Protecting your business from ID thieves

The COVID-19 pandemic has led to many challenges for small business operators, including a significant escalation in cybersecurity threats.

One of the fastest growing of these threats is identity (ID) crime, with the Australian Competition and Consumer Commission’s (ACCC’s) Scamwatch finding ID theft in Australia increased 234 per cent in 2021.

The scale of the problem is worrying, with a recent survey by the Australian Institute of Criminology finding 19 per cent of respondents had experienced misuse of their personal information.

What identity criminals want

The explosion in ID crime is not just a problem for individuals, it’s a growing headache for businesses. This is due to the increasing amount of personal information they now hold, about their employees, clients and customers.

The ATO has been reminding small businessowners that ID documents are like gold to tax scammers, who can use information such as a driver’s licence, passport and tax file number to steal tax refunds and super.

Cybercriminals can also commit fraud in your name, take over your business and submit amendments to your Business Activity Statements. This makes it vital to protect key information ID thieves target, such as employees’ personal information, business records containing personal information, BAS documents and myGovIDs.

Check your physical records are protected

Worrying about the physical security of your information may seem old-fashioned, but ensuring your business premises and systems are protected is vital.

ID criminals can obtain invaluable business and client details simply by breaking into your premises and photographing business records or employee details.

To combat this, fit physical barriers such as window and door locks, file copies of documents and ID information in lockable storage units, and ensure you install an appropriate alarm system to protect against intruders.

Securing your business online

Strong online security practices are also essential to protect information about your business, employees and clients from ID thieves.

If you hold financial records, confirm the identity of anyone requesting changes to their information and fully verify new payment details. Ensure your employees are trained to identify suspicious requests for personal information, or emails that may link to fake websites built to capture passwords.

It’s also important to secure your email account through multi-factor authentication or a strong, unique passphrase.

Good online security also means changing all the passwords used in the business on a regular basis and ensuring they are not easy for potential thieves to guess. Updated security and anti-virus software needs to be installed on all devices used by the business and by any employees working from home.

When sourcing business software and support (such as payroll services), ask vendors about their system security, including where the data will be stored and their security certification and support services for data breaches.

Reporting cybercrime to the ATO

While your business’s reputation can take a real battering if you don’t have adequate protections for both your own and your clients’ ID information, there are also regulatory requirements when it comes to data breaches.

Businesses have an obligation to report all tax-related security issues to the ATO.

To help you manage your obligations to protect identity information, the ATO has an online security self-assessment questionnaire small businesses can use to check their performance in this area. This can help you identify which online security measures you are getting right as well as potential areas for improvement.

Businesses also have data breach reporting obligations under the Privacy Act. The Office of the Australian Information Commissioner has helpful tips on how to create a solid data breach response plan.

Protect your myGov ID

The government’s push for more online transactions means more and more personal and business information needs to be protected. If you or a key employee accesses the government’s online services on behalf of your business, you will need a myGovID.

This new digital identity key uses encryption technology to protect your identity when interacting with government agencies online. To strengthen protection of your identity and business information online, you can now set up face verification on myGovID.

If you are aware or suspect your myGovID has been inappropriately accessed, you need to report it immediately.

If you need any assistance setting up your myGovID, please get in touch via email drouin@rgmgroup.com.au or contact us on 03 5120 1400.

Material contained in this publication is a summary only and is based on information believed to be reliable and received from sources within the market. It is not the intention of RGM Financial Planners Pty Ltd ABN 36 419 582 Australian Financial Services Licence Number 229471, RGM Accountants & Advisors Pty Ltd ABN 69 528 723 510 that this publication be used as the primary source of readers’ information but as an adjunct to their own resources and training. No representation is given, warranty made or responsibility taken as to the accuracy, timeliness or completeness of any information or recommendation contained in this publication and RGM and its related bodies corporate will not be liable to the reader in contract or tort (including for negligence) or otherwise for any loss or damage arising as a result of the reader relying on any such information or recommendation (except in so far as any statutory liability cannot be excluded).

Liability limited by a scheme approved under Professional Standards Legislation.

Caring for family with a Will

Few of us like to think about death, let alone plan for it. But far from being morbid, getting your affairs in order and drawing up a Will is one of the kindest and most caring things you can do for your loved ones.

Not only does a Will make your wishes clear but it ensures your family isn’t wrestling with legal red tape at a difficult and emotional time.

Yet despite the advantages, it’s estimated 45 per cent of Australians don’t have a Will.i

Who needs a Will?

The short answer is everyone over 18. Even young adults have assets such as super, personal possessions, possibly a vehicle and some savings.

Once you reach an age where you have a partner and children, along with a home and perhaps other investments, the need for a Will becomes even more pressing.

What can be included in a Will?

