MYOB clarifies plans for its desktop product

Accounting software provider MYOB has clarified the situation around its plans to cease support for its desktop product, amid some confusion and frustration at the move.

A number of My Business readers have expressed concerns at the situation, including about how the transition is being managed, why it is being done and what they have (or have not) been told about it.

MYOB's general manager of clients, Nick Burkett, told My Business that the decision to stop supporting its Version 19 desktop accounting software was driven by a desire to deliver more value for its customers.

"We vehemently believe that the move to online is really beneficial for clients and industry in general, and we can see from the people who have made that move already that they have seen really large benefits from doing so," he said.

"We're seeing a range of benefits … the first thing I would say is that by using online, they've got a number of features that they can use that aren't available on the desktop software. That's everything from bank fees, which enables them to reconcile and save lots of time within their business, through to online invoicing, which enables them to track whether people have received the invoices, take online payments etc … and the ability for multiple people to collaborate [among employees from different locations as well as with the business' accountant or bookkeeper].

"There are a huge number of benefits of moving online, and in fact the people who have moved say those benefits are pretty large."

Business owners and MYOB customers had raised the following concerns and frustrations, to which Mr Burkett has directly responded:

My Business reader: "I was told by the MYOB Melbourne office … that my product was no longer supported."

"That's not accurate," Mr Burkett replied.

"That is in a year's time, so September next year [2019] is the point at which MYOB will no longer be supporting version 19."

My Business reader: "For many years, I was assured that desktop would continue without an end date."

"The v19 [Version 19] software, while it has been a good set of software, is coming to the end of the road," said Mr Burkett.

"And while that's true, people can continue to enjoy using that software for as long as they want, we just won't support it anymore.

"As an example, if Microsoft were to release a new operating system, we will not be doing work to make sure that the version 19 product is compatible with that. It may continue to work, we can't guarantee that it will not, but we will not be supporting the product any longer [past September 2019]."

 Mr Burkett added that anyone who bought a desktop product has purchased a "perpetual license", meaning they are able to continue using it for as long as they choose to do so.

My Business reader: "I run a manufacturing business in a rural area where NBN is not available and ADSL2 is so slow. I could never operate on a cloud-based product."

"Version 19 is not the only product that can work in desktop mode," Mr Burkett replied.

"AccountRight Live, which is the product that people can move to very easily, also works in desktop mode, and customers who are in areas with poor internet connectivity could use that product as a replacement.

"It has an identical feature set to version 19 [and] a very similar user interface, and so that, we believe, is a very easy transition for customers to make."

My Business reader: "People that have paid good money for the full desktop version (non-subscription) are effectively being forced to hand over MORE money by MYOB intentionally disabling their files."

Mr Burkett said that such an experience sounds extreme, and suggested it could actually be caused by fraudulent access or unlicensed software.

"That is in no way, shape or form linked to people being required to upgrade," he explained.

"Anyone who has had an experience like that … they should reach out to MYOB and we will look into that really closely.

"There is a feature in all of our desktop products – and it's a feature that has existed for a long, long time – called 'activation and confirmation', and that is really an anti-piracy process.

"Because desktop software can be installed on multiple computers, that process ensures that people are licensed appropriately and have not, for example, installed it on a thousand computers and are using it freely.

"So the software can lockout [users] and require you to call in an ID. What should happen is that, if you're licensed appropriately, you should be turned straight back on and be up and running again."

My Business readers' concerns around pushy sales tactics and misinformation being supplied by MYOB's call centres.

Mr Burkett urged any customer who has specific questions, or who is unhappy with their experience in dealing with MYOB, to contact the company directly.

"We pride ourselves on delivering great customer experiences in our local call centres. If anyone has any concerns about interactions with MYOB, they should contact us directly and we will look into those matters very seriously," he said.

"To my knowledge, we haven't had any of this feedback directly, which is why I would encourage anyone who has had experiences like this to reach out to MYOB … so that we can investigate it and come up with a solution."

According to Mr Burkett, MYOB has already been actively engaged with customers impacted by the transition – and will continue to do so in the lead up to September 2019 – through a series of emails, running webinars, visibility on its website and announcements at its Partner Connect events.

Editor:  If you would like some assistance in determining a course of action for your desktop MYOB product, please contact us for a confidential discussion of your options.


From the 2018 financial year onwards, travel expenses related to inspecting, maintaining or collecting rents for a residential property can no longer be claimed as a tax deduction by investors. The restriction applies to all transport costs (regardless of the mode of transport used), meals, and accommodation expenses incurred in relation to residential rental properties.

There are however some exceptions to these changes as follows:

Firstly, the rules will not prevent a deduction from being claimed if the expense is necessarily incurred in carrying on a business. This means that you can continue claiming travel deductions if you carry on a business of property investing, or a business of providing retirement living, aged care, student accommodation or property management services.

