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We’ve all got memories of February 14, whether they be from receiving nice cards and choccies in primary school to being scalded by your better half for forgetting it, but one thing doesn’t change… Valentine’s Day is big business.
In 2022, Aussies collectively spent somewhere between $415M and $500M on V-Day for their special someone. It seems an industry all its own with numbers like that. And, looking abroad the numbers only increase with American’s punching past the $1B mark in2022.
With all that in mind, (and the fact that it’s almost upon us) we thought it worth diving into Valentine’s Day with a look at its history through to how it has become such a big event for so many businesses.
There’s not really one source of truth when it comes to the original Valentine’s Day but, most historians say it’s roots either run through Christian or Roman history. There are even alternate versions of each story, so take the below with a grain of salted caramel ….
Some historians suggest that the Christian church placed St. Valentine’s feast day in February to “Christianise” the celebration of Lupercalia, a fertility festival (a pagan one), dedicated to Faunus, the Roman god of agriculture. It was an attempt to slowly remove the pagan beliefs and build the Christian fraternity. Many suggest this happened a long time after the ancient Roman’s version of the story however…
Legend has it that Emperor Claudius II executed two men (both named Valentine) onFebruary 14th in consecutive years of the 3rd century.Apparently one of the two Valentines was a priest who performed marriages in secret despite the fact that such things were outlawed for young men byClaudius who believed that single men made better soldiers. Once the weddings were discovered, Valentine was put to death. The tradition for love letters is said to have come from the note he wrote the night before his execution to his jailer's daughter, whom he had befriended, signing it "From Your Valentine."
As mentioned, Valentine’s Day has become big business with so many millions being spent in such a short period, and, we can point the finger at clever marketing over literal centuries as the reason...
In 1714 Charles II of Sweden began communicating with flowers, assigning messages to each type of flower. It’s suggested he was the first to assign love and romance to the red rose, setting the stage for the exchange of the rose on what we call Valentine’s Day today.
In 1822,Cadbury sold the first heart-shaped box of chocolates in England on Valentine’sDay, clearly seeing an opportunity to grab the market on a day that has by now been celebrated for hundreds of years.
In 1849 inMassachusetts, S.A Howland & Sons produced 12 sample Valentine’s Day cards hoping to make $200 on sales, but ends the sales trip with 25 times that amount, proving massive demand for such things on Valentine’s Day. One year later, the company featured the first ad for their cards in the famed local newspaper.
The business of Valentine’s Day began to blowup between 1866 and the 1950s, with everything from conversational candies being born, then turned into hearts. The launch of the Hershey Chocolate company and their Hershey kisses, the beginning of American Greetings(specialising in cards). During the same period, Hallmark cards was founded and the first florist delivery service (then known as FTD) pioneered the enormous business of sending flowers to far-away loved ones.
From the 1950s until now, it’s a landslide ofValentine’s specific businesses popping up, while clever marketers began to use the holiday for businesses that aren’t specific to Valentine’s Day. Examples of such things will just about blow your mind …
Well, as with any business, understanding and identifying a market then fitting that market is the beginning. But, building a strategy to support such things is the real key to longevity and solid growth.
We’re not suggesting that building a business around one day of the year is best practice, but if you apply the same thinking as those who are incorporating Valentine’s Day into their model you might find your own niche to fit and dominate. After all, strategically growing a business is where the fun is right?
For us it’s examples like V-Day that make us think a little bit laterally. Thanks to the sheer volume of business that happens on Valentine’s Day around the world, we as accountants can’t help but look a little closer.
If you’re looking for tailored, strategic advice that fits your business and financial goals, speak with the Attune team today on 1300 866 113 or send us an email to start the conversation.
Whether you’re staying in the workforce longer to boost your superannuation, or making more, early contributions to your super, you’re likely to be aware of the “superannuation work test” that required you to prove you were employed before your super accepted contributions.
As of 1 July 2022, some changes were made to the work test, namely it was abolished if you’re 67 years or older. That said, there’s still some cause for caution as there is more to consider.
Let’s take a look at the changes while first covering what the work test(and the exemption) actually is…
Since the beginning of our super system, contributions have been tied to employment and income, meaning you needed to be working to make or receive contributions to your superannuation.
