myGovID is an app that allows you to securely access ATO online services. It proves to the ATO that the person attempting to access a service/info is who they say they are – super important in this day and age of constant cyber attacks etc.
Setting up the app for the first time requires quite a few steps and can be slightly complicated. Sadly, if you buy a new mobile or tablet, or wish to use your myGovID on multiple devices, you will need to set up your myGovID again and re-verify your identity. You cannot just install the app on your new device and expect it to work. Below are the steps you need to follow to solve this issue.
How to set up myGovID on a new device
Firstly, you need to select “reset the app” within your myGovID app’s settings. Then, select “I am an existing user”. Then, follow the prompts to:
enter your latest myGovID email address – this is linked to the identity documents you previously verified. Setting up with a different email address will lock your myGovID on all devices and you’ll be unable to use it.
re-verify your identity – ATO recommends using the identity documents you previously used.
For security purposes, you’ll receive an email letting you know your myGovID is active on another device. You can view your myGovID setup history in your app.
Each time you set up your myGovID, its identity strength is unique to that device. This means if you set up your myGovID on multiple devices, the identity strength will only reflect what identity documents you’ve verified on that device. For example, you could have one device with a Strong identity strength and another device with a Standard identity strength. To access a service with your myGovID, that device needs to meet the minimum identity strength required of that service. Where you’re setting up on a new device, you need to take additional steps if you transferred your app.
eInvoicing is a new way to securely send and receive invoices between businesses via a secure global public network known as Peppol. The Australian Peppol Authority is the ATO. eInvoicing, despite being a popular and efficient method of transacting, is not mandatory.
A buyer and a supplier must both be registered with Peppol in order to use eInvoicing. This is done via your accounting software (if it offers eInvoicing functionality). Larger businesses may need to use alternative options in order to connect to the network.
eInvoicing is secure and time-efficient. It removes the need for using email or snail mail as methods of sending invoices and therefore, is more secure. It also removes the need to key in invoice data when an invoice is received and/or scan and attach PDF copies of the invoice. Data entry error is also heavily reduced when using eInvoicing due to little or no keying in of details required. When an invoice is received via eInvoicing, you would simply go through your normal approval process and then prepare to pay the invoice when ready. The below image is from the Institute of Certified Bookkeepers and explains the difference between the current invoicing process you probably use now, and the eInvoicing process which is much simpler.
How do I know if my supplier or customer is eInvoicing-enabled?
When you or your supplier becomes eInvoice-enabled, you will be listed in the Peppol Directory. You can search the directory to see if your contact can receive or send eInvoices.
How do I know if my software product is eInvoicing-ready?
All software products that offer eInvoicing functionality are listed in this register on the ATO website. Some products are accounting packages and some offer online web portals for eInvoicing.
Below are 3 of the most popular online accounting packages which are eInvoicing-ready now. Each software link below will assist you to get started using eInvoicing and explain the process specific to that software. It’s important to note that MYOB and Xero do not charge anything extra to use eInvoicing which is excellent! Reckon has monthly packages including eInvoicing.
Not ready to commit to eInvoicing? Need more information?
eInvoicing is relatively new, although large companies and government departments have been using it for quite some time now. Small businesses are slowly engaging in this new method, with the uptake increasing continually. It is understandable that you may not be ready to make the jump to eInvoicing or even require it at this stage in your business development. If you would like to do some further research before moving forward, here are some useful links:
So the message is don’t hide under a rock. The debt won’t disappear and the ATO will chase you to recover it. Instead, contact the ATO immediately and work with them to resolve the issues. They can’t help you if you don’t communicate with them. Your tax or BAS agent can do this on your behalf if you would prefer not to call the ATO yourself.
It is important to note that from July 2022, any tax refunds or credits will be automatically applied to any tax/super debt you may have, meaning that you may not receive any refund or a smaller refund than expected.
The ATO has various avenues of help for businesses or taxpayers experiencing tax/super debt stress. Some of these are listed below:
Applications for a Director ID will close on 30th November 2022. Have you got yours yet? If not, why not? Is it because you lack the confidence to use a computer or smartphone or the technology required? Have you been told that you need to have a myGovID to apply for a Director ID and don’t know how to get one or even what it is? Never fear, there are other ways to apply for a Director ID and these are explained below.
What is a Director ID? Just quickly, before we go on, for those not in the know, a Director ID is a unique number identifier that identifies you as being a company director to government authorities, shareholders, employees, consumers, creditors, external administrators, and regulators. The reason behind obtaining a Director ID is to prevent the use of false or fraudulent director identities i.e. director identity fraud. Read more information about the Director ID here.
