Is your SMSF adequately diversified?

January 2019

In the unsettled and volatile markets of today, SMSF trustees need to truly understand diversification and know how to effectively diversify their portfolios.

The benefits of a well-diversified portfolio are numerous but the key ones are:-

• Reducing volatility and short-term downside investment risks,
• Preservation of capital, and
• Higher overall returns in the long term.

By spreading an SMSF's investments across different asset classes and markets, each of which offers different risks and returns, SMSF trustees can generally position themselves for a more secure retirement.

While most trustees know this, many do not achieve it in practice.

A recent survey conducted by the Self-Managed Super Fund Association showed that although 82% of SMSF trustees believe that diversification is important, roughly 50% cite various barriers to achieving it.  Many believe that it is not a primary goal for SMSF trustees, or that they lack the funds to implement it.

Furthermore, only 36% of SMSF trustees say they have made a significant (10%) asset allocation change to their SMSF over the last 12 months, which indicates that many SMSFs may not be actively restructuring their portfolios in response to changing market conditions.

Other facts about SMSFs which indicate a problem with diversification include:-

• Many SMSFs have 50% or more of their SMSF invested in a single investment, and
• Many SMSFs are heavily weighted towards domestic equities, and trustees tend to rely on industry sector allocation to achieve diversification in their SMSF, rather than allocating to different asset classes, such as global equities, fixed interest and alternatives.

So what can you do?

If your SMSF is not sufficiently diversified, there is good reason to take control of your investments in a more disciplined and deliberate way.  This may include:

• Ensuring there is a clear and demonstrable retirement purpose in the choices you make.
• Ensuring you have an investment objective and a strategy to achieve that objective.
• Reviewing your portfolio regularly and assessing it against the objectives you have set.
• Minimising concentration to any one asset class.
• Ensuring your Australian share portfolio is sufficiently diversified.
• Considering the benefits of geographic diversification.
• Ensuring your cash allocation is appropriate.
• Considering the benefits of exchange traded funds, listed investment companies and other digital investment platforms that allow low cost access to different markets.

How can we help?

If you need assistance with the diversification of your fund, please feel free to contact us on 1300 885 761 to discuss your particular circumstances in more detail.

Farm Investment Loans and Drought Loans

December 2018

The Australian Government has established the Regional Investment Corporation (RIC) in order to provide concessional loans to eligible farm businesses starting from 1 July 2018. The new loans are for farm businesses that are in need of financial assistance and have sound prospects of long-term financial viability.

The RIC will offer two loan products for farmers:

• Farm Investment Loans: to help farmers build and maintain diversity in the markets and take advantage of new opportunities across the country and overseas.
• Drought Loans: to help farmers affected by drought and prepare for future droughts.

1. Loan amount and terms

Farm business owners can borrow up to $2 million for a 10 year term. For the first 5 years, repayments are comprised of interest only, with principal and interest repayments for the final 5 years.

Farmers do not have to repay the full principal in the final 5 years as they are able to refinance the remaining loan balance with a commercial lender.

Current interest rate from 1 July 2018 is 3.58% variable, which is reviewed every six months with new rates coming into effect in February and August each year.

2. Fees and charges

There are no ongoing fees and charges.

3. Who can apply

To be eligible, farm business owners must:

• Be located in an eligible area (eligible area map)
• Have a drought management plan
• Be in financial need of a loan
• Be financially viable in the long term
• Additional eligibility criteria:
  • have the capacity to repay the loan
  • be able to provide sufficient and satisfactory security for the loan
  • have existing commercial debt
  • be involved within the agricultural, horticultural, pastoral, apicultural or aquacultural industries
  • undertake all primary production aspects of the business wholly within Australia
  • operate as a sole trader, partnership, trust or private company
  • be registered for tax purposes in Australia within an ABN and be registered for GST
  • not be under external administration or bankruptcy.
• All members of your farm business must not have more non-farm assets and liquid assets than the amount needed for prudent risk management.
• At least one member of your farm business must: 
  • be an Australian citizen or a permanent resident
  • have owned and operated the farm business for at least the past three consecutive years
  • be a farmer who, under normal circumstances, contributes at least 75% of their labor and earns at least 50% of their income from the farm business.

4. Loan uses

• Drought loans 
  • pay for water infrastructure, grain storage or fencing
  • buy fodder
  • agist livestock
  • pay to restock to replant
  • pay outstanding bills
  • pay salaries or wages to employees etc.

• Farm investment loans 
  • investment in new infrastructure like silos and sheds
  • upgrade machinery
  • purchase livestock etc.

Full loan guidelines can be found here (guidelines).

Further information regarding loans for farmers, please go to http://ric.gov.au/farmers, or contact us on 1300 885 761 to discuss your circumstances and find out how we can assist.

Update - ATO Scam Alerts

December 2018

The Australian Taxation Office (ATO) is currently urging all Australians to keep their personal information secure and to report any suspicious activity immediately.

There are three methods that scammers have been using to impersonate the ATO.  These are:-

- Email scam: scammers are sending fake ATO emails claiming they don't have your credit card details stored and provide a link to a fake site called 'ATO Office Portal' or 'ATO Gateway Portal'. Do not click on the link and do not disclose the information requested.

- Text message scam: scammers are sending scam text messages notifying of tax refunds to claim by providing tax file number (TFN) and credit card details. Do not reply to such a text message.

- Phone scam: scammers are contacting people by using technology to make it looks like the calls originate from a legitimate ATO phone number and leaving people voicemail messages threatening the recipients with arrest due to an unknown tax debt or suspected tax evasion. Do not return the call.

Tips on How to spot an ATO scam

The ATO will not:

• be abusive or offensive to you
• threaten you with immediate arrest
• ask you to transfer money into an account with a BSB that is not held with the Reserve bank of Australia
• request payment via unusual methods such as iTunes gift cards, bitcoin or other prepaid cards
• stay on the phone with you while you go to the bank, post office or shops to make a payment
• request personal security information such as your TFN or your bank details via email or SMS or social media sites
• ask you for money up front in order to receive a refund or other payment
• refuse to allow you to speak with a trusted advisor or your regular tax agent
• present a phone number on caller ID
• direct you to download files from the internet.

The ATO will:

• provide you with a range of options for paying debts, which are all set out on the ATO website at ato.gov.au/howtopay

• contact you by phone:
  • if you are in doubt about the authenticity of a call claiming to be from the ATO, you can call the ATO on 1800 008 540 to verify.  You will generally be aware of any debt before it is due for payment, but you can check with us first if required.

• send emails and SMS asking you to take specific action such as:
  • provide additional information required to process a BAS or tax return lodged
  • provide additional information regarding an application that has been made
  • verify changes to an account

• send general notifications and reminders via SMS or email
• send promotional and informational SMS and emails.

For more detail regarding ATO scam alerts can be found here.

If you have any concerns regarding correspondence from the ATO please contact us on 1300 885 761 or contact the ATO directly on 1800 008 540.

Claiming motor vehicle expenses

November 2018

There are two ways you can claim the business usage of your car.  These are:

1. The Logbook method, or

2. The cents per kilometre method.

Logbook method

Under this method you need to have retained documentary evidence of your running costs, and to keep a logbook for a minimum 12 week period.  Each logbook must contain the following information:

• The beginning and end dates of the logbook period, plus the car's odometer readings at these dates
• The total number of kilometres the car travelled during the logbook period
• The odometer readings at the start and end of each income year you use this method
• For each business journey:-
  • Start and end dates and odometer readings for the journey
  • Kilometres travelled
  • Reason for the journey

The allowable claim is calculated as follows:

1. Divide the distance travelled for business by the total distance travelled during the 12 week logbook period;

2. Multiply by 100 to provide the business use percentage;

3. Determine your total expenses, including depreciation, for the income year;

4. Multiply the total expenses by your percentage to find the total amount you can claim.

When you commence using the logbook method, it is important to keep a logbook during the income tax year for at least 12 continuous weeks, and that 12 week period needs to be representative of your travel throughout the year. The business use percentage calculated using the logbook method can be used for up to five years, or until your business use varies by more than 10%, whichever comes first. More information regarding the log book method can be found here.

Cents per kilometre method

For the 2015-16, 2016-17 and 2017-18 years, the cents per kilometre method is set at 66 cents per kilometre, however it has been increased to 68 cents per kilometre for 2018-19.

Under this method you can claim a maximum of 5,000 business kilometres per vehicle per year, provided the distance was actually travelled. However you cannot make a separate claim for depreciation or any operating costs.

Please contact us on 1300 885 761 for more information regarding motor vehicle expense claims.

Brand New Mileage Tracker Tool in Dawson & Partners App

November 2018

We are delighted to announce a high-tech update to the GPS Logbook in our App, meaning you can benefit from state-of-the-art technology to effortlessly track both your personal and business journeys.

GPS background tracking – no missed journeys

When you open the App, it will activate a location service in the background that will trigger the GPS to start auto-tracking as soon as you are driving, meaning you no longer must click to start and stop.

This automatic tracking will enable all of your journeys to be accurately captured, and of course you can then export them from the 'Export all trips' screen.

Streamlined management interface

The manual trip form allows you to log the details of a trip for the App, and categorise it as either personal or business. This will also sync to the cloud in real-time, meaning your trips are backed up and stored safely.

How it works

The updated logbook feature looks like this.

• To get automatic tracking, simply click 'My settings'.

•  Once you are in the settings, click on 'Manual Tracking' and select Disabled, meaning you have activated the auto-tracking as the background. This will pick up automatically when your start driving and you will receive a notification after your journey end.

• Now you have the information of your trip(s), you can review data, edit, or email individual trips. It also enables you to select between business or personal trips. If you want to change it  to a personal trip, just simply tap on the Green 'Business Trip?' icon, which will turn the icon to red.

• You can also manually add in your trip by clicking on 'Log Manual Trip'.

• This 'Add Manual Trip' feature will allow you to add your own journeys by simply filling out the form and click on 'Submit' at the bottom. 

