2019-20 Federal Budget Highlights

The 2019/20 Federal Budget was released by the Treasurer Josh Frydenberg on April 2, 2019. This pre-election budget detailed some significant tax measures including:

• An increase in the immediate asset write-off to $30,000 for businesses with turnover of less than $50m per annum;
• a six-year staged reduction in the marginal tax rate from 32.5% to more closely align with the corporate tax rate, which is hoped to stimulate consumer spending.

Government focus on business tax compliance also continues, with the Tax Office compliance programs receiving a funding boost of $1 billion. It is indisputable that those businesses rorting the system should be brought to account, however, increased ATO scrutiny of compliant small businesses will be disruptive and costly.

Individuals

The Government has announced measures that seek to build on previously legislated changes to reduce personal income tax over the next six years.

Low & Middle Income Tax Offset (LMITO)

With immediate effect for the 2019 income year, the Government has proposed to increase the non-refundable low and middle-income tax offset (LMITO) to a maximum amount of $1,080 (up from $530) for taxpayers earning more than $48,000 but no more than $90,000. The LMITO then phases out from $90,001 to $126,000. The base amount of the LMITO is also proposed to increase from $200 to $255 for those earning no more than $48,000. This offset is in addition to the existing low-income tax offset (LITO) and is a temporary measure due to be removed on 30 June 2022.

Tax Rate Changes
With effect from 1 July 2022, the Government proposes to increase the top threshold of the 19% tax bracket from the previously legislated $41,000 to $45,000 and will also increase the LITO from the previously legislated amount of $645 to $700. These changes are intended to lock in the reduction in tax provided by the LMITO, once the LMITO is removed.

The Government has already legislated to remove the 37% tax bracket with effect from 1 July 2024. In this Budget, it announced a further change to reduce the 32.5% marginal tax rate to 30%, which will take effect at the same time. This means that taxpayers earning up to $200,000 will pay a maximum marginal tax rate of 30% from the 2025 income year. For that year, taxpayers will be able to earn fully franked dividends of approximately $158,000 without paying any top-up tax (assuming a franking rate of 30%) and approximately $90,000 (assuming a franking rate of 25%).

Tax Rates and Thresholds for 2018/19 Onwards
The table below summarises the announced personal tax rate and threshold changes (excluding the 2% Medicare levy).

Medicare Levy Low-Income Thresholds for 2018/19

For the 2018/19 income year, the Medicare levy low-income threshold for singles will be increased to $22,398 (up from $21,980 in 2017/18). For couples with no children, the family income threshold will be increased to $37,794 (up from $37,089 in 2017/18). For each dependent child or student, the family income threshold will increase by $3,471 (up from $3,406 in 2017/18).

For single seniors and pensioners eligible for the seniors and pensioners tax offset, the Medicare levy low-income threshold will be increased to $35,418 (up from $34,758 in 2017/18). The family threshold for seniors and pensioners will be increased to $49,304 (up from $48,385), plus $3,471 for each dependent child or student.

Small & Medium Business Tax

Instant Asset Write-Off
The Government has announced an expansion of the instant asset write-off threshold from $25,000 to $30,000, with medium-sized businesses (with a turnover of up to $50m) now also qualifying.

Following the Government’s announcement on 29 January 2019 to increase the instant asset write-off threshold from $20,000 to $25,000 and extend the eligible purchase period to 30 June 2020, this Budget announcement increases the threshold even further to apply to assets costing less than $30,000, while retaining the 30 June 2020 deadline.

While the deduction measure was previously limited to small businesses (being those businesses with an aggregated annual turnover of less than $10 million), it will extend to “medium-sized business” with an aggregated annual turnover of less than $50 million. This means all businesses with an aggregated turnover of less than $50 million will be able to obtain an immediate deduction for eligible assets costing less than $30,000 that are first used, or installed ready-for-use, from Budget night to 30 June 2020.

We note that the instant asset write-off for medium-sized businesses will only apply to assets that were acquired after 2 April 2019 and will not apply to assets acquired before this date (even where they are first used or installed ready for use after Budget night).

