King & Whittle September 2023 Newsletter

September is upon us, and spring is in the air. It’s time to shake off the winter cobwebs, get out into the garden or the great outdoors. Meanwhile, AFL and NRL fans will be hoping the sun shines on their team this finals season.

After endless gloomy forecasts, there was a glimmer of hope last month that the cost of living might be easing. Inflation fell in July to 4.9% from 5.4% in June, despite predictions by economists of a rise.

While housing prices are still rising, up by 7.3 per cent for the 12 months, and total dwelling approvals recorded a sharp decline in July, the next Reserve Bank Governor Michele Bullock believes prices in some areas will fall by five per cent or more by 2050 because of climate change.

Consumer confidence is continuing to slowly improve. The ANZ-Roy Morgan Consumer Confidence has now increased for a record 26 weeks in a row. Unemployment was up slightly by 0.2% to 3.7%, meaning an extra 36,000 people are now looking for jobs.

China looms large as a threat to Australia’s economy. As our largest two-way trading partner, China’s worsening economic conditions are concerning for Australian investors although stronger demand from steel producers led to a small increase in iron ore prices. The ASX200 ended the month down, gains in financial stocks were offset by losses in mining and energy shares because of their dependency on China. The Australian dollar rebounded slightly based on improved confidence in the US.

King & Whittle would like to remind all clients to be aware of scams and fraud especially at this time of year.
Scammers use fake emails, phone calls and or Text messaging. They pretend to be from your Bank, ATO, MYGOV, Government Departments and legitimate businesses and institutions.
Unfortunately there are some really authentic looking emails and texts circulating at the moment from the ATO and MYGOV, requesting you click on links to access refunds or asking for further information.
Protect yourself - Your Bank will NEVER send an email or text asking for any account or financial details including any updates of addresses or log in details.
Government and other legitimate organisations will NEVER ask you to update details by clicking a link.
If in doubt contact the organisation directly or speak to us at King & Whittle for assistance.

On a much lighter note - King & Whittle proudly supports Brainwave Australia - so they can continue their efforts supporting over 1,300 families across Australia caring for a child with a brain injury or illness and working in supporting the families so the can adapt and thrive. We have much pride in our support of community events. It was a wonderful gala evening and raised some much needed awareness and funds for such an important holistic provider of services and resources for families.

Market movement & review video - September 2023

Stay up to date with what's happened in Australian markets over the past month.

After endless gloomy forecasts, there was a glimmer of hope last month that the cost of living might be easing.

Inflation continued to fall, despite predictions by economists of a rise.

The ASX200 ended the month down with gains in financial stocks being offset by losses in mining and energy shares because of their dependency on China.

View Video

Tax Alert September 2023

Lodgement amnesty and new landlord data matching program

While the government is boosting the tax deductions available for small business spending on staff training, other taxpayers such as landlords are facing closer scrutiny from the Australian Taxation Office. Here are some of the latest developments in the world of tax.

Amnesty for small business late lodgements

If your small business is not up-to-date with its tax lodgements, it could be a smart idea to take advantage of the government’s current Lodgement Penalty Amnesty.

The program is designed to encourage small businesses to re-engage with the tax system and fix any outstanding income tax, FBT returns and business activity statements due between 1 December 2019 and 28 February 2022.

Taxpayers have until 31 December 2023 to lodge their overdue forms without lodgement penalties being applied (general interest charges still apply).

Businesses with an annual turnover under $10 million when the original lodgement was due are eligible for the amnesty.

Insurance focus for latest data-matching

As part of its ongoing data-matching program, the ATO has announced it will require both income protection (IP) and landlord insurers to provide information on their customers for the period 2021-22 to 2025-26.

Insurers must provide detailed information on the policy and policy owner to help the ATO “identify and educate” taxpayers failing to meet their lodgement obligations.

The landlord data is expected to net records relating to around 1.6 million landlords, while the IP data will cover 800,000 individuals.