The distinction between someone merely investing in passive property investments and someone carrying on a business of property investing is a matter of fact. The ATO will look at the characteristics of the business including:

  •  the total number of residential properties that are rented out
  • the average number of hours per week you spend actively engaged in managing the rental properties
  • the skill and expertise exercised in undertaking these activities, and
  • whether professional records are kept and maintained in a business-like manner.

The fact that a taxpayer has multiple properties does not necessarily mean that they are in business. It will really depend on whether you can prove that you actively manage the properties like a business. In a recent case, the Administrative Appeals Tribunal found that a taxpayer with 9 rental properties was considered to be carrying on a business of property rental largely because the taxpayer actively supervised the real estate agent employed and managed issues associated with the properties (thus having a discernible pattern of trading to their activities), the capital employed was significant and they had conducted property rental activities for a number of years.

Also, the rules do not apply to certain entities including:

  • Companies;
  • Superannuation funds that are not  an SMSF;
  • Public Unit Trusts;
  • Managed Investment Trusts;
  • Unit trusts or partnerships (but only if all unit holders or partners fall within one of the categories above).

In addition to the rules that prevent a deduction from being claimed, the changes also ensure that travel expenses cannot be included in the cost base or reduced cost base of a property. This means that they cannot be used to reduce a capital gain or increase a capital loss made on sale of the property.

For all taxpayers with investment properties the message is now very clear – unless you are in the business of property investing – No More Travel Deductions are allowed!!

If you're unsure whether you can legitimately claim travel expenses related to your residential investment property, please give either of our offices a call on Sunshine Coast 07 54754300 or Brisbane 07 38423128 or email us with your queries to

#rentaldeductions #propertytaxadvice #Taxadvice #ATOchanges

Don't let a Grinch of a scam ruin your holidays

Scammers are phoning unsuspecting taxpayers pretending to be the ATO and telling victims they have committed fraud against the tax office.  If you receive on of these types of phone calls our advice is that you should hang up immediately and ignore it. 

Receiving these types of phone calls can be quite upsetting and stressful but the less involved you get, the better.

The goal of the scammer is to build pressure and stress in the call, in an attempt to create an urgency for payments to be made or personal details released.   If you release any information they can use it to take advantage of you and in some (most) cases, exploit your personal bank accounts.

We have had both clients and staff experience these calls recently:  anyone can be a target for these types of phone calls.

We urge you to stay up to date about your own tax affairs so you will not fall victim to a scammer, but never divulge any type of information to them. Hang up immediately.

Some of the tell-tale signs that it is a scam call, and not the ATO include:

    •    threatening that you will be arrested or police are on their way to your address;

    •    the caller will not provide you with explanations or let you speak to another manager in charge;

    •    demanding you pay outstanding debts via the use of pre-paid cards, cryptocurrency or direct credit into a bank account of which they provide details for; and

    •    demanding you pay a fee to release tax refunds owed to you.

Guard your personal and financial information, and do not hand these out to anyone you do not know or trust. 

Let your accountant know about the call (scam); and report the scam to the ATO's dedicated scams line 1800 005 540.

The ATO's website lists a range of previously reported scams.  If you would like to see some examples if you would like more information click here:

Any small business's lifeblood is its cashflow.  If your business operations rely heavily on regular payments from clients and some won't pay on time, such delays can be frustrating, or in the worst case scenario, threaten the very livelihood of your business.


Many small businesses are still struggling to build reputations which means they need every client they have, whether they're faced with late payments or not.  And with the added publicity through social media that lies at every client's fingertips these days, you need to stay ahead of the game.


Business is about building relationships so cutting out every client who won't pay on time is not an option.   If you depend on regular payments from those who purchase goods or services from your small business, there are a few things you can do to ensure you maintain that great relationship and always get paid on time. 


1. Communicate Your Policy


Implement a policy that will work for you.  If you require full payment upfront, and don't wish to begin the work until the payment is received, take this step because it rarely deters clients.  Everyone knows where they stand, it minimizes headaches, reduces stress, eliminates money-chasing, and establishes an expectation of trust from the get-go. And it can work in your favour by weeding out the clients you don't want to deal with anyhow.


You could also introduce your payment policy at that start of any new contract with a client.  By clearly outlining your policies at the start of the business relationship you have something to refer to if the client fails to meet that agreement. If you're providing a service, it is standard practice to set milestones and deliverables from the beginning, especially on large projects which will require months of your hard work to complete. These milestones should outline what will be delivered by you the provider, along with the payment amount that will be expected and due at the time of that delivery. Your wording should also stress what the consequences will be if payment isn't received on time.


For short-term projects, you may require partial payment as a deposit before work begins. Many tradespeople and professional service providers ask for a deposit at the time contracts are signed as a good-faith payment. Even with this in place, however, the final half may be late in coming once work is complete, leaving a business to decide whether to continue with the next project the client is requesting or wait until payment on the last project has been submitted.

Your policy should outline how late payments will be handled, including service charges at set intervals. Each state has its own regulations, but in general this is charged as a percentage of the total due. Some businesses have found taking a more positive approach to this is more effective, though. Offer a 5-10% discount to any client who pays his invoice early or on time.  You may be surprised how many debtors take you up on it.  If you do opt to take a late-fee approach, be sure to look at it as more of a deterrent to late payments than a money-generating tool for your business.

