In a November 2020 newsletter, we wrote extensively about some of the various scams doing the rounds and offered suggestions for ways in which everyone could protect themselves from financial harm. The subject has recently popped up on our radar again, unfortunately, as an associate recently came close to being defrauded. It was only as a result of some close attention to detail that the matter was identified and swiftly handled.
While we can’t speak in detail about what occurred as authorities are currently investigating, the situation involved a customer receiving an invoice from what appeared to be a company they did business with – the invoice was anticipated by the customer and otherwise wouldn’t have been cause for concern – however, on close inspection, key elements of the email the customer received were changed and the company’s emails and banking details were similarly modified. Noticing that something looked “off” about what they’d received, the customer contacted the company in question and alerted staff as to what had happened. The customer subsequently proceeded to make payment to the company’s legitimate bank account, as they had done previously, and the authorities were alerted to the scam.
We strongly recommend that when you receive invoices from suppliers that you take the time to examine the invoice and its details carefully to ensure that nothing looks amiss.
It’s important to check that the email address you received the email from is correct and hasn’t been modified in some way. For example, emails from amazon.com should say amazon.com and not arnazon.com or amaz0n.com or similar. If you hover over an email address, the information that pops up should similarly be consistent and not present as some foreign, third-party URL.
If an invoice states that a supplier has recently changed banks, we urge you to take the time to call the supplier and verify the new banking details, ideally using a telephone number you have used before and not whatever is listed on the invoice in question. We also recommend making payment using a credit card you can afford to lose temporary access to, as banks are increasingly efficient at blocking fraudulent transactions and protecting their customers.
You should also feel free to double check emails or invoices you receive with trusted friends, relatives or associates. Sometimes the things we miss are precisely the things that stand out to other people. If you’re ever in doubt, it’s worth asking for a second opinion.
Once again, we’ll leave you with a link to Scamwatch, which we hope you’ll visit to learn about the various other scams the Government is aware of. You can also subscribe to scam alert newsletters to keep up-to-date with what’s happening.
Tax Planning 2021: The Time Is Now
Some of the most frustrating feedback accounting firms receive from clients relates to their tax positions for the previous financial year. “Why do I have to pay so much tax?” and “Why didn’t you warn me??” are two questions every practitioner will hear at some point in their career, and one that leaves everyone shaking their heads, practitioners and clients alike.
The fact of the matter is, in firms where accountants are actively talking to their clients about tax planning, the vast majority of clients either ignore or refuse the offer of help. Sometimes it’s because they’re too busy running their business to review their numbers. Other times it’s because they don’t want to pay additional accounting fees.
Regardless of the situation, too many clients then find themselves paying more in tax than they otherwise may have needed to, and resenting their accountant/s for not being more assertive.
April and May each year are ideally the time you should be examining your financial position – whatever that looks like for you – and making some calculated decisions as to how and where you invest your resources before June 30.
Before the financial year ends is when tax planning is effective; not afterwards, when the year in question is over. By then it’s too late.
Depending on your situation this financial year, you might consider:
- pre-paying expenses;
- making additional, voluntary superannuation contributions;
- salary sacrificing into super;
- bringing forward the purchase of any new business equipment needed and taking advantage of the instant asset write-off;
- writing off bad debts;
- making donations to charities and deductible gift recipients that matter to you;
- postponing any invoicing you might ordinarily do in June;
- re-structuring your affairs so that you’re positioned to make the most of the next and subsequent financial years.
There are other tax effective strategies that can be implemented, too, however many depend on your unique circumstances. (We’re happy to advise further, if you’d like to chat.)
It may be that it’s the next financial year that is looking at being a big one for you, in which case it’s important to structure yourself appropriately now (before June 30) to make the most of your future opportunities.
It’s also important to remember that the ATO is cracking down on the substantiation connected to motor vehicle deductions and other work-related expenses. Making sure you have the appropriate substantiation required to support your deduction claims is a no-cost way to ensure you’re not stuck paying more tax than you need to. For example, if you rely on a logbook, when was the last time you reviewed your travel? Given that COVID-19 has required that more people work from home and via Zoom calls, it may be that your logbook doesn’t reflect your new circumstances. Now is the time to get yourself organised.
Lastly, there are defined distinctions between tax planning, minimisation, avoidance and evasion. It’s critical that you know the difference. Tax planning is proactive, legal and legitimate. Certain minimisation, avoidance and evasion strategies, however, are not. If you hear about or are offered an introduction to a scheme that sounds too good to be true, chances are good that you’re right. We urge you to be careful and seek professional advice before making any significant investments. Better safe than sorry!
Superannuation Guarantee Changes?
Based on current guidance, the Superannuation Guarantee percentage will increase to 10% from the 1st of July 2021. However, we are holding off on formalising that advice as the Federal Government still has a budget to hand down on the 11th of May and, given the COVID-19 pandemic and warnings against imposing additional costs on businesses, it may be that the increase is postponed.
As always, as soon as we know for certain, we’ll be in touch.