New skills and training boost starts

Small business owners keen to upskill their employees can now take advantage of the government’s new skills and training boost if they spend money on these activities before 30 June 2024.

If you have an aggregated annual turnover of less than $50 million, you can claim a bonus deduction equal to 20 per cent of qualifying expenditure on external training courses provided by eligible registered training providers.

You can also claim an additional 20 per cent bonus for expenditure on digitising your business operations and relevant assets such as portable payment devices, cyber security systems and subscriptions for cloud-based services.

Tax penalties increase again

The unit amount used by the ATO to calculate penalties it imposes has increased again, rising to $313 from 1 July 2023.

The government had already increased the penalty amount for the 1 January to 30 June 2023 period, making this the second increase this calendar year.

If the ATO decides to impose a penalty, the unit amount is used to calculate your actual fine. Activities such as giving false or misleading statements, or behaving with intentional disregard for example, result in a 60 penalty unit fine.

GST food and beverage list updated

If you supply or sell food and beverage products, it’s time to recheck the ATO’s detailed food list showing the GST status of major food and beverage product lines, as the tax regulator recently made around 30 updates to the list.

Although some changes corrected existing entries, new food and beverage lines have been added and some current entries deleted.

The ATO encourages businesses to review this list regularly to ensure they are meeting their GST obligations accurately.

Reminders about tax offsetting rules

The ATO is currently writing to businesses with a debt on hold of more than $10 to explain its tax offsetting process.

Under the offsetting rules, any tax refund and credit entitlements are automatically used to pay off an existing tax debt.

If you have an outstanding tax debt, you can choose to pay all or part of it at any time, including through a payment plan.

New-look ATO Charter

Taxpayers could find their interactions with the ATO improving following the release of its revised Taxpayers’ Charter, now called the ATO Charter.

The Charter explains what you can expect when interacting with the ATO, the regulator’s commitments to taxpayers, and the steps you can take if you’re not satisfied.

AI - a smart move for small business

There has been a lot of media coverage about recent breakthroughs in artificial intelligence (AI) and new applications suitable for small business, but how exactly can a small business utilise AI and reap the benefits?

Artificial intelligence has come a long way from being the realm of science fiction to forming an integral part of our daily lives. The term ‘artificial intelligence’ was coined back in the mid 1950’s, when a number of academics and professionals in the field of technology first proposed a study of the term.ⁱ In that same year, the first AI program was developed.

Once considered to be exclusive to big business with deep pockets, the technologies that use AI are now cheaper and more accessible and being widely embraced by small businesses. You may already be using AI without realising it.

Not just for big business

A recent study from Deloitte and Stanford University found that around a quarter of small businesses are currently using AI in some form or another including chatbots, predictive analytics and marketing automation.ⁱⁱ

While that adoption may seem a little slower in the context of large enterprises’ use of AI which sits at around 40%, many small businesses have the edge on the bigger players when it comes to embracing innovative technologies.

The benefits

The beauty of AI is its ability to do tasks that human beings either find tedious or take a long time doing. Used wisely AI can save time, reduce costs, and improve customer service. Some areas of the business where AI can play a powerful role include:

Administration: AI can help small businesses reduce the time spent on administration tasks, eliminate duplication, and minimise human error, ultimately freeing up resources for other activities. AI can be used for time and task management, bookkeeping activities, scheduling meetings, managing emails, and generating reports. Another area where AI is making an impact is in data analysis, which can be time-consuming, especially when dealing with large data sets. AI-powered analytics tools can make it easier for small businesses to extract insights from data and make more informed decisions.

Sales and client support: One of the most common applications of AI is the use of chatbots to answer frequently asked questions. These can include questions on available products, delivery dates, the status of orders and more, freeing up your resources to focus on more complex enquiries. AI also has the potential to assist with lead generation, marketing automation, client engagement and sales forecasting.

