News

Government Makes Important Superannuation Announcement

16 Sep 2016

    Facing legislative obstruction from the newly elected parliament, significant adverse public reaction and opposition from within its own party ranks, the Australian Government has announced significant changes to the superannuation reforms proposed in the most recent Federal Budget.
    Key changes announced:

  • The proposed $500,000 lifetime non-concessional contributions cap has been scrapped

  • The existing annual non-concessional contributions cap is to be reduced from $180,000 to $100,000.

  • Individuals under 65 years old will continue to be able to bring forward up to two years of non-concessional contributions cap (i.e. maximum non-concessional contributions of up to $300,000p.a.)

  • Individuals with a superannuation balance in excess of $1.6million will no longer be able to make non-concessional contributions from 1 July 2017.

  • Individuals aged 65 to 74 will continue to need to satisfy the work test to be eligible to make contributions (the work test, which requires working a minimum of 40 hours within a consecutive 30 day period during the financial year, was to be scrapped).

  • The commencement date from which individuals with a superannuation balance of less than $500,000 can carry forward (for up to 5 years) any unused portion of their annual $25,000 concessional contributions cap has been deferred until 1 July 2018.

  • Please contact us if you would like to discuss any aspect of these changes.


Changes to the Xero Subscriptions

01 Jul 2016

From 2 June 2016, Xero's pricing plans for all existing and new subscribers will have changed. The biggest change is to the standard plan, where the limit of payroll employees reduces from five to one. For businesses with two to five employees, Xero has introduced a Premium 5 Plan. Premium 5 has up to five payroll employees and the advanced feature of auto-super and multi-currency, for $60 per month.

If you are currently on a standard plan and do a pay run for more than one employee, you'll be automatically switched to the premium 5 plan. Otherwise, you will remain on the standard plan.

The existing and new premium plans have increased by $10 per month. If you are on a premium 10 for multi-currency and have not ever done a pay run in Xero, you will be moved to the premium 5 plan and won't have to pay a price increase.

There are no changes to the starter or partner edition plans and they remain the same price. There are also no changes to the GST cashbook price plans.

The below table lists the changes that have been made to the subscriptions.


Deadline Extended for Small Business Superannuation Contributions

23 Jun 2016


This article is important to small businesses that have not arranged SuperStream solutions yet.

Australian Taxation Office announced in its earlier media release that the deadline of small businesses to implement SuperStream is 30 June 2016. In order to help those small businesses that are still not SuperStream ready at this stage, ATO announced, in its newest media release on 22 June 2016, that it will not take any compliance actions against small businesses that miss the 30 June deadline and will extend the due date to 28 October.
We recommend that you contact us if you have not implemented SuperStream yet. We will be happy to assist or further clarify.
Click the link below to view the ATO media release.


Important Changes to Superannuation Contributions

21 Jun 2016


This article is important to anyone who:


  • Has an employer who is making superannuation
  • contributions for them, or
  • Is an employer making contributions for employees, or
  • Has a self-managed superannuation fund receiving contributions from an employer(s).

Some time ago the government announced changes (collectively referred to as "SuperStream") relating to the handling of superannuation contributions. The core requirement of these changes is that superannuation contributions must be paid to superannuation funds electronically (EFT or BPay), and similarly reporting of the relevant details pertaining to contributions payments can also only be transmitted electronically (in a standardized format) to superannuation funds.

These changes have been introduced in stages, and are already in force for employers with 20 or more employees. However, from 1 July 2016 these requirements will also apply to employers with less than 20 employees.

Contributions to your own self-managed superannuation fund (SMSF) by a related party employer (e.g. family business) and personal contributions are exempt from the new requirements.


SMALL EMPLOYERS (<20 EMPLOYEES)

Contributions must be paid electronically.

You can choose to pay to each superannuation fund individually, or alternatively you can use a clearing house to which you make one total payment and have them distribute that amount (and the relevant contributions data provided by you) to each of the relevant superannuation funds to which you have an obligation.

If you have a turnover of less than $2m or 19 or fewer employees you can make use of the Small Business Super Clearing House, which is a free service provided by the Australian Taxation Office. Many people will use this option.

There are also other superannuation clearing houses such as, for example, Quick Super.

If you choose not to use a clearing house, then unless you use payroll software that is set up to produce and send contributions data in the required format, you will need to register and submit your contributions data using an electronic messaging portal. We would expect that most people will either use payroll software that is already set up to be compliant or use a clearing house (or both).

