Succession Planning Has To Be Planned!
Well managed businesses plan and budget for sales, expenses, cashflow and growth. At the same time businesses should be planning for, and anticipating, the various changes that do occur in businesses through death, disability or retirement of a key person or any other event that may cause problems within the business.
Research indicates that the vast majority of family owned businesses do not have a formal succession plan in place. Ignoring the consideration of financial arrangements and rearrangements that will be necessary for businesses in the event of the death, disablement or retirement of family members can dramatically affect the value of a business. In the worst case scenario, the business itself could collapse and the family left with immense problems.
Some of the items that can be planned relative to succession planning include:
- Setting up and reviewing plans for changes in leadership.
- Maximising the value of the business.
- Installation of mentoring so as to ensure that skills are passed on.
- Having informed stakeholders.
- Documenting relationship agreements so that the details are known to successors.
Unfortunately, just as night follows day, retirement and then death, will occur to all business operators. After all the sweat and toil that has gone into establishing a business, some consideration should be given as to what would happen to that business if the current principals or key persons were no longer available. Succession planning is very important and it should start at the very beginning of the life of the business.
R and D Registration Deadline
If you are operating as a company and wish to claim an accelerated deduction or a rebate relative to Research and Development expenditure for the year ended 30th June 2010, then the latest date the company can register with AusIndustry is 30 April 2011.
If you have any queries on the R & D system, please contact us.
The new approach being endorsed by the FWO requires annual leave loading on accrued annual leave balances be paid out when employment ends - even if a Modern Award does not require the loading to be paid. Essentially, the reasoning behind this is that employees should be not disadvantaged for not taking their accrued annual leave before their employment ends.
Annual Leave Loading
A new approach by the Fair Work Ombudsman (FWO) requires annual leave loading on accrued annual leave balances be paid out on termination - even if a Modern Award does not require the loading to be paid. The reasoning behind this is that employees should not be disadvantaged for not taking their accrued leave before their employment ends.
Self Education Expenses
The Australian Taxation Office has recently released a Decision Impact Statement in regards to “Self Education Expenses and Youth Allowance”. In prior years, the ATO has always been of the position that deductions cannot be claimed against Youth Allowance, however this was overturned in the Anstis Case decided in late 2010. The ATO now states that eligible full time students are eligible to claim self education expenses against their Youth Allowance income.
The ATO has advised that it will be contacting all taxpayers who declared Youth Allowance in their 2007, 2008, 2009 and 2010 income tax returns and advising taxpayers that they will be entitled to an automatic $550 income tax deduction each year without the requirement for any substantiation and that the ATO will automatically amend these returns on the taxpayers behalf.
If you have any queries on this please contact us.
Key Aspects To Achieve Business Success
In most cases business success will not occur unless the business operator has undertaken some detailed planning and introduced systems which have enabled:-
- Financial analysis on a regular basis so that the business performance can be compared against budgets and benchmarked against industry standards.
- Preparation of performance indicators and reviewing KPIs against preset targets and other organisations against which the business is being benchmarked.
- Analysis of resources so as to enable the assessment of the capabilities of the business and determination of the improvement required.
- Marketplace review so as to ensure that the business has recognised the opportunity and is also aware of threats in the marketplace.
- Development priorities – this is where you list what you are going to achieve over the next 3, 6 or 12 months as part of a business plan.
- Business plans for businesses are like “maps for tourists”. One of the key ways of developing a business plan is by conducting isolation planning meetings every 6 months.
This will include an analysis of:
- What action is required?
- Who is going to do it?
- What is the targeted completion date?
These strategies should be written down and reviewed on a regular basis to ensure that implementation has been achieved. Please contact us for a discussion if you would like assistance regarding developing your business strategies.
Fringe Benefits Tax
At the 31 March every business that is paying Fringe Benefits Tax should have recorded odometer readings of each motor vehicle using the declarations we sent out in March. Fringe Benefits Tax is payable on fringe benefits made available to employees including car, loan, debt waiver, expenses payment, housing, board, airline transport, living away from home allowance, entertainment, car parking (in some cases), property and residual fringe benefits.
There are 13 categories. If a benefit does not fit into any of the other 12, it will be classified as a Residual Fringe Benefit. The Fringe Benefit Tax year runs from 1 April to 31st March each year.
Fringe Benefits Tax returns have to be lodged by the 28 May (if the return is being prepared by accountants and taxation agents). If you believe you are providing fringe benefits and have not previously lodged a return, or you would like to have a discussion with us relative to Fringe Benefits Tax, please contact us.