Supply chain enhancements: AI’s capacity for data crunching makes it ideal for identifying supply chain trends and making predictions to assist in the optimisation of a supply chain.

How to incorporate AI into your small business

These are just a few examples of some of the most common ways AI is being utilised by small businesses. For your business to get the most out of AI, the first step is to identify your specific business needs and then choose the applications that can help you meet those needs. Take advantage of the wealth of online resources available to familiarise yourself with the potential AI offerings.

It’s important to also recognise the potential risks of using AI. Some review of the information generated by AI is needed as mistakes can occur. Also consider security risks and take the appropriate steps to keep your customers’ details and information about your business secure.

When it comes to implementing AI within your business consider the business case for its deployment (it’s easy to get carried away when it comes to new technology) and how it will be managed, what resources will be required including internal processes that need to be refined before you get going.

The real beauty of AI is in freeing up the humans in the business to do what they do best, so think about how you can utilise AI to make the best of the people in your firm, reducing onerous admin tasks and freeing up resources for the mission-critical stuff. 

i http://www-formal.stanford.edu/jmc/history/dartmouth/dartmouth.html
ii https://aiindex.stanford.edu/report/

Productivity - the key to thriving when times are tough

Productive businesses are like cacti – able to survive and grow in tough conditions using minimal resources. So, let’s look at how your business can emulate those prickly plants and thrive in what is shaping up to be a challenging environment for businesses.

With high inflation, rising rates and even talk of a possible recession on the cards for Australia, it can be a tricky time to be running a small business.

It can be beneficial during tough times, or even in anticipation of challenging times on the horizon, to focus on increasing productivity - doing more with less resources. Some species of cacti can do without water for up to two years - they are masters at doing a lot with a little, but as a business it can be hard to ensure you are running a lean machine without losing output, sacrificing quality or profits.

Here are a few ways you can improve your business’s productivity and run a lean, but productive, machine:

Maintain and keep the focus on growth

Just like the cactus that manages to keep growing with minimal resources, your business should also focus on growth. It’s important that the processes you are putting in place to enhance productivity and remove unnecessary costs do not constrain growth.

Make sure you set goals for achievable growth milestones and review them regularly against progress.

Empower and motivate employees to improve their output

One of the best ways to improve productivity is to involve the team. Share your goals and aims and get everyone in on the journey with you. Equally, working together to set achievable goals and targets for individuals will improve buy-in as well as productivity, as people tend to work more efficiently when they’re involved in the decision-making process and focused on achieving clear objectives within agreed timeframes.

Innovate to make the most of existing resources

Innovating does not mean you have to reinvent the wheel – there are a lot of existing systems and applications out there that can help you to be more productive as a business. Seek out technology solutions that remove mundane, repetitive tasks and support collaboration and automation. Review your processes and try to streamline how things are done and promote efficiencies.

Orient to the provision of customer value

Productive businesses tend to be focused on business processes that deliver customer value. Orienting and pivoting to the provision of customer value will help you uncover inefficiencies like outdated procedures and unnecessary steps.

The process works best when employees at every level are encouraged to suggest changes to improve the way things are done. If an employee can identify a shortcut that makes their work faster without sacrificing results, support them to implement it.

Outsource certain tasks

Using third party providers can enhance productivity as you can pay for services as you need them and avoid making major investments in infrastructure, software, or personnel.

Another advantage of outsourcing is you’re able to increase the efficiency of your business by getting expert help without having to hire experts full-time.

Implement lean financial practices

Running a lean business means reducing or removing unnecessary costs so it’s a clever idea to review your cash flow to see whether you can reduce your costs anywhere in the business. Review your suppliers and ensure you are getting the best deals from utilities providers.

Part of your lean implementation can also be to cut down on liabilities by not keeping excessive amounts of stock. You can do this by implementing good inventory management practices and forecasting to match supply and demand.

