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Business

Why cybersecurity is everyone’s obligation

by Bailey Amber
written by Bailey Amber

Over the years, we’ve used technology to secure technology, and for the most part, it’s been done to great effect. 

However, we’ve not been so good at using tech to secure people. Given that humans are the primary attack vector, there’s a need to solve “the people problem,” and that starts with breathing life into an organisation’s cybersecurity culture. 

According to the OAIC’s latest Notifiable Data Breaches report, human error accounted for 25 per cent of data breaches between July to December 2022. This shows there’s a need for organisations to focus on developing a culture of security best practices. 

The stronger a security culture is, the more likely it is that people will behave securely and exhibit secure behaviours. To build a resilient cybersecurity workplace culture, groundwork must be laid, and an attitude that enforces secure behaviour must be instilled in the workplace. 

The culture cultivated in the work environment influences the perceptions, beliefs, and values of the people co-existing in it. We can drive a positive cybersecurity culture by educating ourselves and prioritising workplace values such as positivity and collaboration. An overtly authoritative security team who use “a stick” instead of “a carrot” drive the cybersecurity culture of a workplace underground, with staff less likely to identify cybersecurity risks and more likely to see the cybersecurity team as unapproachable. 

Instead, if the security team encourage people to participate and ask questions to better understand cybersecurity best practices, a more desired outcome can be achieved. Getting cybersecurity right is essential and leaves little room for error or mistakes, as a threat actor only needs one error to be made by staff to gain access to an organisation.  

What can organisations do to drive a positive cybersecurity culture, without falling down along the way? 

  1. Collaboration is key

Self-awareness plays a leading role in this endeavour, and security teams must be able to hold a mirror in front of themselves and ask, “would I buy into what I see here?” It’s a measure that requires an understanding of what people think about the security team. By asking the workforce about their thoughts on the cybersecurity team, you can gain an honest cyberculture health check and an understanding of what needs significant improvement. 

These key performance questions can help indicate the organisation’s cyberculture level.  

  • Do people feel safe reporting incidents? Even ones they might have been responsible for?   
  • Does the security team receive regular communication from the workforce, such as requests for briefings?
  • Do staff understand the priorities of the security team? Do they trust the security team to keep them, and the information they are working on, secure?
  • Is the message getting through? If not, why? Is it too technical, too vague, or too unfamiliar? 

When trying to steer the security course of an organisation, remember that emotions are vital. It’s very important to facilitate a frank discourse where employees can freely share their thoughts and feelings about everything from the security team to policies and training opportunities.  

  1. Keep things simple

Motivating the workforce to be cyber-secure and ensuring security, are two simple goals that facilitate success. Understanding people and using simple, non-technical language, you can inspire people to do what you want without feeling like you’re burdening them. It is much easier to advise people on positive actions that can assist them in being cyber-secure than providing a list of 20 things they should not do.  

  1. Get creative with your message delivery

Success lies in communicating cybersecurity instructions concisely and simply. Why not make it easy and tell people how much time they’ll save with a new password manager solution that can be installed using a few clear instructions? By being creative and joining forces with your HR or internal communications team, you can brainstorm engaging ways to help communicate your vision using non-technical language. Whilst writing instructions is the most effective way to communicate instructions to the broader organisation, you can make it more of an enjoyable experience for the readers. Placing instructions in a creative medium such as a comic book or on a poster is much more engaging and exciting. 

The best managers will tell you that trying to rule with fear is never recommended; the same thought applies to building a cybersecurity culture. Collaborating with employees and speaking to them in simple terms, rather than cyber jargon that will just confuse them is essential. Cybersecurity is everyone’s responsibility, so make sure your entire business feels empowered to contribute meaningfully. 

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Business

 SMEs need support for privacy overhaul 

by Bailey Amber
written by Bailey Amber

Although many of the proposed changes to upcoming data privacy laws are supported by experts, there are some that could have serious ramifications for small-to-medium business owners.

The Australian government is currently seeking feedback from businesses on proposed reforms to the Privacy Act. 

