Ethical Investing: Is It For You?

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Ethical investing is gaining traction, with more and more investors selecting where their money will go based on their personal principles. This style of socially conscious investment holds companies accountable for their negative impacts and is driving many investors to select their investments dependent on their mutual shared values.

Ethical investing can align with moral, social, political, religious and environmental values, and takes them into account prior to making investment decisions. The primary objective of ethical investments is to create a positive impact by investing in companies that take environmental, social governance (ESG) and ethical issues into consideration and make an effort to address or prevent the business from contributing to the issues.

Rather than only receive a financial return on their investment, investors also receive a social conscious return that has an overall impact on them and the planet. 

There are two ways that ethical investing can be done. 

Personal Screening

An investor chooses to invest in industries/sectors/companies whose values align with their own values. As an example, they may look towards companies who are environmentally and socially conscious, who treat their workers fairly, have high governance standards and carry out environmentally sustainable practices.

Negative Screening

This is when an investor avoids industries whose values directly differ from their value – those involved in fossil fuels, gambling, military ammunition and tobacco are automatically crossed out from ethical investors’ choices. Treatment of workers can also determine to an ethical investor whether or not a company is worth investing in.

Ethical investing, while praiseworthy, needs to consider the soundness of their investments as well as their values. To examine whether the investment is sound and has the potential to reap significant returns, a review of a company’s history and finances is necessary. It is also important to confirm the firm’s commitment to its declared ethical practices and measures.

Super Guarantee Rate To Rise On 1 July

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Many years ago Julia Gillard’s government announced increases in the Superannuation Guarantee rate from 9% at the time, up to 12%.  The impact of the Global Financial Crisis has led subsequent governments to continually postpone these increases. So far, Australia has only received two increases, back in 2013 and 2014, when the superannuation rate went up to 9.5% over two years.  It has remained at 9.5% since 2014.

 

Now it is time for the next increase. This will happen on 1 July 2021 when the rate of superannuation that you have to pay for most of your employees will be 10% of their salary or wage instead of the current 9.5%.

 

For most employers that are using payroll software, this change will happen automatically. You should however confirm with your software provider (either directly or through someone like us) that this will happen to ensure that you remain compliant without needing further action.

 

For most employees, this will mean an extra 0.5% added to their current salary plus super.  But where an employee is on a contract where their salary is superannuation inclusive it could be that they will receive a corresponding reduction in their salary to offset the extra superannuation.  Employers and employees will need to have a discussion about this so that everyone knows the situation they will be in for the new financial year.

 

The proposed increase to 12% is still scheduled to happen in 0.5% increments each financial year until the 2025-26 year when the Superannuation Guarantee rate will peak at 12%.  The rates applicable to each financial year are proposed to be:

 

           1 July 2021 to 30 June 2022                 10%

           1 July 2022 to 30 June 2023                 10.5%

           1 July 2023 to 30 June 2024                 11%

           1 July 2024 to 30 June 2025                 11.5%

           1 July 2025 onwards                             12%

 

It is also possible that the government will delay the increases as it has done in the past, but you will be kept informed regarding that information. 

Gig Economy Workers Are Warned That The ATO Is Watching

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The inexpensive and profitable side hustle is under the ATO’s watchful eye when it comes to declaring income this tax season. With many gig economy workers often earning their income as independent contractors, the ATO warns that a failure to report all income from all of the work that they carry out could land them with severe penalties. 

 

The ATO is expected to employ advanced data-matching from platforms that play host to large proportions of Australia’s gig economy to ensure that tax is declared and paid on the income from workers of the gig economy. Those workers may include Uber workers, Doordash, Lyft, Airbnb and many more similar side hustle income earners.

 

There is a silver lining for gig workers this tax time. Many gig economy workers may find themselves more eligible for tax deductions – but are warned against claiming more than they are allowed to.

 

Gig workers are eligible to claim deductions for most costs incurred while earning their income (such as travel or vehicle expenses, financing and marketing). These deductions, however, can only be claimed for the work-related proportion of the claim. You won’t be able to claim the whole amount for the deduction if the claim is made because you picked up an Uber fare on the way back from your Grandma’s for example, it will only be deductible from when you picked up your passenger. 

 

Those who prepare their deductions based on a representative period are also warned to prepare an additional record for this period, as the pandemic has induced numerous tax challenges for many gig economy workers involved in declining and rising fields of the economy. 