Upgrade to the new GPS Logbook now!

If you haven't downloaded our free App, please head to the Apple or Android store on your device and search for MyAccountants and enter the code DAWSON to start benefiting from this technology today.

Alternatively, you can download the App using the links below:

   

Do feel free to share the App with anyone you think might find the App useful.

Fuel tax credits

September 2018

Who can claim Fuel Tax credits?

You may be eligible to claim fuel tax credits for fuel purchased for use in your business. To be eligible you must:

• Be registered for GST
• Use the fuel for an eligible activity including but not limited to:  
  • Use in heavy vehicles travelling on public roads if the vehicle has a gross vehicle mass (GVM) greater than 4.5 tonnes.
  • Use in business activities such as agriculture, forestry, mining, construction and manufacturing if the vehicle (including light vehicles) was travelling on private roads and off public roads.

Further details regarding eligible fuels and business activities can be found on the ATO website.

Indexation of rates:

The rates for fuel tax credits are now indexed bi-annually on 1 February and 1 August in line with the Consumer Price Index (CPI).

The indexed rates for the period from 1 August 2018 to 31 January 2019 are as follows:

• Increase from 15.1 to 15.4 cents per litre for liquid fuels used in a heavy vehicle on public roads;
• Increase from 40.9 to 41.2 cents per litre for liquid fuels in all other business uses;
• Increase from 10.725 to 13.065 cents per litre for E85 (85% ethanol/15% petrol) in all business uses except heavy vehicles on public roads;
• Increase from 13.3 to 13.4 cents per litre for liquefied petroleum gas (LPG) ; and
• Increase from 28 to 28.2 cents per kilogram for compressed natural gas (CNG) and liquefied natural gas (LNG).

These changes will affect fuel tax credit calculations for December quarter Activity Statements.

If you claim less than $10,000 in fuel credits each year you can calculate your fuel tax credit using the rate that applies at the end of the BAS period.

The ATO fuel tax credit calculator can be found here.

Please contact us on 1300 885 761 for more information.  

Affected by drought?

September 2018

There are drought support measures to help drought affected taxpayers across regional, rural and metropolitan areas of New South Wales.

Assistance for primary producers

• Primary producers can get immediate tax deductions for new fencing infrastructure and accelerated depreciation for new fodder storage and on-farm water storage facilities.
• Primary producers may be eligible for an early farm management deposit access without changing the deduction you claimed due to exceptional circumstances, drought or applicable natural disaster.
• The NSW Government will waive Local Land Services rates for all landholders for 2019.To give farmers and their families some much needed drought relief, the government is waiving registration charges on Class 1 agricultural vehicles at the time of their next annual registration. Class 1 agricultural vehicles eligible for registration relief must fit the below criteria:

o   exceeds one or more of the following prescribed dimensions

§  2.5m wide

§  4.3m high

§  12.5m long

§  42.5 tonnes gross mass (or exceeding a statutory axle mass limit)

o   has its own automotive power

o   is built to perform agricultural tasks

o   e.g; tractors, fertiliser spreaders, excavators, crop sprayers, bulldozer, bucket loader, combine harvesters etc.

• Farmers across the state will receive a rebate on heavy vehicle registration costs from 1 July 2018 up to 30 June 2020. Primary producers may also be eligible to claim a refund on some past heavy vehicle registration charges paid from 1 July 2015 to 30 June 2018. New South Wales Roads & Maritime Services is working to identify primary producers who are eligible for a refund and will be contacted by mail from October 2018 and notified the process to claim the refunds.
• The Government will provide a refund on interest charges for the 2017/18 financial year and 2018/19 financial year for all existing Farm Innovation Fund customers, and all applicants who submitted an application on or before 30 July 2018.
• The NSW Government will offer a transport subsidy of up to $20,000 per eligible farm business per year, which equates to $30,000 over 18 months from 1 January 2018 to 30 June 2019.
• Drought transport subsidies cover 50% of the full cost of freight up to a maximum of $5 per kilometres per journey. The subsidy can be applied for the cost of transporting fodder, water to a property for stock, stock to and from agistment, and stock to sale or slaughter. The subsidy will be back-dated so farmers can access subsidies for freight expenses incurred since 1 January 2018. More information regarding freight subsidies can be found here.

Drought assistance crowfunding

• Making donations: a donation you make in association with drought assistance relief will be tax deductible if it is $2 or more and is made through registered charities and has a focus on rural assistance.
• Receiving payments: if you are a primary producer and have received payments from crowfunding to assist your farming business, the amount received may be assessable income if you use it for business purposes rather than for emergency relief, such as food and clothing.

Assistance for all businesses affected by drought

The ATO is prepared to help all drought affected businesses by:

• Providing more time to pay your tax bills
• Waiving penalties and interest you might incur during drought
• Payment plans with interest free periods
• Adjusting pay as you go (PAYG) instalments to better suit your circumstances
• Various tax relief measures to help primary producers and small business operators

Remember even if you can't pay, you should still lodge all activity statements and tax returns by the due date and contact us to discuss your circumstances as required.

Contact us on 1300 885 761 to discuss your circumstances and find out more how we can assist.

 

"Downsizer" Contributions into Superannuation

August 2018

In the 2017-18 Budget, the government announced the introduction of a new "downsizer" contribution into superannuation in order to reduce pressure on housing affordability in Australia.

From 1 July 2018, if you are 65 years old or older and meet the eligibility requirements, you may be able to choose to make a downsizer contribution into your superannuation of up to $300,000 from the proceeds of selling your home.  The contribution amount can't be greater than the total proceeds of the sale of your home.

A downsizer contribution is not a non-concessional contribution and will not count towards your contributions caps.  It also does not affect your transfer balance account (i.e. pension account cap), which is only impacted when you move your super savings into retirement phase.

Downsizer contributions are also not tax deductible, however the additional funds in superannuation will generally be taken into account in determining eligibility for the age pension.

Eligibility for the downsizer measure:

You will be eligible to make a downsizer contribution to super if all the following requirements are applied to you:

• You are 65 years old or older at the time you make a downsizer contribution
• The contract to sell your home exchanged on or after 1 July 2018
• Your home was owned by you or your spouse for 10 years or more prior to the sale
• Your home is in Australia and is not a caravan, houseboat or other mobile home
• The capital gain or loss from the sale of the home is either exempt or partially exempt from capital gains tax under the main residence exemption, or would be entitled to such an exemption if the home was acquired after 20 September 1985
• You have provided your super fund with the necessary signed form either before or at the time of making the contribution
• You make your downsizer contribution within 90 days of receiving the proceeds of sale, which is usually at the date of settlement
• You have not previously made a downsizer contribution to your super from the sale of another home.

If you have any questions or would like further clarification regards downsizer contributions, please feel free to give us a call on 1300 885 761 so that we can discuss in more detail.

 

ATO Scam Alerts

August 2018

The Australian Taxation Office (ATO) is currently urging all Australians to keep their personal information secure and to report any suspicious activity immediately.

There are three methods that scammers have been using to impersonate the ATO.  These are:-

- Email scam: scammers are sending fake ATO emails claiming they don't have your credit card details stored and provide a link to a fake site called 'ATO Office Portal' or 'ATO Gateway Portal'. Do not click on the link and do not disclose the information requested.

- Text message scam: scammers are sending scam text messages notifying of tax refunds to claim by providing tax file number (TFN) and credit card details. Do not reply to such a text message.

- Phone scam: scammers are leaving people voicemail messages threatening the recipients with arrest due to an unknown tax debt or suspected tax evasion. Do not return the call.

Tips on How to spot an ATO scam

The ATO will not:

The ATO will:

• send emails and SMS asking you to take specific action such as:

• send general notifications and reminders via SMS or email
• send promotional and informational SMS and emails.

If you have any concerns regarding correspondence from the ATO please contact us on 1300 885 761 or contact the ATO directly on 1800 008 540.

 

Accessing The Receipt Manager in Dawson & Partners App

August 2018

Sometimes you need to keep receipts for expenditure you have incurred. This is particularly the case when travelling. With our new Dawson & Partners App you can easily save these receipts by accessing with The Receipt Manager tool.

Receipt Manager: you can simply use your phone to take a photo of a receipt and input any relevant data such as a receipt name or how you paid for the receipt.

To access with this smart tool, please follow the below steps:

• On your home page there will be an icon named 'Receipt Manager'. Tap this icon to open the 'Receipt Manager' section of the App.

• In the Receipt Manager click the 'Photograph a Receipt' icon to open your device camera. Tap on an appropriate category for your receipt e.g; Travel Expenses or Office Expenses. Take a picture of your receipt that is clear enough to use for future reference, and then enter an appropriate name for the receipt as well as total cost of the item(s) on the receipt. Click save.

• Managing a receipt: Click 'Manage Receipts' in the Receipt Manager section, then select the category your receipt is in e.g. Travel expenses or Advertising & Marketing. You can also choose to email the details to us, export the data as a CSV, or delete.
  

• Exporting receipt: Click 'Export all Receipts' icon then you select the range of dates which the App exports all the data of receipts from, once this is chosen the data is sent to you via an email. You can also export a whole category or individual receipts, rather than every receipt within a certain amount of time.

 

 Do feel free to share the App with anyone you think might find the App useful.

 

Accessing The Mileage Tracker Tool in Dawson & Partners App

July 2018

Keeping a motor vehicle log book every five years can be a time-consuming exercise. With our new Dawson & Partners App you can save time by accessing with The Mileage Tracker tool.

Mileage Tracker: this tool will record your mileage at the press of a button. Just simply tap on the start button and the App starts tracking your journey. Once you have finished your journey, hit stop then give it a name.

• On you home page there is an icon named 'Logbook'. Tap to open.

• To start recording a trip, simply click the Green 'Start Trip' icon on the page. You can now exit the App as it continues to track the journey in the background.

• To finish recording a trip just click on the Red 'End Trip' icon. The trip will be automatically stored.