As part of that, you were required to prove you were gainfully employed before your fund would accept a contribution. This is referred to as the superannuation work test.
Back in 2004, the rules were changed for people under 65, abolishing the work test for that age group, but the rules remained for those between 65 and 75 years of age.
In 2020, regulations changed further, lifting the threshold to age 67 in recognition that many Aussies are staying at work longer. This meant you didn’t need to meet a work test requirement for making personal or non-concessional contributions if you were under 67.
Now, in 2022, the law was repealed for contributions made for those aged between 67 and 75 wanting to make non-concessional or salary-sacrifice contributions. It’s important to note that contributions here are still subject to contribution cap limits.
The main caveat is this: If you’re between 67and 75 and wish to make a personal contribution (for which you’d like to claim a tax deduction), you are still required to meet the requirements of the work test.
The key to these is that once you turn 67, you must be able to prove you are gainfully employed. Any younger, and you’re in the clear.
You must be gainfully employed. This is defined as working at least 40 hours of 30 consecutive days during the financial year in which you’re making contributions. There’s no rule around how the hours are structured, but they must be over 30 consecutive days.There is no maximum number of hours.
Interesting …
Super funds were previously the administers of the work test rules, requiring you to complete a declaration before they’d accept your contribution.Since July 2022, funds are no longer required to administer the work test at the time they accept the contribution, it now falls to the ATO to be responsible for checking you meet the work test. This will happen when you lodge your income tax return as part of the normal assessment.
More broadly, the ATO deem you gainfully employed if you’re employed or self-employed and getting paid for the work.Receiving payments for assisting family members (gardening, baby sitting etc),doesn’t meet the definition for those wondering. It also doesn’t allow for passive investment income through dividends or property investment to qualify under the work test.
On 1 July 2019 the government introduced an exemption from the work test for voluntary super contributions made in the first income year after you retire designed to allow recent retirees more time to get things in order while preparing for retirement.
To qualify for the exemption you must:
Remember though, since 1 July 2022 if you’re between 67 and 75, you no longer need to use the work test exemption to make or receive non-concessional or salary-sacrifice contributions.
You can contribute any amount up to your current concessional contributions cap for a particular financial year if you’re using the work test or work test exemption to make contributions for which you intend to claim a tax deduction.
As at 2022-2023, the annual general concessional contributions cap is $27,500, but you may be able to contribute more if you have unused concessional contributions caps from previous years. This is called a carry-forward contribution.
As with just about any matter involving superannuation (and indeed related taxation), whether it be a Self Managed Super Fund or not, the best advice is to get advice. Speak to the Attune Advisory superannuation experts as part of your planning. We’re hereto give you tailored, strategic advice that will remove the guesswork and put you in the best position for retirement possible for you. Give the team a call on 1300 866 113 or send us an email to start the conversation.
Travel can certainly be part of running a business, but what constitutes travel that you can claim at tax time? Holidays certainly don’t count, but many try to tie business in with pleasure, so where’s the line?
Let’s start with the normal definitions of what you can claim as tax deductions when it comes to travel and go from there…
Costs like public transport, taxis and flights are generally the obvious ones but there’s certainly more to deduct that can make your travels work better for your financial situation at tax time:
Be aware though that there are some caveats with some of the above.
Transport expenses are one of the more common deductions but, be aware that work-related travel in your car or on public transport is only claimable if it isn’t your normal travel to-and-from work. This also applies to parking, where you can not claim parking at your normal place of work or home.
Again, car parking is in line with this – you can claimparking costs if you’re attending a company meeting or event off-site and youuse your own transport to get there, but you can’t claim parking costs if youdrive to your normal workplace and pay for parking there.
This is a good time to mention, if your employer reimburses you for any travel expenses (parking, fuel or other), you can not claim that.
If you’re travelling for more than six consecutive nights, keep a travel diary to record where you are each day and what you’re doing each day. You’ll want to include start and end times of the work related activities you’re involved in too.
It doesn’t need to be a long story for each entry, simply something like:
– 7:00am flight to Melbourne –Arrival 8:30am
– 8:30am – 9:30am Taxi fromTullamarine Airport to St Kilda
– 10:00am – 5:00pm BusinessConference
– Overnight at Rydges St Kilda
As with any tax deduction, always keep your records for any travel. You can link them to your diary entries by day or simply take photos of receipts and store them in dated folders on your device. Either way, the ATO will need these as proof if they decide they’d like more information and without them you’ll be unable to claim the deductions.