 

Workers who fail to declare cash income from the gig economy may incur penalties in the form of interest on their tax bills or potential criminal charges. It is vital that you ensure your tax return is correctly lodged and all income is declared if you are a gig economy worker of any kind. If you need assistance regarding your tax return lodgment process, you can always contact us for advice.

What You Need To Check Before Purchasing Life Insurance

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If something unexpected or untoward happens to you or your loved ones, life insurance is financial protection that you don’t want to skimp on. It’s crucial to find the right insurance to suit your needs, as the cost of life insurance can become a costly amount in your budget.

Different life insurance products are designed to protect you and your loved ones from various events that can occur. Some of the products that may be covered under life insurance (depending on the provider) include:

  • Life Cover pays out a lump sum if you die.
  • Total and permanent disability (TPD) insurance pays a lump sum to help you with rehabilitation and living costs.
  • Trauma insurance covers you if you’re diagnosed with a major illness.
  • Income protection insurance pays some of your income if you can’t work due to illness or injury.

Before making a purchase, you should read the life insurance provider’s product disclosure statement (which legally must be provided to you before purchase). Check the product disclosure statement for:

  • What’s covered and excluded under the policy
  • What information you will need to give to an insurer
  • Information on premiums and how they change over time
  • Waiting periods before you make a claim
  • How to make a claim
  • How to make a complaint about the claims process or decision

As it is a significant financial decision, shop around before making the final decision to ensure that you are getting the product that best suits your needs.

You should also check whether or not you already have life insurance through your super to make sure that you are not paying for your insurance twice. If you’re not sure about whether or not your super provider already covers your life insurance, it’s best to speak with them directly to be certain.

It is also important to know that only licensed financial advisers can give you advice about what life insurance you should hold.

Mental Health In The Workplace

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1 in 6 Australians will experience a mental illness at some point in their lives. Regardless of the severity of the condition, your mental health can be either a positive or a debilitating force on you and affect your ability to be productive.

In many cases, your work and workplace can also become a significant source of stress, severely impacting on pre-existing mental health conditions of yourself and your colleagues. If you are in a high-pressure situation or environment, you might liken it to a pressure cooker; too much heat, and you might have a bit of an explosion on your hands.

Suppose you work while suffering from poor mental health. In that case, you may exhibit signs of presenteeism, poor productivity and a higher likelihood of exiting your profession (leading to higher turnover rates for your employer).

That being said, there is no obligation on your part to inform your employer of your mental health condition if it does not affect you and your performance of your role. Many of us experience low levels of anxiety, stress or depression in our day to day lives and can perform adequately regardless. However, you will need to tell your employer if or when your mental health condition:

  • It affects how you carry out your job requirements – this will allow your employer to identify reasonable adjustments to assist you in performing the role regardless.
  • It affects the health and/or safety of you and your colleagues
  • Is affected or could be affected by the nature of your work – failure to disclose a mental illness may disentitle an employee to workers compensation should they suffer any recurrence, aggravation or exacerbation of a preexisting mental illness.

Though you may be tempted to pull a sick day on a day where your mental health isn’t 100% (and it might be the right solution to your particular mental health situation), you can also discuss with your employer (if comfortable with doing so) ways in which you can adjust your duties within reason and benefit from remaining there.

Individuals frequently identify work as providing several important outcomes, including a sense of purpose, acceptance within society, and development opportunities. It may play a pivotal role in a person’s recovery from mental health difficulties.

Concerned About Someone In Your Workplace? 

If you have noticed that things seem amiss with a colleague or even your employer, it’s essential to check in regularly with them. By having regular, informal conversations with your colleagues and employer, you build a sense of belonging and connectedness within the team. It also makes it easier for you to notice changes in behaviour that might not otherwise be expressed vocally, and having an informal relationship based on regular and casual conversations can make it easier to share “difficult” conversations with you.

The Balance of UX & UE For App Design

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App design combines the user interface (UI) And user experience (UX) into a seamless balance of functionality and style. In terms of designing an app, the term user interface tends to speak more about the overall design in terms of style (such as colours, fonts and general look and feel), whilst the term user experience focuses more on the overall useability and functionality of the app.

The user interface tends to deal more so with the overall style of the app (including colours, fonts and general look and feel) experience focuses on the actual functionality and useability.