Generally you can and should set out where you want your physical assets (property, cars, jewellery, furniture and collectibles), financial investments (bonds, shares, bank savings) and sentimental possessions (family heirlooms) to go.

Generally, assets you jointly own, such as a house bought with your partner, pass automatically to your co-owner. But if you own property under what is called a ‘tenancy in common’ you can distribute your share according to your Will.

Because superannuation is held in trust, it’s treated differently to other assets. The trustee of your super fund has the final say on where your money, formally referred to as a ‘death benefit’, ends up unless it is paid to your estate.

If you wish to be certain your death benefit goes to the person you want it to, you should fill out a ‘Binding Death Benefit Nomination’ form and lodge it with your super fund. You can nominate your estate as the beneficiary and your death benefits, including any life insurance, will be distributed according to your Will.

Individual life insurance payouts don’t automatically go through the policyholder’s Will, but if that’s what you would like you can nominate your estate as the beneficiary.

How watertight are Wills?

If you invest the necessary time, effort and expense into producing a well-drafted Will, you can be more confident your wishes will be respected.

The exception to this rule occurs when it can be argued a Will treats a dependant unfairly. Classic examples are a parent leaving more to one child than another or leaving everything to a new partner and excluding children from a previous marriage.

Assets don’t need to be split equally, especially if one dependant has previously received financial assistance, or has dedicated years to caring for you. But be aware a dependant who feels dudded may successfully contest your Will.

What happens when there’s not a Will?

If you die without a valid Will, legally referred to as dying intestate, the relevant state or territory laws will be left to sort things out.

Someone, typically your next-of-kin, will have to apply for a grant of Letters of Administration. An administrator will then be appointed. They will divide your estate according to set formula, which differs slightly in each state but generally goes to your surviving partner and children.

Even in a best-case scenario, dying intestate may mean one or more of your loved ones will have to go through an arduous bureaucratic process during a traumatic time. In a worst-case scenario, a partner, child or friend may receive far less than you would have wished.

What’s next?

There are essentially four conditions a Will needs to meet:

  • It has to be made by someone over 18 who is mentally competent
  • It has to properly dispose of all assets
  • It needs to be signed and witnessed appropriately
  • It needs to be properly drafted.

While DIY ‘Will kits’ may be better than nothing, if you have substantial assets, a complicated family situation, or you just want peace of mind, you’ll want to engage the services of a trusted solicitor.

A Will is just one part of the estate planning process. If you would like to know more, we can assist you in getting the right advice.

https://www.tag.nsw.gov.au/wills-faqs.html

Material contained in this publication is a summary only and is based on information believed to be reliable and received from sources within the market. It is not the intention of RGM Financial Planners Pty Ltd ABN 36 419 582 Australian Financial Services Licence Number 229471, RGM Accountants & Advisors Pty Ltd ABN 69 528 723 510 that this publication be used as the primary source of readers’ information but as an adjunct to their own resources and training. No representation is given, warranty made or responsibility taken as to the accuracy, timeliness or completeness of any information or recommendation contained in this publication and RGM and its related bodies corporate will not be liable to the reader in contract or tort (including for negligence) or otherwise for any loss or damage arising as a result of the reader relying on any such information or recommendation (except in so far as any statutory liability cannot be excluded).

Liability limited by a scheme approved under Professional Standards Legislation.

Future proofing your career with professional development

“The only thing that is constant is change” – so said the ancient Greek philosopher Heraclitus and it continues to ring true today.

Industries are changing, continuing to evolve in response to challenges (such as the COVID-19 pandemic), technological disruptors and customer expectations. As a result, there is a greater need for the workforce to continue to adapt and develop. We need to be agile to stay on top of these changes, continue developing and learning, which will work towards future proofing our careers.

While some industries have formal professional development programs, there are many ways to foster your own development for those who don’t have formal pathways. Here is how you can take the lead to future proof your career.

Enrol in a course

Some workplaces offer both in-person and online courses, for example LinkedIn Learning, so take advantage of what’s on offer. You can also seek out professional courses relevant to your industry to upskill, keeping you abreast of the changing environment – not to mention that further education is a great additional to your CV as it showcases your engagement within the industry and your proactive approach to your career.

Attend webinars or seminars

While COVID restrictions have halted many in-person seminars, there are plenty of online webinars you can attend, some which are specifically on the topic of future proofing your career. While there are a number of free webinars you can attend, others may be offered by organisations to their members. Paid membership to these organisations be they industry groups, or groups centred around a common goal, can be a worthwhile investment assisting with not only educational sessions but networking opportunities.

Not only are webinars accessible from your office or living room, they tend to be more budget-friendly than seminars. However, seminars offer face-to-face learning and networking opportunities, so they are great to utilise where possible.