In most situations, if you receive a travel allowance from an employer, it’s considered taxable income and treated as such at tax-time, but if you spend that money on travel, you can claim the portion spent as a deduction.
This means you can only claim the portion of your allowance actually spent on work-related travel. So, if you receive $2,000 annually from your employer and you’ve spent $1,500 on work-related travel, you can only claim deductions for the $1,500 you spent, not the entire amount.
Once again, receipts will help you make the right deductions.
Here’s where the lines can get a little blurry, but by now your travel diary and keeping of receipts can be what helps you here.
The rules are pretty simple:
• The primary purpose of your trip must be work-related
• You can’t claim any part of the trip that isn’t work-related
For example, if you travelled interstate for a five-day conference and decided to stay on for an additional two days to enjoy yourself here’s what you can claim and what you can’t:
• Accommodation costs for the four nights or five days the conference was running
• Taxi/uber/transport costs from the hotel to conference and back
• Meals during the conference period
Claiming flights and travel to-and-from airports needs some calculations to understand what’s deductable … Out of the 7 days you’re away, 5of those were work-related meaning 71.5% of your trip is work related. This means you can claim:
• 71.5% of your flight cost
• 71.5% of the travel to-and-from the airport(s)
You cannot claim leisure expenses like the cost of accommodation, meals, transport or car hire for the two leisure days you spent while away. If you add a partner or child onto your trip, you can’t claim any of the expenses they incur, and you can’t claim extra flights that aren’t related to the work portion of the trip either.
This scenario is completely different if you’re away on a holiday and decide to go to a work conference. In that scenario, you can claim the costs related to the conference alone and none of your flights or travel that took you to your holiday destination. This is because, the primary purpose of the travel is NOT work-related.
To ensure you’re staying on top of how you or your business treat travel expenses and any other tax-related matters, speak with the Attune team. Our tailored accounting services are designed to fit your situation, enabling you to keep doing what you do best. Give the team a call on 1300 866113 or send us an emailto start the conversation, you won’t regret it.
Are you aware of the incentives available for up-skilling your staff? The scheme is called the Skills and training boost and it offers you a 120% deduction on money spent training your staff. There is also a related scheme called the Small Business Technology Investment Boost that allows the same level of deductions if your business and the expenditure qualify.
If you’re looking to upgrade your business whether it be through staff training or additional tech to support your needs, then read on …
In the 2022-23 budget, the Government announced it will support small businesses looking to up-skill staff by creating a tax incentive.As you’ve already seen, small businesses (with an aggregated annual turnover of less than $50 million) will be able to deduct an additional 20% of expenditure incurred on eligible training courses provided to employees. As it currently stands, the scheme commenced on March 29, 2022 and will be available for claiming against until June 30 2024.
Eligible businesses can continue to deduct expenditure that is ineligible for the bonus deduction under existing tax laws.
There’s currently no “clear” list of eligible training courses, referred only to those that are “registered training courses inAustralia”, but we can help you navigate this as part of your business and taxation planning, so reach out to the Attune team if you would like help assessing your eligibility.
Once again, the budget for 2022-23 included a tax incentive for businesses who are looking to support their digital adoption. This includes(but is not limited too) the addition of portable payment devices, cybersecurity systems or subscriptions to cloud based services. As you think about each of these technical additions, you’ll likely find a place for them in your business if you’re not already using them.
The deduction once again allows businesses to claim an additional 20% of the cost incurred and depreciating assets that are eligible.
Importantly, there is a $100,000 cap on expenditure that applies each qualifying income year, but you’re able to continue to deduct expenditure over $100,000 under existing tax laws.
The Small Business Technology Investment Boost also commenced on March 29 2022 and will be available to access until June 30, 2023.
Once again, there are some specifics around what is eligible as far as expenditure goes, but the Attune team are here to help advise how you can best structure your adoption of tech from a tax perspective.
If you’re looking for tailored strategic advice to help grow your business alongside incentives like these, we’re here to help. Call theAttune team on 1300 866 113 or send us an email to start the conversation.