• Now you have the information of your trip(s), you can review data and export all trips or email individual trips. To do so, click the 'Export all Trips' icon and then select the date range you would like to see.

 

Do feel free to share the App with anyone you think might find the App useful.

Our New Updated Dawson & Partners App

July 2018

As a firm, we are consistently looking for ways we can improve the service we offer our customers, and we are pleased to announce a major overhaul of our Dawson & Partners App. It is packed with lots of exciting new features to make your life, and the way in which we work with you, even easier. 

Our existing App will cease to be supported so please follow the link below to download our new App and take advantage of its powerful new features.

What does the App do?

The App will give you access to key accounting data, in real time, whenever you need it and gives you access to a suite of super useful calculators. It brings all the financial tools we use with you together in one, easy to use place.

Save hours with these 4 powerful tools:

• Never lose a receipt again with the powerful Receipt Manager!
• Track your daily, weekly and monthly income using the inbuilt Income Tracker.
• Manage your mileage on the go with the GPS Mileage Tracker!
• We can keep you updated on key updates via rapid Push Notifications, direct to your phone.

You can get your free App here!

Apple store: MyAccountants

Google Play: MyAccountants

   Your App is easy to access. Search for MyAccountants in the Apple or Play store or scan the QR code to the left.

Your Unique Access Code is: DAWSON

Do feel free to share the App with anyone you think might find the App useful. 

Superannuation Guarantee due date for payment

July 2018

All employers are now required to pay and report super guarantee payments electronically to ensure they meet SuperStream requirements. With the introduction of SuperStream it is now easier for the ATO to monitor your payments to ensure they have all been paid on time.

Super guarantee payments must be made by employers to their employees' complying funds by quarterly due dates, which are 28 days after the end of each quarter.

The due dates for each quarter are as follows:  

Quarter	Period	Payment due date
1	1 July – 30 September	28 October
2	1 October – 31 December	28 January
3	1 January – 31 March	28 April
4	1 April – 30 June	28 July

When a due date falls on a weekend or public holiday, you can make the payment on the next working day.

If you miss the due date your payment will NOT be tax deductible.

Please note the above due dates in your calendar and ensure all superannuation guarantee payments are made on or before these dates. 

Next date for payment: Period: 1 April 2018 – 30 June 2018 Payment due date: 28 July 2018

 

If you would like any further information or assistance with complying with your super guarantee obligations please contact us on 1300 885 761.

 

PAYG Payment Summaries due on the 14^th July 2018

July 2018

If you have paid and/or withheld PAYG tax from payments you have made to workers or contractors during the 2018 financial year you need to give those workers an annual payment summary. The PAYG Payment Summary must detail the total payments you made to them in the financial year and how much you have withheld from those payments. These payment summaries may be either electronic or in paper form and must be given to employees by 14 July 2018. Please note the payment summaries are not due for lodgement with the ATO until 14 August 2018.

Each type of worker has a different form of PAYG Payment summary statement that must be completed, please see a summary of the different forms below:

• PAYG Payment summary – Individual non-business: This is the most common and will apply to most workers who are classified as employees, company directors and office holders to whom you pay salary and wages, pension payments, compensation, allowances or other payments.
• PAYG payment summary – withholding where ABN not quoted: Where no ABN has been quoted by a contractor.
• PAYG payment summary – business and personal services income: Workers, other than employees, who have a voluntary agreement with you to withhold amounts from payments you make to them, workers you engaged under a labour hire arrangement, certain other workers, such as performing artists, to whom you paid specified payments, individuals from whose personal services income you have to withhold amounts.
• PAYG Payment Summary – Foreign employment: This is for employees who have had amounts withheld from foreign employment income and income earned for work in the Joint Petroleum Development Area.

If you have provided any of the following to your workers these also need to be reported in their payment summary:

• Reportable fringe benefits
• Reportable employer superannuation contributions
• Allowances e.g. motor vehicle allowance, tool allowance etc.
• Union/professional association fees paid on your employees behalf
• Workplace giving

If you have any queries regarding PAYG Payment Summaries or would like assistance preparing the payment summaries for your business please contact your accountant at Dawson & Partners on 1300 885 761.

Single Touch Payroll Starts on 1^st July

June 2018

From 1 July 2018, Single Touch Payroll will come into effect for employers with 20 or more employees.

Under Single Touch Payroll (STP) employers are required to report payments to the ATO, including salaries and wages, pay as you go withholding (PAYG) and superannuation information, directly from your payroll software each time you pay your employees.  

Employers with 19 or less employees will start from 1 July 2019, subject to legislation being passed in parliament. You can also choose to opt in and report through STP before 1 July 2019 if your software is ready.

To determine if you are over the 20 employees threshold you will need to do a head count 1 April 2018.

How to count your employees:

• Who to include in your headcount

o   Full-time employees

o   Part-time employees

o   Casual employees who are on your payroll on 1 April and worked any time during March – there are exemptions to counting seasonal workers who were employed for a short-time only

o   Employees based overseas

o   Any employee absent or on leave (paid or unpaid)

• Who do not include:

o   Any employees who ceased work before 1 April

o   Casual employees who did not work in March

o   Independent contractors

o   Staff provided by a third-party labour hire organisation

o   Company directors

o   Office holders

o   Religious practitioners

Further information on Single Touch Payroll can be found here.

Please feel free to contact us on 1300 885 761 if you would like further clarification.

DAWSON AND PARTNERS

CHARTERED ACCOUNTANTS

92 COOPER STREET

COOTAMUNDRA NSW 2590

  

1918-2018 100 YEARS OF ACCOUNTING EXCELLENCE

Please join us in celebrating the 100th anniversary of the foundation of our business.

Henry Livingstone Dawson commenced work as an Accountant in Cootamundra in July 1918. The business continues to carry the name of its founder.

We invite you to attend a cocktail party on Friday 6th July 2018 to be held at the Olympic Hotel, Parker Street Cootamundra from 6pm, to mark this special occasion.

This invitation is extended to all current and past employees of the firm and to all our valued clients.

RSVP 18th June 2018

Email : enquiries@dawson.com.au 

Phone: 1300 885761

Property and my SMSF

June 2018

Directly held property makes up approximately 19% of all SMSF assets, indicating that many SMSF trustees consider it as an important and significant part of a diversified portfolio.  There are numerous strategies and ways for property to form part of a SMSF's investments and each must be carefully considered.

Investment strategy first!

Before any investment decision, it is imperative and a legal requirement that you as a SMSF trustee consider your investment strategy. Your strategy should detail such things as how much exposure you would like to the property market, the form of exposure and how appropriate it is for your current circumstances. A well-diversified portfolio is essential to provide income for retirement and spread investment risk so that any single asset class, such as property, does not dominate your SMSF risk and returns.

Direct investment

A common form of property exposure is direct investment into a property. This can be in the form of either a residential property or commercial property. When purchasing a property for cash there are some important considerations that must be worked through including:

• Your asset allocation and diversification.
• Potential rental income and property expenses.
• How close you are to retirement and the need for liquid assets to pay pensions.
• Unless the property is a business real property (BRP) you or your related parties cannot use the property.
• If the property is BRP you may be able to work from the premises, or farm the land which is owned by your SMSF.
• You may be able to utilise the small business CGT concessions and contribution limits, if you wish to transfer an existing business property into your fund.

Limited Recourse Borrowing Arrangements (LRBA)

SMSFs may also invest in property through an LRBA. These are complex borrowing structures which allow SMSF trustees to take out a loan from a third party lender. The SMSF trustee then uses these funds to purchase a property to be held on trust. The lender only has recourse to the property held in the trust – this is why the loan is "limited recourse".

An LRBA should only be utilised when it is the right structure for your SMSF on the basis of specialist advice. Some very important considerations in addition to the ones above include:

• Can your SMSF maintain the loan repayments over a long period of time considering asset returns, interest rates, liquidity, and contributions caps?
• Evaluating set-up costs and structures.
• Is your property valuation accurate?
• You cannot use borrowed money to improve the asset or change the nature of the property at any time.
• Do you meet the strict bank lending requirements?  Typically, lenders require the SMSF to have a minimum of $200,000 in net assets, and the loan to have a loan to value ratio (LVR) below 70%.

Indirect investment

Another way to gain exposure to property for SMSFs is through indirect investment. This can include listed invested vehicles such as listed investment companies (LICs) and exchange traded funds (ETFs).  Unlisted managed investment trusts are also a common investment for SMSFs to gain exposure to property. Investing indirectly may suit your SMSF needs more than a purchase of a direct property because it is relatively simple and most likely will not require a large amount of capital. It also allows your SMSF to get exposure to large value properties such as office blocks, shopping centres and industrial properties that would otherwise be out of reach.

How can we help?

At Dawson & Partners, we can help you understand how the different forms of property investment may or may not be relevant for your SMSF portfolio and the impact it may have on you and your fund.  Please feel free to give us a call on 1300 885 761 to arrange a time to meet so that we can discuss your particular requirements, especially in regards to the property investment strategy that would be most appropriate for your SMSF.

Primary production depreciating assets

Primary producers face a number of challenges that can adversely affect their operations and cash flow including climate and natural disasters, pests and diseases, and other environmental factors. Due to these issues, they are provided with various specific income tax concessions that do not apply to other businesses.

Primary producers are able to use these concessions to claim deductions for expenditure on certain depreciating assets such water facility, fencing assets & fodder storage assets.

1. Claiming deductions for water facility assets

• A primary producer can claim an immediate deduction for a water facility asset, including dams, tanks, bores, wells, irrigation channels, pipes, pumps, water towers and windmills, and other similar things. It also includes structural improvements such as repairs or extensions.
• The deduction is claimed in the income year in which the primary producer first acquired the water facility asset. However, the deduction amount is reduced for any period where the asset was not wholly used for business purpose.