Given the announcements made on 29 January 2019, there are effectively three different thresholds that will apply for purchases made during the 2019 financial year. In summary, the immediate deduction will be available in respect of assets that cost:

The Budget announcement makes it clear that the existing small business tax depreciation concessions, including the pooling rules, will continue to apply to those businesses with aggregated turnover of less than $10 million and will not be extended to medium sized businesses (more on this in our Tax Planning section).

Export Market Development Grant (EMDG)
The Government announced that it will provide additional funding of $60 million to the EMDG scheme over a three-year period to support small and medium enterprises that export Australian goods and services to overseas markets.

The EMDG is currently available to Australian exporters who have income of less than $50 million and who promote their products to international customers. The objective of the EMDG is to reimburse eligible entities up to 50% of their promotional expenses (i.e. advertising, marketing, overseas travel to trade shows) incurred above $15,000. The minimum grant entitlement is $5,000 and the maximum is $150,000 per annum.

Superannuation

The Government has again announced superannuation changes in this year’s Budget, which are aimed at increasing contribution opportunities for individuals aged between the ages of 65 and 74.

Work Test Exemption for Individuals Aged 65 and 66
The Government has stated that from 1 July 2020, individuals aged 65 and 66 will be permitted to make voluntary superannuation contributions without satisfying the work-test requirement. Currently, contributions by those aged 65 and over are subject to a work-test that requires the person to have worked a minimum of 40 hours in a consecutive 30-day period during the financial year.

In addition to the work-test exemption, the Government has stated it would also permit ‘bring-forward’ contributions for individuals aged 65 and 66. The ability to bring forward contributions is not currently available once an individual has reached age 65. On a practical level, the measure would extend access to bringforward contributions for an additional two years of an individual’s life. Bringforward contributions allow individuals to use three years of non-concessional contributions in any one year – i.e. non-concessional contributions of up to $300,000 could be made in one financial year, significantly boosting superannuation fund assets available for investment.

Indirect Tax

Increased Luxury Car Tax Refunds
Farmers and tourism operators who use luxury vehicles in their business are currently able to access refunds of up to $3,000 of the luxury car tax (LCT) paid. From 1 July 2019, the LCT refund limit will be increased to $10,000.

ABN Integrity Measures
The Budget also proposed measures to counter the black economy through more stringent (annual) ABN eligibility rules. From 1 July 2021, ABN holders with an income tax return obligation will need to lodge their income tax return to retain their ABN. From 1 July 2022, ABN holders will also need to confirm the accuracy of their details on the ABR register on an annual basis.

These changes will enact some of the measures recommended by the Black Economy Taskforce, which identified widespread abuse of ABNs. The change will also impose an additional compliance burden on businesses to ensure the currency of the ABN of their suppliers. Where a supplier’s ABN is cancelled, a payer could find themselves with a no-ABN withholding obligation.

Year End Tax Planning

Everybody wants to save tax. The late Kerry Packer (Australian billionaire and media magnate) once said in reference to the Australian Government, “Now of course I am minimising my tax and if anybody in this country doesn’t minimise their tax they want their heads read because as a Government I can tell you you’re not spending it that well that we should be donating extra.”

No doubt, Mr Packer had a big tax problem to solve.

Tax planning is a very important part of our role as accountants. With the 2018/19 financial year drawing to a close, now is the time to look at some tax planning strategies to help you minimise your tax liability within the framework of the  Australian taxation system.

There are two primary tax minimisation strategies for businesses including:

❶ Delaying the Derivation of Assessable Income
Of course, there’s no point delaying the receipt of your income if it will cause cash flow problems. You’ll save some tax this year but it might put your business under financial pressure. Please note, not banking amounts received before June 30 until after June 30 does not qualify because the income is deemed to have been earned when the money is received or the goods or services are provided (depending on whether you are on a cash or accruals basis of accounting).

• Cash Basis Income – Some income is taxable on a cash receipts basis rather than on an accruals basis (e.g. rental income or interest income in certain cases). You should consider whether some income can be deferred in those instances.
• Consider delaying your invoices to customers until after July 1 – this will push the derivation of the income into the next financial year and defer the tax payable on that income. If you operate on the cash basis of accounting, you simply need to delay receiving the money from your customers until after June 30.
• Lump Sum Amounts – Where a lump sum is likely to be received close to the end of a financial year, taxpayers should consider whether this amount (or part thereof) can be delayed or spread over future periods.

