ABNs – Important News

This is an article I shared with my own VA network members and was asked to share it here too. This relates to all VAs in Australia.

A year or so ago I asked for stories of those who were struggling to obtain, or keep their ABN for their business. The reason why I asked this is because an organisation, of which I am on the Board, is looking into these matters and dealings with the ATO and building a picture. We are now aware of over 30 cases and are looking for more. Self Employed Australia (formerly Independent Contractors Australia) is a group that was formed some years ago to assist and aid those who are self-employed here in Australia. You would do well to subscribe to their newsletter. Their article ‘Can an Incoming Tide be Stopped?‘ is just one example. But you might also like to read ‘Lies and blatant misrepresentation really get up our nose!‘ I’m sure you’ll find them interesting reading.  In fact, all of their articles are worth reading. You’ll see a list of others on the right of the screen when you view either of them.

The two articles above are very recent and the ATO are aware we’re watching them. That’s where you come in. If you’ve contacted me before, or even of you haven’t, and have a story you want to share, please do get in touch with me direct so that I can let this group know about the challenges you, or someone you know, has been experiencing. The more numbers we can get, the better.  Just today someone on their Facebook group (more members welcome) shared she knew of several people who had problems with obtaining ABNs or keeping them with no explanation, no notice, nothing. It is important to make sure that each and every one of you do have a separate bank account for your business and that you’re not using a personal account only. This is one of the things that is a trigger for the ATO with respect to withdrawing ABNs.  We have even had Robert Gottliebsen write articles in The Australian on things that the Self Employed Australia group have been working on. And it is good having someone with such a high profile on our side.

Now, it’s possible your Accountant might have told you that you don’t need to have a separate bank account as a sole proprietor – that has certainly been discussed recently on a VA forum at Facebook. However, other Accountants advise that you should (mine did). While the ATO website indicates you don’t need to, what ATO staff say can be quite different – depending on who you get on the phone.  Why risk your business for the sake of one bank account? Besides it makes it easier for tax and accounting purposes if all, or most transactions, in that one account are business related rather than mixed with personal stuff.

If you have had challenges with accessing or keeping an ABN, the Self Employed Australia group would really like to know about it. And their membership is worth exploring. If ever you did end up with a case against the ATO, knowing this group is on your side is going to be worth it. Feel free to contact me (Kathie) direct if you wish to discuss. You can find me online or ask the AVAA committee to put you in contact with me.

Kathie M. Thomas,
AVAA Past President

Ernst & Young goes offshore for VA support

Another large corporate, Ernst & Young, has decided to take their support needs offshore, thereby taking more jobs away from Australia. To date we’re not aware of them actually contacting any Australian based VAs to provide the support they needed. I wonder if they even know we exist – despite having been here since 1996 – the industry that is, not our association 🙂

It is important that all VA networks here in Australia, and VAs individually, help to educate the public and particularly businesses, about the benefits of engaging a VA, or VAs, here in Australia.

While it might cost a lot to employ full time staff, the reality is that engaging a VA means only paying $$ per hour (or a package rate) for the work being done. There are no extras such as morning and afternoon teas, or lunch, or leave breaks, or sick leave, or equipment, software, Superannuation, taxes, or any of the other overheads involved in engaging staff.  This has to be an immediate saving in itself.

The majority of VAs here in Australia have good corporate background experience and, I daresay, there are probably some who used to work with E&Y and know their work culture.

Hey, Ernst & Young, and other corporations, please do look in your own backyard and consider the Australian VA workforce that is here, ready, willing and able!  We’ll save you money, know the language and culture of our land, understand the laws and tax needs here and will also protect your IP. After all, we’re governed by the same laws you are.

$2 an hour VAs, says Sydney Morning Herald

If you are a VA in Australia, have you seen the article in the Sydney Morning Herald “Outsourcing Puts a Price on Spare Time”?  This was brought to light at a VA forum on Facebook and has had a fair bit of discussion. Rightfully so too. When are journalists going to do the research and show things on an equal basis? Let us share with you an email of complaint our President sent to them.

