggling to find the talent they need, says Nick Deligiannis, Australia and New Zealand managing director of recruiter Hays.

According to the company’s latest salary guide, most businesses have permanent staffing levels equal to or above pre-pandemic levels, and almost half intend to add to their permanent headcount before June 2022.

“At the same time, turnover is increasing and the ‘great resignation’ has been flagged by many commentators as a significant issue for Australian businesses,” Deligiannis says. Hays data shows 38 per cent of skilled professionals plan to look for a new job in the next 12 months, while a further 39 per cent are open to opportunities.

Deligiannis says 2022 will become the year of the ‘employee value proposition’. This means businesses need to think beyond salary and career progression to values and purpose.

“To attract and retain suitable talent, you’ll need to clearly articulate who you are as an organisation and what you stand for,” he says. “Then make sure you promote this across every touchpoint.

“When you add regular flexibility, job security, career progression and a competitive salary and benefits package, you’ll create an appropriate defence for 2022’s war for talent.”

5.Embrace innovation

Meanwhile, organisations need to remember innovation remains critical to their businesses, helping their growth and safeguarding their future, says Tania Bucic, Professor of Marketing at UNSW Business School. Businesses are typically a powerhouse for innovation and also the backbone of the Australian economy, she adds.

Innovations include emerging technologies such as facial recognition, germ line editing (that is, genetic alterations within germ cells), the internet-of-things, blockchain, artificial intelligence, augmented/virtual reality and machine learning.

“Emerging technologies can change the business landscape quickly by being integrated into existing businesses for a competitive boost, or used to create new industries altogether,” Bucic says.

“They can be used strategically to manipulate market dynamics to force change, engineer trust by pre-empting customer needs, and accelerate growth.”

Bucic also acknowledges that businesses may find it tricky to fund this kind of development after spending so much of their cash reserves surviving lockdown. Those struggling to find cash to invest could look to government support and incentives for help.

For instance, in the last Federal Budget, the government announced a $1.2 billion digital economy strategy. Other support for innovation includes the R&D tax incentive scheme.

It’s not always a matter of spending up big, though. NAB Group Executive of Business and Private Banking Andrew Irvine points out that even small-scale ideas can have an impressive impact on growth. “The vast majority of innovation isn’t your Apples and Amazons,” he says. “It’s making your product five per cent better, but doing that consistently.”

6.Understand customers intimately

“COVID has changed the conversation with customers and laid bare how some businesses took their customers and their reputation for granted,” Sweeney says.

“It has highlighted how important it is to understand and predict customer needs.”

Some ways of doing this, he says, are engaging honestly and openly with customers or those that are affected by business decisions, investing in a PR/reputation management strategy, reimagining your brand and purpose post-COVID, and finding ways to bring customers’ voices into your business.

Perhaps most crucially, businesses should invest in the skills and expertise needed to make good use of data, in order to glean strong insights into customer behaviour and needs, then use them as the pillars of their strategy.

That way, businesses can be sure they’re backing up their ‘customer first’ mantra with genuine action and creating a competitive difference that can drive home growth and increased profitability in the year ahead.

For Irvine, achieving this boils down to constantly asking yourself these questions: “What value am I providing to my customer? Am I making their lives, their businesses better, and how am I doing that?”

Some great insights and critical that we understand how these things impact us and will keep impacting us in the future.

This is why you Must be There…….

Where: Hilton, Surfers Paradise

When: 28 – 30 March, 2022

Our Guarantee (so absolutely NO RISK FOR YOU): If you come along and do not get at least 1 idea that pays for the course investment 10 times over then we will give you your money back. The only disclaimer is that you come along with an open mind and you get involved and work through the course and you implement what you learn. It will be the best decision you ever make for your business and your life.

100% Tax Deductable: The whole event (getting up there and back, accommodation, the course investment, meals and spending a few days up there before and/or after) is 100% tax deductable. So, the Government helps you grow your business by letting you claim all of those things, now that is awesome. 

At the Event: We will have a team member of ours on every table. So you will not be left alone, we will work with you for the 3 days.

After the Event: We will not leave you alone. We will work with you (if you like) after the event to make sure you get the maximum results and benefits form the 3 days.

Like Minded People: The event brings like-minded forward thinking people in one room where everyone shares and provides ideas and thoughts for all attendees to use.

