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JobKeeper 1.0 Finalisation & JobKeeper 2.0 Start
JobKeeper 1.0 Finalisation & JobKeeper 2.0 Start

JobKeeper 1.0 has finished as of yesterday, the 27th September. Any final top-up payments should be paid and will only be up to this date. If you think you are eligible for JobKeeper 2.0, we suggest not making any top-up payments until you receive confirmation from us. Top-ups for JobKeeper 2.0 do not have to be paid immediately, and we…

Urgent JobKeeper action required
Urgent JobKeeper action required

Due to the recent modifications to the JobKeeper scheme allowing certain new employees to qualify for JobKeeper payments from 3 August 2020, it has placed additional obligations and deadlines on eligible employers. For additional information, we would like to share with you the Urgent JobKeeper action required from NTAA (National Tax & Accountants’ Association Ltd.), which includes details on how to…

JobKeeper 3.0
JobKeeper 3.0

On Friday, 7 August 2020, the Government announced adjustments to JobKeeper 2.0 to expand the eligibility criteria for JobKeeper Payment (now referred to as ‘JobKeeper 3.0’), primarily in the wake of the tougher COVID-19 restrictions recently imposed in Victoria. We would like to share with you the JobKeeper 3.0 from NTAA (National Tax & Accountants’ Association Ltd.), for a summary relating…

JobKeeper 2.0 + More
JobKeeper 2.0 + More

We would like to share with you an important update resulting from the Government’s announcements recently, relating to JobKeeper 2.0 and other measures in the Economic and Fiscal Update. You may view and download the JobKeeper 2.0 summary from NTAA (National Tax & Accountants’ Association Ltd.), which includes appropriate links to the relevant Treasury Fact Sheets, which also allows you to…

Another financial year is about to finish
Another financial year is about to finish

As a business owner, there are many obligations that you need to consider and action over the next few weeks. Some of these will help to minimise your tax. We have outlined these action points below to assist you. Key Changes from 1 July 2020 Please urgently check these key things: Has your payroll software automatically updated for these changes?…

Some Key Items that mean $ in your pocket
Some Key Items that mean $ in your pocket

You can reduce your tax by hundreds of dollars (if not thousands), with some of the following strategies. Here’s how to do it: The Strategy behind Tax Planning The tax you pay depends on your taxable income, and the tax rates that apply to that income. Therefore, your tax is reduced if you: 1. Reduce your income, or 2. Increase…

Prepare for Life: June 2020
Prepare for Life: June 2020

Welcome to a new decade! In Financial Planning, we tend to focus on short, medium and long-term client goals and objectives. Short term goals tend to be 12-24 months, medium-term – a decade, and long-term goals to retirement, a lifetime, or inter-generational. From a medium-term perspective, it is often good to look backwards to understand just how quickly deferring savings decisions can pass, and why time in the market rather than market timing is so important. If you would like to sit down to review your last 10 years, and update your current plan for the next short or long-term goals for you or any other family members, we hope this newsletter gives you some reason to make this decade a financial success. Unfortunately, the year has started with both tragedy and personal triumph with bushfires, wild storms sweeping our great country, as well as a deadly virus breakout at this stage in parts of Asia. Australians have reached deep into their pockets to assist those impacted, particularly those who have been left homeless, lost businesses, loved ones, or live in a community that may be in a form of recession for up to a decade in some instances. Insurance companies have been fielding record levels of claims for fire and storm damage, and as advisers, we hope the homes, fire and storm randomly selected were those homes fully insured, and a greater percentage than we have seen in many other tragedies or previous catastrophes. Insurance, whether it be life insurance, income protection insurance, business insurance, or just a typical home and contents policy vary dramatically between each other. Insurance purchased directly and not from a professional is often found to be inadequate, only after an event like we have just seen. Many of our clients have either suffered directly or indirectly, and our thoughts are with those impacted, and fortunately, the better insurers have been fast to act and provide positive outcomes for those under financial stress. In this newsletter, we have discussed numerous subjects, but in relation to those directly impacted by fires who might not have had insurance, there is scope to get early access to some of your superannuation in certain circumstances. We have discussed this in brief, and offer any friends or families you know that have been impacted with an advice line. Reviewing your Super – Results for the calendar year 2019 in superannuation have been very good for those who had weightings in property, as well as International and Australian equity investments. (See more…) The Pyramid of Financial Success – When we talk to clients about financial planning, it is all about you and not generic. (See more…) Natural disasters and access to superannuation – This article was written by Olivia Long, and appeared on Morningstar. (See more…) Insurance – are you self-insuring? – Insurance is not compulsory, and each of us has a choice to transfer the risk to an insurer or self-insure. (See more…) Dealing with debt – Australia’s household debt is among the highest in the world and rising, thanks largely to worsening housing affordability and plentiful consumer credit. (See more…) Learning to invest in yourself – Australia has had an extraordinary run of good economic times, but the party is beginning to wind down, with unemployment trending upwards, and wages flat-lining. (See more…) The Reward of Donations – The bushfire disasters across Australia over the past months have demonstrated the enormous generosity of Australians – from sporting stars, Hollywood heavyweights and business leaders through to ordinary people from across the country, all just wanting to help and make a difference. (See more…) In fact, if you have any questions or queries about how you or your business might be affected by anything you see in this client update, please reach out to our office for further information. We hope you enjoy the newsletter, and look forward to bringing you more updates as the year progresses, and wish you well for another big year ahead. We have attached a short schedule so you can assess your own insurances, to see if you are happy remaining uninsured in some areas, and if not, wish us to assist in plugging the gaps of your own family’s risk.

