Financial transparency important

Financial transparency is important to investors

When pitching a business to investors, getting the right number - whether it's net profit, sales, margins - is key.

financial transparencyBut the kind of data you present depends a lot on the stage of your startup and the kind of investor you're looking at.

As an investor himself, Sam had this advice to give: "If we're talking about seed [funding], they'll be investing more in the team, personality, vision, and market-depending on the stage."

He goes on to advise small and medium enterprise that "annual finances are useless in the beginning because business is changing so frequently. Investors will want to see on a month-on-month basis what's happening."

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Overseas pensioner status

'Proof of life' certificates required for overseas pensioners

One of the stranger pieces of legislation to be introduced into Parliament last month is an attempt to ensure that overseas welfare recipients over the age of 80 are in fact, alive.

pensionerThere are approximately 96,000 people permanently living overseas who currently receive an Australian social security payment. The majority of these receive the age pension. At present, the system relies on a relative to advise Services Australia that the recipient of the payment has passed away for payments to cease. 

Government data suggests that, "there is a disparity in the death rate of pensioners aged 80 years and above overseas, compared to pensioners in Australia." So, either living overseas is good for your health and people are living longer than Australian norms suggest, or deaths are simply not being reported. The Government is betting on the latter.

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Tax and compensation from financial institutions

Tax treatment of compensation from financial institutions

By 30 June 2019, five major financial institutions paid $119.7 million in compensation for poor financial advice to 6,318 customers. 

serviceThe question is, how are these payments treated for tax purposes?

The tax treatment varies according to why the compensation was paid and to whom the payment was made. Compensation payments are made for a number of reasons including fee for no service, deficient advice or overcharging for insurance premiums for death or disability insurance cover. Each one has different tax consequences.

In some cases, the compensation will be assessable income and in others will impact the cost base of any underlying investment. If an investment has already been sold, the compensation may trigger a capital gains tax liability and in some cases it will be necessary to amend prior year tax returns.

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FBT and ridesharing

FBT and Uber style ride sharing

When an employee uses a taxi service for travel to or from work or if the employee is sick, it is generally exempt from Fringe Benefits Tax (FBT) under the FBT taxi travel exemption. 

Ride sharing and FBTThe question is, what about Uber and other ride sharing services, do they also qualify for the exemption? If Uber is considered to be a taxi for GST purposes, that is, all drivers need to be registered for GST and charge GST as they are considered to be a taxi service, does the FBT exemption extend to employees using Uber for travel?

The ATO has confirmed its view that travel in ride sharing services is not exempt from FBT under this specific exemption as they do not meet the definition of a taxi service under the FBT laws (even though they do under GST law).

However, this does not mean that FBT will necessarily apply to travel undertaken by employees using a ride sharing service.  Read more…

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