Best of Breed Key Note Speakers: specialising in technology, social media, marketing, the numbers, customer service, team, culture, motivational, strategy, sales and much more

The 3 Day Program focuses on:

• The 6 Secrets™ of any successful business. This simple yet powerful concept will give you a structured starting point to start the journey improving the performance of your business.
• The 5 Key Business Building Strategies™.
• You will also learn how to apply systems that will improve your business.
• How you can profit by working ON rather than IN your business.
• You will discover how to calculate the real value of your business and what you can do to increase that value.
• You will learn how to increase the profitability of your business but NOT at the expense of your quality of life.
• Discover how it is the “Little Things” that have a profound effect.
• Benefit from the experiences of other business people.

What are some of the things you will work on?

• We look at how planning ensures you can manage the things you can control.
• We look at the impact of beginning with the end in mind and how it dramatically can alter how your business moves forward.
• We drill in and look at the 5 Key Business Building Strategies™ – the 5 ways will show you how little changes can have profound effects on your business.
• We look at the 5 Dysfunctions of a Team and how by tackling them you can multiply your businesses service levels and in turn your profits.
• You will learn about the Value Gap Test™ and start to work on it.
• You will be introduced to the 5 Steps to Successful Succession™ – this alone will ensure you obtain a much higher price for your business.

You will also have the opportunity to meet and do business with other people who are business people just like you. You will be able to combine the shared experience of the group with your own resources to work on the specific issues your business is faced with.

What People are Saying about the Global Business camp Event:

What I loved about GBC: John’s infectious excitement! Business bible (take home folder). Revisiting our values, mission and culture. Making sure the right people are ‘on the bus’, and improve our team. – IRENE, BUSINESS SERVICES INDUSTRY

John is the man that defies all of your expectations of accountants! He is the greatest cheerleader we’ve ever met! He’s exciting, engaging and challenging. John mixes his business savvy with unbridled enthusiasm and a commitment to seeing us realise our business dreams!

He comes off the stage and into the heart of the business and we love him for it! It’s John’s voice that gets into your head once you’ve left Global Business Camps, whispering to you “that’s so cool” when you’re turning the 6 Secrets™ into your reality! – TRICIA, TRAIN TO SUCCEED

We plan to go on holidays, we plan how to build our house but we don’t really plan as to where we want our business to be in 5 then 10 years so that we’ve got a set goal to get to. – IAN HEALY

Or just go and listen to a what a few wonderful people have had to say – https://globalbusinesscamps.com.au/event/testimonials/

Please contact us if you have any other questions. We would love to see you all at the event.

Merry Christmas

If someone asked you what your ideal day is, what would you answer?

This year was a year where many of us have taken stock of what is important, refined our goals, and focussed on closing the gap between our ideal and our reality.

We’ll look forward to working with you again in 2022 and helping you to close that gap!

On behalf of all the team we wish you a safe and happy Christmas.

Every year, we are asked about the tax impact of various Christmas or holiday related gestures. Here are our top issues:

Staff gifts

The key to Christmas presents for your team is to keep the gift spontaneous, ad hoc, and from a tax perspective, below $300 per person. $300 is the minor benefit threshold for Fringe Benefits Tax (FBT) so anything at or above this level will mean that your Christmas generosity will result in a gift to the Tax Office as well. To qualify as a minor benefit, the gifts also have to be ad hoc (no ongoing gym membership payments or giving the same person regular gift vouchers amounting to $300 or more).

A question we often get is what is the tax impact if you give your team say a hamper and a gift card? The good news is that the tax rules treat each item (the hamper and the gift card) separately. FBT won’t necessarily apply as long as the value of each item is less than $300. However, the minor benefits exemption is a bit more complex than this. For example, you need to look at the total value of similar benefits provided to the employee across the FBT year etc.

If you are planning to provide your team with a cash bonus rather than a gift voucher or other item of property, then this will be taxed in much the same way as salary and wages.  A cash bonus at Christmas is not a gift; it’s still income for the employee regardless of the intent. A PAYG withholding obligation will be triggered and the ATO’s view is that the bonus will also be treated as ordinary time earnings which means that it will be subject to the superannuation guarantee provisions unless it relates solely to overtime that was worked by the employee.

The staff Christmas Party

If you really want to avoid tax on your work Christmas party then host it in your office on a work day (COVID rules allowing!). This way, Fringe Benefits Tax is unlikely to apply regardless of how much you spend per person.  Also, taxi travel that starts or finishes at an employee’s place of work is also exempt from FBT.  So, if you have a few team members that need to be loaded into a taxi after overindulging in Christmas cheer, the ride home is exempt from FBT.