Enduring Powers of Attorney – Why do you need one?
Enduring Powers of Attorney – Why do you need one?

Everyone is talking about SMSF’s these days. Even with the changes made by the Government (such as the $1.6M cap), SMSF’s can be the way to go. In simple terms, SMSF is a Super Fund that you fully control. You make all the investment choices – including shares, managed funds, property, and cash. SMSF’s can borrow from a bank to purchase investments, but this opportunity might be limited. Strategy Choosing the right STRATEGY for your SMSF is the key.
One great strategy can be to purchase your business premises in your SMSF, or purchase an existing commercial property, that will be owned by your SMSF. Either strategy means that you can get your Super money working for you now and save significant dollars. If you already own a commercial property outside of Super, it may be worthwhile looking at transferring the property to your Superannuation Fund. It may help to free up cash, and possibly even reduce your personal non tax deductible debt on your mortgage. One of our Clients owned a commercial property outside of their Superannuation Fund. The property was worth $275,000, with a small loan of approximately $50,000 left on the premise. They netted $205,000 (after Capital Gains Tax); that left them with only $50,000 on their personal mortgage. A great outcome for the client. Furthermore, they now have net tax savings of $2,175 every year, because the income from the property is taxed at 15%, not 34.5% and 39%. It is important to review any stamp duty implications with the transfer of property, and best to seek advice as to whether you will have to pay stamp duty on the transaction. Super Share Strategy Another great strategy can be to lend your SMSF money to buy shares. The rate that your Fund has to pay you is determined by the ATO (and is a pretty good rate). By lending the money to your Super Fund, you will get a great return on your money, and potentially help with your contributions tax inside Super. It can also provide a little bit of leverage in your Super; making it work harder for you. The benefits of this strategy can add up to tens of thousands of dollars for those with a decent balance ($300,000), and contributions ($20,000 p.a.). Estate Planning Another key reason for using a SMSF, is that it gives you exact Estate Planning options. For example, you can nominate a specific dependent (spouse or child under 18), to receive your Super benefit if you die. Unlike a Will, this cannot be contested. Would you like NO TAX on your Investments? Once you turn the age of 60, you can start to pay yourself a pension from your SMSF. There is NO tax on income from the SMSF, and NO tax on any capital gains; subject to the transfer balance cap (currently $1.6M). This means you can gradually sell down assets (including property), held in your SMSF, and pay NO TAX regardless of any capital gain you make. This can have an absolutely fantastic outcome – and it is possibly far better than owning an investment property in your individual name or Family Trust.

