Which documents should my Australian Company Number (ACN) appear on?

Every company in Australia is issued with a unique nine-digit number by Australian Securities and Investment Commission (ASIC) when incorporated. This is an Australian Company Number (ACN) which is used to identify your company.

Your ACN is an important identifier for your company. It is important to know which documents require your ACN to ensure you comply with the Corporations Act. You must include your ACN wherever necessary so that other businesses and the public know who they are dealing with.

Section 153 of the Corporations Act provides that your company’s name and ACN must appear next to each other on the first page on all ‘public documents’ and ‘negotiable instruments’.

These documents include;

• Statement of accounts, including invoices
• Receipts (which is no machine-produces)
• Business letterheads
• Orders for goods and services
• Official company notices
• Contracts and dealing where the company intends to be contractually bound
• Written advertisements making special offer
• All company documents that are required to be lodged with ASIC

If your company has an Australian Business number (ABN) which includes your ACN, you may use the ABN in place of the ACN on documents.

If you need help in meeting the requirements of Section 153 of the Corporations Act please feel free to contact us on 02 9281 4067.

Changes in the way you access government services

Your Key for accessing government online services is changing. AUSKey is being replaced by myGovID and Relationship Authorisation Manager (RAM).

AUSkey is a secure login that identifies you when you use participating government online service on behalf of a business.

AUSkey will be replaced by myGovID and RAM at the end of March 2020. MyGovID is an easy way to prove who you are online and RAM lets you manage who can use online services on behalf of your business.

Your MyGovID and RAM will need to be set up prior to the termination of AUSkey at the end of March 2020.

Setting up your myGovID involves 3 steps.

1. Downloading the myGovID app on your smart phone via the App Store or Google Play;
2. Entering your details as prompted within the myGovID app;
3. Adding your Identity documents such as a driver’s licence or passport. Uploading 2 forms of identity documents will be sufficient enough to allow you to access all participating government online services.

If you are the principal authority of the business, you will need to link you myGovID to your Australian Business Number (ABN) in RAM.

To set up your business in RAM follow the below steps:

1. Go to authorisationmanager.gov.au to log in using your myGov ID credential;
2. Select ‘Link your business’ to be directed to the ATO to find your business or businesses and enter required information as prompted;
3. Once complete you will be redirected to the RAM page where you can then set up important authorisations for others to work on behalf of the business.

Roles and Responsibilities of a Company Director

Company Directors have an obligation to comply with The Corporations Act and ensure the company is operates to its highest standard. A Director is responsible for the company’s business and compliance performance and must attend to all company needs.

Section 181 of the Corporations Act states ‘A director or other officeholder must exercise their powers and discharge their duties in good faith in the best interests of the corporation and for proper purpose’.

Directors are responsible for controlling their company’s business. This includes the responsibilities of the following:

• Keeping up to date with the company’s performance and knowing how any proposed actions will affect the company;
• Keeping accurate financial records and knowing the company’s financial state;
• Getting appropriate legal and accounting advice when needed;
• Taking an active role in directors and board meetings;
• Talking to managers and staff on how the business is performing.

Directors must be honest and careful with dealing with the company and meeting their legal obligations. There are numerous legal responsibilities that directors must comply by within the Corporations Act and other laws. Some of these duties include:

• To act in good faith in the best interests of the company;
• To exercise care and diligence;
• To avoid conflicts between company and personal interests;
• To prevent the company trading while insolvent.

The corporations act also imposes responsibilities on the company. It is the director’s responsibility to ensure the company is compliant. These responsibilities include:

• Having a current registered office;
• Having a principal place of business;
• Disclosing personal details of directors;
• Notifying ASIC of any key changes;
• Paying relevant fees to ASIC;
• Checking annual statements.

If you have any questions on your responsibilities as a director please don’t hesitate to contact the NWA team on 02 9281 4067.

Are you ready for streamlined reporting with Single Touch Payroll??

From 1 July 2018 employers with 20 or more employees will need to update their payroll solution to report through Single Touch Payroll.

 Employers will report payments such as salaries and wages, pay as you go (PAYG) withholding and super information to the ATO directly from their payroll solution at the same time they pay their employees.