If your work Christmas party is out of the office, keep the cost of your celebrations below $300 per person. This way, you won’t generally pay FBT because anything below $300 per person is a minor benefit and exempt.

If the party is not held on your business premises, then the taxi travel is taken to be a separate benefit from the party itself and any Christmas gifts you have provided. In theory, this means that if the cost of each item per person is below $300 then the gift, party and taxi travel can all be FBT free.  However, the total cost of all benefits provided to the employees needs to be considered in determining whether the benefits are minor.

The trade-off to this is that if the costs associated with hosting the party are not subject to FBT then it would be difficult to claim a tax deduction or GST credits for the expenses.

If your business hosts slightly more extravagant parties and goes above the $300 per person minor benefit limit, you will generally pay FBT but you can also claim a tax deduction and GST credits for the cost of the event.

Client gifts

Few of us have that much time in the diary for pre-Christmas entertainment so why not give a gift instead?  In addition to a few extra hours saved and a lot less calories to work-off (most of us are still struggling post lock down), there is also a tax benefit.  As long as the gift you give to the client is given for relationship building with the expectation that the client will keep giving you work (that is, there is a link between the gift and revenue generation), then the gift is generally tax deductible as long as it doesn’t involve entertainment.

Entertaining your clients at Christmas is not tax deductible. If you take them out to a nice restaurant, to a show, or any other form of entertainment, then you can’t claim it as a deductible business expense and you can’t claim the GST credits either.  It’s goodwill to all men but not much more.

Charitable gift giving

The safest way to ensure that you or your business can claim a deduction for the full amount of the donation is to give cash to an organisation that is classified as a deductible gift recipient (DGR). And, the charities love it as they don’t have to spend any of their precious resources to receive it.

There are a few rules that make the difference between whether you will or won’t receive a tax deduction.

• The charity must be a DGR. You can find the list of DGRs on the Australian Business Register.
• If you buy any form of merchandise for the ‘donation’ – biscuits, teddies, balls or you buy something at an auction – then it’s generally not deductible (the rules become more complex in this area).  Your donation needs to be a gift, not an exchange for something material.  Buying a goat or funding a child’s education in the third world is generally ok because you are generally donating an amount equivalent to the cause rather than directly funding that thing.
• The tax deduction for charitable giving over $2 goes to the person or entity whose name is on the receipt.

If your business is making a donation on behalf of someone else, such as a client or that friend ‘who has everything’, it will depend on how the donation is structured. The tax rules generally ensure that the deduction is available to the individual or entity who actually makes the gift or contribution. Having receipts issued in someone else’s name can make this more complex.

Please contact us should you need any clarification regarding these issues.

Merry Christmas

If someone asked you what your ideal day is, what would you answer?

This year was a year where many of us have taken stock of what is important, refined our goals, and focussed on closing the gap between our ideal and our reality.

We’ll look forward to working with you again in 2022 and helping you to close that gap!

On behalf of all the team we wish you a safe and happy Christmas.

2021 was to be the year we returned to a post-COVID normal however the pandemic has fundamentally changed the way many of us operate in our personal and work lives. Here is some of what we can expect in 2022:

Federal Election

The Federal election will be held between March and May 2022. Annoying text messages, robo messages and advertising are on their way!

Federal Budget in March

The timing of the election will bring the Federal Budget forward to March 2022. It’s an election year; expect many of the productivity based tax concessions to be extended.

Lock-in digital gains

McKinsey & Company reports that consumer digital adoption rates accelerated dramatically during the pandemic.

• Many sectors will lock in the digital gains they made. Some, however, will see a decline in digital sales as consumers are no longer forced to shop online – groceries for example.
• To lock in the gains of digitalisation, consumers expect trust, end-to-end digital service (from start to after sales service), and an improved online experience.
• Forced online adoption has changed the consumption habits of an older and wealthier portion of the market. The average age of online users in the McKinsey Global Sentiment Survey increased by around 3 years and spend around 4% more.
• Coming off a lower base, developing nations have experienced a much higher growth in digital adoption than developed nations; evening out global access.

Going green

Business and consumers will be expected to be mindful of their carbon footprint. A wasteful process is likely to diminish consumer appeal.