Life Protection with COVID-19
Life Protection with COVID-19

Everyone is talking about SMSF’s these days. Even with the changes made by the Government (such as the $1.6M cap), SMSF’s can be the way to go. In simple terms, SMSF is a Super Fund that you fully control. You make all the investment choices – including shares, managed funds, property, and cash. SMSF’s can borrow from a bank to purchase investments, but this opportunity might be limited. Strategy Choosing the right STRATEGY for your SMSF is the key.
One great strategy can be to purchase your business premises in your SMSF, or purchase an existing commercial property, that will be owned by your SMSF. Either strategy means that you can get your Super money working for you now and save significant dollars. If you already own a commercial property outside of Super, it may be worthwhile looking at transferring the property to your Superannuation Fund. It may help to free up cash, and possibly even reduce your personal non tax deductible debt on your mortgage. One of our Clients owned a commercial property outside of their Superannuation Fund. The property was worth $275,000, with a small loan of approximately $50,000 left on the premise. They netted $205,000 (after Capital Gains Tax); that left them with only $50,000 on their personal mortgage. A great outcome for the client. Furthermore, they now have net tax savings of $2,175 every year, because the income from the property is taxed at 15%, not 34.5% and 39%. It is important to review any stamp duty implications with the transfer of property, and best to seek advice as to whether you will have to pay stamp duty on the transaction. Super Share Strategy Another great strategy can be to lend your SMSF money to buy shares. The rate that your Fund has to pay you is determined by the ATO (and is a pretty good rate). By lending the money to your Super Fund, you will get a great return on your money, and potentially help with your contributions tax inside Super. It can also provide a little bit of leverage in your Super; making it work harder for you. The benefits of this strategy can add up to tens of thousands of dollars for those with a decent balance ($300,000), and contributions ($20,000 p.a.). Estate Planning Another key reason for using a SMSF, is that it gives you exact Estate Planning options. For example, you can nominate a specific dependent (spouse or child under 18), to receive your Super benefit if you die. Unlike a Will, this cannot be contested. Would you like NO TAX on your Investments? Once you turn the age of 60, you can start to pay yourself a pension from your SMSF. There is NO tax on income from the SMSF, and NO tax on any capital gains; subject to the transfer balance cap (currently $1.6M). This means you can gradually sell down assets (including property), held in your SMSF, and pay NO TAX regardless of any capital gain you make. This can have an absolutely fantastic outcome – and it is possibly far better than owning an investment property in your individual name or Family Trust.

Do you have an Emergency Fund?
Do you have an Emergency Fund?

Everyone is talking about SMSF’s these days. Even with the changes made by the Government (such as the $1.6M cap), SMSF’s can be the way to go. In simple terms, SMSF is a Super Fund that you fully control. You make all the investment choices – including shares, managed funds, property, and cash. SMSF’s can borrow from a bank to purchase investments, but this opportunity might be limited. Strategy Choosing the right STRATEGY for your SMSF is the key.
One great strategy can be to purchase your business premises in your SMSF, or purchase an existing commercial property, that will be owned by your SMSF. Either strategy means that you can get your Super money working for you now and save significant dollars. If you already own a commercial property outside of Super, it may be worthwhile looking at transferring the property to your Superannuation Fund. It may help to free up cash, and possibly even reduce your personal non tax deductible debt on your mortgage. One of our Clients owned a commercial property outside of their Superannuation Fund. The property was worth $275,000, with a small loan of approximately $50,000 left on the premise. They netted $205,000 (after Capital Gains Tax); that left them with only $50,000 on their personal mortgage. A great outcome for the client. Furthermore, they now have net tax savings of $2,175 every year, because the income from the property is taxed at 15%, not 34.5% and 39%. It is important to review any stamp duty implications with the transfer of property, and best to seek advice as to whether you will have to pay stamp duty on the transaction. Super Share Strategy Another great strategy can be to lend your SMSF money to buy shares. The rate that your Fund has to pay you is determined by the ATO (and is a pretty good rate). By lending the money to your Super Fund, you will get a great return on your money, and potentially help with your contributions tax inside Super. It can also provide a little bit of leverage in your Super; making it work harder for you. The benefits of this strategy can add up to tens of thousands of dollars for those with a decent balance ($300,000), and contributions ($20,000 p.a.). Estate Planning Another key reason for using a SMSF, is that it gives you exact Estate Planning options. For example, you can nominate a specific dependent (spouse or child under 18), to receive your Super benefit if you die. Unlike a Will, this cannot be contested. Would you like NO TAX on your Investments? Once you turn the age of 60, you can start to pay yourself a pension from your SMSF. There is NO tax on income from the SMSF, and NO tax on any capital gains; subject to the transfer balance cap (currently $1.6M). This means you can gradually sell down assets (including property), held in your SMSF, and pay NO TAX regardless of any capital gain you make. This can have an absolutely fantastic outcome – and it is possibly far better than owning an investment property in your individual name or Family Trust.

