What is a Living Away from Home Allowance – Leigh Barker West Pennant Hills

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A living away from home allowance is a payment made by an employer to an employee who due to work commitments is living away from their usual residence.

A living away from home allowance pays for expenses such as accommodation and meals while working away from your usual place of residence for extended periods. Generally, an employee is considered to be living away from home when an employee occupies a temporary residence for greater than 21 days.

A living away from home allowance is income tax free and is not declared as assessable income in a tax return. Conversely there is no tax deduction available for expenses that have been covered by a living away from home allowance.

A living away from home allowance is a fringe benefit that is paid by the employer, not the employee.

As a living away from home allowance is administered by the employer as opposed to the Australian Tax Office, living away from home allowances a generally provided on a timetable set by the employer. Generally, a living from home allowance is deposited into the employee’s bank account at the same time as normal pay.

In receiving a living away from home allowance, it is advisable to retain and to give to an employer a record of expenses incurred such as receipts, credit card or bank statements and a declaration setting out information about the expense.

Disclaimer: Prepared by Leigh Barker West Pennant Hills, MWC Group, Accountant, Portfolio Finance, Gordon and Tangible Assets. Note that all content of this blog is general in nature and is not financial or investment advice thus anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstance.

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What is a Family Business – Leigh Barker West Pennant Hills

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While all around us, family businesses are often overlooked as a form of ownership.

A family business typically has two or more family members involved in the business, holds a majority ownership or control lies with the family. A family business is a commercial operation in which decision making is influenced by family members.

The family business is one of the oldest and most common forms of business which is economically important and often underestimated. Family businesses play an important role in all countries and make a sizeable contribution to all economies.

A family business of any size is considered a family business if decision making rights are in possession of the person who established the business, or in the possession of the person who acquired ownership of the business, the majority of decision making is made directly or indirectly, and at least one family member is formally involved in governing the business.

Like all businesses, a family business can have both advantages and disadvantages and balancing competing interests often becomes difficult within a family business. There appears to be two main factors that affect the development of a family business and subsequent succession planning these being the size of the family compared to the volume of the business and suitability to lead the business in terms of management ability, technical skills and a commitment to continuity.

While a family business can present special challenges to those who run them, these are of little consequence as long as they continue to be managed by those who are steeped in tradition.

Please note: Prepared by Leigh Barker West Pennant Hills , Accountant, Portfolio Finance, Gordon, MWC Group and Tangible Assets. Note that all content of this blog is general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstance.

What is a Travel Allowance? – Leigh Barker MWC Group

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A travel allowance is an amount paid to employees to compensate for out of pocket expenses incurred on behalf of the employer while you travel for work. In the main a travel allowance will cover such expenses as accommodation, food, drink, transport, laundry and telecommunications.

A travel allowance is paid to an employee who is travelling on business and is not thought of as living away from home. Generally, an employee travelling for business is not accompanied by their spouse or children.

While a travel allowance is considered to be assessable income which may attract PAYG withholding, any expenses incurred on meals and incidentals may be deducted against the allowance on the proviso that it meets the criteria.

Every year the Australian Tax Office (ATO) releases a tax determination listing all reasonable amounts that can be paid as a travel allowance covering accommodation, meals and incidentals.

Thus, when the amount claimed by an employee for a domestic travel allowance does not exceed the ATO’s reasonable allowance amount there is generally no requirement to substantiate the claim by providing either written evidence or a travel diary. If the expenses associated with the travel allowance exceed the reasonable travel allowance set by the ATO it would wise to retain documentary evidence to substantiate the expense. Conversely, claims for overseas expenses must be substantiated through written evidence inclusive of a travel diary.

If the travel allowance does not appear on the payment summary the allowance is not included in the return and in this instance, there is no ability to claim any deductions.

Please note: Prepared by Leigh Barker MWC Group , Accountant, Portfolio Finance, Gordon, West Pennant Hills and Tangible Assets. Note that all content of this blog is general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstance

What is an Australian Business Number – Leigh Barker Tangible Assets

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When an activity becomes a business, it may require an Australian Business Number (ABN). If this point has been reached you can apply for an ABN to use in all business transactions. In order to ascertain if an activity has become a business there is an ABN entitlement tool located on the Australian Business Register (ABR) to assist with that decision-making process.

While there is no single test to determine if an activity is a business there are numerous features that may indicate that activities being undertaken may form a business. For example, there is an intention to make profit, there are sales of products or services of a reasonable size, activity is conducted in a business-like manner, having licenses or qualifications, having a registered business name, and maintaining records and accounts.

An Australian Business Number (ABN) is an eleven-digit unique identifier that is issued by the Australian Business Register (ABR) which is a branch of the Australian Tax Office (ATO). An ABN is free when registering through the ABR and once registered, ABN details are held in the ABR.

An ABN is generally quoted on all invoices and other documents relating to the sale of goods or services made to another business else a withholding tax may be applied under the PAYG withholding system.