Global taxation

There have been significant shifts over recent years to ensure that multinational enterprises pay tax in the country where they generate their income. The increase of digitalisation has only exacerbated the issue. While not earning an income, your enterprise operates globally with a workshop located in the North Pole and delivers to clients across the globe.

Representation in a particular country may also be enough to make your operation subject to local tax laws. You appear to have local agents – several thousand Santa representatives – with authority to operate on your behalf in shopping centres across Australia. These agents commit the operation with the promise of toys to millions of children. A local agent acting with authority may expose you to local tax laws. This is an issue that may extend well beyond Australia and requires urgent assessment.

As discussed, there are currently no provisions within Australian tax law to allow the Commissioner the discretion to ignore your tax liabilities as a goodwill gesture.

Please contact us should you need any clarification regarding these issues.

Merry Christmas

If someone asked you what your ideal day is, what would you answer?

This year was a year where many of us have taken stock of what is important, refined our goals, and focussed on closing the gap between our ideal and our reality.

We’ll look forward to working with you again in 2022 and helping you to close that gap!

On behalf of all the team we wish you a safe and happy Christmas.

A reminder for all Family (Discretionary) Trusts that own residential land in NSW – Revenue NSW (formerly known as the Office of State Revenue) considers Family Trusts to be automatically subject to the Foreign Persons Surcharge on transfer duty and land tax for any New South Wales residential property owned through the Trust.

Land Tax Assessments for property in NSW that is held as at 31 December will be issued early in the new year. If you hold residential property through a family trust at that time and have NOT amended your Family Trust Deed to exclude foreign persons and informed Revenue NSW of the amendment BEFORE 31 December 2021, you will be subject to the 2% foreign person surcharge land tax for this year.

We urge you to act quickly with regards to these changes for any Family Trust (even those based outside of NSW) that owns or intends to purchase residential property in NSW, to minimise financial hardship caused by having to pay these surcharges.

Quote of the month

“You can’t change conditions. Just the way you deal with them.”

Jessica Watson, sailor

Merry Christmas

If someone asked you what your ideal day is, what would you answer?

This year was a year where many of us have taken stock of what is important, refined our goals, and focussed on closing the gap between our ideal and our reality.

We’ll look forward to working with you again in 2022 and helping you to close that gap!

On behalf of all the team we wish you a safe and happy Christmas.

Being Different in Business and Winning

We always get this question asked – how can we be different in our business? The perfect example is one we have used before and that is Don Beyer Volvo. This place is very different.

A typical car dealership generates about 12% of it’s revenue from after-sale service, Don Beyer is more like 30%. They also have convincing evidence that satisfied customers will keep traffic moving for new cars as well. More than 80% of one year’s sales were to past customers or to people that had been referred by past customers. Now that is cool.

Some different things that they do:

1. Mechanics are on salary above the award.
2. Based on work quality the top mechanics have the keys to a car for the month.
3. Test drives for cars repaired are as common as new car test drives.
4. People are there until 8.00pm to make it easy for customers that work to get their cars.
5. Limousine service is available for customers.
6. Service training for all team and for customers by their full time service trainer.
7. 2 days after the repair the full time customer relations person calls customers to find out: Was the repair satisfactory? Was any of the work a repeat repair? Would they recommend the service department to others?
8. A few days later the same as above follows in writing as some people are more comfortable responding this way.
9. Customer advisory board meets with team members quarterly to discuss feedback etc
10. One such recommendation is the Guarantee. If customer finds a cheaper genuine part from somewhere else, they will get double their money back.
11. Open dealership, so customers if they like can spend all day there looking around.
12. Goodwill budget, where money is allocated and must be spent each year in the service department.
13. 100,000 and 200,000 mile club to keep owners of older cars coming back. Members get discounts on repairs. Great way to keep them coming back to see the new cars and the new things in the dealership. They know that one day they will buy another car.
14. Express check in and out for customers in a rush.
15. After a car is sold to a customer the procedure is for 4 1/2 years that they will receive a call on a quarterly basis. The questions they will be asked are: How is the car going? They will be queried about any service issues. They will be invited in to look at the new models. Their answers will be valuable market intelligence and clues to developing problems that can be caught early.

These are just some of the things that this really amazing business is doing and has been doing for years. All little things that add so much value and differentiates this business from most others.

Every business could be doing things like this and not just car dealerships. The question is how many are?

If you are not this is a massive opportunity to be different in your business and to WIN. Contact us to discuss how we can help you get your business to the next level with our business advisory services.