 

4 Traps To Avoid When Selling Your Business

Business owners have been known to refer to due diligence as ‘the entrepreneur’s proctology exam.’ It’s a crude analogy but a good representation of what it feels like when a stranger pokes, prods, and looks inside every inch of your business. Most professional acquirers will have a checklist of questions they need answered if they’re considering buying your business. They’ll want answers to questions like: • When does your lease expire and what are the terms?
• Do you have consistent, signed, up-to-date contracts with your customers and employees?
• Are your ideas, products and processes protected by patent or trademark?
• What kind of technology do you use, and are your software licenses up to date?
• What are the loan covenants on your credit agreements?
• How are your receivables? Do you have any late payers or deadbeat customers?
• Does your business require a license to operate, and if so, is your paperwork in order?
• Do you have any litigation pending? In addition to these objective questions, they’ll also try to get a subjective sense of your business. In particular, they will try to determine just how integral you are personally to the success of your business. Subjectively assessing how dependent the business is on you requires the buyer to do some investigative work. It’s more art than science and often requires a potential buyer to use a number of tricks of the trade, such as: Trick #1: Juggling calendars By asking to make a last-minute change to your meeting time, an acquirer gets clues as to how involved you are personally in serving customers. If you can’t accommodate the change request, the acquirer may probe to find out why and try to determine what part of the business is so dependent on you that you have to be there. Trick #2: Checking to see if your business is vision impaired An acquirer may ask you to explain your vision for the business, which is a question you should be well prepared to answer. However, he or she may ask the same question of your employees and key managers. If your staff members offer inconsistent answers, the acquirer may take it as a sign that the future of the business is in your head. Trick #3: Asking your customers why they do business with you A potential acquirer may ask to talk to some of your customers. He or she will expect you to select your most passionate and loyal customers and, therefore, will expect to hear good things. However, the customers may be asked a question like ‘Why do you do business with these guys?’ The acquirer is trying to figure out where your customers’ loyalties lie. If your customers answer by describing the benefits of your product, service or business in general, that’s good. If they respond by explaining how much they like you personally, that’s bad. Trick #4: Mystery shopping Acquirers often conduct their first bit of research behind your back before you even know they are interested in buying your business. They may pose as a customer, visit your website, or come into your business to understand what it feels like to be one of your customers. Make sure the experience your business offers a stranger is tight and consistent, and try to avoid personally being involved in finding or serving brand-new customers. If any potential acquirers see you personally as the key to wooing new customers, they’ll be concerned business will dry up when you leave.

Steps to Financial Freedom!

I remember at a swimming carnival at the start of the year, we decided that we needed to get food but because there was a music festival on; Caspian and I should walk rather than drive to the supermarket. So walk we did, a total of 4.7km’s there and back to the supermarket to get some food. Caspian is only 3 and a half so it was a long walk for him. Coaching him and seeing him make the full distance made me realise that the journey to financial freedom isn’t so different to Caspian’s walk to the supermarket and back. I knew where Caspian and I had to go and what was required to do it. I knew Caspian would find it hard at some point and would require some guidance and coaching along the way. People want financial freedom and have an idea of where they want to be; but they need to get someone to help them with the directions to get there. During the journey they will need guidance, coaching and support as it is a long journey. I used a few methods of getting Caspian to keep up and make it to the end. The first one was, “Every step you take is a step closer to the pool”. So it is the same with reaching your financial goals. People sometimes think it is just one big win that will get you there. It isn’t, it is a journey and you need to take steps. Getting good advice is just about getting guidance on what steps to take so you don’t take bad ones and go backwards. That way every step you take is a step closer to financial freedom. The last method I got to get Caspian to make it to the end played on his desire to always win. I would say “Do you want to win?”, he would respond “Yes” and I would say “Then get in front and stay there”. We made it to our destination.