2. Claiming deductions for fencing assets

• A primary producer can claim an immediate deduction for fencing costs such as structural improvements, repairs or extensions to a fence.
• The deduction amount is reduced for any period where the fencing asset was not wholly used in carrying on a primary production business in Australia. 

3. Claiming deductions for fodder storage assets

• A primary producer can deduct capital expenditure on fodder storage assets over three years. For example, silos, liquid feed supplement storage tanks, bins for storing dried grain, hay sheds, grain storage sheds and above-ground bunkers for silage all qualify for this treatment.
• A deduction for the first income year is equal to one-third of the cost and the same amount is claimed in each of the following two income years.

The taxpayer is not eligible to deduct the assets if a previous owner has already deducted the asset under these provisions.

Under Small Business Tax Concessions, a small business may be eligible to immediately write-off for certain assets. For more detail regarding small business concessions, please refer to last weeks Small Business Tax Concessions hot topic.

If you would like any further information or assistance please feel free to contact us on 1300 885 761.

Small Business Tax Concessions

May 2018

Small Business Entities (SBE) may apply for immediate write-off for certain costs that are incurred as business expenses.

1. Requirements to qualify as an SBE:

• The aggregated turnover for the current income year is less than $10 million. 'Aggregated turnover' is generally your annual turnover plus the annual turnover of any business connected with you and that you are part of; or
• The taxpayer also carried on a business in the previous income year and its aggregated turnover in that previous year was less that $10 million.
• Please note the turnover threshold for the small business capital gains tax concession remains at $2million. 

2. SBE may be eligible to claim certain business expenses:

   2.1. Immediate write-off for depreciating asset costing less than $20,000

• An immediate deduction can be claimed for the business use portion of a new or used depreciating asset costing less than $20,000, if the asset is first used or installed ready to use for business purposes by 30 June 2019.

2.2. Immediate deduction for certain prepaid business expenses

• An immediate deduction for prepaid business expenses in the income year, if:

o The prepaid period for that expenditure is 12 months or less; and

o The prepaid period for that expenditure ends in the following income year.

 2.3. Immediate deduction for certain start-up business costs

• The expenditure incurred in receiving advice or services relating to the structure or operation of a proposed business, or payment of a fee, tax or charge, such as payment to a lawyer or accountant for setting up the business systems, professional advice on a business development plan or costs of transferring assets to the proposed business.

3. SBE Pooling:

• Assets costing more than $20,000 or more can be placed into the small business depreciation pool, which is depreciated at 15% in the first income year and 30% each following income year.

 If you would like any further information or assistance please feel free to contact us on 1300 885 761.

 

2018/19 Federal Budget

May 2018

The Federal Treasurer, Mr Scott Morrison, delivered his third Federal Budget on 8th May 2018.

There are a number of changes that may have an impact on your business or personal situation. The key points are:

Changes affecting personal income tax

1. Personal income tax rates

The government will introduce the Low and Middle Income Tax Offset, a non-refundable tax offset of up to $530 per annum to Australian resident low and middle income taxpayers. The offset will be available from the 2018/19 tax year and will be received as a lump sum on assessment after an individual lodges their tax return.

From 1 July 2018, the Government will increase the top threshold of the 32.5% personal income tax bracket from $87,000 to $90,000. 

2. Medicare levy to remain unchanged

The government has announced that it will not proceed with the previously announced increase in the Medicare levy from 2% to 2.5%.

Changes affecting business income tax

1. Extending the $20,000 immediate write-off for small business

The government will extend the $20,000 immediate write off for small business with aggregated annual turnover less than $10 million to 30 June 2019.  The assets must be purchased and first used or installed ready for use on or before 30 June 2019 and the taxpayer must be using the simplified depreciation regime.

2. Introduction of an economy-wide cash payment limit

From 1 July 2019, the government will introduce a limit of $10,000 for cash payments made to businesses for goods and services. Transactions over $10,000 have to be made through an electronic payment system or cheque. Transactions with financial institutions or consumer to consumer non-business transactions will not be affected.

3. Expanding the contractor payment reporting system

From 1 July 2019, this system will be expanded to cover:

• Security and investigation services;
• Road freight transport; and
• Computer system design and related services.

4. Payments to employees and contractors

From 1 July 2019, businesses will no longer be able to claim a deduction for payments to:

• Employees where no PAYG is withheld
• Contractors where no ABN provided and no PAYG withheld 

5. Other changes

• The Government will reform tax laws to assist with any illegal phoenix activity.
• From 1 July 2019, the Government will deny deductions for expenses associated with holding vacant residential or commercial land, including interest incurred to finance the acquisition of the land.
• The Government will amend the research and development (R&D) tax incentive to better target the program and improve its integrity and fiscal affordability from 1 July 2018.

Please feel free to contact us on 1300 885 761 if you have any questions or would like further information in regards to any of the above changes.

Government delivers SMSF friendly 2018-19 Federal Budget

May 2018

A SMSF friendly budget is the good news coming out of the 2018-19 Federal Budget. This Federal Budget will provide much needed stability while looking to reduce costs for SMSFs and prove additional flexibility.

The key changes proposed for SMSFs and superannuation are:

Three-yearly audit cycle for some self-managed superannuation funds

The Government will change the annual SMSF audit requirement to a three yearly requirement for SMSFs with a history of good record keeping and compliance. The measure will start on 1 July 2019 for SMSF trustees that have a history of three consecutive years of clear audit reports and that have lodged the fund's annual returns in a timely manner.

Expanding the SMSF member limit from four to six

As already announced, the Federal Government confirmed its decision to expand the number of members allowed in a SMSF from four to six from 1 July 2019. Expanding the definition of a SMSF to a fund with a maximum of six members will provide greater flexibility in how funds can be structured.

Work test exemption

The Government will provide more time for Australians aged 65 to 74 to boost their retirement savings, by introducing an exemption from the superannuation work test from 1 July 2019.

This exemption will apply where an individual's total superannuation balance is below $300,000 and will permit voluntary superannuation contributions in the first year that they do not meet the work test requirements.

Deductions for personal contributions

From 1 July 2018 the Government will improve the integrity of the system for claiming personal superannuation contributions by ensuring that individuals lodge a "notice of intent" (NOI) with their superfund if they intend to claim a personal deduction.

Older Australian package

The Government introduced the following measures to enhance the standard of living older Australians:

• Increase to the Pension Work Bonus from $250 to $300 per fortnight.

• Amendments to the pension means test rules to encourage the take up of lifetime retirement income products.

• Expansion of the Pensions Loan Scheme to allow more Australians to use the equity in their homes to increase their incomes.

How can we help?

If you have any questions or would like further clarification in regards to any of the above measures outlined in the 2018-19 Federal Budget, please feel free to give us a call on 1300 885 761 so that we can discuss your particular requirements in more detail.

Franking credits and your SMSF

April 2018

You may have noticed significant media coverage recently regarding the Australian Labor Party's proposed policy to stop SMSFs from receiving tax refunds for the franking credits they receive in conjunction with the dividends paid from Australian companies they own.

First of all, what are franking credits and how do they benefit SMSFs?

Under the Australian tax system companies pay 30 percent tax on their profits. When these profits are then passed on to their shareholders in the form of dividends, the company also hands the shareholders a credit for the tax the company has already paid (the "franking credit"). The individual shareholder then pays tax on the profit they received from the company less the credit for the tax the company has already paid.  The franking credit ensures that the company profits are taxed at a shareholder's marginal tax rate.

For SMSFs in retirement phase which generally have a zero tax rate, this means they can receive a full refund of the tax already paid by the company on their behalf.

SMSFs who have members in accumulation phase benefit from franking credits reducing the tax they pay on their SMSF's earnings and may receive partial refunds of their franking credits depending on the fund's overall tax liability.

Labor, if elected, will change the law so that SMSFs and other low tax paying entities will no longer be able to receive a tax refund for the franking credits they receive. This will affect all SMSFs that own Australian shares, especially funds that have received tax refunds in recent years.

This could have a significant impact on the retirement income of many SMSF members in retirement. For example, an SMSF with $500,000 in retirement phase with 40 percent of assets held in Australian shares could lose around $4,285 per year in tax refunds from their franking credits. This impact could be a significant hit to your annual retirement income.

How can we help?

We can help you understand how a change in the tax treatment of franking credits may impact your SMSF portfolio and retirement income.  Please feel free to give us a call on 1300 885 761 if you wish to discuss this matter in more detail.

DAWSON AND PARTNERS

CHARTERED ACCOUNTANTS

92 COOPER STREET

COOTAMUNDRA NSW 2590

 

 

1918-2018 100 YEARS OF ACCOUNTING EXCELLENCE

Please join us in celebrating the 100th anniversary of the foundation of our business.

Henry Livingstone Dawson commenced work as an Accountant in Cootamundra in July 1918. The business continues to carry the name of its founder.

You are invited to visit our current office on Friday 6th July from 2pm, followed by a cocktail party to be held at the Olympic Hotel, Parker Street Cootamundra from 6pm.

This invitation is extended to all current and past partners and employees of the firm and to all our valued clients.

 

RSVP 10th June 2018

Email : enquiries@dawson.com.au 

Change in method for Fringe Benefits Tax exemptions

April 2018

A draft ruling from the ATO has introduced a new compliance method for exemptions to fringe benefits tax.

Generally, an FBT exemption applies where an employee is provided an exempt vehicle (such as a ute) and their private use is minor, infrequent and irregular.

Starting this FBT year from 01/04/2018, the exemption will only apply if the private use of the exempt vehicle is less than 750 kilometres for the entire year. Also, no single, return journey for a private purpose can exceed 200 kilometres.

If you have employees who may use their employer provided work vehicle  in excess of these limits please contact us on 1300 885 761 to discuss your FBT options.

What is Fringe Benefits Tax?

Fringe benefits tax (FBT) is a tax employers pay on certain benefits they provide to employees including their employees' family or other associates. If you provide a benefit to your employee or their associates in a different form to salary or wages, FBT may be applied.