2. Offer options

It helps to offer options to clients.  There are many invoicing apps available; some are even free. Automated invoicing ensures you never miss billing someone for the work you do, among a myriad of other benefits.

To make things easy, choose an invoicing solution that allows one-click payment. If your clients receive an invoice with a link they can click to pay using a stored credit card or PayPal account, you'll be much more likely to receive payment without delay.

For recurring payments another option is PayPal, which is known and trusted by just about everyone. Clients agree to automatic recurring billing, and PayPal takes care of the rest. Each month, it charges their credit card and deposits the funds to your PayPal account, with a simple e-mail notification that the charge was successful.

3. Offer payment arrangements

Life can be unpredictable.  Your client may have had every intention of paying until something happens.   This is where you need to communicate to get your payment.  Pick up the phone and get in touch.  A client may have been busy, circumstances have changed, or something unexpected has left them unable to address payment.  Without becoming your clients "bank" you can still offer a payment arrangement, with or without interest charged, to meet both parties' needs.  You are paid and the relationship is maintained. For this time.  Naturally, you need to determine how many times you are willing to bend your own policies.   It is best to say at the outset that this arrangement will only apply once, to this payment only, and that you expect all future payments to be made on time.  Once again you maintain control by communicating an expectation in line with your policy.

4. End the Relationship

Unfortunately in some cases a non-paying client can become the source of the vast majority of your financial stress.   Non-payment is often the primary reason a small business will decide to terminate a client relationship.  As valuable as a client's money may be to your business, if months have passed with no payment, the lack of that money is obviously not helping your business at all. Even if payment eventually comes in, the time and mental costs you spend each month tracking payments, sending notices, and worrying that the client won't pay aren't worth it. In this case, the best thing you can do is put the late-paying client on notice that you'll be ending your working relationship at the end of its current term.

You can graciously bow out while still being firm, especially if you've mentioned the problem with late payments to the client previously.

If you can end things professionally and amicably with the client, that's ideal. Unfortunately, there will be cases where your client won't take it well despite your best efforts. As long as you've conducted yourself as professionally as possible, you shouldn't have any regrets and as time goes on, you'll likely have very few relationships with clients that don't work out.

Adapted from an article by Jason Demers 2014



If you're striving for work-life balance, you'll never get it, argues Stewart Friedman, a noted author and adviser to global leaders who inspires "rock star adoration" among his students at Wharton.

Stewart Friedman advocates developing skills that integrate work with the rest of your life – home, community and the private self of mind, body and spirit – to emphasise overall harmony rather than trade-offs.

In an interview during his appearance at the World Business Forum in Sydney, he outlined these core skills and showed how integrating them can lead you to better performance in all parts of your life.

Work-life balance – that fraught division of time between work and family life – is the Holy Grail of the modern workplace. We're all looking for it, but so far no one has actually found it. 

The work-life balance paradigm

According to the work-life balance paradigm, there's work and then there's life – everything else. Like oil and water, the two don't mix. 

But what if work-life balance is an unattainable myth – an unhelpful binary that privileges one area of life – work – and pits it against all others – life?

Stewart D. Friedman, professor at the Wharton School of Business at the University of Pennsylvania, says the digital age's obsession with elusive work-life balance stems from both "the widespread feeling of being overwhelmed by the demands of everyday life and the increased interest in doing work that has meaningful social value."

Ironically, this frantic pursuit of a full life can leave us feeling stretched thin and unfulfilled. As we try to satisfy life's competing priorities, we often find no one wins.

Friedman, who has developed his theories of work-life integration over three decades of teaching, research and practice in the field, suggests that a better way of understanding what we mean by work-life balance is to view life as the sum of four major domains: work or study, home or family, community, and the private realm of mind, body, and spirit.

Trading balance for harmony

Friedman rejects the notion that success in one part of life, whether it is work or home, requires sacrifice in others – what he calls a "trade-off mindset".

"Our research at the Wharton School and elsewhere shows that it doesn't always have to be this way," he tells INTHEBLACK. 

"Using different language to describe the relationship between work and the rest of life opens your mind to seeing and actually pursuing gains in all the different parts of life." 

Harmony should be our goal, he says, not balance. The challenge lies in finding strategies and solutions that make life better in all domains – what Friedman labels "four-way wins".

This is not "having it all" – code for an impossibly high set of standards we impose on ourselves. 

"You can't have it all – complete success in all the corners of your life, all at the same time. No one can," Friedman writes in Leading the Life You Want: Skills for Integrating Work and Life (Harvard Business Review Press, 2014).

"But even though it can seem impossible to bring these four domains into greater alignment, it doesn't have to be impossible. Conflict and stress aren't inevitable. Harmony is possible."