The aim of these reforms is to modernise the Act, which was enacted in 1988, and address growing concerns around data privacy and security. 

Businesses have just over a week left to submit their feedback before the consultation period ends. This feedback will inform the development of new legislation, which is expected to be introduced to Parliament later this year.

The Privacy Act Review Report, released by the Attorney General’s Department in February, was a comprehensive review of the Privacy Act 1988.

The review aimed to identify areas where the Act could be strengthened and modernised to protect individuals’ privacy better and ensure that the regulatory framework remains fit for purpose in light of technological advancements and the changing business environment. 

The report made a range of recommendations for reform, including changes to the definition of personal information, the introduction of new privacy rights, and the establishment of a new privacy regulator. The report also highlighted the need to provide more support for small and medium-sized businesses to comply with the new requirements under the Privacy Act.

The proposed overhaul includes measures to strengthen the protection of personal information and give individuals greater control over their data. These measures include a mandatory data breach notification scheme, enhanced privacy consent requirements, and increased penalties for non-compliance with the Act.

However, there are concerns that the proposed changes may significantly burden SMBs, particularly those with limited resources or expertise in data protection.

Many industry groups and business associations are calling for more support and guidance to be provided to SMBs to ensure they can comply with the new requirements without facing undue hardship. 

Overall, the proposed reforms are expected to benefit individuals by strengthening their privacy protection, but it remains to be seen how they will impact businesses, especially SMBs.

According to Daniel Stoten, the Executive Chairman of Localsearch, the industry requires additional consultation and support structures, especially for small and medium-sized businesses (SMBs). 

He believes that the proposed compliance requirements could pose a significant burden to SMBs, which are already struggling due to the ongoing pandemic. Therefore, he recommends providing more support streams and structures to help SMBs meet the new requirements without facing undue hardship.

Stoten explains: “Localsearch supports consumer protections and responsible marketing, and we understand the reasoning behind the proposal given widespread concerns about cybersecurity following last year’s major cyber breaches with Optus and Medibank.

“However, we believe further consultation, additional support streams and structures for SMBs are needed to support the industry, as the compliance requirements, in particular, could be a serious burden to already struggling businesses,” says Stoten

Removal of exemption

The Privacy Act has previously exempted small businesses with an annual turnover of $3 million or less. However, this exemption is set to be removed under the proposed changes.

Stoten says: “We urge the government to explain clearly to small business owners what is happening so they don’t run the risk of accidentally doing something they shouldn’t. There needs to be adequate training and even a compliance grace period to make the transition as easy as possible, with minimal costs.

“Small business owners are already struggling post-pandemic with inflation, supply chain issues and a tight labour market. Our 2022 Australian Small Business Report found that 78% of SMBs are fearful of a recession this year.

“This is a complex 300 page proposal – your average Mum-and-Dad business simply isn’t going to have the time or resources to understand it, let alone abide by the proposed changes.”

Digital advertising changes proposed

The Review also proposes changes around direct marketing, targeting and trading which could have a profound impact on how the digital advertising industry operates. 

Stoten says: “The ability to harness data about an individual to better digitally target advertising to them based on their preferences and past behaviours has been one of the most impactful developments for this industry in its history.

“Digital retargeting, in particular, is a key business driver for small business owners, who may have less budget for traditional advertising methods, to market themselves to customers.

“Although we support consumers’ right to opt-out of targeted marketing ads if they so wish, this doesn’t come without consequences. It could result in irrelevant ads being marketed to the wrong people, wasting business owners’ hard-earned investment and consumers’ time.” 

While we won’t know the exact impacts of the Review until the federal government has made a decision on the proposal, it is clear that small businesses could be seriously affected. Localsearch encourages small businesses to have their say via the government website’s simple form.

Stoten concludes: “I have no doubt that some of the proposed changes could seriously damage many of the 2.5 million small business owners in Australia, who are already struggling to keep their heads above water. Some wouldn’t be able to survive.”

Businesses are encouraged to submit their feedback on the 116 proposals to the Attorney-General’s Department before the deadline of March 31, 2023.