You will need the following information in respect of each employee:

  • Employee tax file number
  • Super fund ABN
  • For non SMSF funds the super fund's Unique Superannuation Identifier (USI)
  • For SMSF funds:
    o Fund bank account details
    o Fund Electronic Service Address (see below)


    SELF MANAGED SUPERANNUATION FUNDS

    To receive SuperStream (contributions) data, an SMSF needs an Electronic Service Address, which can be obtained by registering with an SMSF Messaging Provider (we can assist you with this if you wish). There are various Messaging Providers, many of whom offer this service at no cost or low cost. The Electronic Service Address will need to be provided to the employee to be passed on to the employer making a contribution. The Messaging Provider will forward to the SMSF, the contributions data received by it from employers.

    Remember that these requirements do not apply to an SMSF which is only receiving contributions from a related party employer or personal contributions.

    We recommend that you contact us if you believe the above applies to you. We will be happy to assist or further clarify.

    Failure to implement these measures could result in contributions not being correctly received by the intended recipient, or not being received by the due dates, with the consequent risk of penalty.


  • 20 May 2016

    IMPORTANT DECISIONS FOR YOU TO MAKE IF YOUR BUSINESS TURNOVER IS BETWEEN $2M and $10M

    If your business turnover is between $2 million and $10 million you are not currently entitled to the Small Business Tax Concessions, but you will be entitled to some of them after 1 July 2016.

    This has important implications to you in considering the timing of the acquisition of plant and equipment including motor vehicles.

    The small business concessions that may become available to you, include the option of simplified depreciation rules enabling immediate write off of assets acquired (new or second hand) after that date and costing less than $20,000.

    To utilise the $20,000 immediate write off under the Simplified Depreciation Rules, the value of all other assets (pre-existing assets and newly acquired assets costing more than $20,000) must be pooled for depreciation purposes. The opening pool balance at the commencement of each year will be depreciated at 30%. Newly acquired assets will be depreciated at 15% for the first year (irrespective of whether they were acquired on the first or last day of the year) and at 30% thereafter as part of the ongoing pool balance.

    The full value of any asset costing more than $20,000 will be pooled, not just the excess over $20,000. That is, there is no immediate write off of the first $20,000 of an asset costing more than $20,000.

    There are important planning considerations arising from the above.

    Deferral until 1 July 2016 of the purchase of an asset costing less than $20,000 may mean that you can claim a full tax deduction for that cost in 2016/17, rather than the asset being subject to depreciation or pooling over several years.

    Conversely, (assuming that you enter the Simplified Depreciation System in 2016/17) the purchase of an asset costing more than $20,000 before 30 June 2016 may entitle you to roll it into a pool at the beginning of the next year, and claim a 30% deduction in respect of that asset in 2016/17 (as part of the opening pool balance for that year). If you waited until July to purchase that same asset, you would only be entitled to a 15% tax deduction for the 2016/17 year.

    Please call us to discuss your options.


    2016 Federal Budget Report

    05 May 2016

    We thought you might appreciate some information about the new Budget. Below is a more comprehensive commentary prepared by CCH. Some key highlights include:

    • An increase in the small business entity turnover threshold from $2 mill to $10 mill. This will not affect CGT concessions but will allow many businesses to access some of the other concessions such as simplified depreciation and instant write off for plant acquisitions below $20,000.

    • A progressive reduction in company tax rates to 25% over 10 years.

    • An increase from $80,000 to $87,500 of the income tax threshold before the marginal tax rate rises to 37%.

    • Removal of the tax exemption on earnings of assets generating Transition to Retirement income streams.

    • Lifetime cap for non-concessional contributions to superannuation of $500,000.

    • A cap on the amount of superannuation that can be transitioned to pension phase of $1.6 million per member.

    • Lowering of the income threshold above which Division 293 tax is imposed from $300,000 to $250,000.

    • Some changes to the GST system.

    There are a number of changes. We encourage you to look at the attached commentary for further information.

    Click the link below to view the Budget.


    30 June 2015 Year End Tax Tips

    17 Jun 2015

    The tax tips below are not intended to replace individual advice specific to your needs. They are also not an exhaustive list. They are intended for taxation purposes only and should not be construed as investment advice.

    We hope that they will be of interest to you as you prepare for the end of the financial year ended 30 June 2015.

    Individuals

    Consider the following:

    Purchasing work related items less than $300 each for an immediate deduction.

    Prepaying interest on loans for income producing purposes.

    Bringing forward repairs to income producing property.