5 Key things you should do to help improve your cash flow

Small business owners are not planning ahead enough. Small business is getting riskier for many owners, with tens of thousands of SMEs now more likely to experience financial stress in the coming year as per research conducted.

Credit rating agency Dun & Bradstreet says one in 10 businesses with fewer than 20 employees now face a higher risk of failure than a year ago. It’s no wonder when so many SMEs are reportedly struggling with reduced cash flow and more businesses are failing to pay their bills on time.

When businesses go under, it’s generally not because they’re not making an accounting profit, but because they simply don’t have enough cash to pay their bills. In fact, there are plenty of profitable businesses that have ended up in administration because of cash flow issues.

There are ways to improve your SME’s cash flow.

1. Chase Up Payments

The first step is to chase up those who owe you money. A cash crunch could be the result of just a few late-paying clients so it’s imperative to keep track of who’s running late with their payments.

It could be a mail-out or a simple phone call reminder to let them know the payment is due. You just need to be active.

2. Reduce Payment Terms

Consider offering just 30 days credit terms instead of the longer 45 day plus terms, communicate with customers and offer discounts for those that pay straight away.

3. Review Financial Products

Review your financial products – transaction accounts, credit cards, loans – and if they aren’t working for your business talk to your financial institution and make sure you shop around for a better deal.

4. Ask For Help

Don’t be afraid to ask for help – ask us how we can assist you to improve your position. One of the keys to running a better business is having profit and loss and cash flow budgets prepared annually. That way you can see ahead what your profit and cash flow will look like. This then gives you an opportunity to act. If you know ahead of time that you are going to have a cash flow problem then you can do something about it. Most businesses do not know they will have a problem until they actually have the problem. Typically, by then it is too late to do anything about it.

Another great strategy is to monitor and compare the budgets to actual data. Thaw way you can see how you went compared to the budgets.

Another strategy is to conduct ‘what if analysis’.  What we do there is we consider what impact there would be on your business if:

• Sales decreased by 10%
• Accounts receivable are collected in 65 days instead of 40 days
• And so forth

It is a great way to see what would happen to your business if certain things happen.

Speak to us so we can help you get all of the above in place.

Merry Christmas

If someone asked you what your ideal day is, what would you answer?

This year was a year where many of us have taken stock of what is important, refined our goals, and focussed on closing the gap between our ideal and our reality.

We’ll look forward to working with you again in 2022 and helping you to close that gap!

On behalf of all the team we wish you a safe and happy Christmas.

The Australian Taxation Office recently updated its guidance on tax and cryptocurrency.

In early November, the Commonwealth Bank announced that it is now Australia’s first bank to offer customers the ability to buy, sell and hold crypto assets, directly through the CommBank app. You know when the banks come on board, cryptocurrency has become normal.

But cryptocurrency is only one part of the blockchain universe. Non-fungible tokens or NFTs (fungible means interchangeable) are one-of-a-kind digital assets which are part of the Ethereum blockchain. An example is the CryptoKitties game that allows players to purchase, collect, breed and sell unique virtual cats – and, before you laugh, the game transacted over $1 million in virtual cats in its first few days of launching.

NFTs are also rapidly rising in popularity in the artworld because ownership of the asset is on the blockchain and in some cases, the artist can take a percentage of every transaction of that artwork – so, no more starving artists because they can generate an income from the asset over time not just on the first sale. A stellar example is the sale of a NFT artwork by the digital artist Beeple, which was sold at auction by Christies in March 2021 for $69 million (USD).

Let’s look at what the Australian Taxation Office has to say about some of the commonly asked questions about the implications of investing in blockchain.

Is mining cryptocurrency income or an asset?

If you receive crypto from providing services to others, this can represent income. If you create crypto, you acquire a capital gains tax (CGT) asset. A taxing event will arise when you exchange crypto for Australian Dollars or another crypto asset.

Does the ATO really know about my crypto transactions?

The ATO is using various sources for data collection including digital service providers (DSPs) and analysis software to track taxpayer compliance. There are several data-mining projects (no pun intended) underway looking specifically at cryptocurrency and cryptocurrency platforms.

What happens if my cryptocurrency is stolen?