Skills and principles

In 1999, the CEO of Ford Motor Company recruited Friedman to create a program to help employees find better ways of integrating work with the rest of life. The result was Total Leadership, a program he subsequently developed into a course at Wharton and a book, Total Leadership: Be a Better Leader, Have a Richer Life (Harvard Business Review Press, 2008). 

Three key principles underpin Friedman's theory of Total Leadership: to be real, to be whole, and to be innovative.

"To be real is to act with authenticity by clarifying what's important to you…To be whole is to act with integrity by recognizing how the different parts of your life affect each other. All this examination allows you to be innovative," he explains in Leading the Life You Want

Success requires that you understand who and what is most important to you in the different parts of your life.

"Then you create new ideas for how to improve performance in all the different parts," he tells INTHEBLACK.  

Leading by example

Friedman's research found that to increase performance in the different parts of their lives, the most effective leaders act with authenticity, integrity and creativity.

In Leading the Life You Want, Friedman offers six case studies of high-profile people who have successfully integrated work with the rest of life by demonstrating these values. 

One example he gives is Facebook COO Sheryl Sandberg, who has a knack for "creating win-win solutions that meet multiple goals" – like turning the common problems faced by working mothers everywhere into an agenda-setting, bestseller book, Lean In.

But work-life integration is not restricted to the Sheryl Sandbergs of this world. According to Friedman's principles, anyone can achieve four-way wins.

Trial and error

 Like any rigorous scientific method, Friedman's theory relies on experimentation.  

His experiments are systematically planned and executed trials of minor changes to see how they affect the different areas of life. If something doesn't work, the experiment is adjusted or abandoned, and the failure notched up to experience. 

"Little is lost," Friedman writes, while wins accrue to gradually improve life as a whole. 

It's a system that is open to everyone. 

"For decades I've been coaching people at all life stages and in countries around the world and I have never met a person who could not come up with a creative idea for experimenting in what I call 'the laboratory of your life' in the pursuit of four-way wins," he says. 

"To do so is challenging, and fun."  

Do your priorities match your efforts?

Try this test. Prioritise four areas – or domains – in your life and then examine how much focus and effort you're allocating to each (see example below). Are the two lists aligned? 

 This common lack of alignment is what often leaves us with a sense of imbalance or dissatisfaction. By realigning your focus and effort with your priorities, you can start to create greater harmony in your life. 

This article was first published by INTHEBLACK.

Christmas reminders for the Festive Season

ith the well-earned December/January holiday season on the way, many employers will be planning to reward staff with a celebratory party or event.
While keeping it fun and festive, we encourage you plan appropriately for any possible FBT and income tax implications of providing entertainment (including Christmas parties) to staff and clients.

FBT and 'Entertainment Expenses'

Under the FBT Act, employers must choose how they calculate their FBT meal entertainment liability, and most use either the 'actual method' or the '50/50 method'.

Under the actual method, entertainment costs are normally split up between employees (and their family) and non-employees (e.g., clients and suppliers).

Such expenditure on employees is deductible and liable to FBT.  Expenditure on non-employees is not liable to FBT and not tax deductible.

Using the 50/50 method instead?

Rather than apportion meal entertainment expenditure on the basis of actual attendance by staff, etc., many employers choose to use the more simple 50/50 method.

Under this method (irrespective of where the party is held or who attends) – 50% of the total expenditure is subject to FBT and 50% is tax deductible.

Here are the "traps" to consider: 

1 - Even if the function is held on the employer's premises – food and drink provided to employees is not exempt from FBT;
2 -  the minor benefit exemption* cannot apply;   and
3 -  the general taxi travel exemption (for travel to or from the employer's premises ) also apply.

(*) Minor benefit exemption
The minor benefit exemption provides an exemption from FBT for most benefits of 'less than $300' that are provided to employees (and their family/associates) on an infrequent and irregular basis.

The ATO accepts that different benefits provided at, or about, the same time (such as a Christmas party and gift) are not added together when applying this threshold.

However, entertainment expenditure that is FBT exempt is also not deductible.

Editor:  And 'less than' $300 means no more than $299.99!  A $300 gift to an employee will be caught for FBT, whereas a $299 gift may be exempt.

Example: Christmas Party

An employer holds a Christmas party for its employees and their spouses – 40 attendees in all.

The cost of food and drink per person is $250 and no other benefits are provided. 

If the actual method is used: 

·         For all 40 employees and their spouses – no FBT is payable (i.e., by applying the minor benefit exemption), however, the party expenditure is not tax deductible.

If the 50/50 method is used:

·         The expenditure is $10,000, so $5,000 (i.e., 50%) is liable to FBT and tax deductible.


Editor:  When rewarding employees and loyal clients/customers/suppliers it is important to understand how gifts to staff and clients, etc., are handled 'tax-wise'. 

Gifts that are not considered to be entertainment

These generally include, for example, a Christmas hamper, a bottle of whisky or wine, gift vouchers, a bottle of perfume, flowers, a pen set, etc.  

Briefly, the general FBT and income tax consequences for these gifts are as follows:

  • gifts to employees and their family members – are liable to FBT (except where the 'less than $300' minor benefit exemption applies) and tax deductible; and
  • gifts to clients, suppliers, etc. – no FBT, and tax deductible.