Working at the RIGHT time!

I often see and hear people working in their ‘off-time’ regularly. Personally, I think this is one of the worst things you can do. I believe it is important that people remember “you work to live, not live to work”. With technology, people nowadays are always connected and so it can be hard to switch off. But, one of the most important things you can do for yourself, your work, your partner, and your family is to switch off from work. This inability to switch off is even worse for small business owners. So, why is it important to switch off and only work at the right time? It is about having a balanced life and ensuring you focus your energy and attention to one thing at a time. What do I mean by this? It is about putting your phone/tablet/computer away and giving the people who are most important in your life (friends and family) the attention and energy they deserve from you. A perfect example of someone I saw not working at the right time was recently at the park. I was there with my boys (age 7 & 4). I was having a great time chasing them around and playing with them – just enjoying them as they are. And there I saw another father in the park with 2 boys of similar age. Instead of playing with them, he was on the phone with work not paying much attention to his sons. This is a perfect example of when you shouldn’t be working. He should have switched off and gave his full attention and energy to his sons. Here are a few ways where I make sure to switch off so that I am always giving my full attention and I’m always at my best: Create separate space and time for work and the rest of your life. I believe having some physical separation helps create the mental separation needed. This doesn’t mean you shouldn’t work at home. It simply means that if you want to work at home, create a space for it. That way, when you go to that space you are “at” work and when you leave that space, you are not “at” work. Turn off your notifications. You do not immediately need to check that Facebook comment, or that Twitter mention, and even that email straight away. Allocate a specific time to go through these during the day. I personally check my emails only twice a day and deal with them then. I allocate 5 minutes a day to my Twitter and my LinkedIn. TURN THEM OFF, they aren’t that important. Make time in your working day when you switch off. I personally switch off and take a break for 5 minutes, thrice a day. This helps because it allows you to refresh yourself so that you are performing at your best.

There is NEVER enough time!

There is NEVER enough time! WRONG! Anyone who complains about not having enough time is just making excuses. Each of us has the same amount of time as everyone else. The question is, what are you doing with it? I used to be a person who always felt there was NEVER enough time, but then I realised that what I was doing was procrastinating doing “busy” work, and doing other useless things that didn’t add value to myself, my family, my business, or my clients. After some self-reflection, some study, and perseverance, I now get my work done in the time I allocate. I also spend better quality time with my family and significantly add more value to my clients, my business, and myself. So with the realisation and the belief that I had the same amount of time as everyone else, I worked on managing my time more efficiently. Below are some of the things I have done: Work is for during work hours. So often I see people on the phone with a work ‘thing’ whilst at the park with their kids or some other activity. Come on guys, is it really that urgent to be missing out experience with your kids? Most of the time, it’s not, and can wait until the next day. The same goes with working at home during your family time. It is NOT cool, generally unproductive, and leads to a worse home life. So STOP IT! Uninterrupted time. This is a big one that a lot of professionals don’t do enough of. You should be blocking out interruptions to get things done. Uninterrupted time is best to be done 60-90 minute blocks. If you have 90 minutes to really get into your work and get things done, you’ll need a short break afterwards (5-10 minutes). If you do this, you will find that you can get a lot done in that time. More than you would think. If clients and customers call you during this time you are ‘with someone’. You are with yourself and it is a very important meeting. Checking emails. This can be a huge waste of time. If you’re like me, you might receive more than a hundred, or even 200 emails a day. Not uncommon, as it is an easy way for business to communicate and it works quite effectively. This contributes to time wasted, because people are constantly checking their emails all throughout the day and getting distracted by them. Turn off your notification and close your email program. You DO NOT need to read an email the instant it comes to your inbox. E-mail is mail so treat it like mail. Check it only once or twice a day, there is no need to check it more often than that. So turn off those notifications and that email program, get some real work done, or if you’re at home, enjoy your life with your family and friends. Meetings. The WRONG meetings can be a massive waste of productive time. What is worse about this is that they tend to waste multiple peoples’ productive time simultaneously. Change your business so that you start having the RIGHT meetings and get more productive time back. Phone Calls. Just because your phone rings doesn’t mean you need to answer it then and there. Answering or taking a call when it comes in can be highly disruptive. Most of the time, the phone call can wait. A key thing that I do is to get the person who receives the phone call (receptionist) find out when is the most appropriate time to call that person back – then an appointment is made. This stops phone tag and the disruption of productive time. DO THE RIGHT THINGS. This is the most important because there is no point saving and getting all this time back if you do the wrong things with it. So what are YOU going to do to improve how you use your time?