Creating an app with both beauty and functionality and marries the UI with the UX ideally is the essence of good app design. It’s almost impossible to build a perfect app without continual cycles of reiteration and revamping, which is why many apps are constantly updating to suit the needs and wants of their clients. As your customers/users grow, you’ll want your app to follow suit.

A good user experience, for example, may differ based on the targeted demographic of the app. But, even then, the target audience may not necessarily engage with the UX as planned, or the UX may engage better with a different audience.

Fundamental principles to consider when designing an app’s UX include:

  • Is it useful? Will your app enable someone to achieve their goal in a logical, cohesive way?
  • Do your customers find it easy to operate the app? How useable is the app? Is it user-friendly?
  • Desirability – will the user base find this interesting? Will it elevate the user’s experience above and beyond the expected norm?
  • Is it easy to navigate and intuitive to do so?
  • Accessibility – are there restrictions to certain users that may affect how they interact with the app, roadblocks to certain features that can’t be circumnavigated, or increased challenges or difficulty in discerning information?
  • How credible your app’s information is to your clients. Is it fact-checked or inconsistent? Can they trust the information that you provide them?
  • Will the user find the value of your app within it? A lack of value will likely incite no return on investment with users, which you don’t want to happen.

A good user experience, paired with a well-designed interface, can aid in the app’s reception by your customer base and promote further communication.

There is software available for you to trial app designs with, but if you don’t necessarily have the skillset or time to play around and create your own, speaking with a designer/developer could be a path you may want to take if you have the money to do so.

High School Students, It’s Time To Get Creative About Tax & Super

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The ATO’s Tax, Super + You competition is a fun and engaging way for Australian high school students to learn about tax and super, unleash their creativity and potentially win some great prizes.

Working as a part of a team or individually, students are invited to write, make or film an entry for their topic:

* Junior (Year 7–9) are asked to highlight the value of tax or super (or both) in the community

* Senior (Year 10–12) must discuss your first job and what you need to know about tax and super.

Shortlisted entries in 2019 included raps, songs, animations, video skits and even a board game. If you’re a high school student interested in competing this year or are the parent of one, this resource is a great way to see how people have gotten involved previously (and that you can draw inspiration from as well).

The competition opened on 24 May, but entries will be accepted until 13 August. The winners will be decided by a judging panel, including guest judge Effie Zahos who is one of Australia’s leading personal finance commentators. The public can also vote for their favourite entry in the People’s Choice Awards.

Tax Office Assistant Commissioner Sally Bektas said she was thrilled to be back on the judging panel.

“Our Tax, Super + You competition has really shown that building financial literacy can be fun and bring out the best in students. I’m so excited to see the entries for 2021,” Sally said.

You can watch Sally explain how to get involved on ATOtv.

Winners of the 2021 Tax, Super + You competition will be announced in September.

Looking for more information about the 2021 Tax, Super + You competition? Visit www.taxsuperandyou.gov.au/competition to find out more details.

Your First Tax Return: What You Need To Know

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Tax return season is quickly approaching for individuals. You may need to begin thinking about the process sooner rather than later to ensure that you have everything ready for your accountant. If you’ve never had to complete a tax return before (and it’s your first time) or are still uncertain about what you need to do, this process can feel a bit like a Mount Everest you need to climb.

Putting it simply, if you are earning or will earn more than $20,542 this year, you will need to lodge a tax return. However, if you haven’t made that amount but your employer has taken tax out of your pay, you should lodge a return anyway to receive some (if not most) of that money back.

How much money you receive back from the tax return will be affected by how much income you have earned. Some debts (such as HECS or HELP) will begin to take money out of your return after reaching a certain income threshold level (currently set at $46,620).

A tax return is where you report all of your income earned over the past financial year. It should include ATO-reported income (which you generally won’t have to worry about as we have access to it automatically) such as salary or non-ATO reported income. This income may be income that has not been sent to the ATO and could include tips, any income you’ve earned while working under an ABN or payments from a family trust. You need to work out all of the income that you have earned and report it to remain compliant with the ATO.

In a tax return, you will also be entitled to make tax deductions on certain items if they apply to your situation. This means that you may receive a greater amount in your tax refund.

