Generate Newsletter \\ March 2022

Good morning,

Late in 2020 my partners and I got together to revise our roles so that rather than generic 'one-size-fits-all' position descriptions we had jobs that played to our strengths, ones that we're excited about. For me this has meant a reduced focus on the management of Generate outside of a strategic/chair role and a renewed focus on solving problems for clients. So, to anyone asking "what is it that you do, now, exactly?" (Gabe, Dad, others), here is some of the interesting work I've been doing of late.

Through a (thrilling) online course I've bolstered my?financial modelling?skills which means I'm better able to deliver forecasts and predictions for businesses - both pre-conception and existing. Have leveraged these skills for a few clients already this year and it's work I really enjoy - discussing business plans and goals and then working those into a model that can be used to make decisions and decide which course of action to take.

We recently had a really productive?strategic planning day?for the?not-for-profit?I'm involved with. We got in a room and in half a day had mapped out the five-year goals for the organisation and a long list of action items for the coming twelve months to help get us there. No need to for lengthy business plans, unwieldy mission statements, just a goal and a list of strategies to get us there. It's exciting to see what this organisation is capable of and how we're going to be able to help the community in the coming years.

Two other items that seem to be staples in my diary at the moment are?board meetings?(both advisory and non-executive roles) and?transaction work. The first is pretty straightforward - helping businesses set goals and then stay accountable in achieving them. The second is fancy business talk for helping clients through the process of selling their business - interesting work that involves solving a new problem each day.

So, yeah, I've been doing stuff. If you'd like to chat about doing stuff in your business why not give us a call?

Cheers,

Ben.

NSW FLOOD RELIEF

If you're unfortunately in the position of having been seriously affected by the floods you're no doubt already aware of the government support on offer, but thought I'd throw a link in?here?anyway just in case.

The ATO also have their own (meagre) relief on offer with all activity statements or instalment notices due in February or March being granted a blanket extension through to 28 March for anyone in an affected LGA. I'm also guessing they will be a bit more understanding for late payments and the like if you are able to call and explain.

MORE SUPER NOW REQUIRED

Currently you are not required to pay superannuation for people (employees or contractors) who do less than $450 in work for you in a month. This threshold is regularly relied on by business owners to avoid the administrative hassles associated with relatively small superannuation contributions.

No more.

From 1 July 2022 this threshold is being removed meaning that superannuation contributions will be required for employees (and sole trader contractors) regardless of how much they are being paid. You can find out more about the changes?here?and more about whether superannuation is required generally?here.

THE ATO REALLY DOESN'T LIKE TRUSTS

There have been numerous moves over the years to clamp down on the use of discretionary trusts which have been progressively limiting the joys to be had from these flexible structures.

Recent announcements from the ATO are taking these restrictions one step further. We are waiting to get further clarification, but the current draft advice is that the ATO are stopping arrangements where adult children are receiving unearned distributions for tax purposes only.

A common scenario is where a university student child receives a distribution of, let's just say, $180,000 and the accounts show that the child then gives that money back to the parents because are repaying all those years of school fees, food and board, and Pokemon cards.

The ATO doesn't like this. They seem to be okay with legitimate arrangements where the child receives a distribution and gets the cash. They also seem to be okay when the child repays the parents for legitimate costs once in 'adulthood' (e.g. paying them back for uni fees, reasonable amounts for food and board) but they are not okay with the child repaying all of the costs associated with raising them.

We'll be talking to clients at tax-planning time (April/May/June) once we have further clarity from the ATO on the best way to approach these changes.

You can find out more?here.

"TEMPORARY" FULL EXPENSING OF ASSETS

When COVID kicked in the government announced that businesses could expense new assets acquired in full, rather than depreciating them, in order to get people spending money. This "temporary" measure has been extended for a third year and now goes out to 30 June 2023.

Note this applies to depreciating assets and not capital works so you can't claim building costs, renovations, office improvements, etc.

More information available?here.

BOOK RECOMMENDATION

This book makes a compelling argument for the need for us all to go through an emotional education in the same way we go through education for everything else in life. It's a very good point - why can we take courses on all kinds of esoteric and worthless topics but we don't get educated on how on these 'things' we're feeling work?

The School of Life?by Alain de Botton

I thoroughly enjoyed this pragmatic and practical guide to life by de Botton. It's split into five subject areas - self, others, relationships, work, and culture - and whilst most of it isn't (or at least shouldn't be!) new information, he does explain things in such a way that previously unclear or hazy understandings become much more clear.

Highly recommend?this one.