Pick up a book or listen to podcasts

It doesn’t get easier than picking up a book to arm yourself with new knowledge. There is a wealth of information out there, some which will be general advice discussing trends and management styles, others that will be tailored to your industry.

If you don’t have much time to read, opt for an audio book to listen to in the car or during exercise. Podcasts are also excellent ways of getting helpful information in a format that is convenient and can be tapped in and out of. As they are regularly created, you’re likely to get more up-to-date information this way.

Enlist the help of a mentor

It’s clear that a mentor can help you stay on top of your industry or explore new opportunities by providing support and guidance. A 2019 survey showed that while 76% of people thought mentors are important, only 37% actually have one.i

The study also found that 61% of mentor-mentee relationships developed naturally, with 25% happening after someone offered to mentor, and 14% when someone asked for a mentor. This means that there’s likely to already be someone in your life who could be your mentor. Think about who is dynamic in facing industry changes and don’t be shy to ask if they’re open to mentoring you.


Join peer groups

An extension of having a mentor, peer groups provide you with the support of others who are also dedicated to professional and personal growth. If you are someone who thrives on peer support, it will be invaluable to be part of a group of people rather than going it alone.

You can give each other feedback, check in on each other’s goals and share helpful experiences and resources such as great books or webinars. This is also a fantastic way to make real-life connections – you might even meet someone who helps you land a new job or open doors to a new industry. Online tools such as Meetup can help you find a group near you and keep an eye on industry meetups as well.

Life is full of change, but rather than feeling overwhelmed, embrace it. By furthering your education, you’ll future proof your career and feel more empowered tackling the changes you face.


https://online.olivet.edu/research-statistics-on-professional-mentors

Material contained in this publication is a summary only and is based on information believed to be reliable and received from sources within the market. It is not the intention of RGM Financial Planners Pty Ltd ABN 36 419 582 Australian Financial Services Licence Number 229471, RGM Accountants & Advisors Pty Ltd ABN 69 528 723 510 that this publication be used as the primary source of readers’ information but as an adjunct to their own resources and training. No representation is given, warranty made or responsibility taken as to the accuracy, timeliness or completeness of any information or recommendation contained in this publication and RGM and its related bodies corporate will not be liable to the reader in contract or tort (including for negligence) or otherwise for any loss or damage arising as a result of the reader relying on any such information or recommendation (except in so far as any statutory liability cannot be excluded).

Liability limited by a scheme approved under Professional Standards Legislation.

How to manage difficult conversations

Saying or hearing the words, “We need to talk,” whether it’s in the workplace or in your personal life, can be a source of tension and conflict but there are ways to manage conversations that have the potential to be difficult.

Difficult conversations can range from speaking to a family member about concerning behaviour, to ending a romantic relationship, to navigating care options with elderly parents. In the workplace, challenging conversations include raising concerns about performance or unacceptable conduct, although predictably talking about remuneration has been ranked the most difficult conversation, with 33% of those surveyed stating that they avoided conversations about their pay.i

Can you remember a time when you’ve had to initiate a conversation you’d rather avoid? Or when someone approached you for ‘the talk’? Perhaps even now you have a challenging conversation looming that you need to have, but keep avoiding? You’re not alone, research has found that one in four people have been putting off a tough conversation for more than six months, while one in 10 have been doing so for a year.ii

The thing is, avoiding it usually doesn’t help. If handled the right way, an open conversation may even improve the situation or strengthen a relationship, and at the very least your perspective will be better understood. So, let’s look at some ways to tackle a hard topic.

Preparation helps

It helps to give some thought to what you are trying to achieve by having the conversation. Examine your motives carefully and be clear about what you would like as the ideal outcome.

It can be beneficial to do some “role play” in your head before the chat. To prepare yourself for what you think will be said and practice the best way of expressing yourself. Having said that, it’s impossible to prepare for all eventualities and you do need to accept the fact that you are entering into an open-ended dialogue that could go in any direction.

Active listening

While it’s always tempting to go straight in with your thoughts on the matter, it can be beneficial to start the conversation with some questions to obtain a sense of how the other party feels. Listen to their perspective with an open mind without interrupting and ask their permission to give you the opportunity to respond if you are finding it hard to get a word in.

Use your words

When sharing your ideas, it can be helpful to use collaborative language such as ‘we’ or ‘us’ instead of ‘you’ and ‘me’. Acknowledge that you understand and appreciate the other parties’ perspective by using phrasing such as “so what you are telling me is…”.

It’s a good idea to use ‘I’ statements. So, instead of saying, ‘You don’t care about me!’, which can make the other person defensive, try: ‘I feel upset with when you…’.