You will be entitled to tax deductions on items such as:

  • Uniforms and protective clothing
  • Certain travel expenses between workplaces, e.g. travel between sites (but not travel expenses from home to work)
  • If an apprentice or trainee, if you have had to buy any of your tools or equipment out of pocket, you can claim them as a tax deduction (but cannot do so if your employer purchased them for you)
  • Union fees
  • Any donations that you have made
  • Costs that may have been incurred in the process of educating yourself (e.g. course, seminars, training)

If you want to make sure that you understand precisely what you need to do to lodge your tax return, keep this in mind:

  • If you earned money, you need to report it.
  • If you can’t prove an expense, you can’t claim it.
  • If you want to make extra sure that you’ve got it right, see a tax agent

For assistance during the lodgement of your tax return, you can seek advice from us. We’re here to help ensure you meet your tax obligations by reporting your income correctly for this financial year.

What Can Engaging A Business Adviser Do For You?

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Feel like your business is stuck in a rut? Unable to solve a problem that you know is going to cost you in the long run?  It might not be financially tanking, and it’s highly likely that your revenue stream isn’t down, but if you’re not sure what direction to take, it could also mean that you need a fresh pair of eyes to take a look at particular issues that your business is facing to deal with them.

Business advisers can be engaged across many fields with specially focused advice or strategies to a specific area (such as accountants, business bankers or commercial lawyers) or be a business adviser who is dedicated to considering the overall goals and long-term ramifications of your business’s strategies.

A business adviser can be hired on either a one-time basis (to deal with one-off problems your business is set to face) or on an ongoing basis to provide continued support.

Suppose you’re only looking for a particular solution to a problem. In that case, one-time advice from a business adviser can be an easy and cost-effective solution to solve that particular problem. However, suppose you’re looking for long-term ongoing support that’s backed by years of experience and a perspective that’s looking to preempt these issues. In that case, ongoing advice may be more appropriate for your needs.

Engaging a business adviser can provide your business with fresh ideas based on an objective analysis of your business’s current performance and situation.

As an example, contracting an accountant in a business adviser role means that you are looking for strategic and financial advice like profitability improvement, tax planning and advice regarding business performance.

An adviser who can offer timely and relevant advice to your financial situation can make a huge difference to your business in the long run.

If you’re looking for assistance in plotting out the financial future of your business, you can come and speak with us. We’re well-equipped to assist you in mapping out your business’s plan for the future, so start a conversation with us today to see how we can help.

Ensure Your Business’s Emails Are Compliant With New Email Unsubscribe Legislation

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A customer may want to unsubscribe from your newsletters in their inbox for reasons as simple as quantity (too many emails coming in) or relevance (they do not need the product as much as they once did).

Businesses must provide their customers with a simple-to-use unsubscribe function. According to the recently amended Spam Regulations 2021 Act (updated on 1 April 2021), businesses must have a simple and straightforward process in place so that their subscribers can unsubscribe when they want to without jumping through more hoops in a bid to keep them subscribed.

Businesses are also unable to request personal information or force them to log in and create an account to unsubscribe – the process must be made to be as simple as one mouse-click to unsubscribe, and they’re done.

This law aims to provide greater clarity and transparency between businesses and consumers and occurred due to consumers complaining in large number that unsubscribing has become a complicated process, particularly when it comes to being ‘spammed’.

Breaches of the newly amended regulation can result in severe financial penalties of upwards of 6 figure sums; adhering to these new strict rules promotes best-practice performance and outcomes.

Ensuring Compliance according to the new laws is as simple as the following:

  • Use a one-click process, such as an opt-out link. Do not send a follow-up email, and don’t make customers jump through additional hoops to conclude the process.
  • Provide a global opt-out option, allowing customers the opportunity to be removed from all of your business’s lists at the click of a button.
  • Make the unsubscribe link evident so that people can find it easily. Give it prominence by positioning it at the top (with colour, font or size altered to stand out more) or adding a list-unsubscribe header to ensure your customers aren’t stuck trying to find it again.
  • Sign up to feedback loops (which report back on complaints lodged, allowing you to suppress complaints and keep a clean mailing list)
  • Avoid using read mores as it can hide unsubscribe links
  • If there is a survey re-direct after the customer unsubscribes, make sure the opt-out request is already applied. The process should allow subscribers to update their preferences as a way to opt back in.

Reviewing your email programme to ensure that they adhere to the Spam Regulations 2021 Act is the best approach to ensuring compliance. Employing these tips should also establish greater loyalty with customers, as they will trust that you are providing them with a way back out (and without blocking their exit).