❷ Bringing Forward Deductible Expenses or Losses
• Prepayment of Expenses – In some circumstances, Small Business Entities (SBE) and individuals who derive passive type income (such as rental income and dividends) should consider pre-paying expenses prior to 30 June 2019. A tax deduction can be brought forward into this financial year for expenses like:

✓ Employee Superannuation Payments including the 9.5% Superannuation Guarantee Contributions for the June 2019 quarter (that have to be received by the Superannuation Fund by June 30, 2019 to claim a tax deduction).
✓ Superannuation for Business Owners, Directors and Associated Persons
✓ Wages, Bonuses, Commissions and Allowances
✓ Contractor Payments
✓ Travel and Accommodation Expenses
✓ Trade Creditors (if on a cash basis of accounting)
✓ Rent for July 2019 (and possibly additional months)
✓ Insurances
✓ Printing, Stationery and Office Supplies
✓ Advertising including Directory Listings
✓ Utility Expenses – Telephone, Electricity & Power
✓ Motor Vehicle Expenses – Registration and Insurance
✓ Accounting Fees
✓ Subscriptions and Memberships to Professional Associations and Trade Journals

A deduction for prepaid expenses will generally be allowed where the payment is made before 30 June 2019 for services to be rendered within a 12-month period. While this strategy can be effective for businesses operating on a cash basis (not accruals basis), we never recommend you spend money on items you don’t need. However, paying expenses in June that are due in July could save you some tax this financial year and provided your cash flow permits, it makes good business sense.

Businesses should also consider:
•Accounts Payable – If you operate on an accruals basis and services have been provided to your business, ensure that you have an invoice dated June 30, 2019 or before, so you can take up the expense in you accounts for the year ended 30th June 2019.

• Stock Valuation Options – Review your Stock on Hand and Work in Progress listings before June 30 to ensure that it is valued at the lower of Cost or Net Realisable Value. Any stock that is carried at a value higher than you could realise on sale (after all costs associated with the sale) should be written down to that Net Realisable Value in your stock records.

• Compulsory Superannuation Guarantee – as mentioned above, if you want a tax deduction in the 2018/19 financial year, the superannuation fund must receive the funds by 30 June 2019. The Tax Office doesn’t consider a contribution to be made until the amount is actually credited to a super fund’s bank account so an electronic transfer to another bank account on June 30 is not necessarily considered paid. We strongly recommend you make the payment a week or so before June 30 and then follow up with the super fund to ensure the funds have been received. Don’t risk the tax deductibility of what can often be a significant amount by leaving payment to the last minute.

• Write-Off Bad Debts – if you operate on an accruals basis of accounting (as distinct from a cash basis) you should write off bad debts from your debtors listing before June 30. A bad debt is an amount that is owed to you that you consider is uncollectable or not economically feasible to pursue collection. Unless these debts are physically recorded as a ‘bad debt’ in your system before 30th June 2019, a deduction will not be allowable in the current financial year.

• Repairs and Maintenance Costs – Where possible and cash flow allows, consider bringing these repairs forward to before June 30. If you don’t understand the distinction between a repair and a capital improvement, please consult with us because some capital improvements may not be tax deductible in the current year and could be claimable over a number of years as depreciation.

• Obsolete Plant and Equipment should be scrapped or decommissioned prior to June 30, 2019 to enable the book value to be claimed as a tax deduction.

• Immediate Write Off for Individual Small Business Assets – The accelerated depreciation write-off for small businesses has been extended to 30th June 2020 and the threshold has increased to $30,000. The asset can be new or second hand and a number of conditions apply.