Try not to talk in generalities. Get to the point, describe exactly what you want from the discussion – do you want an apology, your point of view acknowledged, or change in behaviour moving forward? This will help provide structure to the discussion and a clear way forward.

Look for solutions

The ideal outcome is a mutually acceptable solution to the problem at hand. To avoid the discussion becoming adversarial ask for ideas ie “What are your thoughts are on how we can move forward and work through this issue together?”

Of course, not all conversations are going to have a happy ending. There will be people, situations or behaviours that you just can’t talk through – and that’s okay. By agreeing to disagree you have both at least aired your respective viewpoints.

You should also be proud of yourself for taking part in a difficult conversation. It takes real courage. And remember each challenging conversation you have is a learning experience making the next one that little bit easier.

https://www.managers.org.uk/knowledge-and-insights/news/top-10-difficult-conversations/

ii https://www.hrmonline.com.au/topics/management-of-workplace-issues/avoid-tough-conversation-quit/

Material contained in this publication is a summary only and is based on information believed to be reliable and received from sources within the market. It is not the intention of RGM Financial Planners Pty Ltd ABN 36 419 582 Australian Financial Services Licence Number 229471, RGM Accountants & Advisors Pty Ltd ABN 69 528 723 510 that this publication be used as the primary source of readers’ information but as an adjunct to their own resources and training. No representation is given, warranty made or responsibility taken as to the accuracy, timeliness or completeness of any information or recommendation contained in this publication and RGM and its related bodies corporate will not be liable to the reader in contract or tort (including for negligence) or otherwise for any loss or damage arising as a result of the reader relying on any such information or recommendation (except in so far as any statutory liability cannot be excluded).

Liability limited by a scheme approved under Professional Standards Legislation.






Stay safe from Scams

As we approach tax time, we also head into the season where scammers increase their activity – that is, looking to hoodwink small business and individuals alike.

Scammers are becoming increasingly sophisticated, so it pays to be aware of what is real and what is fake. Because unfortunately they’re not going away any time soon, with over 216,000 scams reported to Scamwatch during 2020, resulting in total financial losses of around $1.75 million dollars.i

Here are some recent scams to be aware of:

COVID-19 phishing

With increased communications being sent out due to the COVID-19 pandemic, this has also created ample opportunity for scammers. By pretending to be from official organisations, scammers aim to find out your personal information (such as your usernames, passwords, bank details, etc.) – this is known as phishing.

There have been emails and SMS messages impersonating the Department of Health and the ATO, providing links to what are purported to be information pages. One example is an SMS which says that you are due to receive a support payment and asks for your bank details.

To know what is real and what’s fake, don’t click on links in messages – instead visit the organisation’s website directly, or call them if in doubt.

Verifying your myGov details

Another common example of a phishing scam is receiving an email or SMS asking you to verify your myGov details. Often the message will have time pressure, saying that your account will be locked if you don’t do so within 24 hours.

You will get email or SMS notifications from myGov whenever there are new messages in your myGov inbox, however these messages will never include a link to log into your myGov account.

Automated calls regarding a suspended TFN

Your tax file number (TFN) is important for both you and/or your business’ tax and superannuation purposes, which is why hearing it has been suspended can be alarming. Linked to your name and date of birth, this piece of personal information should generally only be shared with the ATO, banks, your superannuation fund, the Department of Human Services and your employer.

Under law, any individual, organisation or agency that is allowed to ask for your TFN information must not record, collect, use or pass on your TFN (unless allowed under taxation, personal assistance or superannuation law).ii

A common scam involves an automated phone message advising you that your TFN has been suspended. The purpose of this is to convince you to pay a fine or transfer money to reactivate it.

The ATO do not suspend TFNs or need you to pay for reactivation, nor will they send unsolicited pre-recorded messages to your phone. So if you hear this scam message, hang up.

Tax debt

Another worrying message to receive is that you have tax debt that needs to be paid off. This scam is often done through SMS, voicemail and direct calls, whereby the scammer pretends to be from the ATO. They then will ask you for payment, which is often through methods such as cryptocurrency or gift cards.

Suffice to say this isn’t regular procedure from the ATO, so if you receive a call or message like this, ignore or hang up.

Scams are ever-evolving but are often based on similar concepts, as shown above. A helpful resource to keep up-to-date with current scams is the Scam Alerts page on the ATO website.

While scammers can be conniving and convincing, it’s important to err on the side of caution whenever you receive an unexpected message or call, or whenever your personal details are requested. Never give out any personal information unless you can independently verify the identity of the person or organisation you are providing it to.