So, when you visit the Director ID information page via the Australian Business Registry Services (ABRS) to learn about how to apply for the ID number, it will immediately begin by explaining that you need to have a myGovID account. A myGovID account is a digital identity that helps you prove who you are online by participating government online services. This is a good thing to have but if you aren’t ready to go down that road or can’t for some reason, you can actually apply for a Director ID by phone or by sending in a paper application – yep, that’s right, you can do it old school style! Read on to find out how!
Apply by Phone
To apply by phone, have the below data at hand, then call 13 62 50. Wait for the automated system to ask you to make a selection from the following and select option 1. Tell the operator that you wish to apply for a Director ID number. Supply the operator with the below data and when he gives you the ID number, record it. A copy will also be sent to you by mail or email – your choice.
your tax file number (TFN)
your full name
your date of birth
your residential address as held by the ATO
two Australian identity documents – one primary and one secondary
Australian full birth certificate
Australian citizenship certificate or extract from a Register of Citizenship by Descent
Visa (if you are using a foreign passport but are still in Australia)
Australian driver’s licence or learner’s permit
Apply by Paper
To make an application via a paper form, you will need to call the ABRS on the same phone number as above i.e. 13 62 50,and ask for the form to be mailed to you. In addition to completing the form, you will also need to send certified copies of:
one primary and 2 secondary identity documents, or
2 primary and one secondary identity document.
Australian full birth certificate (extracts and commemorative certificates are not acceptable)
Australian passport (including passports that have expired in the past 3 years)
Australian citizenship certificate or extract from a Register of Citizenship by Descent
Australian driver’s licence or Australian learner’s permit. This must show your photo, licence card number and signature, and the address on the card must match the details on your application.
If you have changed your name, you must provide another document showing the change, such as a
change of name certificate.
Certifying your Documents
Copies of documents you provide to support your application must be certified as true and correct copies of the original document by an authorised certifier. To certify your documents:
ensure the copy and any photograph is clear and identifiable
take the copies and originals to an authorised certifier.
The following people can certify copies of your original identity documents as true and correct:
Justice of the Peace (JP)
Minister of religion (who is authorised to celebrate marriage)
Bank, building society or credit union officer with at least 5 years of service
Commissioner of Declarations (in Queensland only).
A certifier should never witness documents:
for their family, business, clients, employer or any other person where it could create a real or perceived conflict of interest
connected with matters in which they have an actual or perceived personal or financial interest.
So there you have it – you can apply for a Director ID without having to set up a myGovID account. Of the two old-school methods above, I think phoning is the easier option as long as you have all of the documents and information in front of you before you call.
PS – I’m not against getting a myGovID account and in fact, I do advise that you try to get one eventually. However, I do recognise that not everyone is tech-savvy or has a smartphone, or if they do, may not be sure how to navigate it – it is certainly a learning curve and not that easy for some. Luckily, the government understands this too and is providing alternative options to those who may require more time to transition to the digital world.
If your business has a tax debt of at least $100K and it is overdue by more than 90 days, chances are you will soon receive a letter from the ATO explaining its intention to report the debt to credit reporting agencies. These letters are known as “Notices of Intent to Disclose”.
See below for the tax ruling background.
If your tax debt is reported to such credit agencies, this would have a detrimental effect on the business’s ability to maintain a good credit rating or score, leading to a possible inability to lend from banks and finance companies and/or obtain extended payment terms (credit) from suppliers.
The Notice of Intent to Disclose letter will outline ways to avoid reporting action, including paying out the debt, entering into a payment plan and several other methods. It is important to note that where exceptional circumstances have led to, and/or impacted the tax debt, such as family tragedy, serious illness and/or natural disasters, it may be possible to prevent tax debt reporting.
If you think your business may be in the firing line for receipt of one of these letters from the ATO, it would be prudent to contact your tax agent ASAP to discuss the way forward.
(The measure is known as “Disclosure of Business Tax Debt”, and received Royal Assent on 28th October 2019. This measure can be sourced in Schedule 5 of the Treasury Laws Amendment (2019 Tax Integrity and Other Measures No. 1)).
Finally, after the dark days of COVID-19 and endless lockdowns, etc., we are now seeing glimpses of opportunities to travel again (THANK GOD!). For business owners, this means work-related travel is once more on the table. Given it’s been a while between trips, I thought it might be useful to provide a refresher on travel diaries and when they are required.
