News Pulse for May 11, 2018

A daily download of SME, startup, fintech and tax news from around Australia.

Budget crackdown on income splitting by lawyers, accountants

A key aspect of a common tax-reduction strategy employed by partners in legal, accounting and other professional service firms has been cut off i n this year’s budget .

The Tax Office will no longer allow partners to access the small business capital gains tax concession for any capital gain made on assigning an income stream to another person.

Australian startup Unlockd has had a win in its fight against ‘anti-competitive’ Google

Australian startup Unlockd has had a win in its fight against Google.

The English High Court today granted an interim injunction to stop Google from disabling AdMob-generated ads and removing Unlockd apps from the Google Play Store in the UK.

What the Open Data revolution means for you

A quirky debate on banking data is happening on the sidelines – but with consequences that will radically change how you interact with your major suppliers and potentially your customers.

It all started with the banks. Last year, the treasurer, Scott MorrisonThe Hon. Scott Morrison, Federal Member for Cook Treasurer from 21.9.15, commissioned the Open Banking Review, chaired by Scott Farrell, to find out the most appropriate model for “open banking” in Australia. Open banking essentially means giving customers greater access to and control over their banking data. This has the potential to transform the way in which customers use and benefit from the banking system.

Xero’s operating earnings turn positive as subscriber base continues to grow

Accounting software company Xero announced a 38% rise in operating revenue to $NZ407 million ($378 million) in its annual results this morning.

The company said earnings before interest, tax, depreciation and amortisation (EBITDA) rose to $NZ26 million for the financial year ended March 31.

Xero’s offshore subscriber growth picks up as revenue jumps 38 pc

New Xero chief executive Steve Vamos has indicated he will take a more measured and targeted approach to investment decisions that support the cloud accounting provider’s overseas growth and continued product expansion.

In his first outing after taking over from founder Rod Drury in April, to report full-year results, the former Microsoft Australia chief executive suggested the company could do more to improve the explanation of its investment strategy to shareholders.

Xero boasts subscriber boost

Cloud accounting software outfit Xero’s full-year result, its first under former Microsoft executive Steve Vamos, has beaten market expectations,

Xero, which delisted from the New Zealand stock exchange earlier this year to now be solely listed on the ASX ( XRO ), narrowed its loss to $NZ27.8 million ($25.87m) in the year ended March 31, from a loss of $NZ69.1m a year earlier.

Small Business Digital Taskforce submits report to Government

The taskforce charged with ensuring the nation’s 2.1 million small businesses make the most of digital technology has delivered its recommendations to the Australian Government.

The Small Business Digital Taskforce has handed its final report to the Treasurer, Scott MorrisonThe Hon. Scott Morrison, Federal Member for Cook Treasurer from 21.9.15, and the Minister for Small and Family Business, the Workplace and Deregulation, Craig Laundy.

Bligh welcomes open banking

Banks have welcomed the federal government push into open banking, with Australian Banking Association chief Anna Bligh saying the latest reforms strike the right balance between giving customers more freedom without compromising their security.

Treasurer Scott MorrisonThe Hon. Scott Morrison, Federal Member for Cook Treasurer from 21.9.15 on Wednesday announced a phased launch of open banking, which will have banks cede control of credit and debit card, deposit and transaction account data back to their customers by July 1.

The hidden open banking gem in Scott Morrison’s Budget announcement

This week’s Federal Budget announcement – as it always does – caused a whole lot of controversy. But among talk of income tax cuts, changes to your superannuation and pension loan schemes, there was one hidden gem in Scott MorrisonThe Hon. Scott Morrison, Federal Member for Cook Treasurer from 21.9.15’s budget speech that has the fintech world talking.

It certainly didn’t dominate the headlines, so you’d be forgiven for missing out on the open banking news that came from the Treasurer’s Budget speech on Tuesday night.

New Consumer Data Right Funding Set To Fuel Open Banking

The federal government has set aside $44.6 million over the next four years for the new Consumer Data Right (CDR) scheme, which will underpin Australia’s shift to open banking.

CDR aims to give Australian consumers greater control of their data, allowing them to more easily share transaction, usage and product data with service competitors and third party comparison tools.

Tax cuts and bracket creep solution welcomed by small business

With a growing business and a young family, Canberra builder Brenton Wells welcomes the Coalition’s flatter tax scales that Labor’s Bill ShortenHon Bill Shorten MP,  Federal Member for Maribyrnong Leader of the Opposition from 13.10.13 says favours the rich.

“It’s hard to speculate what the general public is going to think about a flatter tax bracket system, but I think it gives us a bit more room to breathe in terms of what we want to draw out of our business,” Mr Wells said.

R&D slug for small business

Start-ups with turnover under $10 million will get a lower refund on their research and development activities from 2018-19, in a little-remarked part of the budget’s slashing of $2.9 billion from the R&D incentive over the next three years .

Businesses turning over less than $10 million have, since 2015-16 been subject to a reduced company tax rate of 27.5 per cent. This means the net benefit on their 43.5 per cent refund on R&D was 16 per cent once they started to pay tax.

Xero Earnings Begin To Add Up

Accounting software company, Xero, which shifted its primary market listing to Australia recent says it has made its first positive earnings before interest, tax, depreciation and amortisation (but a bottom line loss nevertheless).

In its 2017-18 results yesterday, the company said EBITDA for the year was $NZ26 million, on a 38% jump in revenue to $NZ407 million ($A378 million).

Open banking to be phased in from mid-2019

The federal government has announced that Australia’s open banking regime will be officially implemented from July 2019.

Banks and other financial bodies will have to make client data available in a “useful digital format” when requested by customers in a bid to increase transparency, competition and consumer mobility.

Open banking may force down lending costs

Bank customers will be able to use their complete transaction histories from July 1 next year to get a better deal on savings accounts and credit cards in a gradual introduction of the open banking regime, which challengers say will put downward pressure on borrowing costs.

The government has accepted the banks’ argument for a phased-in approach to adding products to the regime, but has insisted on quicker timeframes than the banks had been arguing for. Treasurer Scott MorrisonThe Hon. Scott Morrison, Federal Member for Cook Treasurer from 21.9.15 described the establishment of the new regime as a “challenging but realistic timeframe” for the big banks.

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