    Making tax deductible donations.

    Review your vehicle log book to ensure that it is less than 5 years old and that there has not been a change in circumstances since it was kept.

    Look at our budget review letter which details changes being made in the methods for claiming motor vehicle expenses.

    Remember claims for home office expenses, telephone, internet, laundry of uniform or protective clothing.

    Remember tax offsets such as zone allowance, medical expenses etc.

    The superannuation provisions.

    There are concessional and non-concessional contributions both of which have caps (limits) which you cannot exceed in contributing.

    The concessional contributions are taxable to the fund but may be tax deductible to you, provided that all the conditions are met and you have not become excluded. If you have employment income, take advice from us or your planner before making any further contributions. Broadly speaking If more than 10% of your assessable income comes from employment income it is likely that you will not be able to make concessional contributions yourself, other than by way of a salary sacrifice arrangement.

    This financial year the concessional cap is $30,000, or if you were aged 49 or older at 1 July 2014 then $35,000.

    Talk to your financial advisor about the potential benefits in later years, of making non concessional contributions now.

    Consider the superannuation co-contribution. An individual likely to earn less than $49,488 in the 2014-15 tax year should also consider making after-tax contributions to their superannuation to qualify for the superannuation co-contribution. The Australian Government will match after-tax contributions fifty cents for each dollar contributed up to a maximum of $500 for a person earning up to $34,488. The maximum then gradually reduces for every dollar of total income over $34,488 reducing to nil at $49,488.

    Make sure to keep your receipts and if they are on the type of paper that deteriorate scan or photocopy them.

    Self-education expenses can be claimed provided your study is directly related to either maintaining or improving your current occupational skills, or it is likely to increase your income from your current employment. By contrast, if the study is designed to enable you to obtain new qualifications in a different field then the expenses incurred are not claimable. You must generally also exclude the first $250 of self-education expenses.

    Immediate deductions can be claimed for depreciating assets that cost under $300 and are mainly used to earn non-business income. The deduction on assets – which might include tools, calculators, briefcases, computer equipment and technical books bought by an employee, or minor items of plant bought by a landlord – is only available to an individual employee or rental property owner, when used mainly to earn salary and wages or rent.


    Rental property deductions

    Landlords can claim immediate deductions for a range of expenses such as interest on investment loans, land tax, council and water rates, body corporate charges, insurance, repairs and maintenance, agent's commission, gardening, pest control, leases (preparation, registration and stamp duty), advertising for tenants, and reasonable travel to inspect properties. Landlords may be entitled to claim annual deductions for the declining value of depreciable assets (such as stoves carpets and hot-water systems), and capital-works deductions spread over a number of years (for such structural improvements as remodelling a bathroom).


    Self-Managed Superannuation Funds

    If you are approaching the age of 60 speak to your financial advisor about whether the fund should transition to pension mode.

    If the fund is in pension phase make sure that the minimum pension requirement has been paid to you for this financial year.

    If the fund is approaching pension mode consider whether to wait until then before realising capital gains. They may be tax free when the fund is in pension mode.


    Capital Gains

    If you are selling a property, the capital gain (if any) is deemed to be earned at the time that you sign the contract, even though settlement may not be until the next financial year. So you might delay signing the contract until July instead of June if you do not want the income in this year.

    Capital gains are added to income in the year in which they are made. Capital losses can only be offset against capital gains. If there are no capital gains to offset them against, then they are carried forward to be offset against capital gains in the future years.

    So timing is important; from a tax perspective it makes sense to realise capital losses in the same financial year as capital gains, or in prior years to the capital gains, so that they can be offset against the gain.

    If you have made capital gains this year consider whether you should realise any capital losses before 30 June so that they can be offset.


    Businesses

    Consider the following:

    Accelerated Depreciation. Review our budget letter for details of accelerated depreciation available to small businesses. This could be generate large deductions to you. Please note that to qualify for the claim this year, the asset needs to be in use or installed ready for use by 30 June 2015.

    Prepay expense if you are a small business entity for an immediate deduction in the current year, for example prepay interest on loans.

    Bring forward deductible expenses, such as repairs.

    Review your debtors’ ledger and write off any bad debts prior to 30 June 2015 so you don't pay tax on money you will never collect.

    Review your asset register and scrap any obsolete items of plant and equipment to obtain a tax deduction for the written down value.

    When conducting your stocktake at year end, value each item at the lower of cost or net realisable value. Identify old or obsolete stock that can be written off.

    Pay your employer super contributions prior to 30 June for a tax deduction this year.

