Latest News June 2024

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http://www.mytaxvet.com.au

Don’t forget it’s nearly the end of the year!

We are very close to 30 June and the end of the financial year. There maybe a few things to think about and possibly take action on:

• Are you going to pay the staff superannuation pre 30 June to claim as a deduction this year? 
• Are you thinking of buying equipment under $20k, and would it be better as  a tax deduction this year or next?
• Have you loaned money from the business, and if so have you spoken to your accountant how this will be paid back?
• Have you decided how any profits in a trust will be distributed?
• Remember to check payroll and do the finalisation declaration for payroll by 14 July

Are we about to see a turnaround in the veterinary economy?

There is the possibility now that the veterinary industry has experienced 3-4 months of positive growth after more than 12 months of shrinking! But it’s early days and we need to watch this space. Note also that we are commenting only on the status of the veterinary industry, not the economy as a whole which seems to be in a different position.

To keep it simple we will look predominantly at the number of unique pets visiting our pool of practices and the number of invoices generated rather than all the KPI’s.

The number of pets visiting practices is the most important way of assessing whether consumers are still engaged in veterinary services as well as in the previous years. The number of invoices reflects the fact that pets may be visiting more often and more services are being delivered. Generally the 2 numbers correlate quite closely.

When compared to the identical months (Jan-Apr) of 2023, 2024 looks like this for the number of unique patients and invoices:

Unique Patients:

• Jan 2024 growth = -0.1%
• Feb 2024 growth = 1.1%
• Mar 2024 growth = -8.6% 
• Apr 2024 growth = 7.9%

Averaged over the 4 months Jan-Apr 2024  = 0.075%

Averaged over the same period a year ago = -2.97% (negative)

So whist a 0.075% growth in unique patients is nothing to have a party about, it is the first positive average we have seen for some time, in spite of the very volatile March and April which was a result of the different timings of Easter in the 2023 and 2024 years.

Invoice numbers:

• Jan 2024 growth = 4.7%
• Feb 2024 growth = 5.2%
• Mar 2024 growth = -6.7% 
• Apr 2024 growth = 13.8%

Averaged over 4 months Jan-Apr 2024 = 4.25%

Averaged over the same period a year ago = -4.7% (negative)

Invoice numbers show a marked improvement over the same periods.

So it appears the veterinary market is settling into a new period of normal, for now at least. However it wouldn’t take much to reverse these positive effects and probably any changes such as an interest rate increase would could send it into the negatives again. 

Also a word of warning about how we collect our data – we only use data that is validated and clean, which means it is very bias towards the customers with whom we work ‘hands on’. This also creates a bias towards more proactive practices that are very aware of their financial performance and customer trends. It is very possible that the rest of the industry may not look quite as healthy. However, the trend we are measuring is across a very similar pool of practices over the last 24 months, so the improving trend is likely to reflect the industry in general.

Has your lender requested a letter from your accountant?

In the process of finance applications, we are often requested by your lenders to provide a letter to help support your application. Whilst this has been a common occurrence previously, it is important to note the kind of information we, as your accountants, are allowed to provide. Recently the lenders have been requesting information not previously requested which we can not provide.

To support your credit application, as your accountants, we are only able to provide the following details:

• Your gross taxable income
• Principal sources of income
• Years your tax returns have been lodged, and 
• Confirmation if your accounts have been audited.

Although we are frequently asked, we cannot provide information that we cannot factually verify. If we do, it will be a breach of our professional obligations. These types of information are, but not limited to:

• Estimate or validate your future income or expenses
• If you business is solvent and will remain solvent
• Your ability to service a loan

Further, we cannot provide any assessment, assurance or guarantees that you have the ability to make the repayments should your loan (whatever type it may be) be approved. We have been guided by our professional body that this determination should be made by the lender and we are not allowed to do it. So expect that we will decline providing certain types of accountant letters to your lender if the request is outside the scope described above.

Dog Tales – Maybe the ATO needs a watchdog?

Dad recently hosted a web masterclass on cybersecurity which was very well received because it has become a worrisome problem for a lot of business owners. Part of this event included a part on how to protect your digital identity with the Australian government app called MyGovID.  

Co-incidentally, in the few days that followed, Dad’s iPhone died, so it was time to get a new one. And with this, the whole setup process of the new phone was implemented whilst thinking about how easily the various parts could be hacked.

One of the most surprising things how weak the identification process is when you confirm your identity on the MyGovID app! The requirement for ‘standard strength’ identity simply requires you to enter 2 documents that are not necessarily that private – 1)your drivers license number and 2)your Medicare number. It also asks your birthdate, but that is already on your drivers license anyway. And once you have ‘standard identity’ you can then proceed to lodge your  tax returns online. There is absolutely no photographic or video validation of the human making the application which is used in other apps, for example the Truro car sharing app, nor is there photographic validation of the document itself, you simply type in the numbers.

The reason that this is a big deal is that once you can lodge your tax returns, then you can ask for fraudulent tax refunds. And this is exactly what we are seeing happening these days. In fact Dad thought about how often you hand over these documents to an unknown stranger – he had to get a new phone charger too from JB Hi-Fi and they had a good look at his drivers license when he went to the click and collect counter – it would take nothing other than a hidden camera under the counter to make a copy of it. We simply do not treat these as private documents.

With recent hacks of Medibank, Optus and a number of motor car dealers and car rental businesses, it is clear that the validation documents required are compromised. It is also clear why hackers targeted these businesses.

Our suggestion is that the ATO and other government bodies get a watchdog rather than rely too heavily on outdated technology to keep the humans honest! Our noses cannot be deceived as easily at the app, however the implementation may be tricky!  

For those of you who did not attend the cybersecurity masterclass, here is a link to the recording: https://aplaccountants.info/course/latest-web-masterclasses

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