Tag Archives: income

Qoin and what it means for your Business

In recent times there has been a surge in inquiries regarding the use of Qoin as a payment for goods and services, and of course, for this to happen, businesses must be registered to be able to accept Qoin as payment for goods and services.

This article is aimed at ensuring the businesses that do sign up to accept Qoin as payment for the goods and services they understand the consequences of doing so.

The key issues to consider are:

  1. Qoin has a floating value. It is not as simple as saying that 1 x Qoin equals 1 x dollar.
  2. Capital Gains Tax and Income Tax
  3. Bookkeeping costs in terms of the business owners time or the cost of a professional bookkeeper.

Qoin has a floating value and there is often a focus on the “rising” value of a Qoin. Of course, whatever rises in value can also fall in value. If you are selling an item for $50 and you accept Qoin as payment, you should be aware that your stock and other business bills such as wages, will in normal circumstances need to be paid for in hard cold dollars. If Qoin falls in value, how do you pay the bills each month. If you are in a position where you can afford to speculate with the money you receive for your goods and services, then perhaps you can consider accepting some Qoin as payment, but it would normally be quite unwise for someone to accept Qoin as payment for goods and services if they do not have the cash in the bank to cover their expenses.

Capital Gains Tax and or income tax may be something you need to consider. If you accept Qoin as payment for a $100 service, the first thing that needs to happen is that you record the value of the Qoin offered as payment on that day, because the ATO requires that you have the value in dollars recorded in your books for accounting purposes.

Let us assume you accept Qoin for payment of a $100 service. In 4 weeks’, time, when you are paying your accounts, you need to sell some Qoin to generate the cash needed to pay your bills. The sale price of the Qoin could result in either a capital gain or a capital loss, or in a trading circumstance, could be simply treated as additional income. So, every time Qoin is accepted as payment for goods or services, or Qoin are cashed or used for the payment of suppliers or services of any sort, you will need to record the value of the Qoin on that day in dollars. Every transaction needs to be recorded in dollars.

Bookkeeping – most business owners are seeking simplicity in the bookkeeping or admin tasks in general. The use of Qoin will require additional tasks – the recording of the value of the Qoin at the time of each and every transaction.

Qoin as an investment: It is not the purpose of this article to deal with the value as an investment of Qoin. I am not qualified to talk about it and those selling Qoin tell me they are not qualified to talk about it. But it always comes up. The topic of the rising value of Qoin is always mentioned, but the possibility of a fall in value is not. It was recently suggested to me that some employers were considering paying their staff wages using Qoin at least to some degree. I would recommend seeking industrial relations advice prior to such activity to confirm this would satisfy the awards covering the employee’s employment terms and conditions.

There are many different cryptocurrencies. At the moment there seems to be a lot of interest in Qoin. Just make sure you fully understand the implications of using Qoin in business and it may be worthwhile reading the information provided on the ATO website, click on the LINKS below –

Cryptocurrency used in business

Tax treatment of cryptocurrencies

Transacting with cryptocurrency

If you are looking to simplify your business administration, or if you are concerned about the cost of bookkeeping or accounting fees now, then consider that adding the complexity of using Qoin in your business transactions may add further to the cost of your bookkeeping or accounting services.

I hope this article has been of some assistance.

Senior Financial Advisor

Peter Jordan

Joredg Pty Ltd as trustee for the Jordan Hybrid Fixed Trust t/as ClearWay Advice and Financial Management. ABN 93 745 037 799. Peter Jordan Sub-Authorised Representative 244948. Joredg Pty Ltd Corporate Authorised Representative 473095 Advice Links Pty Ltd AFSL No 517955.

Income Protection – through Superannuation

income-protection-superannuation

I’ve recently had reason to examine at close hand, the value of Income Protection, labelled Total and Temporary Protection within a workplace superannuation product.

I have a new client, who has recently suffered a series of strokes that will leave the client, most likely unable to return to work, especially to the high pressure role previously held. All sick leave and other entitlements have been exhausted and approval for an income payment has been obtained, paid via the insurance held within the workplace superannuation account.

The insurance is labelled Total and Temporary Income benefit but it has a payment period specified and most members would assume they would be paid for the term shown on their statements.

In the case of the person we are working with, there is some doubt, although not yet confirmed, that our client will now not be able to return to work. In this case the client has been advised by letter, that the client’s income benefits will cease in December, after less than 6 months of benefit’s being paid.

On advice, our client has other insurance benefits, but not income protection. The level of insurance for Life and Total and Permanent Disablement within the workplace superannuation account is low because of the age of the client and the investment balance is not great because of the years of service.

I often get told by public servants in particular, that my insurance is covered in my super. Over the years we have seen a number of cases similar to this recent case, where members of a workplace superannuation fund expect that their income protection benefits will be paid for the term specified on their statements, only to find out once on claim, that they may not have the security they initially thought they had.

Our new client, if the medical diagnosis is confirmed, may not be able to work at all again. The plan was to work for another 5 years, and at that point retirement would have been secure. Forced retirement, 5 years early and without the security of the income protection insurance thought to be held, will mean a significantly different retirement.

What does this mean, and what can you do to ensure your financial future is secure? Get advice. Make sure your insurance definitions are confirmed and that your cover is what you think it is. But put simply, insurance through superannuation is not what it used to be. Be aware that a good income protection insurance plan is about providing the right amount of funds when they are needed, to the person who needs them. In the case of my new client, this will not happen.

All insurance and superannuation plans should be reviewed by advisers not associated with the product provider.

Peter Jordan is a Sub Authorised Representative 244948 of Joredg Pty Ltd as trustee for the Jordan Hybrid Fixed Trust, Corporate Authorised Representative 473095 of Keystone Partnership Pty Ltd AFSL No 466137

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