Gifts that are considered to be entertainment

These generally include, for example, tickets to attend the theatre, a live play, sporting event, movie or the like, a holiday airline ticket, or an admission ticket to an amusement centre. 

Briefly, the general FBT and income tax consequences for these gifts are as follows:

    - gifts to employees and their family members – are liable to FBT (except where the 'less than $300' minor benefit exemption applies) and tax deductible (unless they are exempt from FBT); and
    - gifts to clients, suppliers, etc. – no FBT 
    - and not tax deductible.

Non-entertainment gifts at functions

Editor:  What if a Christmas party is held at a restaurant at a cost of less than $300 for each person attending, and employees with spouses are given a gift or a gift voucher (for their spouse) to the value of $150?

Actual method used for meal entertainment

Under the actual method, for employees attending with their spouses, no FBT is payable, because the cost of each separate benefit (being the expenditure on both the Christmas party and the gift) is less than $300 (i.e., the benefits are not aggregated). 

No deduction is allowed for the food and drink expenditure, but the cost of each gift is tax deductible.

50/50 method used for meal entertainment

Where the 50/50 method is adopted:

·         50% of the total cost of food and drink is liable to FBT and tax deductible; and

·         in relation to the gifts:

                             the total cost of all gifts is not liable to FBT because the individual cost of each gift is less than $300; and

                             as the gifts are not entertainment, the cost is tax deductible.

To Sum Up
We understand that this can all be somewhat bewildering, so if you would like a little help, just contact our office.

Please Note: Many of the comments in this publication are 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 circumstances.


Transitioning to the Cloud

Cloud Accounting systems have become mainstream and MYOB is moving toward switching users to the cloud.  Clarke McEwan is presently assisting clients in making the change.

All users should be aware that from September 2019, the DESKTOP version of the software will no longer be supported by MYOB. 

As a Professional Partner, Clarke McEwan is able to assist your practice with its transition to the cloud.

If you aren't sure what clouding computing actually involves, have a look at the attached YouTube video

The incentives of accessing your software via the cloud environment for computing are many and varied depending on your existing set up and requirements. Some of the more obvious advantages are:
- You can do your processing anywhere, anytime you have internet access
- You will be able to inter-connect directly to your favourite business tools
- Your accountant and bookkeeper can log in, do the books and log out
- You'll be able to make business decisions faster with real-time data
- There will be no more stress over the possibility of losing your data, the size of your server or the cost of maintaining it.

If you haven't made a choice yet as to software, let us help you decide which cloud accounting system is for you?     Bit (Business IT) provides a lot of insight as to choice with its review of the top 6 by Stephen Withers.
"While the third-party app ecosystem has become increasingly important part of choosing accounting software, its core functions still have to suit your needs, as well as being quick, convenient and easy to use. So to help you with your decision, we've tested and reviewed six of Australia's major small business cloud applications:

MYOB Essentials QuickBooks Plus Online Reckon One Saasu Sage Xero
Quoting Y Y Y Y Y Y
Invoicing Y Y Y Y Y Y
Online quotes/ invoices N Y N N N Y
Purchases Y Y Y Y Y Y
Purchase orders N Y N Y Y Y
Inventory N Y N Y Y Y
Payment gateways Y Y Y Y Y Y
Bank feeds Y Y Y Y Y Y
Payroll Y Y Y Y Y Y
Time tracking N Y Y (mobile app) N Y N
Document storage (attached to transactions Y Y (mobile app) N Y Y Y
Third-party add-ons 50+ 180+ 10 50+ 5 500+
Mobile app available Y Y Y Y Y Y
More info Review Review Review Review Review Review
Website Website Website Website Website Website
Pricing/ plans $27 (1 employee, 25 bank transactions, 5 invoices) $15 (Simple Start) Core system $5, plus: $15 (1000 transactions a year, 3 bank feeds) $20 $25 (5 invoices and quotes, 5 bills, 20 bank transactions, payroll for 1 employee)
$45 (unlimited transactions, 1 employee) $25 (Essentials: adds data import and multiple currencies) $3 for invoicing ($5 with approvals) $40 (20,000 transactions, 5 bank feeds; adds payroll for 20 employees, inventory, multicurrency) Additional users $3 $50 (unlimited invoices, quotes, bank transactions)
$55 (unlimited transaction and employees) $35 (Plus, adds inventory) $3 for bank feed (up to 100 transactions) or $5 (up to 250) or $7 (for up to 500) $70 (40,000 transactions, 10 bank feeds, 40 employees; adds inventory attributes and P&L consolidation) Bank feeds $7 $60 (up to 5 employees; adds auto- superannuation and multicurrency)

$3 for payroll ($5 with SuperStream output)

$3 for projects ($5 with enhanced features)

$3 for time and expenses ($5 with enhanced features)

Still confused?..  Just Ask a CPA....  Contact us

Clear communication is vital to the success of any business. 
This is especially true in the case of family businesses, which account for more than two-thirds of international companies.