When do I need to keep a travel diary and what do I record?
When you travel for work or your business, you are sometimes required to keep a travel diary as per the ATO to assist in working out which part of your travel is tax-deductible. I have outlined the circumstances below which would dictate when you should keep such a diary:
You are travelling for 6 or more nights in a rowoutside of Australia, regardless of whether or not the amount you are claiming exceeds the reasonable travel allowance amount.
Travel movements and activities before the activities end, or as soon as possible afterwards
The entries must be in English
What can I use as my travel diary?
The ATO has said that you can use a diary or journal of your choice for the purposes of keeping a travel diary. You can also use your digital calendar as well, making sure to attach receipts/invoices to each entry.
What other records do I need to keep?
It goes without saying, that you should keep all receipts and invoices related to your travel as well as the travel diary. This will make both the bookkeeper’s and tax agent’s jobs much easier 🙂 and make the ATO very happy!
Lastly, you need to remember that if you were required to keep a travel diary and you didn’t, then you may not be able to claim the relevant travel expenses on your tax return! Speak to your tax agent for further advice if this affects you.
In an attempt to make it easier for external administrators and regulators to trace directors’ relationships with companies over time, the government now requires every company director to obtain a Director Identification Number or Director ID. This will also prevent fraudulent and unlawful behaviour when a company is wound up e.g. illegal phoenix activities. This will begin in November 2021.
The ID is a unique identifier that is applied for once and is owned by a director forever.
Once the director ID is created, the director will need to share it with his/her company corporation record-holder. This may be the company secretary, another director, contact person, or an authorised agent of the company.
To find out further details about obtaining a director ID, go to the ABRS website.
Over the last few weeks, I have completely turned my beliefs about work, upside down and inside out.
I don’t know if it’s because I’m getting older and starting to eye-off retirement, or if it’s a side effect of living the “Covid-19 lifestyle”, but I’ve changed my mind about how a work-week should look. In short, I’ve decided that for me, the “normal” work-week no longer exists.
I have stopped believing that Monday to Friday are days for work and Saturday and Sunday are days for relaxing or play. For me, there are no longer weekdays and weekends – there are just days. Each day is mine to use as I please. Relaxing can happen on any day. Working can happen on any day. A day may involve both work and play – it’s my choice!
I no longer have set working days or hours – I work when I want to, for as long as I want to, on any day that suits me, including weekends.
I do not subscribe to the “Monday to Friday are for work and weekends are for relaxing”, concept.
How is this possible?
I am well aware that working whenever you choose, is not possible for many people, for various reasons. This is only possible for me because I am self-employed so I can call the shots. I am very lucky in that regard and am very grateful.
But I haven’t written this blog to spruik some sort of new philosophy or to convince you to try it too!
All of this, including this blog, is just for me, but I wanted to share it with you because I have found that this new mindset has made me more relaxed and more focused when I am working. I feel more in control of my work and life in general. I now have a work-life_life-work balance. Cool huh! And, hey, if you do want to give it a try, well that’s up to you, but again, this is really just something I’m doing for myself and my well-being.
How does this make me feel?
This new mindset has given me pure flexibility in my life. On any given day, if I feel like working, then I will work. If I want to take a walk, then I will walk. If I am asked to look after my grandchild, then I will happily do so.
I used to feel guilty if I tried to do something non-work-related during the week, always thinking, “I should be working right now”. Really, I was letting work control my life and my choices. Since enacting my new mindset, I no longer feel guilty. I feel like I’m in charge!
Giving myself permission to work whenever I want to or can, has somehow empowered me. And how do I feel about this? I feel happy and free. Yeah, that’s it. I feel free (even in lockdown!)
Have you made any drastic changes to the way you are working now? Has Covid-19 forced you to work differently compared to pre-Covid days? What are the pros and cons for you? I would love to read your comments – please do leave them below!
If you’ve been thinking of buying new equipment or a new vehicle for the business, now might be the time to do it. The instant asset write-off cost limit of $150K has been replaced by a new “temporary full expensing” measure (TFE) which effectively means you can fully deduct the cost of most assets, no matter how much they cost. This measure is in place to provide immediate tax relief and assist cash flow.
Who & what is eligible?
Businesses with an aggregated turnover of less than $5 billion.
Assets purchased and/or installed between 7:30 pm on 6 October and 30 June 2023.
Commercial vehicles, vans, buses and motorcycles.