As a unique identifier an ABN will allow businesses to be readily identified by government and non-government businesses. Once issued the ABN will appear on the ABN Lookup database.

Please note: Prepared by Leigh Barker Tangible Assets, Accountant, Portfolio Finance, Gordon, West Pennant Hills and MWC Group, Note that all content of this blog is general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstance

What is a Self-Managed Superannuation Fund – Leigh Barker Tangible Assets

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A self-managed superannuation fund (SMSF) is a trust structure managed by its members to provide benefits to these same members upon retirement. An SMSF operates under similar rules and restrictions as ordinary super funds. An SMSF is designed for its members to have direct control over their retirement savings and investments.

An SMSF is a private superannuation fund regulated by the Australian Tax Office (ATO) who checks the compliance of the SMSF on an annual basis. An SMSF comprises no more than 4 members all of whom are trustees of the SMSF, all of whom are personally liable for all decisions made by the SMSF. All members must be trustees and all members are responsible for decision making and compliance with relevant laws.

An SMSF is established for the sole purpose of providing benefits to members in retirement. An SMSF is a vehicle to save for your retirement.

An SMSF may either have a corporate trustee or an individual trustee who is responsible for making investment decisions and implementing the investment strategy of the fund.

It is important that the assets of an SMSF are separated from those of the trustee. As such an SMSF is required to have its own tax file number (TFN), an Australian business number (ABN) and its own bank account into which all SMSF deposits and payments are made. In addition, all investments are to be made in the name of the SMSF. The failure to separate assets is a clear contravention of super legislation and associated regulations.

Please note: Prepared by Leigh Barker Tangible Assets , Accountant, Portfolio Finance, Gordon, West Pennant Hills and MWC Group. Note that all content of this blog is general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstance

What is an Electronic Funds Transfer – Leigh Barker Tangible Assets

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When money is transferred from one bank account to another without the use
of paper documents and without the direct involvement of bank staff this is
referred to as an electronic funds transfer.

In contrast to traditional payment methods new payment systems have been
developed as the internet has evolved. Initially banks changed the method
that interbank payments were processed followed shortly thereafter at the
retail banking level whereby corporate and retail customers were offered
electronic banking platforms to process incoming and outgoing payments.

Electronic funds transfer systems have the effect of reducing administrative
costs as the direct involvement of bank staff is not required. Due to
potential cost saving benefits electronic funds transfer systems are
promoted by most financial institutions.

Electronic funds transfer systems have been applied to such transactions as
payroll related payments, debit or credit transfers, mortgage payments etc.

While there are many applications currently in place for an electronic the
most common services available comprise

* Automatic Teller Machine (ATM) is an electronic terminal that
permits banking any time. To withdraw cash, make deposits or transfer funds
using an ATM card & pin.
* Pay by Phone systems permit the user to contact the biller to pay or
transfer funds between accounts
* Payment transactions permits the user to make purchases with a debit
card. Transactions can take place in person, online or by telephone

Initially electronic funds transfer was driven by banks and aimed at
efficiency gains and cost savings whereas today the focus is on e-commerce
solutions to address how consumers access and pay for new services.

Please note: Prepared by Leigh Barker Tangible Assets, Accountant, Portfolio
Finance, Gordon, West Pennant Hills and MWC Group. Note that all
content of this blog is general in nature and anyone intending to apply the
information to practical circumstances should seek professional advice to
independently verify their interpretation and the information’s
applicability to their particular circumstance

What is an Electronic Signature – LEIGH BARKER TANGIBLE ASSETS

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As technology has advanced so has the method in which documents are executed
through the use of electronic signatures.

An electronic signature is simply a signature used on an electronic document
or transmission comprising either a symbol or other data in a digital format
attached to an electronically transmitted document. Thus, an electronic
signature is a person’s electronic agreement to the terms of a document and
are recognised at law both internationally and in Australia as having the
same effect as hand written signatures.

The aim of the electronic signatures is to create an accurate and secure
method to identify the signatory. As such electronic signatures are subject
to increasing levels of security to prove the validity of the signatory such
as

* A private key to create the electronic signature
* A capability to determine if the data has been altered or amended
after the message was signed
* A unique identifier linked to the signatory
* The ability to invalidate the signature is data has been changed

While the system may vary amongst those who offer the ability to execute
documents with an electronic signature the general concept is the same
whereby a document is uploaded to an on-line service and tagged where
signatures are required. The uploaded document is then sent electronically
for execution which can occur through a few clicks, or the use of standard
fonts or through scribble using a mouse or electronic pen. When finished,
the executed document is returned.

Please note: Prepared by Leigh Barker Tangible Assets, Accountant, Portfolio
Finance, Gordon, West Pennant Hills and MWC Group. Note that all
content of this blog is general in nature and anyone intending to apply the
information to practical circumstances should seek professional advice to
independently verify their interpretation and the information’s
applicability to their particular circumstance