 Ninety per cent of family firms conduct business meetings on a regular basis. If yours is not yet among them, here are four reasons why you should consider making family meetings a top priority in 2017.


Meetings Build Unity

Humans have always yearned for a sense of belonging. An old Navajo interpretation of sadness is to "sleep outside the net." It's no wonder that the vast majority of members within successful family businesses report a sense of pride in being part of the family unit.


In fact, more than eight out of ten owners of the largest family businesses say that they care deeply for fellow family members, devoting a huge amount of time and effort towards cultivating a deep sense of unity among them.


One of the best ways to do this is by holding regular business meetings, which strengthen the relationships between members of the family and help to build cohesion, a key ingredient for success.


When families are in a state of agreement, rather than progress being stunted by short-term thinking, they have the freedom to take a long-term view of their business aspirations. They may, for example, pursue investments that promise growth at some distant point in the future, even if they don't generate quick returns.


Meetings Encourage Innovation 

Successful family businesses adapt as their management changes hands from generation to generation, but it's also vital that they take care to maintain relationships as they vary over time.


A family meeting can help prevent stagnation, as newer generations are encouraged to offer fresh perspectives and ideas. Rather than allowing older members of the family to become too set in their ways, injecting exciting and novel ideas can be a lifeline – after all, in companies of all stripes, change is essential for survival.


Brown Brothers, a family-run wine company based in Milawa, Victoria, serves as a case in point. Founded in 1889 by John Francis Brown, the company spans four generations, with the first son, John Charles Brown, initiating ongoing experiments in trialing uncommon varieties.


Now considered "one of Australia's foremost winemaking innovators", his experimental approach continued down the bloodline, with more than 40 varieties now grown in diverse microclimates of the company's vineyards.


Katherine Brown, Assistant Winemaker for the 2015 Vintage, says that "always trying something different" remains a cornerstone of the Brown Brothers' philosophy.


Meetings Create Trust 

Many family businesses delegate management responsibility to a few select family leaders. Although it's impossible and impractical to include every family member in every decision, these leaders should do their best to make their actions transparent. Failure to do so can result in anxiety rising within the family ranks.


There is often an unspoken but underlying assumption that certain issues, such as salaries or executive distributions, should remain closed to discussion. Since most family members count on the business for their livelihood, however, adopting this attitude results in a lack of knowledge. This can breed conflict.


Clear, open communication through regular meetings helps to foster a sense of trust and security. When family members feel able to ask any question without limitation, suspicion diminishes and a sense of security grows.


Meetings Resolve Conflict 

Unfortunately, even with a focus on pride and unity, conflict is sometimes unavoidable. Nonetheless, a small amount of conflict can be healthy if families resolve the issues surrounding the disagreement in a positive manner.


The most successful families excel at resolving conflict, rapidly creating solutions and making adjustments to their ongoing practices. Working through differences can bring people closer together and enhance family cohesion.


Pretending that a conflict doesn't exist in the first place can cause serious problems. Families that feel unable to resolve conflict may delay making important decisions that both damage the overall health of the business and result in missed opportunities.


While family meetings can often be difficult, it's worth it in the end. Meetings can be used to facilitate business decisions, resolve differences, build trust and encourage innovation, allowing for families to work together in deciding on the best future for their enterprise.


David Harland CPA is managing director of FINH, an organisation that specialises in the provision of advice to family groups in business across the Asia-Pacific region.  The opinions expressed in this article are those of the author. 

Professional indemnity insurance for Dentists

Today's dentists operate in a far more litigious environment than they did in past decades. So it's crucial that your professional indemnity insurance affords you adequate and appropriate cover for your full scope of practice, say experts.


Like all health professionals, dentists now operate in an increasingly litigious environment. Nearly one in 10 dental practitioners will face a lawsuit in their professional lifetime, and one in 20 will be slugged with a regulatory complaint or matter in any given year. So it's crucial that dentists' professional indemnity insurance (PII) covers them for the full scope of their practice and that its limits enable them to mount a proper defense, should they wind up in court or face regulatory action.


Why dentists need PII


According to the Dental Board of Australia, PII refers to a policy or arrangements "that secure for the practitioner's professional practice insurance against civil liability incurred by, or loss arising from, a claim … made as a result of a negligent act, error or omission in the conduct of the practitioner".


"Having PII is a legal requirement, part of your registration," explains Dr Hugo Sachs, Australian Dental Association federal president. "It covers you for the actual procedural events that occur in a dental surgery, so anything from restorative work to tooth removals.


"PII also ensures members of the community that if something untoward occurs in their [dental] treatment, the provider of that service is indemnified, and therefore they will be recompensed."


Craig Hockley, head of marketing at Guild Insurance-the ADA's preferred insurer in NSW, Victoria, Tasmania and SA-says having comprehensive PII cover isn't just mandatory; it's a necessity.