Another financial year is about to finish!

As a business owner, there are many obligations that you need to consider and action over the next few weeks. Some of these will help to minimise your tax. We have outlined these action points below to assist you. Date Action Required BEFORE 30 June 2015 Ensure your employee superannuation payments are received and allocated by your employees’ super fund prior to 30 June 2015 to ensure a tax deduction for this year. Any payments made between 1 July 2015 and 28 July 2015 will count towards your Superannuation Guarantee requirement but will not be tax deductible until the 2016 financial year. If you operate through a trading company, review shareholder loan accounts and make minimum loan repayments. If you operate through a discretionary family trust, ensure that a Trust Distribution Resolution for each Trust is signed by 30 June 2015. Review 2015 LAST MINUTE strategies on our blog to reduce your tax prior to 30 June 2015. Carry out a stocktake by 30 June 2015. 1 July 2015 Superannuation Guarantee stays the same for 2015 at 9.5% 2% Temporary Budget Repair Levy continues Medicare Levy stays at 2% 14 July 2015 or before Provide 2015 PAYG Payment Summaries to all employees 21 July 2015 Taxable Payments Annual Report due for lodgement with the ATO (building and construction industry) 28 July 2015 Quarterly Superannuation contributions due for employees (for the period 1 April 2015 to 30 June 2015). THIS IS A KEY DEADLINE! (Note: If you fail to meet your requirements by 28 July 2015, you must complete a Superannuation Guarantee Charge Statement and forward it to the ATO together with underpaid superannuation plus administration fees and interest by 14 August 2015. Superannuation Guarantee Charge payments are NOT tax deductible.) 14 August 2015 or before Lodge your 2015 Annual PAYG Payment Summary Statement (for employees) with the ATO. Penalties apply for late lodgement. 1 April 2016 FBT rate is set to stay at 49% Key Changes from 1 July 2015 Please urgently check these key things: 1. Has your payroll software automatically updated for these changes? Or do you need to load these changes into your payroll software?
2. Check your first pay run from 1 July 2015 to ensure the changes are correct.
3. Review any salary packaging and calculations and make any adjustments to employee FBT contributions or other items where needed. Accelerated Depreciation
All small businesses with an aggregated annual turnover of less than $2 million will get an immediate tax deduction for any individual assets costing less than $20,000, purchased after 7.30pm (AEST), 12 May 2015. The previous threshold sits at $1,000. This $20,000 limit applies to each individual item. Small businesses can apply this $20,000 rule to as many individual items as they wish. These arrangements will continue until the end of June 2017. Company Tax Cut
To help all Australian small businesses grow, the Government is proposing to reduce the income tax rate to 28.5% for small business companies with annual turnover less than $2 million starting 1 July 2015. For those companies with an aggregated annual turnover of $2 million or above, they will continue to be subject to the current 30% tax rate on all their taxable income. The current maximum franking credit rate for a distribution will not be changed at 30% for all companies maintaining the existing arrangements for investors.
2% Debt Tax for High Income Earners From 1 July 2014 until 30 June 2017, a 2% Temporary Budget Repair Levy, or debt tax, will apply to individuals on their taxable income in excess of $180,000 per annum. This means that the tax rate will increase by 2% for every dollar of taxable income you earn above $180,000 in a financial year. Continue to be aware that if you have a one-off spike in income after 1 July 2014, for example from the proceeds of a sale of business or a capital gain from the sale of an investment property, the debt tax is likely to impact on this increase in personal income. If you have employees or directors affected by the debt tax, talk to us about strategies to lessen the impact. While the legislation dealing with the debt tax has not yet passed through Parliament, this is likely to occur soon. Trust Distributions – Timing of Resolutions Trustees (or directors of a trustee company) need to consider and decide on the distributions they plan to make by 30 June 2015 at the latest (the trust deed may actually require this to be done earlier). Decisions made by the trustees should be documented in writing by 30 June 2015. If valid resolutions are not in place by 30 June 2015, the risk is that the taxable income of the trust will be assessed in the hands of a default beneficiary (if the trust deed provides for this) or the trustee (in which case the highest marginal rate of tax would normally apply). You might not need to do a Stocktake Small Business Entities (operational businesses with an aggregated turnover below $2 million) have access to a range of tax concessions. One of these concessions is the simplified trading stock rules. Under these rules, you can choose not to conduct a stocktake for tax purposes if there is a difference of less than $5,000 between the opening value of your trading stock and a reasonable estimate of the closing value of trading stock at the end of the income year. You will need to record how you determined the value of trading stock on hand. If you would like to take advantage of the simplified trading stock rules, call us today to make sure you are eligible to use the simplified rules and to discuss how to use them properly. Deadline for 2015 PAYG Payment Summaries You need to provide your 2015 PAYG Payment Summaries to your employees and other workers by 14 July 2015.