Should you ever be unsure whether someone requesting your financial details is a trusted source, don’t hesitate to get in touch for our advice on 03 5120 1400.

https://www.scamwatch.gov.au/scam-statistics?scamid=all&date=2020

ii https://www.oaic.gov.au/privacy/your-privacy-rights/your-personal-information/your-tax-file-number/

Material contained in this publication is a summary only and is based on information believed to be reliable and received from sources within the market. It is not the intention of RGM Financial Planners Pty Ltd ABN 36 419 582 Australian Financial Services Licence Number 229471, RGM Accountants & Advisors Pty Ltd ABN 69 528 723 510 or RGM Finance Brokers Pty Ltd ABN 81 330 778 236 (RGM) that this publication be used as the primary source of readers’ information but as an adjunct to their own resources and training. No representation is given, warranty made or responsibility taken as to the accuracy, timeliness or completeness of any information or recommendation contained in this publication and RGM and its related bodies corporate will not be liable to the reader in contract or tort (including for negligence) or otherwise for any loss or damage arising as a result of the reader relying on any such information or recommendation (except in so far as any statutory liability cannot be excluded).

Liability limited by a scheme approved under Professional Standards Legislation.





Opportunities amidst the COVID-19 disruption

small plant growing out of a crack in the ground.

COVID-19 is resulting in significant disruption to well-established business models, impacting businesses, sectors and stocks across the board.

However as Albert Einstein once said “in the middle of difficulty lies opportunity”. That certainly rings true in 2020 as analysists predict significant changes in the types of businesses that will prosper through the crisis, with certain sectors dominating others.

At a time where our movement has been constrained in an unprecedented way, sectors relating to the movement of goods, data and people are being heavily impacted by the crisis. However, they are also well positioned to capitalise on the changes brought on by the pandemic.

Supply chain and logistics embrace technology

The pandemic has significantly impacted many bricks and mortar businesses, yet online shopping has boomed. Australia’s e-commerce industry had a growth of over 80% in the two months after the COVID-19 pandemic was declared by the World Health Organisation.i

Yet this boost to e-commerce has brought its own challenges. Back in April 2020, Australia Post was delivering an estimated 1.8 million parcels each day, which resulted in lengthy delays to delivery times.ii Meeting the demand for timely deliveries, avoiding supply chain disruption and bottle necks has called for innovation in logistics.

While demand may not remain at the heightened COVID-19 levels, experts are predicting long-term shifts to micro supply chains and the decentralisation of manufacturing capacity. Also critical to the creation of smart and nimble supply chains is the use of technology to drive efficiencies and manage significant fluctuations in demand.

Data movement and security a focus for business

It’s clear that where people’s physical mobility is limited, fast and secure movement of data is critical. 2020 has seen innovation being applied to find new ways to secure, verify and exchange business-critical information.

With many workers based at home, this shift to a hybrid workplace means a change in workflows as well as the immediate need for security measures to protect networks, as staff are no longer using their corporate networks. The increase of Zoom calls, for example, has meant becoming more aware and prepared for the potential of cyber hacks.iii

Businesses need to ensure their systems are robust and well-tested as we move to an increased reliance on technology. Expect a stronger emphasis on collaboration tools, workflow management and data protection.

Challenges and opportunities for travel

Suffice to say the travel industry has been one of the hardest hit during the COVID-19 pandemic. There’s no doubt travel will surge once restrictions loosen, although this industry is one that will see profound change as it adapts to the post-COVID landscape.

Airlines are struggling to navigate uncharted territory. The ones that survive this crisis will have to be strategically creative to find a way to prioritise public health and sustainability, all the while maintaining profitability.

With more rigorous sanitation requirements, the quick turnaround times budget airlines have relied on may not be possible. This will result in fewer flights at a higher cost, making travel less accessible for some.

Longer term trends emerging from the crisis will include greater automation driven by public health and budget constraints, and changing consumer preferences such as holidaying closer to home.

Public transport will also be impacted, as the need for distancing will restrict the number of passengers allowed to travel. Less congestion on our roads may be the silver lining to more flexible working arrangements, with some people continuing to work from home. This ability to work from anywhere will make it possible for an increasing number of Australians to relocate to regional areas.iv

The term ‘new normal’ has been expressed many times already and for good reason – lives have changed permanently. Only time will tell what life will look like post-pandemic. There will be more changes as society emerges from the pandemic that will impact how we live, and these will drive innovation in the way businesses and industries operate.