"Twelve years ago, around one in 30 dentists experienced the stress of a professional indemnity claim; today, it's closer to one in 10," Hockley says. "Not only has the incidence of claims increased, so has the cost. Without professional indemnity insurance, dentists risk losing their business and personal assets."


Clive Levinthal, CEO of Experien Insurance Services, agent for Australia's largest indemnity insurer, Vero, notes that dentists' need for PII cover has increased with changes in the regulatory environment. "Historically, the main concern for dentists was civil claims, and that's still a high risk. But [as] regulatory bodies have become … easier for consumers to access, regulatory cases have spiked: in 2016-17, these increased by around 30 per cent year on year."


Regulatory cases run the gamut, Levinthal says, from complaints about quality of work done, "say, in putting on veneers, to failing to exercise 'reasonable care and judgement' during a filling or extraction that failed, or the dentist having inadequate skills to do work such as implants or orthodontics" to allegations of poor infection-control measures, inappropriate behaviour and threats to patient safety.


"It could come from anyone-a patient, current or former staff member or the regulators themselves, following an audit of compliance practices or allegations made by a third party," he says.


And even competent, careful dentists can be at risk, cautions Dr Sachs. "No-one's immune-there are some scurrilous claims," he says. "And in general, the more complicated the treatment, the higher the risk. Which is why you have professional indemnity insurance: it's there to help both patient and practitioner."


Registration standard


Under Section 129 of the Health Practitioner Regulation National Law, a registered health practitioner can engage in his or her profession only if "adequate and appropriate" PII arrangements are in force.



"No-one's immune-there are some scurrilous claims. And in general, the more complicated the treatment, the higher the risk. Which is why you have professional indemnity insurance: it's there to help both patient and practitioner."-Dr Hugo Sachs, president, Australian Dental Association


All dental practitioners except those with student or non-practising registration must be covered by PII that meets the minimum terms and conditions outlined in the DBA's Indemnity Insurance Registration Standard.


Whether direct or third-party, your PII cover must include civil liability cover, appropriate retroactive cover; and automatic reinstatement, dictates the DBA.


Civil liability cover pays for any legal expenses you incur defending or settling a civil claim, plus any damages. Retroactive cover means PII arrangements covering you against claims arising from procedures undertaken prior to the start of the policy, while automatic reinstatement means the limit of indemnity (amount insured) is reinstated for new, unrelated claims even after claims have been paid to the indemnity's limit.


If you work under third-party PII that doesn't meet this standard, you'll need to take out additional cover. Ditto if you intend to practise outside the scope of your employer's PII-say, through additional study or volunteer work


Moreover, under the DBA's registration standard, 'practice' isn't restricted to direct clinical care; it includes "using professional knowledge in a direct non-clinical relationship with clients… and [in any roles] that impact on safe, effective delivery of services in the profession".


Practice owners should take out practice entity cover in addition to their individual PII, advises Levinthal. "Though it's not mandatory, it's recommended, especially if they employ other dentists. Because if one of those associate dentists makes a mistake, litigation … can be brought on both the individual treating dentist and the practice that employed that dentist."


The same could apply to an assistant's error, he notes. "So if you're the owner and employ staff, ensure you're covered for mistakes they may make."


Full scope of practice


In line with the National Law, the DBA sets out "broad scope-of-practice requirements for the different types of dental practitioners, rather than specific activities", explains the Board spokesperson. "Practitioners are expected to practise safely and within the limits of their competency, training and expertise.


"In all cases, dental practitioners need to assess whether their PII is adequate, given the area/s of practice they work in, their professional experience, the risks involved in their practice and any previous insurance claims made against them," says the spokesperson.


"All dental practitioners must declare if they meet the Board's standard on PII when they apply to renew their registration. The Australian Health Practitioner Regulation Agency audits practitioners at random to ensure they meet … registration standards. Any practitioner who cannot produce evidence demonstrating that they're covered by appropriate PII may have action taken against them."


While most APRA-approved insurers take a 'full scope of practice' approach to PII for dental practitioners, not all policies are equal, asserts Levinthal.



"It's important a practitioner pays close attention to these details as well as any limits of cover the policy may extend."-Craig Hockley, head of marketing,

 Guild Insurance


"We don't nitpick and charge additional premiums for general dentists who, say, do implants or orthodontics-our policy covers for everything they're registered to practise," he explains. "There are different premium bands, however. So a part-time dentist can opt to pay less. And while there's no discount for not practising particular treatments, choosing certain excesses lowers your premium."


Hockley notes that while some insurers "dictate the number of hours a week a practitioner can work or limit the number of hours they can spend on specific treatments, Guild's dental PII policy's written in such a way that if the DBA says you're able to do it, you're covered".


That said, loadings are applied to general dentists intending to undertake implants and/or orthodontics, Hockley says, because audits show "there's a greater risk to those two procedures".


For general dentists, taking out a full-scope-of-practice PII policy is a simple way to ensure you're covered in any eventuality, says Dr Sachs. "If you don't, and you're not paying the add-ons-which, for orthodontics and implants, [can] attract a significant loading-you can't legally practise these procedures. And without 'full scope of practice' cover, dentists who've had repetitive misadventures can find their insurer says, 'We'll no longer insure you for that'."