Action Step: If you have any doubt about how to correctly complete your 2015 PAYG Payment Summaries, please contact us for assistance BEFORE you prepare them. Building and Construction Industry Reporting From 1 July 2012, new tax reporting rules apply for businesses in the building and construction industry. Businesses will have to lodge an annual report with the ATO setting out details of payments made to contractors. This will assist the ATO to reduce the “cash economy” by ensuring tax is paid on all income including “cash” payments. From 1 July 2012, you will need to record the following details of all payments made to contractors from 1 July 2012 for building and construction services: • The ABN of the contractor
• The name and address of the contractor
• The gross amount paid for the financial year, including GST
• The total GST included in the gross amount paid If you use computerised accounting software, your system should be able to track this information for you and prepare the required Taxable Payments Annual Report. Action Step: Ensure that you lodge your Taxable Payments Annual Report with the ATO no later than 21 July 2015. Payroll Tax Payroll tax applies to all entities that have an Australian payroll that exceeds state-based limits. You should note that in addition to normal salaries and wages, the following items are generally also included in payroll expenses if payroll tax applies: • fringe benefits based on the grossed-up taxable value of fringe benefits;
• all employer contributions to superannuation on behalf of employees; and
• some contractor or sub-contractor fees. For more detailed information about whether payroll tax applies to your business, please contact our office. Action Step: The Annual Return/Reconciliation for payroll tax must be lodged by 21 July 2015 with your State Revenue Office. WorkCover/WorkSafe Your WorkCover/WorkSafe insurer sends an annual reconciliation to all registered employers at the end of the financial year. In completing your annual reconciliation, you will need to include the following items in addition to normal salaries and wages: • fringe benefits based on the taxable value of fringe benefits (do not gross-up);
• all employer contributions to superannuation on behalf of employees; and
• some contractor or sub-contractor fees. For more detailed information about what items to include in the reconciliation statement, please contact our office. Once the reconciliation is received and processed by your WorkCover/WorkSafe insurer, you will be issued with a final assessment or a refund depending on the instalments you have paid during the year. Action Step: Complete and lodge the Annual Reconciliation with your WorkCover/WorkSafe insurer by the due date. Goods and Services Tax (GST) A reconciliation of GST should be performed as at 30 June 2015 to determine if there has been an under or over-payment of GST in the 2015 tax year. If a discrepancy has arisen, then it is possible to amend a subsequent Business Activity Statement (BAS) to rectify the error, however there are limits imposed on adjustments that can be made in this way. Income declared on your BAS should be reconciled to income declared on your income tax returns. Also, please note that you are required by law to substantiate all Input Tax Credit claims with a complying Tax Invoice, and you need to retain these documents for a minimum of 5 years. Action Step: Complete the annual GST reconciliations, and check that you have all required tax invoices and other supporting documents. ATO Audit Activity Please note that the ATO and State Revenue Office are constantly increasing their audit activities. In particular, there has been an increase in audit activity for PAYG Withholding, Payroll Tax, WorkCover, GST, Division 7A loan accounts from companies, and Trust distributions from Discretionary Trusts. We are able to offer a review of your records and record-keeping procedures if you are concerned about your ability to satisfy an audit. Action Step: Please contact our office if you would like to request this service.
Last Minute Tax Minimisation Tips Here’s a few final reminders about ways to reduce your tax for 2015 1. Write-off Bad Debts
2. Write-off any trading stock that is damaged or obsolete
3. Review your asset register and scrap any obsolete plant and equipment
4. Pay for repairs, consumables, office stationery, and donations before 30 June 2015
5. Realise any capital losses you have before 30 June 2015 to offset against any capital gains you may have made Feel free to call our office any time on 03 5134 1778 or email us at admin@prestoncoering.com.au. We can’t wait to provide you with better advice now for a beautiful future.