ATO’s comments on the roll out is “We will continue to provide information to help you understand what you need to do to get ready for Single Touch Payroll. Right now we’re working closely with payroll software and service providers to help them get ready to offer Single Touch Payroll reporting for their employer clients. Some providers have told us they’re waiting for final versions of ATO technical documents before they can build updates to their products. We’re currently finalising these, and will publish them on the Software Developers website as soon as possible. We know some providers will not have their products ready by 1 July 2018. They will need to use our guidelines to provide evidence so we can consider deferrals for their employer clients. We will publish separate deferral guidelines for employers shortly.”

Single Touch Payroll will expand to include employers with 19 or less employees from 1 July 2019 subject to the legislation being passed in Parliament.

Aged Care

With the recent announcement on 9 October of The Royal Commission into Aged Care Quality and Safety, the possibility of entering aged care has unsettled some Australians.

Whether it be you, a parent or loved one entering aged care it can be a daunting and nerve-racking process. Ensuring you receive the correct advice and information is vital in safeguarding your future care, security and happiness. Planning ahead is always recommended however it is never too late to start. Today is better than ever to begin preparing your finances for the future and Networth Accounting can help make this an uncomplicated process for you.

Networth Accounting can offer detailed advice tailored to you and your circumstances by:

• Assessing your financial position;

• Providing an understanding of the options available to fund the daily care fees, any means tested fees and how different funding scenarios will affect cash flow;

• Structuring the costs so the aged care is affordable in the short and long term;

• Minimising any future aged care means tested fees;

• Analysing the cost vs. benefit of selling your residential home;

• Understanding the impact on your age pension and Centrelink/DVA benefits;

• Integrating aged care into you estate planning.

ATO Targets Trusts

The Australian Taxation Office commissioned the Royal Melbourne Institute of Technology to research tax issues involving trusts. They estimated that by 2022 there will be more than one million trusts operating in Australia. This growing number of trusts has created the opportunity to exploit a mismatch between income for tax law purposes and income under trust law. RMIT argues that “the interactions between the trust and tax laws are being manipulated, which could contribute to the sheltering of significant amounts of tax. Inconsistencies between trust and tax income definitions can be used to shelter income from higher rates of tax.” The report has found that over the past six years the Tax Avoidance Taskforce had raised more than $1.2 billion in liabilities and collected more than $467 million in relation to trusts. The ATO says recent investigations reveal the ease with which wealthy taxpayers can utilise trusts in private groups and reduce their tax liabilities. The RMIT report says: “Anti-avoidance provisions may not be sufficient to deal with common cases of income tax shuffles, and such arrangements can be easily enacted by taxpayers.”

Shadow Treasurer Chris Bowen is hoping Labor’s new proposed trust tax would eliminate these “tax loopholes” which are costing the budget ““billions of dollars through tax, avoiding income tax shuffles including income splitting via beneficiaries.” The new reforms would introduce a minimum 30% tax rate for discretionary trust distributions to adults and could also include a withholding tax regime similar to that in place for salary and wage earners or taxing the trust or trustee as an entity and maintaining the current flow through features of trusts.

Government continues to support small businesses

On January 29 2019 the Government announced its continuing support to small businesses by increasing the instant asset write-off threshold to $25,000 from $20,000 and extending the initiative to 30 June 2020. This will take effect immediately.

Senator Michaelia Cash – Minister for Small and Family Business, Skill and Vocational Education said “the increase and extension will further improve cash flow for hard working Australian small business owners by bringing forward tax deductions, providing a boost to small business activity and encouraging more small businesses to reinvest in their operations, and replace or upgrade their assets.” The instant asset write-off was initially introduced in the 2015-2016 budget and more that 300,000 small businesses took advantage of the opportunity.

Already in support of the small business owners and the seven million people they employ the government has introduced:

• Tax relief for incorporated small and medium businesses, with turnovers of less than $50 million per annum. These companies will move to a 25 per cent tax rate by 2021-22

• An increase to the rate of the tax discount for unincorporated small businesses with turnover below $5 million to 16 per cent by 2021-22; 

• An increase to the small business entity turnover threshold from $2 million to $10 million per annum, which has extended access to a range of tax concessions.

Government crackdown on Uber, Airbnb and others

The government are making steps to address the underreporting in the sharing-economy sector. Under new proposed legislation, sharing-economy platforms including Uber, Airbnb, Airtassker, Deliveroo, Uber Eats, CarNextDoor and others may be required to share data about their users to the ATO. The model put forward by Treasury was in response to a Black Economy Taskforce recommendation and would mean sharing-economy platforms would share data with the ATO which would then be pre-filled into the relevant individual’s tax return – similar to the current model for employer’s reporting wages and bank reporting interest received.