Who/what is not eligible?
Cars costing more than $59,136 (they can only be depreciated up to this amount).
Assets allocated to a low-value pool or a software development pool.
Certain primary production assets (water facilities, fencing, horticultural plants or fodder storage assets), unless you are a small business entity that chooses to apply the simplified depreciation rules to these assets.
Buildings and other capital works.
Assets that will never be located in Australia, or will not be used principally in Australia for the principal purpose of carrying on a business.
If your entity has an aggregated turnover of $50 million or more, you cannot TFE the cost of assets that are secondhand or that you purchased or installed prior to 7:30 pm on 6th October 2020.
While TFE sounds good on paper, it is imperative that you get advice from your tax agent or accountant about TFE and how it may impact your tax situation, especially if it results in creating a loss. As we are BAS Agents, we cannot advise you about this so please do speak to your tax advisor if you think you would like to use the TFE measure for your business.
In this blog, I am going to share a cash flow spreadsheet that I use in my business. This is my very “simple cash flowtool”. It’s not a forecast per se (but could be made into one), rather, it’s a reality check tool for your business, that tells you exactly how much you have to spend, as opposed to how much you think you have to spend!
We’ve all looked at our bank balance when it’s healthy and started having visions of new clothes, holidays and nights out etc. However, as business owners, we also know that we have business (and personal) costs that must be paid for before any of those enticing dollars can find their way into our pockets. Below is a list of those costs included in the spreadsheet. You may have different costs or extra ones – feel free to amend the list to suit your needs.
General expenses (operating costs)
Wages, superannuation and PAYG withholding
PAYG income tax and/or previous years’ income tax repayments
Loans and credit card payments
Previous’ month/quarter BAS
Your own sundry spending (your drawings or director loan amounts)
How does the spreadsheet/tool work?This tool asks you to review a prior period such as last week, fortnight, month, quarter or year. For the purposes of the tool, we call these periods your “focus periods”. Before you begin using the tool, it is a good idea to choose your focus period. Of course, you can change the period type later as needed, but to begin the process, just choose one period of interest.
In summary, the spreadsheet is split into two sections. The first section takes your opening bank balance at the start of your focus period, adds any income from sales, deducts your operating costs and deducts the required minimum bank balance (that amount you know you need to leave in the bank for running costs). The result provided is the balance available for spending or saving as at the end of the focus period i.e. how much you have at your disposal TODAY. Here is an example of what section one looks like – the cells highlighted in green show your available balance:
You could decide to transfer some funds to savings, pay down debt, buy something special, give employees a bonus, buy new equipment – the choice is yours. While this information about available funds is extremely useful, our tool goes a step further!
The second section in the spreadsheet takes today’s available balance as above, then adds back any future income and deducts future bill or liability payments.
The final result is called your “true cash flow figure“, and is a more accurate representation of your financial position. Note the difference between the result in section one and that of section two in our example above! The true cash flow figure is less than half of the available funds as at the end of the focus period. This is often the case because section two takes all future cash transactions into account, whereas the figure in section one only looks at the here and now. Don’t get me wrong, knowing your available spending balance as of today is still necessary, however, in order to understand your true cash position, it is important to include all future spending/income. Doing this will ensure that you don’t inadvertently spend dollars that really should be saved for the long term.
Now that you can see your “true cash flow figure” you will be able to make a more informed decision about how much is really available for spending (or saving) today. Of course, if your figure is low or even negative, then perhaps you need to review your situation and work out why this is happening. Whatever the outcome, this tool will provide you with a snapshot of your overall financial position. One important aspect to note is that for this tool to work properly, your accounts need to be up to date. As a minimum, ensure that your bank accounts are reconciled up to the end of your focus period prior to using this tool.
I suggest running this cash flow tool on a regular basis to assist you in controlling and understanding your business finances. If you need assistance to use this tool or would like us to prepare it for you, please get in touch to discuss.
Getting started with the cash flow tool
Open the spreadsheet which is shared below. There are 3 tabs in the spreadsheet. The first tab of the spreadsheet is an example of how the tool works and includes notes and instructions. The second tab is a single-period cash flow to look at one focus period only e.g. one week, one month etc. The third tab is a multi-period tool that allows you to look at several periods at once. Follow the instructions provided in the first tab and then enter the figures as required into either the single or multi-period tab.
I hope you find this spreadsheet tool useful. Let me know if you have any questions about it or have some suggestions about how to improve it, by leaving your comments below.