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Survey: US business executives’ outlook on global economy Improving, inflation and personnel issues top concerns

by Bailey Amber
written by Bailey Amber

According to the latest first-quarter AICPA & CIMA Economic Outlook Survey, US business executives still have significant concerns about the economy, but there has been a notable increase in optimism regarding revenue and profit expectations and other key performance indicators for the coming year. 

This survey collected responses from chief executive officers, chief financial officers, controllers, and other certified public accountants who hold executive and senior management accounting roles in US companies.

Although there has been progressed, with 23% of business executives expressing optimism about the US economy’s prospects over the next 12 months, there are still many concerns.

Only 12% felt optimistic in the previous quarter, which was the lowest level since early 2009. Factors such as inflation, rising interest rates, and geopolitical concerns continue to weigh heavily on the US outlook. Additionally, 90% of those surveyed expressed concerns about the potential impacts of a recession, with 15% of respondents indicating that they were significantly concerned.

The survey indicates that business executives are more optimistic about their companies’ financial performance despite these concerns. The results show that many expect revenue and profits to increase in the coming year, which is a positive sign for the US economy.

This quarter, there are several positive indicators:

Business executives are anticipating a slight profit growth of 0.6% over the next 12 months, which is a significant improvement from the negative or zero growth projections over the past two quarters. Additionally, 12-month revenue growth projections have increased from an expected rate of 2.1% last quarter to 2.6%.

Furthermore, the number of business executives expressing optimism about their own organisations’ prospects over the next 12 months has increased from 35% to 47% quarter over quarter. This positive trend suggests business leaders are more confident in their companies’ abilities to weather economic uncertainties.

Additionally, more business executives are expecting their companies to expand at least somewhat over the next 12 months, with 52% of respondents indicating expansion plans, up from 47% last quarter. Among businesses with over a billion dollars in revenue, the proportion expecting expansion is even higher, with 68% indicating plans to expand.

The survey also revealed other important findings:

U.S. business executives’ outlook on the global economy for the next 12 months has improved, with the proportion expressing pessimism decreasing from 72% in the previous quarter to 48% currently.

For the sixth consecutive quarter, inflation remains the top concern for business executives. However, the challenges of “Availability of Skilled Personnel” and “Employee and Benefit Costs” have switched places and are now the second and third most significant challenges, respectively.

“While hiring demands may be cooling a bit, we’re not seeing widespread layoffs – most companies are looking to interim strategies to protect their workforce options. In fact, a third of business executives say they’re looking to hire immediately, while ‘availability of skilled personnel’ continues to be a top concern from the survey.” said Tom Hood, the AICPA & CIMA’s executive vice president for business engagement and growth.

“This illustrates the unique pressures companies have been under the past year, with so much uncertainty clouding financial modeling,”

he full report can be downloaded in the below link:  https://www.aicpa.org/professional-insights/download/1q2023-aicpa-business-and-industry-economic-outlook-survey

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Funding roundup March 2 – March 9: Till Payments, Sumday, Humane  and more

by Bailey Amber
written by Bailey Amber

This weekly feature from Dynamic Business runs down the week’s top funding rounds from Australia and the US. Check out last week’s biggest funding rounds here.

SimConverse raises $1.5 million seed round

SimConverse, a healthcare startup that aims to improve communication between medical professionals and patients by simulating real-life patient conversations, has secured $1.5 million in Seed funding. 

The round was led by Folklore Ventures, with participation from Artesian. The company was founded by Aiden Roberts and Will Pamment, who met while studying medicine at university.

Till Payments banks $70 million 

Earlier this year, Till Payments, a fintech company that specializes in business payments, laid off 40% of its workforce before securing $70 million in a Series D funding round. The company cut 120 employees in order to raise capital for its planned listing on the US NASDAQ later this year, which took them about five months to find.

Sumday announces $2 million seed round

Tasmanian startup Sumday, which specialises in carbon accounting, has raised $2 million in a Seed funding round. Sumday has secured investment from venture capital giant Blackbird Ventures, with software company billionaire Cameron Adams also participating in the funding round.