Here are some key points to consider:

*The amount must be under $30,000 (or $20,000 depending on date of purchase) exclusive of GST (i.e. $33,000 including GST)
*If you borrow to purchase the asset, the asset is still eligible
*The asset must be installed and ready to use by the deadline (purchasing a car to be delivered in the future won’t qualify until the car is actually delivered)
*To claim the write off on a motor vehicle you will need to have a valid log book and claim only that percentage of the cost as an immediate write off
*Some taxpayers may try to reduce the cost of an asset to under $30k by using a trade-in when purchasing the asset (for example a car). However, the monetary value of the trade-in will form part of the asset cost and not reduce the cost of the asset.
*Any attempt to manipulate invoices etc. will attract the ATO’s use of the anti-avoidance rules, thereby eliminating the $30,000 write off.
*If your business has a small profit or even a loss, the write off will be of little or no benefit in the current year (losses are not refundable but can be carried forward to the next year)
*Building structural improvements are not eligible for the instant write off
*Depreciating assets valued at more than $30,000 will be depreciated in one pool at a rate of 15% in the first year and 30% in future years
*If your pool balance at the end of the year is less than $30,000 before applying any other depreciation deduction, the entire pool balance can be written off
*If your business is not a ‘Small Business Entity’ you will need to depreciate all assets purchased over $100. Any assets purchased for $100 or less can be written off immediately

• Superannuation Contributions – some low or middle-income earners who make personal (after-tax) contributions to a superannuation fund may be entitled to the Government Co-Contribution. In 2018/19, the maximum $500 co-contribution is available if you contribute $1,000 and earn $37,697 or less. A lower co-contribution amount may be received if you contribute less than $1,000 and/or earn between $37,697 and $52,697.

• Capital Gains/Losses – the timing of the sale of assets is critical and deferring the sale until after June 30 will defer the tax if you make a capital gain. Of course, if you have made other capital gains during the financial  year it could be worth bringing forward the sale of an asset to crystallize a loss that you can offset against other capital gains. Note that the contract date is often the key date for when a sale has occurred for capital gains tax purposes, not the settlement date.

The above strategies are general in nature and depending on your circumstances (including your turnover and whether you are on a cash or accruals method of accounting), terms and conditions may apply. We  encourage business owners to schedule a meeting as soon as possible to assess your options and this might require the preparation of a preliminary calculation of your taxable income for the year ending June 30, 2019.

Thinking of Renovating Your Investment Property?

Renovation Tax Tips
Creating wealth through buying an investment property is a well established practice in Australia. In fact, there are approximately 9 million residential dwellings in this country and almost 25% of them are rented from private landlords.

According to the Australian Tax Office there are just over 23 million people in Australia of which just under 8% of the population (1,811,174  individuals) own an investment property. According to the ATO data, 72.8% of individuals that owned an investment property owned just a single one. Meanwhile, 18% of individuals owned 2 properties and just 0.9% of individuals owned 6 or more. Clearly, negative gearing is a part of our DNA and it is fuelled by the tax incentives, our population growth, historic low interest rates, growth in property values and use of investment vehicles like self-managed superannuation funds.

Ultimately, the only way investors make money from their property investment is through capital growth. Accordingly, it’s no surprise to find a lot of investors renovate their investment property in a bid to increase the value. Unfortunately, for tax purposes, there is a big distinction between a repair and a renovation. In fact, there can be both income tax and capital gains tax implications when renovating a property.

If you’re looking to renovate or sub-divide your property we urge you to consult with us and if you’re intending to renovate we provide the following general guidelines:

Repair or Renovation?

For taxation purposes, the difference between a repair and a renovation can be a grey area. A renovation with structural improvements like adding another storey to the building or adding a new room is typically a capital expense and the construction costs would claimed over a number of years. If you demolished the back of the house and rebuilt, the construction costs would be written off over 40 years at a depreciation rate of 2.5% per annum. If the property was sold before the construction costs were totally written off, the balance of the capital costs would reduce the capital gain on sale.

If the renovation included replacement items of plant and equipment (like an oven or air conditioner) they can be depreciated over the useful life of the asset. The distinction between a repair and a renovation can be summarised as follows. A repair is basically maintaining the existing asset or structure. Repairs are deductible because they are fixing the wear and tear caused by the tenant and it’s usually occasional or partial and involves restoring something to its original efficiency. Repairs make good to damage that has occurred through normal wear and tear, by accidental or deliberate damage or through the effects of natural causes.

Replacing the thermostat in a hot water service is a repair while replacing the hot water service is not. Replacing old lino in the kitchen with floating floorboards would be considered a renovation and the expense written off over several years as depreciation. Repainting the property would generally be considered a repair.