    If you have a company, review any loans that the company has made to associates and have us review the situation prior to 30 June to consider estimated profits, salary levels, dividends etc.


    Trusts

    Trustees of discretionary trusts are required to make and document resolutions by 30 June 2015 about how trust income should be distributed amongst beneficiaries for the 2014-15 year.

    Plan for and document year end trustee resolutions as to the distribution of income.


    Take advantage of the tax rate cut for small business from 1 July 2015

    An opportunity for tax planning is provided through the proposed reduction in the company tax rate to 28.5% from 30% for companies that meet the small business entity test. Additionally, there is a proposed small business tax discount of 5% on income tax payable on business income received by an unincorporated entity that meets the small business entity test; this is capped to $1000 per individual. In particular, eligible businesses could consider whether it is possible to bring forward expenses into this financial year, when they will receive a higher deduction for such expenses – and delay revenue into the next financial year, as such revenue will be subject to a lower tax rate.

    Care should be taken to ensure that any actions do not breach the tax general anti-avoidance rules or any specific provisions such as the tax prepayment rules.


    Closing Comments

    If you would like any further clarification on how any of the above may apply to you, then please give us a call. We will be happy to speak with you.


    2015 Budget, what it means for you

    10 Jun 2015

    The 2015 Federal Budget was handed down on Tuesday 12 May. Following are some of the headline announcements.

    Individuals/ Families

    Car Expenses Claims simplified (Effective 1 July 2015)


    The "12% of original value method" and the "one-third of actual expenses" method for claiming motor vehicle travel will be abolished. Furthermore, the "cents per kilometre" method will be streamlined by replacing the three current rates based on engine size, with one rate set at 66 cents per kilometre to apply to all motor vehicles.

    Fly-In Fly-Out and Drive-In Workers (Effective 1 July 2015)

    The Zone Tax Offset will no longer be available for these types of workers where their normal residence is not within a "zone".

    Childcare Relief (Effective 1 July 2017)

    A new childcare subsidy covering up to 85% of fees paid will be introduced.

    Paid Parental Leave Double-Dip removed (Effective 1 July 2016)

    Individuals will no longer be able to access both Government paid parental leave (PPL) as well as any PPL that is provided by their employer. They will only be able to access one of these.

    Overseas HELP Debts Chased (Effective 1 July 2017)

    The help (HECS) repayment scheme will apply to individuals residing overseas for six months or more if their worldwide income exceeds the standard repayment threshold (AUD $53,345 in 2014-15.) This will apply to both new and existing debts.

    Family Tax Benefit (Effective 1 July 2016)

    Family Tax Benefit Part A Large Family Supplement will be discontinued.

    Visitors to Australia on "Working Holidays" (Effective 1 July 2016)

    The government will change the tax residency rules to treat most people who are temporarily in Australia for a working holiday as non-residents for tax purposes, regardless of how long they are here. This means they will be taxed at 32.5% from their first dollar of income, and will not be able to access the tax-free threshold, the low income tax offset (LITO) and the lower tax rate of 19% for income above the tax threshold up to $37,000.

    Business

    Company Tax cuts (Effective 1 July 2015)


    The company tax rate will be cut by 1.5% (from 30% to 28.5%) for companies who are small businesses. However the maximum franking credit rate for distributions will remain at 30%.

    Tax cut for other small businesses (Effective 1 July 2015)

    A new 5% tax discount will be given to individuals with business income from an unincorporated business (e.g. sole trader, trust or partnership structure) that has an aggregated turnover of less than $2 million. It will be capped at $1,000 per individual, per year.

    Accelerated Depreciation (Effective Now)

    Small business entities (those in business with an annual aggregated turnover of less than $2 Million) are now able to totally write-off/deduct in the year that the asset is first installed ready for use, depreciable assets costing less than $20,000 (up from $1,000). This would include cars, electronic equipment like computers and machinery, furniture and other depreciable assets but not assets already subject to their own specific rules (such as horticultural plants and in-house software).

    This write-off is available for assets acquired between 12 May 2015 and 30 June 2017.

    Small business depreciation pools (including existing pools) can also be immediately deducted if the balance is less than $20,000 during that period.

    Assistance for Start-ups (Effective 1 July 2015)

    An immediate deduction will be available for professional expenses associated with starting a new business (such as legal or accounting advice in establishing a business structure).