Sumday’s innovative technology helps businesses track and manage their carbon footprint, aiding their sustainability efforts.

Envisics raises over $50m in series c funding; reaches $500m post-money valuation

Envisics raised over $50M in Series C funding at a $500M post-money valuation. The company intends to use the funds to accelerate the pace of product development and delivery. General Motors will be the first company to deploy the Envisic 2nd Generation AR-HUD technology, debuting in the 2024 Cadillac LYRIQ.

Humane raises $100M in series C funding

Humane raised $100M in Series C funding. Funded by Kindred Ventures, with participation from SK Networks, Microsoft, LG Technology Ventures, Volvo Cars Tech Fund, Top Tier Capital, Hudson Bay Capital, and Socium Ventures. The company intends to use the funds to expand operations and business reach.

Keep up to date with our stories on LinkedIn, Twitter, Facebook and Instagram.

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How B2B partnerships will transform small business in 2023

by Bailey Amber
written by Bailey Amber

This year hasn’t started off kind to small business owners. With rising interest rates, increased cost of living, and businesses still struggling with workforce shortages, the companies that can hang on throughout this year will come out the other end stronger.

Despite these challenges, it isn’t to say that we won’t see growth in the small business sector. Alternatively, we can expect businesses to band together and begin relying on B2B partnerships to expand their businesses despite a looming recession. 

While B2B partnerships aren’t a new tactic, we can expect to see many more partnerships and collaborations pop up throughout this year. B2B partnerships have the potential to transform small businesses by providing new opportunities for growth and innovation. 

Accessing and tapping into new markets

By utilizing and partnering with complementary businesses, it can help them access new markets that they wouldn’t have otherwise been able to tap into. By partnering with a business that already has an established presence in a new market, small businesses can quickly and efficiently expand their customer base.

Expanding products and services to become a more comprehensive business

By collaborating with other businesses it can help smaller businesses expand their services by allowing them to offer something they wouldn’t have been able to previously. It ends up acting like an extension of your service and simultaneously allows small businesses to tap into different types of customer basis and increase loyalty. 

Costing-saving advantageous 

Partnerships or collaborations often come with the assumption that it comes with a heavy price tab, but that’s not necessarily true. With B2B partnerships it can actually help with cost saving.

Businesses have the opportunity to save money by pooling their resources and sharing the brunt of the costs. For example, small businesses could partner to share specific tools or machinery, which helps ease pressure of upfront costs for all parties. 

Increase in a competitive edge and increase in market share

Through these types of partnerships, small businesses can expect an increase in market share and have a better competitive advantage. By partnering with complementary businesses, small businesses have a better leg up on the competition because they now have a more comprehensive service offering, a wider customer base and demographic, and have entered into new markets. 

Small businesses that don’t leverage B2B partnerships this year will be left behind as they will be missing out on profits, new customer acquisition and will lack a competitive edge. B2B partnerships offer small businesses a chance to innovate in the most cost-effective and efficient way. 

This year will bring innovative B2B partnerships that will lead the way for how future small businesses will interact with the market, leverage their technology, their services but most of all how they will change the landscape of how traditional small businesses have been operating. 

Overall, B2B partnerships have the potential to be a game-changer for small businesses in 2023. By leveraging these partnerships, small businesses can gain access to new markets, products, and services, save money, become more competitive, and drive innovation.

Keep up to date with our stories on LinkedIn, Twitter, Facebook and Instagram.

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Survey shows the majority of employees value productivity amidst financial pressures

by Bailey Amber
written by Bailey Amber

Employment Hero, a platform for managing people, has recently published its Talent Insights Report 2023. 

The report highlights that a significant majority of Australian workers, approximately 57 per cent, feel that their wages need to be keeping up with the increasing cost of living. 

However, despite this concern, a considerable number of employees, around 68 per cent, have rated their productivity levels as high over the last six months, indicating their determination to persevere.