If COVID-19 has affected how your business operates, get in touch with our team on 03 5120 1400.

https://which-50.com/huge-spike-in-ecommerce-once-covid-19-hit/

ii https://www.abc.net.au/news/2020-04-22/waiting-on-a-parcel-from-australia-post-why-its-taking-so-long/12172772

iii https://www.deccanchronicle.com/technology/in-other-news/170720/vulnerability-in-zoom-could-allow-hackers-to-target-devices-cyber-sec.html

iv https://www.realestate.com.au/insights/eight-regional-areas-set-to-boom-after-covid-19/

Material contained in this publication is a summary only and is based on information believed to be reliable and received from sources within the market. It is not the intention of RGM Financial Planners Pty Ltd ABN 36 419 582 Australian Financial Services Licence Number 229471, RGM Accountants & Advisors Pty Ltd ABN 69 528 723 510 or RGM Finance Brokers Pty Ltd ABN 81 330 778 236 (RGM) that this publication be used as the primary source of readers’ information but as an adjunct to their own resources and training. No representation is given, warranty made or responsibility taken as to the accuracy, timeliness or completeness of any information or recommendation contained in this publication and RGM and its related bodies corporate will not be liable to the reader in contract or tort (including for negligence) or otherwise for any loss or damage arising as a result of the reader relying on any such information or recommendation (except in so far as any statutory liability cannot be excluded).

Liability limited by a scheme approved under Professional Standards Legislation.

New tax shortcut for employees working from home

With many people now working from home because of COVID-19, some of the expenses your employer normally covers – such as electricity, heating and cooling – are coming out of your pocket instead. 

Some employers provide a daily allowance to help with these additional costs, but if not it’s important to claim your extra expenses at tax time. 

To simplify things, the ATO has announced shortcut rules if you find yourself working from your kitchen table or sofa for the first time. 

New shortcut rules

Under these temporary measures, if you are working from home due to COVID-19 you can claim a simplified tax deduction of 80 cents per work hour for your running expenses. 

Your running expenses include things like lighting; heating and cooling; cleaning; and office supplies like printer paper and stationery. The shortcut rate also covers the cost of your internet, phone and computer equipment. 

The decline in value (or depreciation) of the furniture and fittings you use in your home office is covered too. 

Items such as tea, coffee and toilet paper, can’t be claimed. Neither can expenses such as rent, mortgage interest, property insurance, rates and land tax. 

Substantiating your claim

Before you get too excited, you are only entitled to a deduction for expenses related to earning income. You must have actually spent the money and not been reimbursed. 

Fortunately, the shortcut method only requires you to keep a record of the number of hours you worked from home as evidence of your claim. This can be in the form of a time sheet, or an Outlook calendar or diary entry. 

If you are audited by the ATO, it’s likely you’ll also be asked for supporting evidence from your employer. 

The shortcut arrangements are in place for running expenses incurred from 1 March to 30 June 2020. The ATO intends to review the arrangement for the next financial year as the COVID-19 situation progresses. 

Eligibility for the shortcut rules

The simplified rules are only available to employees working from home. If you are a sole trader or run a small business from home, you must use the normal business deduction rules. The shortcut rules allow multiple people living in the same house to claim the new 80 cents rate, so both members of a couple can claim a deduction at tax time. You’re not required to have a dedicated work area, which is a requirement under the normal rules. 

If you normally work from home a few days a week, you need to keep two sets of records – one covering the period from 1 July 2019 to 29 February 2020 and a second one covering the period from 1 March to 30 June 2020 if you decide to use the shortcut method. 

Current rules for working from home

Although the simplicity of the shortcut method is attractive for claiming your running costs, you can choose to use the pre-existing rules if you prefer. 

Currently there are two ways to calculate your running expenses: claiming a fixed rate of 52 cents per work hour, or calculating your actual expenses. 

Under the fixed rate method, you claim 52 cents an hour for your running expenses. You then work out separately your costs for phone and internet usage, computer consumables and stationery, and the depreciation on your computer. To claim, you need to keep records of actual hours worked, or a four week diary to show your usual working pattern. 

Dedicated home offices

If you have a dedicated work area at home, you can choose to calculate your actual running expenses. These costs (plus depreciation on your equipment, furniture and furnishings over $300) need to be apportioned into personal and work related amounts. 

For your phone and internet expenses, you can claim up to $50 with limited documentation, or calculate your actual expenses and apportion them. 

Before opting for the new shortcut, it’s worth having a chat, as the best method depends on your individual situation. Although there is less administration with the shortcut, it may not provide you with the biggest tax deduction. 

Call us on 03 5120 1400 to discuss how working from home will affect your tax preparations this financial year.

Material contained in this publication is a summary only and is based on information believed to be reliable and received from sources within the market. It is not the intention of RGM Financial Planners Pty Ltd ABN 36 419 582 Australian Financial Services Licence Number 229471, RGM Accountants & Advisors Pty Ltd ABN 69 528 723 510 or RGM Finance Brokers Pty Ltd ABN 81 330 778 236 (RGM) that this publication be used as the primary source of readers’ information but as an adjunct to their own resources and training. No representation is given, warranty made or responsibility taken as to the accuracy, timeliness or completeness of any information or recommendation contained in this publication and RGM and its related bodies corporate will not be liable to the reader in contract or tort (including for negligence) or otherwise for any loss or damage arising as a result of the reader relying on any such information or recommendation (except in so far as any statutory liability cannot be excluded).