    CGT Relief for Restructures (Effective 1 July 2016)

    The Government will allow small businesses to change legal structure (e.g. from a sole trader to a trust) without attracting a CGT liability. Until now this kind of roll-over relief has been largely only been available to sole traders who incorporate.

    Fringe Benefits Tax (FBT)

    More work-related electronic devices (Effective 1 April 2016)


    Small businesses with a turnover of less than $2 Million will be able to provide employees with more than one eligible work-related portable electronic device during the year, without attracting FBT. This means employees will be able to sacrifice as many tablets, laptops and mobile phones as they like in the same year.

    Not for profit crackdown (Effective 1 April 2016)

    For employees of not-for-profit organisations, a separate (grossed up) FBT exemption cap of $5,000 will apply to meal entertainment benefits. Benefits exceeding this cap can be counted in calculating whether an employee exceeds their existing FBT exemption or rebate cap. In addition all meal entertainment benefits provided by not for profit employers will be reported on employee payment summaries, which may have an impact on certain income-tested offsets and benefits.

    Other Items which might interest you

    GST (Effective 1 July 2017)


    Australian consumers will be forced to pay GST on offshore intangible supplies. “Intangibles” will be defined as anything other than goods or real property (such as digital products including streaming or downloading movies, music, apps, games, e-books, as well as consultancy and professional services.

    Superannuation and Terminal illness (Effective 1 July 2015)

    Individuals may be able to access their superannuation early if they have two medical practitioners certify that they are likely to die within two years. Currently the timeframe is one year.

    Primary Producers (Effective 12 May 2015)

    Primary producers incurring expenditure on fencing and water facilities such as dams, tanks, bores, irrigation channels, pumps, water towers and windmills will now be able to immediately deduct that capital expenditure.



    SuperStream Dates Looming

    17 Apr 2015

    SuperStream is the new data and payment standard (the standard) designed to improve the operation and efficiencies of rollovers and contributions in the superannuation system.

    All employers and superfunds are required to make and receive super contributions and transmit related data in an electronic format that complies with the standard.

    Key dates that employers and superfunds need to be aware of in respect of the implementation of the standard are:

    From 1 July 2014:

    o Medium to large employers (with 20 or more employees) started using the standard to send contribution data and payments electronically. These employers have until 30 June 2015 to finalise their implementation and meet all the requirements.
    o All super funds (including SMSFs) must receive any employer contributions sent to their fund in accordance with the SuperStream standard.

    From 1 July 2015:

    o Small employers (with 19 or fewer employees) will also be required to use the standard to send contributions data and payment electronically. These employers have until 30 June 2016 to finalise their implementation and meet all the requirements

    Members are encouraged to review the ATO's dedicated page, SuperStream data and payment standard, to assist them with understanding the obligations and requirements under the standard.


    Tax Depreciation

    20 Aug 2014

    The Australian Taxation Office (ATO) has released a new tax ruling effective 1 July 2014 in regard to calculating depreciation. It can also at times be beneficial to engage a quantity surveyor to produce a tax depreciation schedule for rental properties. Please contact us if you would like any further information on these matters.


    Update to Payroll in Xero

    19 Aug 2014

    Yesterday, Xero released a much-anticipated update to Payroll in Xero. Amongst a bunch of nifty new features, this release includes automatic integration of your payroll transactions into your general ledger, which is something we have been waiting for.

    With this automation up and running, you'll no longer need to create a draft bill at the end of each and every pay run. Processing your pay runs will be easier and seamless - when you post your pay run, your general ledger is automatically updated.


    Tax cuts possible in next 5 years: PM

    23 Jul 2014

    An interesting article relating the budget, tax and the next five years.


    Our referral policy

    10 Dec 2013

    A referral from a friend or colleague is one of the best ways of finding the right adviser. Referred people also tend to become good clients.

    When referring family or friends it is important that you know that the person that you are referring will be treated well. We assure that we treat each referral very seriously and treat everyone with respect.

    All client referrals are treated on a no-obligation basis. We do not charge for our first meeting of up to one hour and there is no obligation placed on people to proceed any further than the initial meeting. We welcome the opportunity to meet with anyone who may benefit from our services.

    We maintain strict confidentiality and will not discuss either party's situation unless we have prior approval from the respective parties.

    We would be delighted if you would refer your family, friends and associates to us. All that is needed is for you to first check with them and then give us the appropriate contact details. We will take it from there.


    Goldings CA Pty Ltd is now an accredited partner with Xero Accounting

    30 Jun 2013

    Feel free to give us a call to discuss how we may assist you with this or any other accounting or taxation related query.


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