The report also highlights that salaries in Australia have been fluctuating while inflation rates have continued to surge. Furthermore, around 54 per cent of the survey respondents reported that they had not received any salary increments in the past 12 months. 

Despite the recent influx of international workers into the Australian job market, job vacancies still remain high. It is noteworthy that in the face of global job uncertainties, the employment market in Australia still seems to favour job seekers, making it an employee market.

Based on a survey of more than 1,000 employees across Australia conducted in the initial weeks of January 2023, the Talent Insights Report revealed that over half of Australian workers, 54 per cent, did not receive a salary increase last year, potentially leading to the perception that their wages are not keeping up with inflation. 

For those who did receive an increment, it was, on average, seven per cent, which is similar to the inflation rate, with younger generations benefiting more. Approximately 52 per cent of employees aged 18-34 saw an increase in their salary, while 67 per cent of those aged 55 and above reported no salary increase. Additionally, employees between the ages of 25 and 34 were more likely to receive a cash bonus.

Despite a challenging global economic outlook in 2023, Australian workers remain optimistic about their professional futures. According to a recent survey, 71 per cent of Australians believe that their jobs are secure, and 44 per cent are confident that their companies will continue to grow this year.

While talk about the Great Resignation may have subsided, many Australians are still seeking career advancement and are actively looking for new opportunities. In fact, 63 per cent of employees who plan to switch roles are looking to make a move within the next six months. Additionally, 44 per cent of workers are eager to pursue career growth by seeking their next role in a different organisation.

One of the key drivers for this job-seeking behaviour is a desire for continuous learning and upskilling. Australian workers are seeking opportunities for personal and professional growth, with 36 per cent expressing a desire for their next role to be a promotion or lateral move within their current organisation – a significant increase of 29 percentage points from 2021.

Ben Thompson, Co-founder and CEO of Employment Hero, said: “The past two years have challenged managers and leaders to lead their teams in a fast-paced environment. Businesses must continue to keep up with the evolving working future or risk being left behind. The employee experience is now more important than ever – instilling a more holistic approach that acknowledges the full range of job seekers’ expectations needs to be implemented in the work culture.”

Mr Thompson continued: “With the worker shortage crisis looking to continue, small business owners need to overcome hiring challenges by shifting the lens of recruitment and retention of employees. To attract job seekers in the midst of a shortage of talent and a looming recession, companies need to adjust to an increased schedule of work flexibility, increased wages, and opportunities for professional growth and wellbeing.” 

“Despite the challenges, small businesses can be well placed to win the war for talent if they have a clear plan in place to strengthen their EVP. Actions can send a strong message to potential employees about the workplace culture, and it is important that they recognise the genuine intention to respect and protect staff through flexible working conditions.”

“Companies cannot afford to ignore the values of flexible working and the impact it has on productivity rates. Job seekers are feeling more empowered with their growing options, and employers need to take the initiative to be compatible with changing expectations,” he said.

The report will be available to download here https://employmenthero.com/talent-insights/

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Funding roundup February 5 – February 10:  Skipperi, Fable Food Co and more

by Bailey Amber
written by Bailey Amber

This weekly feature from Dynamic Business runs down the week’s top funding rounds from Australia and the US. Check out last week’s biggest funding rounds here.

Fabrum raises $23M in Series A funding

Christchurch, New Zealand-based developer of zero-emission transition technologies raised $23M in Series A funding. AP Ventures led the round with participation from Fortescue Future Industries, Obayashi Corporation and K1W1. The company intends to use the funds to expand its global presence and scale up its manufacturing capacity.

Fable Food Co raises US$8.5M in Series A funding

Fable Food Co, a Sunshine Coast, Australia-based meat alternative company, raised US$8.5M in Series A funding. The round was led by K3 Ventures, ByteDance and Grab, with participation from Blackbird, AgFunder, Aera VC, Osher Günsberg, Greg Creed, Professor Peter Singer, Frantz Braha and Adrien Desbaillets.