FBT is separate to income tax and is calculated on the taxable value of the fringe benefits provided. If a FBT return is required to be lodged the FBT year is from 1 April to 31 March and the return will be due for lodgement on 21 May.

Some examples of fringe benefits include:

-          Allowing your employees to use a work car for private purposes

-          Holiday accommodation

-          Providing entertainment by way of free tickets to concerts

-          Paying an employee's gym or club membership

-          Giving your employee a loan with no interest or a low interest rate

-          Provide your employee with property (e.g. stock, property etc.)

If you think you are providing a benefit that relates to any of the above examples please contact us to discuss any potential FBT concerns. FBT is a complex area as some benefits are exempt from being taxed. The ATO have increased their audit activity in this area as an increasing number of employers have not complied with their obligations.

 

Have you completed your 2017 tax return?

April 2018

If you haven't yet lodged your 2017 tax return, you are running out of time. We recommend you contact us immediately to avoid a last minute rush, and to avoid potential penalties and interest for late lodgement.

For most of our clients, the due date for lodgement of 2017 tax returns is 15 May 2018. However, there are many exceptions to this deadline, especially for business taxpayers.

We will be contacting clients who have yet to complete their returns to ensure everyone lodges on time.

If you are not aware of your lodgement requirements please contact us on 1300 885 761 to discuss.

Fuel Tax Credits 

February 2018

Who can claim Fuel Tax credits?

You may be eligible to claim fuel tax credits for fuel purchased for use in your business. To be eligible you must:

• Be registered for GST
• Use the fuel for an eligible activity including but not limited to:  
  • Use in heavy vehicles travelling on public roads if the vehicle has a gross vehicle mass (GVM) greater than 4.5 tonnes.
  • Use in business activities such as agriculture, forestry, mining, construction and manufacturing if the vehicle (including light vehicles) was travelling on private roads and off public roads.

Further details regarding eligible fuels and business activities can be found on the ATO website.

Indexation of rates:

The rates for fuel tax credits are now indexed bi-annually on 1 February and 1 August in line with the Consumer Price Index (CPI).

The indexed rates for the period from 5 February 2018 to 30 June 2018 are as follows:

• Increase from 14.5 to 15.1 cents per litre for liquid fuels used in a heavy vehicle on public roads;
• Increase from 40.3 to 40.9 cents per litre for liquid fuels in all other business uses;
• Increase from 10.55 to 10.725 cents per litre for E85 (85% ethanol/15% petrol) in all business uses except heavy vehicles on public roads;
• Increase from 13.2 to 13.3 cents per litre for liquefied petroleum gas (LPG) ; and
• Increase from 27.6 to 28 cents per kilogram for compressed natural gas (CNG) and liquefied natural gas (LNG).

These changes will affect fuel tax credit calculations for March quarter Activity Statements.

If you claim less than $10,000 in fuel credits each year you can calculate your fuel tax credit using the rate that applies at the end of the BAS period.

The ATO fuel tax credit calculator can be found here.

Please contact us on 1300 885 761 for more information. 

 

Superannuation Guarantee due date for payment

January 2018

All employers are now required to pay and report super guarantee payments electronically to ensure they meet SuperStream requirements. With the introduction of super stream it is now easier for the ATO to monitor your payments to ensure they have all been paid on time.

Super guarantee payments must be made by employers to their employees complying funds by quarterly due dates, which are 28 days after the end of each quarter.

The due dates for each quarter are as follows:  

Quarter	Period	Payment due date
1	1 July – 30 September	28 October
2	1 October – 31 December	28 January
3	1 January – 31 March	28 April
4	1 April – 30 June	28 July

 

When a due date falls on a weekend or public holiday, you can make the payment on the next working day.

If you miss the due date your payment will NOT be tax deductible.

Please note the above due dates in your calendar and ensure all superannuation guarantee payments are made on or before these dates.

Next date for payment: Period: 1 October 2017 – 31 December 2017 Payment due date: 29 January 2018

If you would like any further information or assistance with complying with your super guarantee obligations please contact us on 1300 885 761.

Tips for property investors

January 2018

The ATO has provided a list of the 10 most common mistakes on tax returns for rental property owners and recommendations about how to avoid them.

1. Make sure your property is genuinely available for rent: an owner must show a clear intention to rent the property in order to claim tax deductions for expenses paid during that period. For example, advertise the property if it is not currently tenanted.

2. Getting initial repairs and capital improvements right: initial repairs and improvements for damage that existed when the property was purchased are not immediately deductible. However, ongoing repairs after the property have been let, such as fixing the hot water system can be immediately deductible.

3. Claiming borrowing expenses: this includes loan establishment fees, preparing mortgage document, etc. You can claim a full deduction if your borrowing expenses are $100 or less. If they are over $100, the deduction is claimable over 5 years.

4. Claiming purchase costs: you can't claim any deductions for the costs of buying the property, including conveyancing fees and stamp duty (outside of the ACT). They form part of the cost base for capital gains tax purposes.

5. Claiming interest on your loan: you can claim a deduction for interest if you take out a loan for your rental property. However, if part of the loan is for personal use, then that amount will not be included for the purposes of calculating your interest deduction.

6. Getting construction costs right: you can claim capital work deductions for certain building costs, including extensions, alterations and structural improvements. You can claim a capital works deduction at 2.5% p.a. of the cost over 40 years, from the date the construction was completed.

7. Claiming the right portion of your expenses: if the property is rented out to friends or family below market rate, you can only claim a deduction for that period up to the amount of rent you received. However, if it is for personal use or when your friends or family stay free of charge, you can't claim any deductions.

8. Co-owning a property: if you own a rental property with someone else as joint tenants, you must declare rental income and claim expenses according to your ownership of the property.

9. Getting your capital gains right when selling: when you sell your rental property, you will make either a capital gain or a capital loss. This is the difference between what is cost you to buy and improve the property, and what you receive when you sell it. If you make a capital gain, you will need to include the gain your tax return for that financial year. However, if you make a capital loss, you can deduct it from other capital gains earned in that year, or carry the loss forward and offset it from capital gain in later years.

10. Keeping the right records: an owner must have evidence of all income and expenses they include in their tax returns each income year. Selling a rental property may generate a capital gains, so keep purchase and sale records for another five years from the date the property is sold.

The following legislative changes have also taken effect from 1 July 2017:

+ Disallow the deduction of travel expenses for residential rental property: Travel expenses relating to inspecting, maintaining, or collecting rent for a residential rental property cannot be claimed as deductions by investors. The travel expenditure is also not recognised in the cost base of the property for CGT purposes.

+ Limit plant and equipment depreciation deductions to outlays actually incurred by investors: Deductions for the decline in value of previously used plant and equipment in rental premises used for residential accommodation are no longer allowed. The changes apply to previously used plant and equipment acquired at or after 7.30 pm on 9 May 2017 unless it was acquired under a contract entered into before this time. New plant and equipment purchased by investors will still be able to be depreciated over the effective life of the asset.

Further information on rental property investments can be found here.

Please feel free to contact us on 1300 885 761 if you would like more information.

New Year's Financial Resolutions

January 2018

The start of the New Year is a great time to consider creating some financial resolutions to ensure that you are fully prepared for the year ahead.  Here are some tips to help improve your business and achieve your financial goals.

1.  Lighten your tax debt

Avoid penalties and interest by lodging and paying your tax debt on time. Set up your calendar with the appropriate alerts and reminders for the coming year. Contact us to make sure you are up-to-date with your tax lodgements and payments.

Our free app includes a calendar function to assist you keeping up with deadlines.

Download the app from Google Play store here.

Download the app from the apple store for iPhones here.

2.  Make a plan for your money

Set up a budget for 2018 and use it to turn your plans into action. Tax planning will assist with budgeting for any tax that may be payable. We can also suggest ways to minimise your tax bill.

3.  Update your payroll and accounting system

Make sure to update your internal systems, such as online payroll and accounting software. If you are unsure of what payroll or accounting software to choose, we are here to help by suggesting options that best fit for your specific business. To help determine which accounting software program is right for you, please download our free app and complete our cloud accounting survey and we will contact you to discuss the results.

4.  Keep records electronically

Keeping your documents electronically is an effective way to secure your records, to save time and money. Make sure you are able to keep regular backups.

5.  Organise your super

Bring your funds together by consolidating your superannuation into one fund. This can help grow your balance faster and you may pay less fees. Maximising your superannuation should be your long-term goal, which is why we encourage you to keep track of your super. We can assist you with all aspects of superannuation, including contribution strategies, investment management and accessing benefits.

6.  Keeping accurate GST records

If you run a business that has a GST turnover of $75,000 or more, you need to register for GST and you need to record your sales and purchases so you can report your GST liabilities accurately and claim the GST credits you are entitled to. It is important that your BAS's be lodged on time to avoid late penalties and ATO compliance activity.

7.  Review your insurance

Make sure your insurance is appropriate for your circumstances. Over time your needs change: those with young families may require higher cover compared to those who are nearing retirement. Speak to us if you are uncertain about your requirements.

8.  Update your will

Your will is like a car. It needs regular maintenance to stay in good working order. Life and circumstances change over time, and your will should reflect those changes. If it has been 2 or more years since you last reviewed your will, take the time to consider whether it is still appropriate for your wishes.

9.  Following through on your financial resolutions

We look forward to working with you in the coming year to help you achieve your New Year financial resolutions.

If you would like more information or assistance, please contact us on 1300 885 761.

Happy New Year!

 

New reporting requirements for superannuation pensions

November 2017

With the new super rules beginning on 1 July 2017, your requirement to report information about your SMSF and the pensions it pays may be changing. This is driven by the introduction of the new $1.6 million transfer balance cap which limits the amount of assets you can use to pay superannuation pensions.

Currently, pensions only need to be reported once a year through the SMSF annual tax and regulatory return to the Australian Taxation Office (ATO).