The ATO has issued some guidelines on repair versus renovation (improvement):

• Whether or not the thing replaced or renewed was a major and important
part of the structure of the property
• Whether the work performed did more than meet the need for
restoration of ‘efficiency of function’, bearing in mind that ‘repair’ involves
a restoration of a thing to a condition it formerly had without changing its
character
• Whether the thing was replaced with a new and better one, and
• Whether the new thing has considerable advantages over the old one,
including the advantage that it reduces the likelihood of repair bills in the future.

Initial Repairs
You need to be very careful with repairs completed in the first 12 months of property ownership. Completing repairs shortly after buying a property and before you have a tenant would be considered ‘initial repairs’ and treated as capital expenditure and not tax deductible. This includes repairs to rectify damage, defects or deterioration that existed at the time of purchasing a property. If you replace depreciating assets such as a hot water service, floor coverings or a dishwasher, you may be able to claim depreciation on the items.

Keep Records
The distinction between a repair and a renovation can be a fine line so it’s important to keep detailed records. You might also need to keep the receipts and records for an extended period of time because items of a capital nature will impact the calculation of the capital gain on sale of the property. For renovations, a detailed tax invoice is required to isolate the cost any appliances, floor coverings, curtains or painting.

Record keeping is also important because items costing less than $300, despite being capital in nature (e.g. light fittings) and normally subject to depreciation, can be written off in the year they were incurred unless they fall under the initial repairs category.

Travel Expenses
From 1 July 2017, travel expenses you incur to inspect, maintain or collect rent for your residential investment property are not deductible. Therefore airfares, accommodation and motor vehicle expenses will no longer be tax deductible against the rental income you receive. From that date these type of expenses cannot be claimed unless you are carrying on a business of letting rental properties or are an excluded entity. Generally, owning one or several rental properties will not be considered ‘being in the business of letting rental properties’.

An excluded entity is a:

• corporate tax entity
• superannuation plan that is not a self-managed superannuation fund
• public unit trust
• managed investment trust
• unit trust or a partnership, all of the members of which are entities of a type listed above.

In summary, investment properties and negative gearing have become a specialist area within our firm. We have identified some common areas where property investors trip up on tax and capital gains tax matters. If you’re looking to renovate, make significant repairs or sub-divide your property we strongly urge you to talk with us today.

Buyer Beware – Before You Buy a Business

Caveat emptor! It’s Latin for ‘let the buyer beware’ and it serves as an important message for people looking to buy a business.

Taking the plunge and buying a business can be exhilarating but terrifying. There are so many things to consider and you need to do your due diligence before you commit to buy someone else’s business. There are plenty of administrative decisions to be made around finance, accounting software selection, business structures and insurances. Of course, once you get the business up and running there are more challenges including political and economic uncertainty, cybersecurity and technological change.

It all sounds daunting but making the right buying decision hinges on having all the key information about the business at your disposal. To make an informed buying decision you need to do a detailed review of the business’s financial performance, operations, reputation and industry as part of the ‘due diligence’ process. For example, from a financial perspective:

• Have you received and analysed the financial records for the past 3 years including the profit and loss statements?
Are there any trends developing – are sales or profits in decline? Do you have a strategy to turn them around and
can you increase sales with the current resources? Here’s an
important tip, never rely on financial statements generated by
the vendor’s accounting system. You need to be working from
certified copies of financial statements produced by an
accountant.
• Are the total sales broken down by product or service line? Do
sales and purchase records reconcile to the bank statements?
• Are there any one-off sales in the numbers that won’t be
recurring and if so, what is the likely impact on the profitability of
the business?
• Do a small percentage of customers represent a large percentage of sales?
• Is there a list of plant and equipment plus fixtures and fittings that the owner intends to sell and where has the valuation come from for these items? Are under of the items under finance agreements?
• Details of any stock being sold with the business and the valuation method. How will it be counted and valued at settlement?
• Are you buying the accounts receivable/debtors? If so, do you have an aged listing of them?
• Is a particular salesperson critical to the business success? If so, will you be able to retain that person in your employment?

This is really the tip of the iceberg from a financial point of view and there are numerous other things you need to research including:

Why?
You know why you’re buying the business but why is the current business owner selling out? They might be retiring or suffering ill health but sometimes there’s a hidden reason that they don’t want to divulge. A new competitor might be opening up in the region or they may have just lost their biggest customer. Information like that could be a deal breaker or the asking price needs to be reduced in your favour. If you do your due diligence and ask all the right questions you reduce the risk and if the owner won’t answer your questions, then it could be a red flag.