Skipperi raises €7M in Series A funding

Skipperi, a Helsinki-based shared-use boating subscription service and peer-to-peer boat rental platform, raised €7M in series A funding. The company intends to use the funds to accelerate its international expansion to Brisbane, Australia, and several locations around the US while strengthening its platform and tech team.

Riot raises $12M in Series A funding

Riot is a French startup building a cybersecurity awareness platform. The company recently passed $2M in annual recurring revenue. It protects a company by preparing employees to deal with cyberattacks. Riot’s main interface is a chatbot called Albert, which is available on Slack, Microsoft Teams and the web.

Canoe Intelligence raises $25M Series B funding

Canoe Intelligence, a New York-based financial technology company, raised $25M in Series B funding. The round was led by F-Prime Capital with participation from Eight Roads Ventures. The company intends to use the funds to accelerate expansion into European markets, grow the team in key functional areas, enhance enterprise product offerings, and develop new data products.

Avicenna.AI raises Series A funding; $10M in total

Avicenna.AI raises $10M in Series A funding round. Uses deep learning to identify, detect and quantify life-threatening pathologies from CT medical images. It will use the funds to scale up the deployment of its solutions across the world and diversify its offering into new areas of medicine.

ALSO READ: 623 deals drive Australia’s venture capital investment to a new record in 2022

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Xero report highlights small businesses seeking more support from advisors

by Bailey Amber
written by Bailey Amber

A new report released by Xero found that small businesses have been relying more heavily on their advisors for additional services and support. 

In addition to traditional accounting and compliance offerings, small businesses have been seeking value-added services such as support with app and software setup (35 per cent), HR advisory (38 per cent), and mentorship for start-ups (33 per cent).

Xero’s State of the Industry report highlights how the impact of the pandemic and ongoing talent shortage has transformed the offerings of advisors to their small business clients. 

The survey, which polled more than 550 accountants and bookkeepers in Australia, discovered that 85 per cent of large practices had been called upon by small businesses to provide a wider range of services in the past six months.

Highlights from the State of the Industry Report:

  • Eighty-five per cent of larger practices reported that either some (41 per cent) or most (44 per cent) of their clients have relied on them more for services and support in the past six months.
  • These larger practices are offering more advisory services, including HR advisory (38 per cent), sustainability reporting (24 per cent), startup mentoring/business development (33 per cent), and advice on capital raising (32 per cent).
  • Thirty-three per cent of all practices emphasize monitoring employee well-being.
  • Forty-four per cent of all practices anticipate the need to raise staff wages to counteract rising inflation; as a result, 45 per cent expect to increase their fees.
  • Despite challenges, 79 per cent of practices are able to meet compliance deadlines without requiring extensions.
  • Larger practices with 11 or more employees acquired half (53 per cent) of their new small business clients from new market entrants.

Addressing the talent shortage

The search for qualified personnel continues to pose a major challenge for the industry, as 38 per cent of the practices surveyed in the Xero report stated that hiring experienced team members is a concern. Additionally, almost a quarter (22 per cent) of the practices reported difficulty in hiring in general. 

To address these challenges, practices are taking proactive measures to ensure their staff are well-supported and equipped with the necessary skills. One-third (33 per cent) of the surveyed firms are now monitoring employee well-being through performance apps and surveys, while 40 per cent are offering benefits to their staff and providing opportunities for development and training. 

Despite these efforts, only 29 per cent of the practices surveyed have increased compensation, and 32 per cent have opted to hire new graduates or interns to support their workflow.

Will Buckley, Country Manager, Xero Australia, said, “As we look to the year ahead, we know that small businesses will have a lot to navigate.

“I am encouraged to see this research confirm what we suspected; that accountants and bookkeepers are playing a more holistic role in supporting their clients, and the digitisation trend that accelerated during the pandemic looks to be continuing. 

“The findings from Xero’s research highlight more clearly than ever the critical role accountants and bookkeepers play in keeping small businesses up and running – not just with their finances but now in other business-critical functions as well.

“Making up over 97 per cent of all Australian companies, small businesses are the lifeblood of Australia’s economy and supporting them is an important responsibility for the industry. 

