No more Mr Nice Guy: the ATO wants its money

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Tax time is just around the corner and the ATO has sent out a warning to businesses around the country that owe it money: the COVID-19 moratorium on debt collection has come to an end. Rest assured though, you’ve got some options.

During the early days of the pandemic, the ATO says it deliberately shifted its focus away from firmer debt collection action to help businesses that were experiencing challenges.

However, the ATO has been busy in recent months sending out almost 30,000 awareness letters for business tax debts and 52,319 awareness letters about the use of Director Penalty Notices.

“We’ve seen an encouraging response. More than 20,000 taxpayers have already responded to our awareness letters by making payments or entering into payment plans,” says ATO Deputy Commissioner Vivek Chaudhary.

What happens if you get a letter and don’t respond?

In a nutshell: nothing good.

The ATO has already issued nearly 300 intent to disclose notices and has commenced disclosing some debts to credit reporting bureaus Equifax and Creditor Watch.

The ATO is also currently issuing 30 to 40 Director Penalty Notices each day and expects that daily number to increase.

If you get one of these notices, you’re in hot water and need to act quickly.

Worst case scenario, if you don’t immediately pay back the debt, the ATO could sue you in court, which could lead to your business going into liquidation or voluntary administration.

And if you have a business loan that’s secured against your family house, that could be at risk, too.

So what are your options?

First and foremost, if you receive any correspondence from the ATO about a tax debt you should contact your registered tax professional straight away, or call the ATO to engage in a payment plan.

Mr Chaudhary says the ATO’s preferred approach is always to work with taxpayers to resolve their situation through engagement rather than enforcement.

“We understand that a lot of people – especially small businesses – have done it tough through COVID and may now have a tax debt,” says Mr Chaudhary.

“But don’t stick your head in the sand. Even if you can’t pay the full amount owed straight away, please contact us or your registered tax professional to discuss and we will work with you to set up an appropriate payment arrangement.”

That said, not everyone enjoys the ATO hovering over their shoulder waiting for them to pay off a large tax debt.

If you’re one of those people, feel free to get in touch with us to explore some of your other options with business loan lenders.

The SME lending space is growing each month, with a surge of new lenders and products recently hitting the market – some of which offer flexible repayment options.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Bulk of SMEs preparing for growth over next 12 months: research

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Small businesses around the nation are once again confident about their future and ready to start driving toward their next phase of growth, according to new research.

The research, carried out by small business lender Prospa, found that 81% of Aussie SMEs expect their businesses to grow over the next 12 months.

This is despite 87% of business owners anticipating challenges within the same timeframe.

“Small business owners have not had an easy ride navigating through the pandemic, supply chain issues, staff shortages, and now increasing operating costs,” says Beau Bertoli, co-founder and chief revenue officer at Prospa.

“Despite ongoing challenges, the majority of small business owners have been working hard to make smart decisions to drive new revenue and become more efficient to propel growth.”

Business owners are also looking to access funding

The research found that 7 out of 10 business owners have either made, or are in the process of making, changes to their business.

This is combined with 71% of business owners expressing that they plan to embark on accessing funds in the short-term, ahead of possible further interest rate rises.

“Small businesses are not only confident, but studies show business owners are planning to apply for funds sooner to spare them from paying extra on their repayments,” adds Mr Bertoli.

Heads-up! The end-of-financial-year is fast approaching

Another key reason why small business owners are looking to access funds over the next few weeks is to take advantage of the federal government’s temporary full expensing scheme this financial year.

The scheme allows businesses keen to invest in their future to immediately write off the full value of any eligible depreciable asset purchased, at any cost.

This can help with your cash flow, as it allows you to reinvest funds back into your business sooner.

Trucks, coffee machines, tools, excavators, and vehicles are just some examples of assets eligible under the scheme.⁣⁣

But here’s the catch: the asset must be installed and ready to use by June 30 in order to be eligible for this financial year.

So if you’d like help obtaining finance to make the most of temporary full expensing ahead of the impending EOFY deadline, get in touch with us today.

We can help you with financing options that are well suited to your business’s needs now, and into the future.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

EOFY alert! Financial year-end is fast approaching

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Small business owners wanting to buy a vehicle, asset or important piece of equipment and immediately write off the cost have just over a month to act this financial year.

There’s nothing like an impending deadline to get you moving.

And with June 30 now just over a month away (didn’t that sneak up on us!), time is running out for your business to take advantage of the federal government’s temporary full expensing scheme this financial year.

What is temporary full expensing?

Temporary full expensing is basically an expanded version of the popular instant asset write-off scheme.

It allows businesses that are keen to invest in their future to immediately write off the full value of any eligible depreciable asset purchased, at any cost.

This helps with your cash flow as it allows you to reinvest funds back into your business sooner.

Trucks, coffee machines, excavators, and vehicles are just some examples of assets eligible under the scheme.⁣⁣

There is just one small catch though …

The asset must be installed and ready to use by June 30 in order to be eligible for this financial year.