You may be able to claim a capital loss if you lose your cryptocurrency private key or your cryptocurrency is stolen. Generally, where an item can be replaced it is not lost. A lost private key can’t be replaced. Therefore, to claim a capital loss you must be able to provide the following kinds of evidence:

• When you acquired and lost the private key
• The wallet address that the private key relates to
• The cost you incurred to acquire the lost or stolen cryptocurrency
• The amount of cryptocurrency in the wallet at the time of loss of private key
• That the wallet was controlled by you (for example, transactions linked to your identity)
• That you are in possession of the hardware that stores the wallet
• Transactions to the wallet from a digital currency exchange for which you hold a verified account or is linked to your identity.

 I mine cryptocurrency as a hobby so I should not have to pay tax on it?

Unfortunately, it’s unlikely mining for fun will allow you to avoid tax. The circumstances where you can generate cryptocurrency or transact it without paying tax are very limited.

Can I get a tax deduction for computer equipment purchased for mining?

If you are in the business of mining, then you can claim a deduction for the equipment you purchase to generate income. If you are not carrying on a business, then the crypto is held as an investment and the equipment is not deductible.

How is my NFT artwork taxed?

As with any other cryptocurrency, an NFT can be held for personal use. Personal use assets are CGT assets that you keep mainly for your personal use or enjoyment.

NFT is not a personal use asset if it is kept or used mainly:

• As an investment
• In a profit-making scheme, or
• In the course of carrying on a business.

The relevant time for working out if an asset is a personal use asset is at the time of its disposal. During a period of ownership, the way that an NFT is kept or used may change (for example, NFTs may originally be acquired for personal use and enjoyment, but ultimately kept or used as an investment, to make a profit on ultimate disposal or as part of carrying on a business).

The longer an NFT is held, the less likely it is that it will be a personal use asset – even if you ultimately use it for personal use or consumption.

Capital gains you make from personal use assets acquired for less than $10,000 are disregarded for CGT purposes. However, all capital losses you make on personal use assets are disregarded. Collectables are not classed as personal use assets and may be subject to CGT.

Can my Self Managed Superannuation Fund invest in cryptocurrency?

The issue is not so much can you acquire cryptocurrency within an SMSF but should you?  The June 2021 ATO statistical report shows that Australians held approximately $212m in cryptocurrency assets as at 30 June 2021- only 0.03% of total assets. The simple reason is that the volatility of cryptocurrency makes it harder to rationalise under Section 62 of the Superannuation Industry Supervision (SIS) Act, particularly if the asset allocation ratio of cryptocurrency assets in the SMSF is high. But, it’s not impossible if managed correctly at an investment and administrative level.

With Bitcoin as low as $14k on 13 September 2020, and $61k on 12 September 2021, it’s easy to see the appeal for investors with the appetite for risk (335% return across 12 months). In this same period, Ethereum grew 767%. But the world was in a different place in September 2020, not just in cryptocurrency.

Before investing in cryptocurrency there are a few things SMSF trustees need to be aware of:

• Trust Deed – the trust deed of the fund must allow for cryptocurrency assets. Most SMSF trust deeds are drafted broadly to enable trustees to invest in assets permitted by the superannuation laws and leave the investment strategy to manage the choice of assets and their appropriateness. However, it is important to check.
• Investment strategy – Your Investment Strategy is a major consideration with any investment

within an SMSF but with cryptocurrency’s high volatility and risks, there must be clearly articulated information in the Investment Strategy. That is, it must articulate the trustees’ plan for making, holding and realising assets in a way that is consistent with the retirement goals of members being mindful of the member’s individual circumstances.

• Separation of assets – it’s important that the cryptocurrency assets are held in a wallet in the name of the SMSF and the IP address is provided to the SMSF auditors to verify the transactions (against the fund bank account). Problems can often arise when a wallet (in the name of the SMSF) is connected to a personal credit card to acquire cryptocurrency. In these cases, the payment is seen as either a contribution or a loan to the SMSF.

The ATO also suggests you look at the diversity of the SMSF’s investments.

How tax applies to blockchain and the generation of income or assets is still a work in progress. Please contact us if we can assist.

Global Business Camp (GBC) 28 – 30 March 2022, Hilton, Surfers Paradise

The next GBC event is booked for the 28^th – 30^th March 2022 and this will be a great time for you to really focus on the future for your business. Australia is now opening up and this is our chance to really kick start our businesses.

The date being in March of 2022 also gives you extra time to tell some other business associates, friends and relatives about the event and to get them to come along as well. Due to COVID and what has happened we are offering all of our valued clients and friends a very special gift.