“However, as the role of advisors and the value they offer small businesses continues to evolve, addressing the skills and talent shortage required to offer these services continues to be a key priority.

“When it comes to staff retention, practices need to start thinking differently about attracting and retaining employees,” says Buckley. 

The trend is likely to continue

The future of the accounting industry in Australia is a mixed picture, with some practices anticipating increased demand for their services while others are predicting a slowdown.

According to the report, 66 per cent of large accounting practices expect their clients to need more support in the coming year. However, this sentiment is not as strong among smaller practices, with only 36 per cent sharing this view.

The report also highlights the growth in the small business sector, with 44 per cent of new small business clients from newly established businesses in the past 12 months.

Despite this growth, the industry is facing significant challenges, with 45 per cent of practices forecasting an increase in fees and 31 per cent considering reducing staff due to the impact of the economic environment.

Xero’s CEO, Buckley, recognizes the importance of supporting the accounting industry, especially as it adapts to provide essential support to small businesses in Australia. He believes that with the uncertain economic outlook, the industry must be supported to evolve and grow in order to help Australian small businesses thrive.

Find more here: Xero’s State of the Industry

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A tax guide to starting and running a home business 

by Bailey Amber
written by Bailey Amber

Running a home-based business offers a number of advantages, including convenience, flexibility, freedom and cost savings. 

It’s great for looking after the kids and also for starting out your business when you can’t afford separate premises. And when it comes to your tax return, you may be eligible for a number of tax deductions.

So, if you run, or are thinking of running, your business at or from home and have a room or space set aside exclusively for business activities, read on.

What is a home-based business?

A home-based business can be run:

  • At home – that is, you do most of the work at your home, for example, a hairdresser who uses a room as a salon.
  • From home – that is, your business doesn’t own or rent separate premises, e.g. an electrician who works at a customer’s premises but stores tools at home and has an office to handle the paperwork.

Claiming deductions

If you have a home-based business, you may be able to claim tax deductions for the following expenses:

  • occupancy expenses (such as mortgage interest or rent, council rates, land taxes, and house insurance premiums)
  • running expenses (such as electricity, phone, the decline in value of plant and equipment, furniture and furnishing repairs, cleaning)
  • The cost of business-related motor vehicle trips between your home and other locations, for example, to clients’ or suppliers’ premises.

You can claim a percentage of all these costs if you run a home-based business. To be eligible to claim, the area set aside in your home for your business must have the character of a place of business, for example:

  • it’s clearly identifiable as a place of business. For instance, you might have a sign identifying your business at the front of your house.
  • it’s not readily suitable or adaptable for private or domestic purposes
  • it’s used exclusively or almost exclusively for carrying on your business (a room that’s used for private purposes occasionally won’t qualify, but a room that is used incidentally as an entrance to your home will be OK)
  • it’s used regularly for visits by your clients.

Examples of businesses that could qualify include:

  • A bed and breakfast establishment
  • A hairdresser’s home salon
  • A caterer’s home kitchen
  • A photographer’s home studio.

You can claim the percentage of occupancy expenses that relates to the area of your home you use as a place of business and the proportion of the year it was used for business.

A common method of working out how much to claim is to work out the floor area you use for your business as a percentage of the total floor area of your whole home. For example, if the floor area of your home office is 10 per cent of the total area of your home, you can claim 10 per cent of your rent or mortgage interest, council rates and insurance assuming the home office is available for use in your business 100 per cent of the time. 

Make sure you keep accurate records of how you worked out the occupancy expenses you claim as deductions, including details of the methodology you have used and the justification for it, copies of mortgage statements, rental payments, home insurance policies and council tax statements.

Running costs

If you can claim occupancy expenses, you will also be able to claim running expenses. From 1 July 2022, you can claim a fixed rate of 67 cents per hour covering the following expenses:

  • energy expenses (electricity and/or gas) for lighting, heating/cooling and electronic items used while working from home
  • Internet expenses
  • mobile and/or home telephone expenses, and
  • stationery and computer consumables.