I wish to complain about the article “Outsourcing Puts a Price on Spare Time”

In it, people are given the idea that they can get a VA for $2 an hour. This is terrible. It doesn’t even state where those VAs are or what currency.

“Virtual assistants can be found for as little as $2 a day. VAs can be hired to do personal and professional tasks – anything from making dinner reservations to surveying customers.”

For your information the VA industry has been here in Australia since 1996 and is alive and strong. There is no way any VA here would work for that rate. Would you work for that rate? It wouldn’t even pay for our internet connection to run a business here in Australia.  VAs’ rates range from around $30-$70AUD an hour here in Australia, depending on the service being provided. We have an industry association, run annual conferences, have training courses, etc.

Even mentioning Airtasker and Freelancer – why not mention actual VA directories or networks that outsource VAs? And yet you go on to mention Concierge and Lifestyle Managers which is here in Australia at obviously a higher rate than the $2 VAs mentioned.

This is very disappointing. Did the author actually research our industry in this country? Or did they just take the word of those other ill-informed people who write about these ‘cheap offshore VAs’ without actually finding out for themselves? Would be nice to see our industry accurately represented in articles.

Clearly it was not in their interests to research our industry here in Australia and this is something we often see in the media. What are your thoughts? And would you like to share your concerns about this article too? We’d love to hear from you in the comments below.

Self employed stats in Australia

Virtual Assistants are Independent Contractors and the Independent Contractors Australia (ICA) is very proactive in keeping the government on track with ICs in our country. If you’re interested in seeing the stats on how many self-employed business people there are in Australia, this article from the ICA may interest you. Our current President, Kathie Thomas, is a board member of the ICA.

http://www.independentcontractors.net.au/Research/How-Many/independent-contractors-how-many

The Top 10 Things to Know re Tax For Virtual Assistants

Happy New Financial Year!  for those VAs in Australia

We have an article by a guest writer to share with you relating to taxation for Virtual Assistants. As with any articles like this one, please refer to your own accountant to ensure that your circumstances have been taken into consideration for anything you do regarding your business.

THE TOP TEN THINGS TO KNOW RE TAX FOR VIRTUAL ASSISTANTS

Congratulations on becoming a Virtual Assistant, an area that is ever-growing in these days of technological mobility and employment flexibility.

Many of you have made the jump from salaried employment to the business of being a Virtual Assistant and are therefore unaware of the things that you can claim as a deduction on your Income Tax Return.

BEFORE WE START

Before we start, we need to discuss what a deduction is.

A deduction is an amount spent on by you on a business item that can used to reduce your Net Profit and, therefore, the amount of tax that you have to pay.

A deduction is only allowable if an amount was spent to derive business income and that there is evidence to prove that the amount was spent.

Now that we have determined what a deduction is, we can now touch upon the top TEN things to know when getting your tax done.

THE TEN THINGS TO KNOW

Clothing, uniforms and footwear: The purchase of clothing, uniforms and footwear is not deductible as these items don’t have the main character of money spent to gain/make income unless the clothing has your logo on it.

Should there be a logo on the clothing, you can claim the deduction; otherwise you cannot.

Conferences, seminars and training courses: A deduction can be claimed for the cost of attending conferences, seminars and training courses to maintain or increase a virtual assistant’s knowledge, ability or skills. There must be a relevant connection with the current work activities of the virtual assistant.

A deduction is allowable for travel expenses (fares, accommodation and meal expenses), registration and conference material costs, incurred in attending work-related conferences and seminars. If these costs are only incidental to a holiday, then only the costs directly attributable to the travel costs are deductible.

Depreciation of equipment: A deduction is allowable for depreciation to the extent of the work-related use of the equipment.

Should the items of equipment is used partly for work-related purposes and partly for other purposes, the depreciation should be reduced to reasonably reflect the extent to which the equipment was not used to produce assessable income.

Should the equipment used is bought part way through the year, the deduction for depreciation should be apportioned on a pro-rata basis.