From 1 July 2018, if a member of your SMSF has $1 million or more in superannuation and a member of the fund is receiving a pension from your SMSF, the fund will be required to report additional information to the ATO.  This will enable them to accurately monitor your transfer balance cap, and determine whether you have exceeded the $1.6 million limit.  Exceeding the $1.6 million transfer balance cap limit can result in additional tax.

Each fund with a member in this category will be required to report to the ATO the credits and debits that count towards the member's transfer balance cap. This means that we will have to obtain more timely notification from you in the following circumstances:

• The commencement of new retirement pensions, including death benefit pensions.
• Ceasing a pension (known as a "full commutation").
• Taking a lump sum out of the pension (known as a "partial commutation")

From 1 July 2018 transfer balance cap credits and debits must be reported within 28 days after the end of the quarter that they occur in.  For instance, if you start a new pension on 1 July 2019, then this credit will need to be reported by 28 October 2019.

If your SMSF does not have any members with a superannuation balance of $1 million or more, then you will not need to undertake this extra reporting.

We are here to help

If your fund is required to participate in the quarterly reporting regime, we will be in contact with you in due course to discuss a plan of action to ensure continued adherence to all reporting requirements.

Single Touch Payroll

November 2017 

The ATO is changing the way employers will report tax and super information. Single Touch Payroll is being progressively introduced from 1 July 2018.  

Under Single Touch Payroll Employers are required to report payments, including salaries and wages, pay as you go withholding (PAYG) and super information, directly from their Single Touch Payroll compliant payroll software to the ATO at the same time they pay their employees.

The aims of Single Touch Payroll appear to be:

1. To ensure all employers are carefully calculating their SGC superannuation obligations from employees;
2. That these obligations are being paid on time;
3. To encourage employers to utilise payroll programs which are compliant with these requirements

This new rule will initially apply to employers with 20 or more employees and will commence from 1 July 2018. Employers with 19 or less employees will start from 1 July 2019.

To determine if you are over the 20 employee threshold you will need to do a head count on 1 April 2018. If you have 20 or more employees on 1 April 2018, you will be a 'substantial employer' and will be required to report through Single Touch Payroll.

How to count your employees:

• Who to include in your headcount
  • Full-time  employees
  • Part-time employees
  • Casual employees who are on your payroll on 1 April and worked any time during March
  • Employees based overseas
  • Any employee absent or on leave (paid or unpaid)
  • Seasonal employees (staff who are engaged short term to meet a regular peak workload, for example, harvest workers)

• Who do not include:
  • Any employees who ceased work before 1 April
  • Casual employees who did not work in March
  • Independent contractors
  • Staff provided by a third-partylabour hire organisation
  • Company directors
  • Office holders
  • Religious practitioners

Further information on Single Touch Payroll can be found here.

Please feel free to contact us on 1300 885 761 if you would like more information.

Superannuation Guarantee due date for payment

October 2017

All employers are now required to pay and report super guarantee payments electronically to ensure they meet SuperStream requirements. With the introduction of super stream it is now easier for the ATO to monitor your payments to ensure they have all been paid on time.

Super guarantee payments must be made by employers to their employees complying funds by quarterly due dates, which are 28 days after the end of each quarter.

The due dates for each quarter are as follows:  

Quarter	Period	Payment due date
1	1 July – 30 September	28 October
2	1 October – 31 December	28 January
3	1 January – 31 March	28 April
4	1 April – 30 June	28 July

If you miss the due date your payment will NOT be tax deductible.

Please note the above due dates in your calendar and ensure all superannuation guarantee payments are made on or before these dates.

 

 If you would like any further information or assistance with complying with your super guarantee obligations please contact us on 1300 885 761.

 

How to spot an ATO scam  

September 2017

The Australian Taxation Office (ATO) is urging all Australians to keep their personal information secure and to report any suspicious activity immediately this tax time.

Assistant Commissioner Kath Anderson warns that identifying information such as tax file numbers, bank account numbers or your date of birth are the keys to your identity, and can be used by scammers to break into your life if they are compromised.

"We cannot stress this enough – your personal information must be treated like your bank PIN. If someone knew your PIN, they would have access to your hard-earned income, and it's the same with your personal information and tax return," Ms Anderson said.

How to spot an ATO scam

The ATO will not:

• be abusive or offensive to you
• threaten you with immediate arrest
• ask you to transfer money into an account with a BSB that is not 092009 or 093003
• request payment via unusual methods such as iTunes gift cards or other prepaid cards
• request personal security information such as your TFN or your bank details via email or SMS or social media sites
• ask you for money up front in order to receive a refund or other payment
• direct you to download files from the internet.

The ATO will:

• provide you with a range of options for paying debts, which are all set out on the ATO website at ato.gov.au/howtopay
• contact you by phone
  • if you are in doubt about the authenticity of a call claiming to be from the ATO, you can call the ATO on 1800 008 540 to verify
  • you will generally be aware of any debt before it is due for payment, but you can check with us or by calling the ATO

• send emails and SMS asking you to take specific action such as:
  • provide additional information required to process a BAS or tax return lodged
  • provide additional information regarding an application that has been made
  • verify changes to an account

• send general notifications and reminders via SMS or email
• send promotional and informational SMS and emails.

If you have any concerns regarding correspondence from the ATO please contact us on 1300 885 761 or contact the ATO directly on 1800 008 540.

Our Goulburn office is moving to 105 Goldsmith Street

August 2017

It is with great pleasure that Dawson & Partners would like to announce that on Wednesday 30^th August, we will open our doors to our new Goulburn office at 105 Goldsmith Street.  

Since we opened our initial Goulburn office in 2009, your loyal support has helped us grow, and now we need more space to serve you better. The new office has undergone an extensive renovation to better reflect the quality of service we attempt to provide at Dawson & Partners. We trust you will agree when you next visit us.

We will close our current office in Auburn Street on Friday 25^th August to begin the relocation and reopen in our new office on Wednesday 30^th August.

Our phone number will not change and our telephones will be fully operational during the moving process. Please still call us on 1300 885 761 if you would like to speak to your accountant and we will respond by mobile if necessary during the relocation.

If you have any questions about the new location or our services, please call us and we'll be happy to help. We look forward to seeing you at our new location. 

Fuel Tax Credits 

August 2017

Who can claim Fuel Tax credits?

You may be eligible to claim fuel tax credits for fuel purchased for use in your business. To be eligible you must:

• Be registered for GST
• Use the fuel for an eligible activity including but not limited to:  
  • Use in heavy vehicles travelling on public roads if the vehicle has a gross vehicle mass (GVM) greater than 4.5 tonnes.
  • Use in business activities such as agriculture, forestry, mining, construction and manufacturing if the vehicle (including light vehicles) was travelling on private roads and off public roads.

Further details regarding eligible fuels and business activities can be found on the ATO website.

Indexation of rates:

The rates for fuel tax credits are now indexed bi-annually on 1 February and 1 August in line with the Consumer Price Index (CPI).

The indexed rates for the period from 1 August 2017 are as follows:

• Increase from 14.3 to 14.5 cents per litre for liquid fuels used in a heavy vehicle on public roads;
• Increase from 40.1 to 40.3 cents per litre for liquid fuels in all other business uses;
• Increase from 10.52 to 10.55 cents per litre for E85 (85% ethanol/15% petrol) in all business uses except heavy vehicles on public roads;
• Increase from 13.1 to 13.2 cents per litre for liquefied petroleum gas (LPG) ; and
• Increase from 27.4 to 27.6 cents per kilogram for compressed natural gas (CNG) and liquefied natural gas (LNG).

These changes will affect fuel tax credit calculations for September quarter Activity Statements.

If you claim less than $10,000 in fuel credits each year you can calculate your fuel tax credit using the rate that applies at the end of the BAS period.

The ATO fuel tax credit calculator can be found here.

Please contact us on 1300 885 761 for more information.  

 

Superannuation: What to do before 30 June

May 2017

If you follow the financial press at all, you will be well aware that 30 June this year is a fair bit more significant than in other years – because it is the last date our existing superannuation regime will apply.  From 1 July many of the Government's much-publicised changes will come into effect, and as a result there are a few things to be done for many super fund members.  Here is a quick one-page checklist:-

1.   Last chance for contributions under the old caps:

The limit for concessional, (i.e. deductible) contributions in 2016/17 is $30,000 (or $35,000 if you are 49 or more).  In 2017/18, this will reduce to $25,000 for everybody.

Similarly, non-concessional contributions (i.e. where no deduction is claimed) of up to $540,000 can be made before 30 June if you are under 65, and have not made large contributions of this type during 2014/15 or 2015/16.  If you are aged 65-74 and still working, the limit is $180,000.  These limits will reduce to $300,000 (under 65) and $100,000 (65-74) on 1 July 2017.

If your employer is taking salary sacrifice deductions from your pay, it will also be worthwhile to ensure that your employer contributions will not exceed the reduced cap of $25,000 in 2017/18, and reduce them if necessary.  An alternative will be to cancel your salary sacrifice entirely, and make deductible member contributions instead, another change from 1 July 2017.

2.   Re-evaluate the case for a TRIS:

If you are under 65, not yet retired, but still receive income from your super fund, you are probably receiving a TRIS (Transition to Retirement Income Stream), and should consider whether you want it to continue past 30 June given the harsher tax treatment which will apply.

The earnings which support the TRIS will now be taxed at 15%, rather than being tax free.  If you are under 60, any income payments you receive will also be taxable income to you personally (although a 15% rebate will continue to apply).

3.   Resolve to reduce any pension balances over $1.6m:

If any individual has total pension balances of more than $1.6m, they will need to "roll back" the excess into an accumulation account by 30 June.  In order to document this, we will be preparing draft resolutions for affected clients in the near future.

4.   Reduce regular pension payments to the minimum:

If you are receiving pension payments which are more than the required minimums, you will make better use of the available pension caps after 30 June if you:

• Take the minimum pension only as regular payments, and
• Take any extra cash requirements as a lump sum payment, if needed.