The Federal Budget 2015

2015 Budget Update
Below is a great visual tool to help you better understand what our federal budget means for you. If you would like more details on any of these, don’t hesitate to contact our office. Credits to Michael Gershkov, InterPrac Financial Planning Pty Ltd

General Tax Planning Strategies – Key Items that mean $ in your pocket

How would you like to legally reduce your tax by $500 or $1,000 or $5,000 or more? Here’s how to do it: The Strategy behind Tax Planning The tax you pay depends on your taxable income (all assessable income less allowable tax deductions), and the tax rates that apply to that income. Therefore, your tax is reduced if you: 1. Reduce your income, or 2. Increase your tax deductions. Seeing we all want to earn more, reducing your income isn’t an option! But increasing your tax deductions definitely is. Below we have given you a link to 2 Tax Planning Flyers which both list a number of items that could be claimed as tax deductions. Use these as a guide, but please CONTACT US if you have any questions or uncertainties regarding this. To illustrate: If you need something in July that is classified as a tax deduction, it makes sense to bring this purchase forward and buy it in June. You then get the tax deduction this year, and not next year. Warning: Don’t fall into the trap of buying something simply to get the tax deduction for it. If your tax rate (including Medicare Levy) is for example 34%, you would only get 34% of the purchase price back as a tax refund (or reduced tax payable) from a tax deductible item. You DON’T get 100% of the amount that you spend back as a tax refund (or reduced tax payable). But if you do need an item for your business or your work and it is tax deductible, we recommend buying it BEFORE 30 June so that you get the tax deduction this year. Your Tax Planning Strategy Checklists Business Owners: Click Here for our Tax Planning Flyer for Business Owners. Individuals: Click Here for our Tax Planning Flyer for Individuals. If you are a business owner, please note that we will review BOTH the Business Owner’s Flyer and the Individual Flyer because both of these apply to you. Help us to help YOU! If you spend a little bit of time with us to review your financial situation and discuss your tax planning options, you could end up saving yourself thousands of dollars. Now’s the time to do it – please contact our office TODAY to get started

Trust Distribution Resolutions

If you have a Family Trust (also known as a Discretionary Trust) YOU NEED TO READ THIS! From the 2011/12 financial year, Trustees who distribute the income of a Trust through a resolution to beneficiaries must do so BEFORE the end of the financial year (June 30) for the resolution to be effective in determining who is to be assessed on the Trust’s income. If a Trustee fails to make a resolution to appoint the income of the Trust before the end of the financial year, the Trustee may be assessed by the ATO on the Trust income at the highest marginal tax rate (i.e. 45%), rather than the intended beneficiary(s). Before 2012, the ATO allowed a certain amount of discretion as to when a resolution could be prepared. However, the ATO now takes the view that following the decision in Colonial First State Investments v FC of T 2011 ATC 20-235, trustees must now resolve to distribute the current year’s income on or before year end to ensure the beneficiary is presently entitled to trust income. What You Need to Do You need to provide us with a Profit & Loss Statement for each Family Trust that you have for the period 1 July 2014 to 31 March 2015. You also need to send us details of all income earned by all family members during the period 1 July 2014 to 31 March 2015, and your estimated income for the period 1 April 2015 to 30 June 2015, including any capital gains. We will then review all options for you, and recommend the most tax effective manner to distribute your Family Trust profits. We will then prepare the appropriate Trust Distribution Resolution for you to sign before 30 June 2015. Contact our office TODAY if you have any questions regarding this information. Your action now may save you thousands of dollars of unnecessary tax payments!