Here’s our list of the top 10 things to action or keep an eye on in 2022.
A budget is the most prized weapon in your business arsenal. A well-thought-through budget will capture your expected monthly income and expenses and enable you to track how you’re doing throughout the year. The good news is, if you don’t have a budget in place, it is never too late to start. You can commence your 2022 budget in January, March, or even July. Just be sure to have a budget at the top of your priority list this year.
2. CASH FLOW
A historical understanding of where your income is coming from is invaluable for predicting the future. Knowing your cash flow will help you track when you need extra staff and inventory and where and when you need to be cautious with expenditure.
3. DIRECTOR IDs
Every Australian company director is now required to have what is known as a ‘Director ID’. The Government has introduced the 15-digit number as part of its efforts to crack down on potential fraud and phoenix company activity. Most existing company directors have until this November to register for their ID number. However, new directors will have just 28 days to apply.
4. JOBKEEPER TAX LIABILITY
If you received JobKeeper during 2019/20, you’ve probably already taken care of the tax liability as part of your PAYG processes. However, not every business has accounted for the tax component of JobKeeper, particularly sole traders. As a result, some business owners could well be facing a higher tax bill when it comes to doing their return for the 2019/20 financial year.
5. FEDERAL BUDGET
2022 is an election year which means an early Federal Budget, most likely in March. From all reports, the Government has set aside a war chest, so there could be some announcements relevant to your business. Beyond the budget, it pays to have a reasonable understanding of both major party’s policies, particularly when it comes to taxation. Regardless of who wins, the election outcome will likely have a direct financial impact on your business.
6. SINGLE TOUCH PAYROLL PHASE 2
From 1 January 2022, phase two of Single Touch Payroll came into effect. This new phase aims to bring in a range of streamlining measures. For instance, new employees will no longer be required to make separate tax file number declarations. Most of the changes should be taken care of by electronic payroll systems. However, if you’re at all concerned, be sure to contact me with any questions.
7. SUPER STAPLING
If you’re taking on new employees this year, remember there is now a process in place called super stapling. Before super stapling came into effect, new employees were added to an employer’s default fund unless the employee nominated otherwise. Now the default is flipped on its head. Where a new employee does not identify a superannuation fund, the employer is required to contact the ATO and request details of the employee’s existing superannuation fund (the fund ‘stapled’ to them).
8. SHARING ECONOMY
In the middle of 2022, expect new laws to come into force requiring platform providers in the sharing economy, such as Airbnb, to report all transactions through their platforms. The Government believes it is missing out on tax revenue, including income tax from income earned, GST on ride-sharing (because the ATO considers all ride-sharing a taxi service and, as a result, GST applies), and capital gains tax on the sale of property used to earn income. While data matching programs have targeted sharing platforms previously, the proposed laws provide a structured and consistent framework to recognise all revenue earned in Australia through these platforms.
2022 could well be the year that cryptocurrency becomes mainstream. For instance, the Commonwealth Bank recently announced it would be Australia’s first bank to offer customers the ability to buy, sell and hold crypto assets directly through the CommBank app. From the art world to gaming, digital assets, known as non-fungible tokens, are increasing in popularity. But the crypto-surge raises some important tax questions, and the ATO has recently updated its guidance.
10. CONSUMER BEHAVIOUR
The big unknown coming out of COVID will be how the public spends. Will the trend to online remain, or will people be keen to return to more physical interactions? Will there be a surge in purchasing, or will consumers be more cautious with their cash? Business owners will need to keep a close eye on expenditure trends so they can adapt and adjust their business models accordingly.