You can’t claim an additional separate deduction for any of these expenses. For example, if you use your mobile phone when you are working from home and when you are working away on-site or with clients, your total deduction for mobile phone expenses for the income year will be covered by the hourly rate of 67c per hour.

Alternatively, you can claim actual costs in relation to all of the above running costs plus:

  • Depreciation of office furniture and equipment
  • Depreciation of any technology items used in your home working (e.g., laptops, desktops, mobile phones or tablets)
  • Repairs to any of the above
  • Costs incurred in cleaning your home office space.

Beware CGT!

There’s a potential snag to be aware of before you start deducting a portion of your occupation costs; you might have to pay capital gains tax (CGT) on the sale of your home when you ultimately sell. Normally your home is exempt from CGT because of the “main residence exemption”, but this doesn’t apply to any part of your home that is used to derive income. So, if you claim deductions for 10 per cent of your home as a place of business, this means that you’ll need to pay CGT on 10 per cent of the profit when you sell. 

H&R Block can help you set up your business

If you’re looking to set up your business, talk to H&R Block for advice on how best to do it. Contact our Tax & Business Services team today by email or call 13 40 42 to talk about your business needs.

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Funding roundup January 29 – February 3: FoodByUs, Fingerprint for Success  and more

by Bailey Amber
written by Bailey Amber

This weekly feature from Dynamic Business runs down the week’s top funding rounds from Australia and the US. Check out last week’s biggest funding rounds here.

Australian app Ziinkle has launched a new crowd-funding campaign on Birchal

Australian dating app Ziinkle, has just launched a new crowd-funding campaign on Birchal. This campaign, which marks the second round of crowd-funding for the tech startup, aims to raise an impressive $1 million.

The funds will be used to optimise Ziinkle’s current singles offering, implement additional features to drive deeper commercialisation and additional revenue streams, build the functionally required to support more businesses and help to accelerate acquisition strategies.

AI Coach creator Fingerprint for Success raises AU$5 million

Fingerprint for Success (F4S) today announced a new AU$ 5 million funding round led by Investible with other Australian and U.S. VCs, including Five V Capital and Salesforce Ventures. This brings the total funding to $9 million.

Q-CTRL lands $39 million in Series B 

Sydney quantum software startup Q–CTRL has raised US$27.4 million (A$39m) in an extension of its Series B. Several new investors joined Q–CTRL’s cap table, including Salesforce Ventures, the VC arm of the US software giant. 

Other new investors include Alumni Ventures, ICM Allectus, Mindrock Capital, former General Dynamics Vice President Bill Lightfoot, and World Cup-winning former Wallabies captain John Eales.

Hospitality supply tech startup FoodByUs raises $12 million in Series B

Australia’s largest wholesale hospitality marketplace, FoodByUs, has completed a $12 million Series B funding round. The Series B was led by Base Capital, a global venture capital company that invests globally across all stages, from seed to listed shares, with a focus on marketplace and software businesses. 

The round also included follow-on from Macquarie Capital, which has invested in the business since inception, global marketplace investor F J Labs, which is based in New York, and Trawalla Group.

Freightify raises $12 million in funding

Singapore-based digital freight forwarders company Freightify raised $12M in debt & equity funding.

The round was led by Sequoia Capital India with participation from TMV and Alteria Capital. The company intends to use the funds to strengthen product, sales and marketing efforts.

Wink extends Seed funding with an additional $3 million

Wink provides a device-agnostic multifactor biometric identity and payments platform that combines face and voice recognition, AI, advanced ML, and ChatGPT technology.

The company intends to use the funds to continue to strengthen and commercially roll out its platform offering. The financing was led by Cerracap Ventures, with participation from Flying Point Industries and several family offices from Texas and California.

Risilience raises $26 million in Series B funding

Risilience, a Cambridge, UK-based climate analytics company, raised $26M in Series B funding. The round was led by Quantum Innovation Fund, with participation from existing investors IQ Capital and National Grid Partners.

The company intends to use the funds to expand its science-based, climate-risk assessment and net-zero planning platform.

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