Industry Regulations
No matter what type of business you run, to operate legally, you have to comply with Federal, State and local laws and regulations. You could incur fines and penalties for non-compliance, so you need to be aware of the regulations and monitor any legislative changes.

There are employment, workplace relations and health and safety laws to consider and depending on your industry type, you might also need to comply with environmental protection laws. The Fair Work Ombudsman recently released the findings from a joint probe with the corporate regulator ASIC that revealed almost 100 underpaid workers. The operation targeted 48 first-time directors located in and around Melbourne’s CBD and the investigation covered several industries including accommodation, food services, rental, hiring and real estate sectors. 22 businesses were found to be non-compliant with more than $40,000 in underpaid wages on behalf of 99 workers. The biggest offender was a noodle bar that owed 14 employees more than $8,500. Sandra Parker, the Fair Work Ombudsman, has warned that ignorance wasn’t an excuse for underpaying workers – “If you are new to running a business, it is your responsibility to ensure you understand your workplace obligations before you hire any employees.”

Privacy laws are also important to protect the sensitive information you might gather on employees. There are rules about how employers must save and secure this data.

If you’re looking to buy a franchise you need to be extra careful. The Franchising Code of Conduct regulates the conduct of franchisees and franchisors, but the industry is littered with disputes. Make sure you understand your rights and obligations under the Code.

Your Customers
I’m sure you’re familiar with the 80/20 rule that means 80% of your business comes from 20% of your customers. Your customer database is central to the sale of the business so make sure it is stored in an appropriate CRM system you can access or import into your preferred software package. Can you extract meaningful reports on customer activity like a history of all their transactions, last year’s sales and their contact details. Is there a trend in their level of orders – increasing or decreasing? Are the biggest customers in decline or have they ceased buying from you?

The business vendor could be exiting for a good reason – their key customers or clients are leaving, gone out of business or have merged with another group. For professional service firms, the list of clients is normally attached to the contract of sale.

Employee Retention
In some cases, the existing employees are the glue that binds the business sale together. Do you intend to retain them or replace them? Do they have long term relationships with key customers and will those customers take their business to their new employer?

Have a clear plan and strategy in place before you sign the contract of sale and be prepared to deal with the ‘people’ issues that come with changing business ownership. Communicate with employees to put them at ease and don’t try and rock the boat early in the handover period.

Finally, it’s an exciting time when you buy a business but make sure you do your homework and due diligence. There are so many questions you need to ask and so much research you need to do. Leave no stone unturned particularly if you are planning to invest a lot of money.

The Importance of Local Search for Small Business Owners

Word of mouth referrals used to be the primary source of new business for professional service providers like accountants, solicitors, architects, engineers and doctors. Courtesy of the internet, consumer behaviour has changed and most people now start their search for a product or service provider online.

If you run a business that relies on local customers like a hairdressing salon, barber shop, florist, restaurant, building trades or car repair business you need to focus on local search. Your potential clients and customers now turn to local online search to find nearly everything and unfortunately, if your business doesn’t appear in local search results on Google then you’re invisible to potential new customers.

What is Local Search?
Search engine optimization (SEO) is all about making sure the pages on your website appear on Google (and the other search engines) when someone searches online for a product or service you supply. Local search is when a person searches for a product or service in a specific area such as ‘Barber in Richmond’. These include searches with certain geographic qualifiers, such as suburb, state, postcode and ‘near me’ searches. Google picks up the geographic location of the person performing the search and provides search results for that area.

Local search marketing is now a vitally important part of digital marketing and to illustrate the power of local search marketing let’s look at a simple example. How many people do you think search for an ‘emergency plumber in Oakleigh’ every month? Now this isn’t just a search for any plumber, it’s specifically for an emergency plumber in the Melbourne suburb of Oakleigh. Would you believe just shy of six and a half thousand people per month or close to 78,000 per annum!