In 2017 Australia’s sharing economy was valued at $15.1 billion and an estimated 10.8 Australians were assumed to have earned extra money in the industry between July and December 2017. Assistant commissioner Kath Anderson said that “No matter how little you earn you must declare the income and cannot avoid tax by calling it a hobby.” Tony Greco, general manager of technical policy at the Institute of Public Accountants and a member of the Black Economy Taskforce says “what we’re trying to do here is blow away myths you don’t have to pay tax and force compliance.” He says it is hard to put a number on how much tax is being missed by believes it is “definitely a big number.”

Assistant Minister for Treasury and Finance, Senator Zed Seselja, said “More and more Australians are making use of the greater choice provided by platforms like Uber and Airbnb, leading to significant growth in the sharing economy …. But as it grows, there is a risk that some individuals are not reporting their full income and avoiding the right amount of tax. The Government is working with the sector on the best way to fix this issue.”

Car sharing platform CarNextDoor have welcomed the proposed changed stating “We think it’s great that the ATO is planning on working with the sharing platforms to make tax time easier for sharers. We give members a summary each year to help them do their tax, but it could make it even easier for people if the ATO were able to pre-fill the earnings information.” Spacer.com.au and Sharing Hub chief executive Mike Rosenbaum also welcomed the changes. In a statement he said “Our member companies regularly advise users to seek advice from tax professionals and to declare their income.”

Private Health Insurance Changes

The government has introduced private health insurance reforms that will be effective from 1 April 2019. The changes have been designed to simplify health cover by introducing a tiered system that will overhaul the current cover. They apply to current arrangements, as well as new policies.

The reforms mandate what will be in each of the four categories – basic, bronze, silver and gold. This means that all products in the same product tier will cover the same services and treatments as all other policies in that tier. Jesse Petterd from iSelect says “this is to make it easier for you to compare hospital products. You’ll know exactly what’s included in your product so there are no nasty surprises.” The Grattan Institute’s health program director Stephen Duckett also is happy with the change, “This will benefit consumers as in the past consumers bought insurance and weren’t receiving cover for what they thought they were getting which led to a lot of complaints. The tiers will clarify the cover and make it clearer so there will be fewer complaints and consumers will be able to compare private health insurance cover easily.” Insurers are able to offer additional “plus” coverage in the basic, bronze and silver tiers, creating an almost infinite variety of combinations in potential policies.

Although the changes are seen as a positive change for consumers, the increasingly soaring costs of insurance has caused many Australians to opt out. According to the latest private health insurance statistics by the Australian Prudential Regulation Authority (APRA), only 44.6% of people are covered – the lowest it has been in 11 years. APRA reported that 12,370 left their hospital treatment membership in the December quarter. The largest decrease was among people aged between 25 and 29. To help encourage those in that age bracket and to help lower policy prices, health insurers are offering a 2% discount on hospital cover for each year that a person is under 30 when they first purchase the insurance. The discounted policy can reach a maximum of 10% off annual premiums.

Premiums on average are also suspected to rise 3.25%. In the last five years, premiums have increased by 25%. Private Healthcare Australia chief executive Rachel David says “The only reason premiums increase is because input costs are rising and health funds are paying for more healthcare as our population ages.”

Insurers will now be able to offer travel and accommodations benefits as part of hospital policies which will benefits people living in rural or regional areas that are required to travel to the city for treatment.

Which documents should my Australian Company Number (ACN) appear on?

Every company in Australia is issued with a unique nine-digit number by Australian Securities and Investment Commission (ASIC) when incorporated. This is an Australian Company Number (ACN) which is used to identify your company.

Your ACN is an important identifier for your company. It is important to know which documents require your ACN to ensure you comply with the Corporations Act. You must include your ACN wherever necessary so that other businesses and the public know who they are dealing with.

Section 153 of the Corporations Act provides that your company’s name and ACN must appear next to each other on the first page on all ‘public documents’ and ‘negotiable instruments’.

These documents include;

• Statement of accounts, including invoices

• Receipts (which is no machine-produces)

• Business letterheads

• Orders for goods and services

• Official company notices

• Contracts and dealing where the company intends to be contractually bound

• Written advertisements making special offer

• All company documents that are required to be lodged with ASIC

If your company has an Australian Business Number (ABN) which includes your ACN, you may use the ABN in place of the ACN on documents.

If you need help in meeting the requirements of Section 153 of the Corporations Act please feel free to contact us on 02 9281 4067.