But rest assured that even if you do order the asset, and then miss the June 30 deadline because it doesn’t arrive in time, you can still write it off next financial year because the scheme is set to run until 30 June 2023.

Asset eligibility

To be eligible for temporary full expensing, the depreciating asset you purchase for your business must be:

– new or second-hand (if it’s a second-hand asset, your aggregated turnover must be below $50 million);

– first held by you at or after 7.30pm AEDT on 6 October 2020;

– first used, or installed ready for use, by you for a taxable purpose (such as a business purpose) by 30 June 2023; and

– used principally in Australia.

Obtaining finance that’s right for your business

Being able to immediately write off assets is one thing, but if you don’t have access to the right kind of finance to purchase them now, the scheme won’t be much use to you this financial year.

So if you’d like help obtaining finance to make the most of temporary full expensing ahead of the impending EOFY deadline, get in touch with us today.

We can help you with financing options that are well suited to your business’s needs now, and into the future.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

SMEs invest in machinery, IT and energy-efficient assets for growth

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Australian small businesses are investing in their recovery through a surge in machinery purchases, IT and office technologies, and sustainable business assets, according to Commonwealth Bank (CBA) data.

The CBA research shows small business financing for equipment and machinery is up 17% so far this financial year compared to last year.

The research also shows 67% of businesses have budgeted for new equipment in the next 12 months, with 55% of those businesses specifically planning to invest in IT and office technology.

“As organisations welcome employees back into offices, they are investing in new technology to attract and retain staff, and many are demanding sustainable business investments,” explains Grant Cairns, CBA’s Executive General Manager for Business Lending.

Businesses going green

Across the small business sector, the biggest investment boosts have been in electric cars (156%), trailers (312%), and forklifts (395%).

According to CBA’s data, an increasing number of small businesses are taking advantage of discounts on financing for energy-efficient vehicles, equipment and projects.

“We’ve seen an uptake in hybrid and electric vehicles, as well as investments across other assets including IT equipment,” he adds.

“More small businesses are also seeing the benefits – including the financial benefit – of replacing old equipment with energy-efficient alternatives.”

What else is stimulating the growth?

Mr Cairns says the growing rate of investment is underpinned by a range of government incentives.

That includes attractive interest rates for the SME Recovery Loan Scheme; the extension of the federal government’s temporary full expensing scheme (aka instant asset write off) to mid-2023, and tax incentives announced in the federal budget that encourage small businesses to invest in technology and training.

Those tax incentives allow small businesses to receive a $120 tax deduction for every $100 they spend on training staff or investing in technology, up to a maximum of $100,000 a year.

“Government incentives have played a significant role in lifting business investment over the past few years,” says Mr Cairns.

“Since July last year, we’ve seen continued growth in asset finance in the small business sector, with the instant asset write-off scheme providing a good reason for customers to upgrade equipment and technology.”

Get in touch now ahead of the new financial year

To make the most of the government incentives outlined above, it’s important to get the ball rolling now.

For example, the government-backed SME Recovery Loan Scheme is only available until 30 June this year.

And to make the most of temporary full expensing (aka the instant asset write-off) this financial year, the asset you purchase must be installed or ready for use by 30 June.

So if you’d like to explore your finance options for purchasing an asset for your business, as well as any government schemes or energy-efficiency discounts your business might be eligible for, get in touch today.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Flexibility emerges as a key priority for small business loans

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What’s most important to you when selecting a lender to provide finance for your small business right now? Well, Australian small business owners have put ‘flexibility’ when it comes to loan repayments right up there on their priority list.

And that should come as no surprise given the disruptive nature of the economy that most businesses have had to endure over the past two years.

In fact, research conducted by RFi Group, commissioned by small business lender Prospa, found one-third of SMEs (33%) would more likely choose a lender with more flexible repayment options when applying for funds over the next 12 months.

So what are flexible repayments?

Well, when respondents were given the opportunity to define flexible repayments, one key theme was prevalent: flexible timeframes.

Many SMEs associated flexible loan repayments with the ability to repay loans earlier, extend repayment periods, or make no repayments for a given time (ie. up to 8 weeks).

“Small businesses were required to adapt, shift, or pivot over the past two years,” explains Prospa national sales manager Roberto Sanz.

“Therefore, it is understandable that business owners are looking for flexibility to work through changing market conditions and make necessary adjustments to keep their business moving.”

Prospa’s research is in line with that of SME non-bank lender ScotPac, which found that cash flow was a top-three concern for business owners right now, with 81.5% of SMEs admitting it had them worried.

Want to explore your flexible finance options in 2022?

The SME lending space is an evolving one, with a surge of new lenders and products recently hitting the market.

And one key emerging trend is, yep, you guessed it: flexibility.

So if you’re an SME owner who might be in need of flexible funding, get in touch today. We’d love to help your business explore its options.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.