Liability limited by a scheme approved under Professional Standards Legislation.

Time to reassess your financial priorities?

At a time of uncertainty about the economy, not to mention unexpected social isolation, people are rethinking their personal and financial priorities. 

Whether you are spending less by necessity or because you are living more simply at home, this could be a good time to reassess your spending and review your household budget. 

Our spending habits have changed

Even though we are spending less in lockdown overall, we have also changed what we spend our money on. We are spending more on groceries, food delivery, streaming services, alcohol, pet care and (home) office supplies. But a lot less on gyms, travel, cafes and restaurants.i

What’s more, many of us are discovering we can happily do without many of the treats we used to think were essential. So, if we can avoid slipping back into our old spending habits, we could be in a much better financial position when the pandemic has passed. 

By doing some legwork to find the best deals on offer, it may be possible to reduce your outgoings on essentials such as utilities, groceries, petrol, general insurance and housing. However, the big savings usually come from eliminating – or at least limiting – non-essential goods and services. 

Eating and drinking

One spending behaviour that has shifted significantly during lockdown is dining out. A 2019 survey revealed Australians spent $2,704 a year on dining out, on average, and $1,612 on alcohol.ii We are now cooking at home a lot more and we seem to be enjoying it, with households now baking their own bread and embracing the slow cooker. 

Once we are able to go back to eating out and visiting pubs and bars we can fatten our wallets by reducing the number of times we eat out, inviting friends over for a coffee, beer or meal rather than meeting them at a café, pub or restaurant. 

When it comes to cooking at home, where you purchase your food can have a big impact on your grocery bill. CHOICE found shopping at Aldi can be up to 50 per cent cheaper than other supermarkets.iii

We are also tending to do a larger shop less frequently. Meal planning and doing a shopping list is one way of avoiding the spontaneous purchases that lead to food wastage. Given that the average Australian household throws away $3,500 worth of food each year these are worthwhile changes that will help our hip pockets on an ongoing basis. iv

Exercise

Another big shift that has come from the lockdowns has been in the way we exercise. When the walls closed in, we took to our bike paths and parks and went for a walk or run. 

So maybe it’s worth rethinking the expensive gym membership and keeping up our Corona exercise plans – particularly if you’re one of the 1.5 million Australians who have a gym membership but rarely use it.v

Travel

Prior to the crisis, heading off on holiday usually meant jumping on a plane. Back in 2018, 6.3 million Australians were holidaying overseas and spending an average of $4,750 per person – or $19,000 for a family of four.vi Of course, it’s unlikely you’ll be engaging in any international travel for a while. But after borders reopen, you may wish to holiday in Australia anyway. 

Not only is holidaying locally likely to be less expensive, but it could also mean your dollars flow into one of the tourism-dependent regions which have been so badly hit by last summer’s bushfires and now the Coronavirus shutdown. 

Thinking to the future

During difficult times such as these, a sound budget based on your financial priorities will help you continue to work towards your long-term goals. 

Depending on your financial situation you may even wish to go against the trend and look for ways to get your money working for you. This could include making personal contributions to your superannuation after the recent market falls, or investing outside super, to capture the upswing when the market bounces back, as it always does. 

If you would like to set some new financial priorities and discuss your situation, contact RGM and speak to an adviser on 03 5120 1400.

https://www.smh.com.au/business/the-economy/stimulus-payments-arrest-spending-slump-real-time-data-shows-20200408-p54ida.html/ 

ii https://thenewdaily.com.au/finance/consumer/2019/09/23/food-spend-australia-budget/ 

iii https://www.choice.com.au/shopping/everyday-shopping/supermarkets/articles/cheapest-groceries-australia 

iv https://www.samedayrubbishremoval.com.au/War-On-Waste-Statistics.php 

https://www.news.com.au/finance/money/costs/lazy-aussies-wasting-18-billion-on-unused-gym-memberships/news-story/6243cf35a8424a8dfa212ea17c1a0208 

vi https://www.budgetdirect.com.au/travel-insurance/research/average-holiday-cost-statistics-2019.html

Material contained in this publication is a summary only and is based on information believed to be reliable and received from sources within the market. It is not the intention of RGM Financial Planners Pty Ltd ABN 36 419 582 Australian Financial Services Licence Number 229471, RGM Accountants & Advisors Pty Ltd ABN 69 528 723 510 or RGM Finance Brokers Pty Ltd ABN 81 330 778 236 (RGM) that this publication be used as the primary source of readers’ information but as an adjunct to their own resources and training. No representation is given, warranty made or responsibility taken as to the accuracy, timeliness or completeness of any information or recommendation contained in this publication and RGM and its related bodies corporate will not be liable to the reader in contract or tort (including for negligence) or otherwise for any loss or damage arising as a result of the reader relying on any such information or recommendation (except in so far as any statutory liability cannot be excluded).