Imagine if you could attract just 2% of the 6,494 monthly searches. That means you would get 129 people to contact you and if you could convert 25% of those leads into customers you would attract 32 new customers every month. If the average emergency plumbing job in Oakleigh was $400 that translates to $12,800 of additional revenue for the month or more than $150,000 per annum. If you were ambitious and could get 10% of the 6,494 leads and convert 50% to customers at $400 per job that would add $129,800 per month or over $1.5M per annum in additional revenue.

The Importance of Local Search
In the digital and social age, local SEO is obviously extremely important particularly given Google reports around half of all mobile searches are conducted in order to find information about a local business, such as their business hours or directions to get to their premises. If you are looking to attract local customers for your business you need to focus on local search. Back in 2015 the number of mobile searches officially surpassed the number of desktop searches and mobile users perform their searches on the fly, often because they have a very specific and immediate needs. For example, shoppers frequently check and compare prices online before they decide which shop they will visit. People looking for a place to eat can search for restaurants in their vicinity and look at their reviews and menus.

According to a study done by Forbes, 95% of smartphone users have used their device to perform local searches, out of which 61% phoned the business and 59% visited the business premises. Search Engine Watch found that 70% of mobile users click to call a business directly from Google search results using their mobile phones. According to Google, close to 60% of all internet searches are for local businesses. Of the individuals conducting those local searches, half of them engage with the business they searched for on the same day. To take advantage of this opportunity, your business must be visible online and here are several ways to boost your local search ranking.

1. Your Google ‘My Business’ Profile
Make sure you claim your free Google “My Business” account and update the profile. There is no cost involved and it will help your business appear in Google local searches and Google Maps. It also allows you to obtain highly valuable online reviews to demonstrate to prospective customers and clients that you can solve their problem or need. It’s important to maintain your business profile and make sure it is complete and has a number of glowing 5 star reviews.

2. Your Website
It goes without saying but an outdated website can make your business look out of touch with the market. Your website is the source of your Google search rankings and the content and links can all affect your business’s local search ranking. Take time periodically to ensure that all website links are functional, that you share accurate and valuable information on your site, and that you follow SEO best practices. These are all important factors that impact your business’s local search ranking.

3. Customer Reviews
Now you have your Google My Business profile page up and running you can demonstrate to prospective customers and clients that you can help them using customer reviews. Google Reviews are extremely important but make sure you also have your business listed on other sites that allow customers to leave reviews. The more popular sites include Yelp, Yellow Pages, True Local, Hotfrog and WOMO. Monitor your reviews and respond to them to show you genuinely care. Always respond in a positive and professional manner particularly if you have to deal with negative reviews.

4. Photos
Consumers love photos of your business and they will also show up in Google Maps. They can boost your local search ranking and business profiles with photos are twice as likely to generate interest as profiles without photos.

If your business relies on local traffic and customers these four relatively simple tactics are easy to implement and are proven to improve your business’ local search ranking.

ATO Expects to Visit 1,800 Business in Black Economy Blitz

In an end of financial year compliance blitz, the Australian Taxation Office (ATO) is targeting small businesses in Victoria, Queensland and the Northern Territory and expects to visit up to 1,800 businesses, looking for evidence of black economy activity.

The visits by the ATO are part of the push to reduce the $50 billion black economy tax gap each year, having identified specific geographical risk areas in each state. Over 10,000 small businesses can expect to receive a visit in the 2019-20 financial year.

The focus is on businesses not registered for pay as you go (PAYG) withholding or GST, but community referrals are also being taken into account when selecting businesses suspected of not doing the right thing. Misrepresenting sales, not reporting income from online transactions and poor record keeping are all issues the community have raised with the ATO.

The ATO agents will also be visiting the tax practitioners of small businesses to “better understand the drivers behind agent behaviour and provide education and support to encourage willing participation of their clients in our tax and super systems”

IMPORTANT DISCLAIMER: This document contains general advice only and is prepared without taking into account your particular objectives, financial circumstances and needs. The information provided is not a substitute for legal, tax and financial product advice. Before making any decision based on this information, you should speak to a licensed financial advisor who should assess its relevance to your individual circumstances. While the firm believes the information is accurate, no warranty is given as to its accuracy and persons who rely on this information do so at their own risk. The information provided in this bulletin is not considered financial product advice for the purposes of the Corporations Act 2001.