Great Offer: As a thank you for being valued clients, friends and associates of our valued clients we are offering something we have never offered before:

As a very big thank you we would love to offer you a referral fee of $200 per person that registers and attends the event (they must tell us who referred them when they register) from your efforts from now until the date of the event.

This is just a small way of us saying thank you.

So to summarise, people that register from your referral (and they tell us you referred them) we will pay you $200 per person.

Now that is quite neat

The camp is truly a great way to lock yourself away for a few days and seriously think and work on your business with like-minded business people. It is also coming at a great time in March of 2022.

For those of you that are already registered (we currently have 96 people registered) that is awesome and for the rest of you do not miss out on this massive opportunity to come along and work on YOUR BUSINESS. Now is the time to get organised so that you can attend in March and spend quality time working ON your business.

Check below for our Very Very Special Post Covid Rates

Enjoy Our Massive Post Covid Rates – Contact us on 08 8212 8585 and we will help you get registered by using this code (SMITHINKMEM) in the COUPON CODE section of the registration form and attend at the Extra Special VIP Rate of $1,980 pp (Normal rate is $3,300 pp, but for you ONLY $1,980 pp).

Massive Saving for everyone. It is our way of making it a NO Brainer for people to join us.

Some of the things we will be working on over the 3 days:

• Working through the importance of the right culture in yourbusiness
• Working ONand not in your business and effective leadership
• Undertaking a strategic planning(strengths, weaknesses, opportunities and threats) exercise for your business
• Looking at financial managementin your business
• Focusing on what customer servicereally is (this is going to be massive in the future)
• What an elevator pitchis and why have one in your business
• Looking at examples of successful businessesand what they do – including visiting Tom O’Toole’s Beechworth Bakery, Stew Leonard’s Supermarket in the USA and Paddi Lund’s Dentist business in Queensland just to name a few
• Focusing on the traits that all successful businesses have from generation to generation
• The importance of having a customer focused business
• Complete our proprietary‘19 point check list’ that gives every individual a chance to tackle things that are easy and can make a massive difference to your business
• Focus on the ‘little things’that make a profound effect
• Look at moments of truthwithin your business and ensure you understand the importance of these events
• Work through our proprietary software ‘GBC Business Analysis Software’ to highlight the impact to your business of what the changes will do. This is a truly powerful tool and ties everything together well. This will highlight what impact focusing on some key drivers will have in yourbusiness
• Discovering the importance of having a management control planin your business to track progress
• Looking at the areas that affects the valueof your business and working on improving those areas
• Discovering the importance of a succession planeven if you are not looking at selling your Just working through this process will dramatically increase the value of your business
• And much more.

To find out more – www.globalbusinesscamps.com.au
.
Detailed agenda/outline of the 3 days and speaker bio’s – https://globalbusinesscamps.com.au/wp-content/uploads/2021/10/GBC-Invitation-2022.pdf

To register – https://globalbusinesscamps.com.au/registration/#

Enjoy Our Massive Post Covid Rates – Contact us on 08 8212 8585 or enter this code (SMITHINKMEM) in the COUPON CODE section of the registration form and attend at the Extra Special VIP Rate of $1,980 pp. Massive Saving for everyone. It is our way of making it a NO Brainer for people to join us.

To register – https://globalbusinesscamps.com.au/registration/#

It is truly an event not to be missed by anyone in business no matter how many times you have attended before. It is all about you and your business.

Look out for more details coming out soon.

Take Care,

From the Indigo Financial and Global Business Camps Team

We have had a number of questions following our previous e-mail regarding the directors ID. Here is some more detail.

 Directors are now required to register for a unique identification number that they will keep for life.

What is a director ID?

A director ID is a 15 digit identification number that, once issued, will remain with that director for life regardless of whether they stop being a director, change companies, change their name, or move overseas.

The introduction of the Director Identification Number (DIN) is part of the Government’s Modernisation of Business Registers (MBR) Program creating greater transparency, and preventing the potential for fraud and phoenix company activity. The MBR will unify the Australian Business Register and 31 ASIC business registers, including the register of companies. In effect, the system will create one source of truth across Government agencies for individuals and entities and will be managed by the Australian Taxation Office (ATO).

For those concerned about their privacy, the director ID will not be searchable by the public and will not be disclosed without the consent of the Director.

Who needs a director ID?

All directors of a company, registered Australian body, registered foreign company or Aboriginal and Torres Strait Islander corporation will need a director ID. This includes directors of a corporate trustee of self-managed super funds (SMSF).