While for many businesses it’s important to project an image of success with big fancy offices, lavish workspaces can incur excessive costs that that eat into profits. With working from home becoming more common, it might be worth reviewing your office space requirements while looking for ways to reduce ongoing costs.

Operating your business in the most productive manner and with minimal outlay and overhead costs isn’t about penny-pinching – it’s a mindset shift that will enable your business to be sustainable in the long term, not just responding to adverse economic conditions.

Think you’ll never fall for a scam? Think again!

It’s no secret that scammers are getting more sophisticated. As this is an ever-evolving space, scammers are constantly developing new ways to part you with your hard-earned cash - and they cast their net wide. 

While it’s easy to think “it will never happen to me”, people who never expected to be victims of scams are actually among the most vulnerable to being taken advantage of. While the stereotype is that older people are the most likely to be scammed, Gen Xers, Millennials, and Gen Zs are actually more likely than seniors to report losing money to fraud.ⁱ

The reality is scammers don’t discriminate and people of any age or demographic who believe they are too smart to be tricked may be less careful and more likely to suffer a loss.ⁱⁱ  And the losses are considerable. Australians were expected to lose around $4 billion to scams in 2022.ⁱⁱⁱ

Here are some scams to be aware of that are doing the rounds:

Texts or calls from a trusted brand

One of the most common scams at the moment is where a criminal pretends to be a trusted brand or government agency getting in touch to collect personal information or demand a payment. You may be contacted by email, social media, phone call, or text message and they will often direct you to an official looking website.

It’s easy to be taken in via text message as it can appear to be from a legitimate sender as the scammer uses ‘alpha tag’ technology to register a mobile number with a word or acronym – the ATO (Australian Tax Office) for example.

Beware of clicking on links and if you get a text message or call that doesn’t seem right, you can find the official contact details on the company’s website and call them to verify the scam.

Buying and selling

Scammers prey on consumers and businesses that are buying or selling products and services.

As a buyer you may pay the money and never receive the goods you have paid for. To protect yourself be on the alert for scams - if the advertised price looks too good to be true, it probably is. For rental properties or holiday accommodation, only use reputable online booking agents.

As a seller, you may be tricked into believing the buyer has paid in full or even paid over your advertised amount, including sending falsified payment receipts to support their claim. The buyer may then request a refund for overpayment. To protect yourself, don’t accept a mobile payment from someone you don’t know and never accept or refund a deposit for more than the selling price.

False billing scams request you or your business to pay invoices for services or supplies you did not order so always double check and query demands for payment if in doubt.

Tugging on the heart strings

Dating and romance scammers often make their approaches on social media or dating sites and will go to great lengths to gain trust. Protect yourself by never giving money or goods of value to someone you have never met in real life.

Scammers also appeal to our emotions by impersonating genuine charities to ask for donations after natural disasters or major events. To avoid being scammed approach charity organisations directly and check an organisation’s credentials on the Australian Charities and Not-for-Profits Commission (ACNC) website to see if they are a genuine charity.^iv

Attempts to gain personal information

These include when a scammer gains access to your personal information by using technology.

Consider using multifactor authentication, a security measure that requires one or more proofs of identity to grant you access to any applications you use regularly and change passwords regularly, making sure to choose secure passwords.

Taking a little extra care to be aware and alert to the possibility of being scammed could save you a lot of heartache. Of course, we are here to help if you think something may be a little suspect.

i https://consumer.ftc.gov/consumer-alerts/2022/11/fraud-reports-and-losses-not-just-grandparents-story
ii https://www.finrafoundation.org/sites/finrafoundation/files/exposed-to-scams-what-separates-victims-from-non-victims_0_0.pdf
iii https://www.news.com.au/finance/money/costs/australia-to-cop-4-billion-scam-loss-in-2022-according-to-scamwatch/news-story/890e469b4b05a6c950e3cb6b4f83f56c
iv https://www.acnc.gov.au/charity/charities