Liability limited by a scheme approved under Professional Standards Legislation.



Achieving focus in a world of distractions

Feel like you’re running on a hamster wheel, beholden to the constant pinging of your phone, busier than ever? You’re not alone, with the trap of always being “on” a curse of the modern day world.

A 2019 report from BankMyCell found that the average smartphone user checks their device approximately 63 times a day, and 69% check their phone within five minutes of waking up.i

These habits are taking a toll. In 2015, TIME reported that we now have a shorter attention span than a goldfish.ii They traced the drop in attention back to the year 2000, when the mobile revolution started. 

Most of us couldn’t work or even live without our smartphones, but there are ways to pair back the time you spend glued to technology and instead focus on your goals. And even without phone in hand, there are things vying for our attention – if you’re a parent it could be your kids, or at work it could be your co-workers and boss. Perhaps it’s even your mind processing a thousand thoughts per hour, or mulling over something from the past or worrying about the future. 

We all contend with many distractions, both internal and external, on a daily basis. Here are some tips for building your attention span to take back control of your life. 

Be deliberate about what you pay attention to

As well as spending less time with technology, think about other distractions you have to deal with. Perhaps you have noisy co-workers who hold impromptu catch-ups next to your desk, or the sound of construction next door to your office. 

By flexing your discipline muscle, you’ll be able to focus your attention to ignore both internal and external factors that are making your mind wander. While you may not be able to put a stop to these distractions, such as a ringing phone or loud office chatter, think about how you can better cope with them. Maybe it’s physically removing yourself from the area or using noise-cancelling headphones, or consciously reverting your attention to your task at hand. 

Reduce tech time

If accidentally leaving your phone at home sends chills down your spine, the thought of reducing the time you spend on your mobile may make you anxious. But many of us underestimate how long we spend on our devices. Having read the above statistic, do you think you check your phone much less than 63 times a day? 

There are apps that will tell you exactly how long you spend on your phone. They can also block notifications, disable sites and send you reports of your weekly phone habits. The BankMyCell stats also reflect that 41% of respondents succeeded in limiting their phone usage, so this is an achievable goal that will make a real difference in your day to day life. 

Pick up some reading material

While not everyone is a bookworm, reading is a hobby in which attention is key. Whether you pick up a book or something shorter such as a magazine or newspaper, reading strengthens your ability to concentrate on the single task at hand. “Use it or lose it” certainly applies to our attention spans, and reading can help lengthen and strengthen them. And by choosing hard copies over reading on your phone, you’ll be avoiding eye strain and the negative effects of blue light.iii

Get moving

Exercise can also help build not just literal muscles, but also your attention muscle. It has been found that physical exercise may strengthen the ability to pay attention due to a change in brain activity as a result.iv 

Runners often credit the methodical “one front in front of the other” rhythm of running as a way to slow their minds down and clear their thoughts. Other forms of exercise, such as lifting weights or taking a class in dance or yoga, can also hone our attention span as we’re following instructions and making mindful movements to ensure we avoid injuries. 

You can make small changes in your life that can will build your attention muscle, better enabling you to stay present and focused. Being deliberate about what you pay attention to and how you spend your time will result in an improved ability to control your attention, and as a result, your life. 

https://www.bankmycell.com/blog/smartphone-addiction/ 

ii https://time.com/3858309/attention-spans-goldfish/ 

iii https://www.preventblindness.org/blue-light-and-your-eyes 

iv https://www.sciencedaily.com/releases/2009/03/090331183800.htm

Material contained in this publication is a summary only and is based on information believed to be reliable and received from sources within the market. It is not the intention of RGM Financial Planners Pty Ltd ABN 36 419 582 Australian Financial Services Licence Number 229471, RGM Accountants & Advisors Pty Ltd ABN 69 528 723 510 or RGM Finance Brokers Pty Ltd ABN 81 330 778 236 (RGM) that this publication be used as the primary source of readers’ information but as an adjunct to their own resources and training. No representation is given, warranty made or responsibility taken as to the accuracy, timeliness or completeness of any information or recommendation contained in this publication and RGM and its related bodies corporate will not be liable to the reader in contract or tort (including for negligence) or otherwise for any loss or damage arising as a result of the reader relying on any such information or recommendation (except in so far as any statutory liability cannot be excluded).

Liability limited by a scheme approved under Professional Standards Legislation.