This is particularly relevant to those who are above or approaching the $1.6m pension limit.

Let us know if you require further assistance with these changes.  We are planning to hold client seminars in July to deal with the new super rules more comprehensively.

Federal Budget Highlights:

May 2017
The Federal Treasurer, Mr Scott Morrison, delivered his second Federal Budget (the government's fourth) on Tuesday the 9^th of May.

There are a number of changes that may have an impact on your business, personal or superannuation situation. The key points are:

Small business

• The $20,000 instant asset write-off for small business will be extended by 12 months to 30 June 2018, for businesses with an aggregated annual turnover of less than $10m. Depreciating assets costing less than $20,000 can be immediately deducted provided they are first used, or installed ready for use, by 30 June 2018. The $10m annual turnover threshold also applies for the 2016/17 year.

Individuals and families

• The Medicare levy will be increased from 2.0% to 2.5% of taxable income from 1 July 2019.
• The Medicare levy low-income thresholds for singles, families, seniors and pensioners will increase from the 2016/17 income year.
• A new set of repayment thresholds and rates under the higher education loan program (HELP) will be introduced from 1 July 2018. A new minimum repayment threshold of $42,000 will be established with a 1% repayment rate. Currently, the minimum repayment threshold for the 2017/18 year is $55,874 with a repayment rate of 4%.

Superannuation

• From 1 July 2018, individuals aged 65 and over will be able to downsize their family home and place proceeds up to $300,000 per member into their superannuation fund without breaching any of the current superannuation caps, work test and age test. The measure will apply to a principal place of residence held for a minimum of 10 years.

Housing affordability 

• First home buyers will be able to make voluntary contributions into their superannuation of up to $15,000 per year and $30,000 in total, to be withdrawn subsequently for a first home deposit. The contributions can be made from 1 July 2017 and must be made within an individual's existing contribution caps. From 1 July 2018 onwards, the individual will be able to withdraw these contributions and their associated deemed earnings for a first home deposit. The withdrawals will be taxed at an individual's marginal tax rate, less a 30% tax offset.

Property Investors

• Deductions for travel expenses related to inspecting, maintaining or collecting rent for a residential rental property will be disallowed from 1 July 2017.
• Plant and equipment depreciation deductions will be limited to outlays actually incurred by investors in residential real estate properties from 1 July 2017. Plant and equipment items are usually mechanical fixtures or those which can be "easily" removed from a property such as dishwashers and ceiling fans. Acquisitions of existing plant and equipment items will be reflected in the cost base for capital gains tax purposes for subsequent investors.
• Our understanding is that this change will apply to improvements purchased with farmland as well.

Other announcements include the introduction of a major bank levy, extension of taxable payments reporting system to courier and cleaning industries, changes to GST for purchasers of new residential properties and extended funding for the black economy taskforce.

How can we help?

If you would like some assistance with identifying how these recent changes are likely to affect your particular circumstances, please feel free to email or call us on 1300 885 761.

Access the full 2017 budget papers here.

 

 

 

Fuel tax credits

April 2017

Who can claim Fuel Tax credits?

You may be eligible to claim fuel tax credits for fuel purchased for use in your business. To be eligible you must:

• Be registered for GST
• Use the fuel for an eligible activity including but not limited to:  
  • Use in heavy vehicles travelling on public roads if the vehicle has a gross vehicle mass (GVM) greater than 4.5 tonnes.
  • Use in business activities such as agriculture, forestry, mining, construction and manufacturing if the vehicle (including light vehicles) was travelling on private roads and off public roads.

Further details regarding eligible fuels and business activities can be found on the ATO website.

Indexation of rates:

The rates for fuel tax credits are now indexed bi-annually on 1 February and 1 August in line with the Consumer Price Index (CPI).

The indexed rates for the period from 1 February 2017 are as follows:

• Increase from 13.7 to 14.2 cents per litre for liquid fuels used in a heavy vehicle on public roads;
• Increase from 39.6 to 40.1 cents per litre for liquid fuels in all other business uses;
• Increase from 8.15 to 8.225 cents per litre for E85 (85% ethanol/15% petrol) in all business uses except heavy vehicles on public roads;
• Increase from 12.9 to 13.1 cents per litre for liquefied petroleum gas (LPG) ; and
• Increase from 27.1 to 27.4 cents per kilogram for compressed natural gas (CNG) and liquefied natural gas (LNG).

These changes will affect fuel tax credit calculations for March quarter Activity Statements.

If you claim less than $10,000 in fuel credits each year you can calculate your fuel tax credit using the rate that applies at the end of the BAS period.

The ATO fuel tax credit calculator can be found here.

Please contact us on 1300 885 761 for more information.  

Have you completed your 2016 tax return?

March 2017

If you haven't yet lodged your 2016 tax return, you are running out of time. We recommend you contact us immediately to avoid a last minute rush, and to avoid potential penalties and interest for late lodgement.

For most of our clients, the due date for lodgement of 2016 tax returns is 15 May 2017. However, there are many exceptions to this deadline, especially for business taxpayers.

We will be contacting clients who have yet to complete their returns to ensure everyone lodges on time.

If you are not aware of your lodgement requirements please contact us on 1300 885 761 to discuss.

Assistance recovery grants for 2016 inland floods

March 2017

The Natural Disaster Relief Assistance Recovery Grant is available to primary producers who have suffered direct damage as a result of the August 2016 inland floods. Grants are available for clean-up, removal of debris, disposal of dead livestock and immediate restoration costs.

This grant is not intended to replace the need for insurance, and is not intended to provide compensation for losses such as destroyed crops.

The grant of up to $15,000 is available to flood-affected primary producers in the Bland, Bogan, Forbes, Lachlan, Narromine, Parkes and Warren Local Government Areas. Additional criteria include:-

• Applicant derives more than 50% of income from the primary production enterprise;
• Intention to re-establish primary production enterprise;
• Enterprise can include agriculture, aquaculture, forestry, fishing and hunting/trapping.

You must lodge your application with the NSW Rural Assistance within 6 months of the date of the event, with all application to be received on or before 19 June 2017.

Eligible expenditure includes:-

• Replacement pasture and fertiliser;
• Fertiliser if seed is held on hand;
• Repair and replacement of equipment (must be listed on business asset register);
• Disposal & removal of dead livestock;
• Purchase of fodder & feed supplements;
• Fencing repairs;
• Internal road repairs;
• Dam wall repairs;
• Creek crossings, causeways and gullies;
• General earthwork repairs;
• Repair and replacement of pumps (must be listed on business asset register);
• Small motors;
• Removal of debris from crops; and
• Posts and trellises for destroyed vines.

Ineligible expenditure includes:-

• Sprays or chemicals;
• Loss of income;
• Damage to dwellings;
• Damages covered by insurance;
• Own labour (including existing staff and own equipment);
• Fuel;
• Capital items purchased after 30 August 2016;
• Upgrades/improvements to damaged areas;
• Animal husbandry;
• Mulch;
• Vehicles; and
• Replacement fruit trees.

Online applications can be submitted on the RAA website, or for further information please contact us on 1300 885 761.

$20,000 Instant asset write-off ending on 30 June 2017

February 2017

What is the $20,000 immediate write-off?

• The immediate write-off is available to small businesses which have annual turnover of less than $2 million.
• Individual eligible assets costing less than $20,000 can be written-off in the year they are purchased, whether they are new or second-hand. The cost includes any additional transportation or installation costs.
• There is no limit to the number of asset purchases under $20,000 that can be claimed.
• If your business is registered for GST, you exclude the GST amount paid on the asset when calculating the small business write-off. If your business is not registered for GST, you include the amount of GST paid on the asset.
• Private use is a factor when calculating the small business write-off. The full cost of the asset is used to determine eligibility for the write-off, however only the business use percentage of the asset is immediately deducted.

The small business instant asset write-off of $20,000 is due to expire on 30 June 2017. From 1 July 2017 the threshold for immediate write-off of small business assets will reduce back to $1,000.

Please note in the 2016-17 Budget, the Government announced an increase to the small business entity turnover threshold from $2 million to $10 million. This legislation is still before the House of Representatives and has not yet been enacted.

If you are a small business and are planning to purchase assets, contact us to determine your eligibility for the instant write-off on 1300 885 761.

The $1.6 million superannuation transfer balance cap – what does it mean for you?

February 2017

Amongst the changes announced in the 2016 Federal Budget was the introduction of a $1.6 million transfer balance cap. This cap limits the tax exemption for assets funding superannuation pensions.

This new limit on superannuation will apply from 1 July 2017. The main issues you need to be aware of are:

• All super fund members who are receiving a pension on 1 July 2017 will have a transfer balance cap of $1.6 million created at that time.
• Any amounts in excess of a member's personal transfer balance cap ($1.6 million) can continue to be maintained in their fund. 
• This means if you have more than $1.6 million in super you can maintain up to $1.6 million in pension phase (tax exempt) and retain any additional balance in accumulation phase (taxed at 15%).
• Those not receiving a superannuation pension on 1 July 2017, but will in the future, their transfer balance cap will be created when they first receive a superannuation pension.
• Approaching 1 July 2017 people may wish to structure their super to be in a position to optimise the $1.6 million transfer balance cap.  For couples, this may involve measures to equalise super balances, to the extent that this is possible.
• The cap could be exceeded in the event of the transfer of superannuation entitlements on the death of a spouse, so estate planning will need to be reviewed.

How can we help?

If you are concerned that the Government's changes to the transfer balance cap will affect you from 1 July 2017, please feel free to contact us on 1300 885 761 to arrange a meeting so that we can discuss your particular requirements in more detail.

 

 

Free ATO Courses for Trustees of Self-Managed Superannuation Funds

February 2017

If you have a self-managed superannuation fund (SMSF) and act as Trustee, it is important to remember that you are responsible for ensuring that the fund complies with the requirements of the income tax laws and the Superannuation Industry (Supervision) Act 1993 (SISA) and SIS Regulations. The Australian Taxation Office may make enquires on fund trustees to ensure they have an understanding of their responsibilities.

