Important reminder for business owners on tax measure and Director ID deadlines, support for flood and storm victims and commercial loans interest rates updates
. While there are many issues for business operators to contend with at the moment – the tight jobs situation, rising prices, continued supply chain disruptions and floods and storms, there are also deadlines for important business matters to be noted and adhered to, some with a sense of urgency.
Urgent Action Required - Director ID
If you are a director of a company and you haven’t yet acquired your Director ID number, then take note. The deadline to have this unique number as per the ASIC regulation is 30 November 2022. The ruling was announced a few years ago but it appears that many directors have been unaware of the requirement.
The requirement is that anyone who is a company director must get their own individual number as a form of verifying identity with federal government bodies. It is a measure brought in to address fraudulent director IDs and other issues.
Even if a person is a director of many companies, only the one number is required. The procedure is quite straightforward as we detailed in a recent blog in our News section. You’ll need the MyGovID app set up first – note that this is different from having an account or login with MyGov. Confusing but it will become clear as you work through the steps.
ASIC is directing all to the Australian Business Registry Services
website to complete the form and receive their unique number. In addition to the MyGovID, you’ll also need to enter details from certain documents such as ATO personal income assessment, super fund details and similar. Once you have all the details gathered, the process should take only a few minutes.
Warning – failure to do this can attract serious financial penalties from ASIC and possibly deregistration of the company. There are some exclusions so read the details. This process must be completed by the individual.
End to Attractive Tax Measure Ahead
It was major news through the latter part of 2020 and 2021 but appears to have faded from the finance headlines of late. We’re talking about IAWO or the updated version – temporary full expensing
. As a memory jogger - this was introduced by then Treasurer Josh Frydenberg as part of the Federal Government’s COVID stimulus package and was tweaked a number of times during 2020.
The tax measure allows eligible businesses to write-off the full value of the purchase of eligible assets in the same year those assets were acquired. This is a huge advantage as usually only a small percentage of that value would be depreciated in a financial year and over several years. By being able to write-off potentially a very large amount, the taxable income for the business is reduced, tax payable is then reduced and the opportunity to also presents to consider using Loss Carry Back.
The reason we are drawing this to everyone’s attention now is twofold – the measure expires on June 30 next year and the delayed delivery times for some motor vehicles and machinery. The assets need to be operating in the business by that deadline. With some wait times for vehicles etc around 6 months, any delay in ordering that equipment may result in missing out on being able to take advantage of temporary full expensing.
Key to being able to use this measure is the asset must be ‘depreciable’. It must be on the business’ balance sheet and that comes down to choice of Motor Vehicle or Equipment Finance
product selection. Chattel Mortgage
is considered most suitable for this purpose.
An additional attraction of Chattel Mortgage is that it typically, and across the board, features a lower interest rate than other finance products such as Leasing and Rent-to-Buy. In the current rising rates scenario, that is also something to note.
The RBA has clearly indicated that the Board expects further increases in the cash rate in the coming period. The next rise is expected on 6 December. Typically such increases will have a flow-on effect through the lending markets. Though lenders make their own decisions and some may hold off to maintain a competitive edge. We are ideally placed to assist businesses source the cheapest rates across our commercial loans and asset financing portfolio. So speak with us for quotes on your financing needs to assist with budgeting and planning.
Information for Flood and Storm Victim
As flood devastate a large swathe of central west NSW at the moment, adding to the already impacted areas of Victoria and Tasmania, ferocious storms have caused serious damage in South Australia. Many businesses will be impacted and require assistance.
- Immediate cash assistance may be available, depending on meeting eligibility, from state and federal governments.
- If equipment is written-off, contact the insurer and lodge the claim.
- If damaged equipment and vehicles are under finance, also contact the relevant lender and discuss how to proceed re repayments etc.
- To replace damaged equipment, there’s no need to delay until after the insurance claim is paid out. We can assist with new finance for the acquisition of the new goods.
There is a lot to contend with at the moment and the busy Black Friday sales and end-of-year business periods are on the doorstep. But time should still be taken to attend to important business requirements to ensure penalties are avoided and major tax benefits are optimised.
To discuss quotes and options for commercial loans, contact Business Finance Australia on 1300 000 033
DISCLAIMER: THE SPECIFIC PURPOSE IN PROVIDING THIS ARTICLE IS FOR GENERAL INFORMATION ONLY. IT IS NOT INTENDED AS THE SOLE SOURCE OF FINANCIAL INFORMATION ON WHICH TO MAKE BUSINESS FINANCE DECISIONS. BUSINESS OWNERS WHO REQUIRE ADVICE OR GUIDANCE AROUND THEIR SPECIFIC FINANCIAL CIRCUMSTANCES ARE RECOMMENDED TO CONSULT WITH AN ADVISOR OR ACCOUNTANT. NO LIABILITY IS ACCEPTED IN REGARD TO ANY MISREPRESENTATIONS OR ANY ERRORS RE ANY DATA, SPECIFICS, POLICIES AND OTHER INFORMATION AS SOURCED FROM OTHERS.