Home Office Expenses: A deduction is allowable for a portion of the expenses associated with an employee’s home given that part of the home is used for income-earning activities and has the character of a ‘place of business’

There are two types of expenses associated with the home:

a)     Occupancy expenses relate to ownership or use of a home and are not affected by the taxpayer’s income-producing activities. These expenses include rent, mortgage interest, repairs to the home, municipal and water rates, property taxes and house insurance premiums; and

b)     Running expenses relate to the use of facilities in the home and may be affected by the taxpayer’s income-producing activities. These expenses include: heating/cooling and lighting expenses, cleaning costs, depreciation, leasing charges and the cost of repairs to furniture and furnishings in the home office.

Should you be renting the house that you run your business from, then you can claim both groups of expenses; should you own the house that you run your business from, then you can only claim the Running Expenses.

Motor vehicle and other transport expenses (see also Travel expenses): Transport expenses including public transport fares and the running costs associated with using motor vehicles, motor cycles, bicycles, etc., for work-related travel. They do not include accommodation, meals and incidental expenses (see Travel expenses).

Given that Virtual Assistants generally work from home, a deduction is allowable for the cost of travelling directly between two places of business, provided that the travel is undertaken for the purpose of carrying out income-earning activities.

Self-education expenses: A deduction is allowable for the cost of self-education if there is a direct link between the course of education and the virtual assistant’s current income-earning activities. Self education costs can include fee, travel, books and equipment.

Stationery: A deduction is allowable for the cost of purchasing items of stationery to the level that they are used for income-producing purposes.

Telephone, mobile phone and other telecommunications equipment expenses: A deduction is allowable for the rental cost or for depreciation on the purchase price to the extent of the work-related use of the item.

Travel expenses: A deduction is allowable for the cost of travel (fares, accommodation, meals and incidentals) incurred by a virtual assistant when travelling overnight in the course of employment, (e.g., to a sales conference in another town)

Wages: A deduction is allowable where virtual assistants incur a wage expense to provide services and assistance relating directly to their income.

However, a deduction is not allowable if the expenditure is private or domestic in nature.

BIOGRAPHY

My name is Mark Peterson, and I run an Accounting Practice called Marked Focus (www.markedfocus.com.au). The aim of this document is to help you claim the deductions that you are entitled to and, therefore, reduce the amount of tax that you have to pay.

Should you have any questions in relation to this document, you can contact me on 0438 873 668 or e-mail me at

DISCLAIMER

The advice provided on this website is general advice only. It has been prepared without taking into account your objectives, financial situation or needs.

Before acting on this advice you should consider the appropriateness of the advice, having regard to your own objectives and needs.

How do I become a VA?

This is a question that is often asked by people via our contact form. Here is an example of the information we send them in reply:

Becoming a VA is a combination of making a decision and then acting on it.  Sounds simple, but that’s not always the case.  You do need to understand that being a VA means being self-employed. You won’t be an employee whereby someone gives you the work to do. You will need to actively network and market your business to gain clients.

Providing you have a good computer and decent printer at home, good internet connection and good office based skills, you have what it takes to be a VA. The next thing is to let people know you exist.

  1. The quickest ways to get clients are:
    • Join one or two Virtual Assistant Networks.  You’ll find some listed at https://www.avaa.asn.au/australian-va-networks/  Client requests will be sent to you and/or clients can contact you direct.
    • Start networking.  No business can live without having contacts; people who can refer business to you and people who can provide the resources you need.  There are sure to be business networks that meet in your own region which will put you in touch with potential and local clients.
  2. Develop an online presence. You can do this through the networks above and/or set up a simple website, a Facebook Page, or even a blog.  Make sure you get a domain and use an email address relating to that domain.
  3. Read as much as you can about being a VA.  Joining a couple of discussion forums for VAs is worthwhile.  The VA networks listed above often have forums attached to them.
  4. Do a VA course. Again, you will find courses attached to two of the VA networks listed on the page linked above.  There are also others available online that are run from the US and UK.

Hope this helps 🙂