Read the fine print


When weighing up various PII options-and before you sign-read the fine print, experts caution. "It's important a practitioner pays close attention to these details, as well as any limits of cover the policy may extend," says Hockley.


PII providers offer anything from $100,000 to $500,000 for defending regulatory matters, and typically between $10 million and $20 million for civil claims. "It's certainly worth shopping around," Levinthal stresses.


Hockley, however, contends that with PII, price correlates directly with the service you receive. "Just because another insurer's premiums are cheaper doesn't mean it's like for like," he says.


"Nine out of 10 of our customers who've made a claim go on to recommend us to a colleague. While we're close to it, we don't pretend to be the cheapest: we aim to be the best, and to be there when you need us. Dentists pay, on average, $2500 a year-claims can be millions. There's a distinct possibility that if you're not properly covered, you can lose your livelihood."


Failing to note changes to the fine print could also prove costly.


For example, the 2012 amendment applied to many Australian health practitioners' PII policies, excluding from coverage anyone using 'therapeutic goods' not registered under our TGA-designed to discourage dentists from using cheap unregistered imports that could be harmful to patients-entailed an apparently 'minor' alteration to the fine print. Ignoring this crucial amendment could, potentially, have cost a practice or practitioner millions-enough to render them bankrupt, with their professional reputations damaged irreparably.

Clarke McEwan's Network of Contacts includes brokers, insurance specialists in the medical industry.   
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Small business is still a vote winner

Small business is still a vote winner with the Government and Opposition teaming up to accelerate tax cuts for the sector by 5 years impacting on an estimated 3.3 million businesses.

Parliament recently passed legislation to accelerate the corporate tax rate reduction for corporate tax entities that are base rate entities (BREs). Under the new rules:

             - A 26% rate will apply to BREs for the year ending 30 June 2021, and

             - A 25% rate will apply to BREs from 1 July 2021

The amending legislation also increased the small business income tax offset rate to 13% of an eligible individual's basic income tax liability that relates to their total net small business income for the 2020-21 income year and 16% for the 2021-22 income year onwards.

The small business income tax offset continues to be capped at $1,000 per individual per year. 


Aggregated annual turnover threshold

Eligible companies*

Entities under the threshold

Other corporate tax entities



SBE ($2m threshold)





SBE ($10m threshold)








2018-19 to 2019-20















* Small business entity (SBE), Base rate entity (BRE)

This means that if your business operates as a sole trader for example, the amount of tax you are likely to pay will be reduced from 2020-21 but only up to the $1,000 cap. 

 What is a base rate entity?

Between 1 July 2015 and 30 June 2017, we used the concept of a small business entity (SBE) to work out what tax rate applied to a company. The concept of an SBE has now been replaced with a base rate entity (BRE) for company tax rate purposes. However, the concept of what a BRE actually is has changed over time to extend the lower tax rate to more companies and to restrict what entities can access the lower tax rate.

For the 2017-18 income year, a BRE was a company that had an aggregated turnover at the end of the income year of less than $25 million and no more than 80% of its income was passive in nature. Passive income includes some dividends, franking credits, non-share dividends, interest income (there are some exclusions), royalties, rent, net capital gains and gains on securities, and some trust and partnership distributions. If the company receiving the dividend holds a voting interest of at least 10% in the company paying the dividend then the dividend is not treated as passive income for the purpose of these rules.

For 2018-19, the threshold to be a BRE increased to companies with an aggregated turnover up to $50 million.

Where income is derived through a chain of trusts or partnerships, things get slightly more complicated as the law requires the tests to be applied at each level of the chain.  Special rules also exist to prevent partnerships and trusts from reducing their net income by increasing expenses. Indirect expenses such as overheads are excluded from the calculation of net income.

The problem for franking credits

The company tax rate changes have also impacted on the maximum franking credit rules.  In 2015-16, the first year small business entities could access a reduced company tax rate of 28.5%, the maximum franking credit rate for franked dividends remained at 30%. However, from the 2016-17 income year onwards the maximum franking credit rate needs to be determined on a year-by-year basis. In many cases this means that if the company's tax rate is 27.5% then the maximum franking rate will also be 27.5%. However, this will not always be the case and you can have situations where the corporate tax rate and maximum franking rate are different in a particular year.

In some instances, a company will pay tax at 30% but when it pays out the profits as a franked dividend the maximum franking rate will be 27.5%. The company may end up with surplus franking credits being trapped in its franking account. This can lead to double taxation as shareholders won't necessarily receive full credit for the tax already paid on those profits by the company.

This problem will potentially become worse as the company tax rate becomes lower as some companies will have paid tax on profits at 30%, but will only be able to apply a 25% franking rate to dividends paid out in future years.

 It will be important to look closely at this issue each financial year as there are some strategies that can potentially be applied to prevent franking credits being trapped in the company and minimise the incidence of double taxation.

 For more information on this tax topic see