You do not need a director ID if you are running a business as a sole trader or partnership, or you are a director in your job title but have not been appointed as a director under the Corporations Act or Corporations (Aboriginal and Torres Strait Islander) Act (CATSI).

The company secretary or officeholder should keep a register of the IDs of their directors in a secure place – director IDs are governed by the same privacy rules that apply to Tax File Numbers (TFNs) and should not be disclosed unless required.

Timeframes for registration

For Corporation Act directors:

For CATSI directors:

If the company intends to appoint new directors, it will be important to ensure that they are aware of the requirements and timeframes to establish their director ID if they do not already have one.

How to set up a director ID

If you are an Australian resident director, you will need to complete a number of steps and have a number of identification documents available and ready (for non-resident directors see Foreign directors and the director ID system below).

1. Verify your identify

If you establish your director ID online, and you have not already set up myGovID, you will need to download the app onto your phone or device and create an account.

The myGovID does not create your director ID –  the app’s only purpose is to validate your identity, and once validated, issue a code that can be used to identify you on government online services without going through the same verification process.

myGovID uses your phone/device’s camera to scan your forms of ID such as your passport, driver’s license and/ or VISA (check the documentation requirements here), to validate who you say you are. Be careful when you are scanning your documentation as the system does not always read the scan correctly.

2. Apply for your director ID through Australian Business Registry Services

Once you have set up your myGovID, you need to apply to the Australian Business Registry Services (ABRS) for your director ID. Use the email you used to create your myGovID to start the process.

In addition to your myGovID, you will need to have on hand documentation that matches the information held by the ATO. If you have a myGov account linked to the ATO, you can find the details on your profile. You will need:

• Your tax file number
• The residential address held on file by the ATO; and
• Two documents that verify your identify such as:
  • Your bank account details held by the ATO (on your myGov ATO account, see ‘my profile/financial institution details’).
  • Dividend statement investment reference number
  • Notice of assessment (NOA) – date of issue and the reference number (on your myGov ATO account, see Tax/lodgements/income tax/history).
  • The gross amount from your PAYG payment summary
  • Superannuation details including your super fund’s ABN and your member account number

The final stage requests your personal contact details (not the company’s)

Once complete, your director ID will be issued immediately on screen. This information should be provided to your company secretary or office holder.

If any of your details change, for example a change of residential address or phone number, you will need to update your details through the ABR. You will also need to notify your company within seven days (14 days for CATSI Act directors) and the company will then need to notify the Australian Securities and Investments Commission (ASIC) within 28 days.

3. Applying by phone or using paper forms

You can choose to verify your identify and apply for your director ID by phone (13 62 50) or on paper. You will need to have your identification documents available. If you are applying using the paper form, your identify documentation will need to be certified by an authorised certifier such as a Barrister, Justice of the Peace etc.

Foreign directors and the director ID system

Foreign directors of Australian companies have the same requirements and deadlines as Australian resident directors, however, the verification process is only accessible in paper form.

One primary and two secondary forms of identification are required to accompany the application that have been certified by a notary publics or by staff at the nearest Australian embassy, high commission or consulate, including consulates headed by Austrade honorary consuls. Primary forms of identification include a birth certificate or passport, and secondary include driver’s licence, foreign government identifier, or national photo identification card.

In the presence of the applicant, the authorised certifier must certify that each copy is a true and correct copy of the original document by sighting the original document, stamping, signing and annotating the copy of the identity document to state, ‘I have sighted the original document and certify this to be a true and correct copy of the original document sighted’. initialling each page listing their name, date of certification, phone number and position.

The form and the accompanying documents will need to be sent by mail to Australian Business Registry Services using the details provided.

Directors in name only

It’s important that anyone agreeing to be a director understands the implications. Being a director is not just a title; it is a responsibility. At a financial level, directors are responsible for ensuring that the company does not trade while insolvent. The by-product of this is that the directors may be held personally liable for the debt incurred. The director penalty regime has also tightened up in recent years to ensure that directors are personally liable for PAYG withholding, net GST, and superannuation guarantee charge liabilities if the company fails to meet its obligations by the due date. For many small businesses, the directors are also often personally responsible for company loans secured against property such as the family home.

Failing to perform your duties as a director is a criminal offence with fines of up to $200,000 and five years in prison.

Ignorance is not a legal defence. Don’t sign anything unless you understand the consequences.