The ATO website offers links to education courses for trustees of SMSF's to help them understand their responsibilities and obligations as trustees.

These courses, approved by the ATO, are offered free and online and are designed to provide a better understanding of how self-managed super funds work and the rules relating to them, including record keeping, investment choices, reporting and lodgement requirements.

If you are interested in enrolling in a course there are four to choose from which can be found at SMSF Trustee free ATO courses.

Please contact our office if you require assistance with enrolling in any of these courses on 1300 885 761.

Abolition of Duties in NSW

January 2017

On 1 July 2016 the NSW Government abolished a number of duties.  The abolition of these duties will provide NSW residents and businesses with savings on a variety of transactions. The duties that have been abolished include:

Mortgage Duty

Duty is not payable on mortgages executed or refinanced on or after 1 July 2016.

Mortgages can be registered with Land and Property Information without stamping or marking.

Business Assets Duty

From 1 July 2016, duty is not payable on the following types of property when included in dutiable transactions:

• Business assets, including:
  • The goodwill of a business, if the business is supplied in NSW, or provides services to NSW customers;
  • Intellectual property that has been used or exploited in NSW; or
  • A statutory licence or permission under a Commonwealth Law if the rights under the licence or permission have been exercised in NSW.

• A statutory licence or permission under a NSW law;
• A gaming machine entitlement.

Marketable Securities (shares and units) Duty

The following types of property ceased to be dutiable property from 1 July 2016:

• Shares in an unlisted NSW company;
• Units in a unit trust scheme, being units registered on a NSW register.

Acquisitions of shares and units in "land-rich" companies and trusts (those owning unencumbered land valued at $2 million or more) will still attract "landholder duty".

Duties that have been retained

The following types of property remain dutiable from 1 July 2016:

• Land and an interest in land (including leasehold interests and fixtures), and
• Goods in NSW if the subject of an arrangement that includes a dutiable transaction over other dutiable property, for example fixtures and improvements to land.

If you require any further information or wish to discuss these changes please contact us on 1300 385 761.

Small Business Wages Grant

January 2017 

The small business wages grant is now available. Its function is to encourage small business in New South Wales that do not pay payroll tax to hire new employees and expand their business.

How much is the Grant?

The grant is a one off payment per new full-time position of $2,000. It applies only to new jobs created, not to replacement employees. In the case of part-time or casual employees, the amount is pro-rated based on FTE hours of employment.

The grant is paid on the 12 month anniversary of when the position was created.

Who is Eligible?

Eligible businesses must have an active ABN and not have a payroll tax liability during the 12 month employment period.

The following conditions must also be met:

• The employment commenced on or after 1 July 2015 and before 1 July 2019.
• The employment is maintained for a period of 12 months.
• The number of full-time equivalent employees, prior to creating a new position must increase and be maintained over a 12 month period.
• The services of the employee are mainly performed in NSW.

How to Claim

The claim is made through the Small Business Grant (Employment Incentive) online application at the Office of State Revenue Website.

The claim must be lodged within 60 days after the 12 month anniversary date.

Business must also provide supporting evidence of:

• Most recent payslip before the anniversary date.
• A PAYG Payment Summary relating to the financial year that is within the 12 month grant period.

For further information or help, please contact us on 1300 885 761 or visit the OSR website.

What the changes to super contribution caps may mean for you

January 2017

With many of the changes announced in the 2016 Federal Budget now passed by Parliament, there is an amount of certainty that you can have when approaching your superannuation planning and the contributions you might wish to make to your superannuation fund this year.

Below is a summary of the changes for both concessional (pre-tax or deductible) and non-concessional (after-tax or non-deductible) contributions.

Pre-tax contributions:

• Taxpayers who were aged 49 or over on 30 June 2016 can make up to $35,000 in pre-tax contributions in 2016/17. 
• Those aged under 49 on 30 June 2016 can make up to 30,000 in pre-tax contributions in 2016/17.
• The concessional contributions cap is lowered to $25,000 per year for all taxpayers from 1 July 2017.

After- tax contributions

• For the 2016/17 year, it is still possible to make a non-concessional contribution of up to $180,000 for one year, or to bring forward three years' contributions of up to $540,000.
• For the 2017/18 and subsequent years the annual cap has been reduced to $100,000 or $300,000 using the bring forward rules.
• If you have a balance of $1.6m or more in your SMSF at 1/7/2017 then you will not be able to make further after-tax contributions
• When approaching the $1.6m cap care will need to be taken with the bring forward rules as these are restricted by the new $1.6 million balance restriction.

Some of these changes may require you to adjust your contribution strategies going forward. 

This will most likely be the case if you have a superannuation balance of over or close to $1.6 million or were planning on making significant contributions to superannuation in the next few years.

How can we help?

If you are concerned that the Government's changes to contributions for superannuation are going to affect you, please contact us on 1300 885 761 so that we can discuss your particular requirements in more detail.

Farm Innovation Fund

November 2016

The Farm Innovation Fund is an initiative funded by the NSW Government and administered by the Rural Assistance Authority (RAA).

The Fund is designed to assist farmers facing an increasingly variable climate by providing low-interest loans to fund capital works that will benefit the land, their long-term profitability, and address adverse seasonal conditions.

The four main categories eligible for funding are:-

• Drought preparedness (water supply, cap and pipe bore, desilting ground tanks, planting perennial species, etc);
• Environment (soil conservation, erosion and weed control, solar power conversions, etc);
• Farm infrastructure (fodder/farm/shearing sheds, fencing, road works, storm netting, upgrading irrigation systems, etc);
• Natural resources (planting shade trees/wildlife corridors, livestock effluent control, fencing river banks, disaster mitigation works, etc).

Loans are available for projects up to $250,000 (exclusive of GST), with terms of up to 20 years. Multiple loans can be granted per applicant to a limit of $500,000, however only one application will be eligible per 12 month period. Funds allocated to this package total $80 million, with only $23 million approved loans as at 18^th November 2016.

Flexible repayment options are available depending on seasonal cash flow, including monthly, annual, or bi-annual. The current interest rate is 2.5% p.a.

Loans are not available for farm machinery or vehicles, transportable items such as grain augers, residential farm buildings, or non-farm related items.

To be eligible for assistance, off-farm assets must not exceed $5 million, and off-farm income must not exceed 50% of your gross income, among other requirements.

For more information, or assistance completing an application for funding, please contact Dawson & Partners on 1300 885 761. Further information can also be found on the RAA website.

SuperStream Compliance extension - Are you ready?

October 2016

All employers need to be SuperStream compliant by 28 October 2016.

Under SuperStream employers need to pay super contributions for their employees electronically (EFT or BPAY) and send the associated data electronically.

The ATO have published a step-by-step checklist for employers. Follow the link here to access.

SuperStream is not a one solution fits all, many employers have different requirements.

To use SuperStream you need to pay super and send employee information electronically.  If you use a payroll system, check with your system provider that it is SuperStream ready. You may need to update your system.  The SuperStream product register may be of assistance.

If you currently use an online facility to lodge your quarterly employee superannuation payments you should register to use SuperStream with them, however, many super funds charge fees to use their clearing house.  Talk to your super fund to see what they offer.

If you have 19 or fewer employees, or a turnover of less than $2 million a year, you can use the ATO free Small Business Super Clearing House.

A clearing house pays super to your employees' funds for you. You send a single electronic payment to the clearing house, together with the contribution data for all your employees, and the clearing house does the rest.

If you are not already SuperStream compliant you have only three weeks till 28 October 2016.

The ATO will be flexible with those who have made a genuine effort to implement SuperStream by the mandatory date but if there has been no attempt, employers may be subject to ATO compliance action including penalties.

If your superannuation is lodged manually and you need assistance to implement SuperStream please contact us on 1300 885 761 for assistance.

 

New Tax Tables for employees from 1 October 2016

September 2016

The ATO produce a range of tax tables to help employers work out how much to withhold from payments they make to their employees or other payees.

In the May Budget the government announced changes to individual tax rates for the 2016-17 income year. Legislation dealing with those announced rates was introduced to Parliament on 31 August 2016. As a result a number of tax tables have been updated to apply from 1 October 2016. Tax tables that have not been updated by the ATO will continue to apply.

The updated tax tables do not include any catch-up component for the portion of the year which has already passed. Individuals affected will receive the full benefit of the tax changes upon assessment of their income tax return for the 2016-17 income year.

If you use accounting software to calculate your withholding tax please contact your software provider to update the tax tables in the software.

To access the updated tax tables visit the ATO website.

A tax withheld calculator that calculates the correct amount of tax to withhold is also available on the ATO website.

If you have any queries please contact us on 1300 885 761.

 

Fuel tax credits

September 2016

Indexation of rates:

As we have advised previously the rates for fuel tax credits will be indexed bi-annually on 1 February and 1 August in line with the Consumer Price Index (CPI).

The indexed rates for the period from 1 August 2016 are as follows:

• Increase from 13.6 to 13.7 cents per litre for liquid fuels used in a heavy vehicle on public roads;
• Increase from 39.5 to 39.6 cents per litre for liquid fuels in all other business uses;
• Increase from 8.135 to 8.15 cents per litre for E85 (85% ethanol/15% petrol) in all business uses except heavy vehicles on public roads;
• Increase from 12.9 to 12.9 cents per litre for liquefied petroleum gas (LPG) ; and
• Increase from 27.0 to 27.1 cents per kilogram for compressed natural gas (CNG) and liquefied natural gas (LNG).

These changes will affect fuel tax credit calculations for September quarter Activity Statements.

If you claim less than $10,000 in fuel credits each year you can calculate your fuel tax credit using the rate that applies at the end of the BAS period.

Who can claim Fuel Tax credits?

You may be eligible to claim fuel tax credits for fuel purchased for use in your business. To be eligible you must:

• Be registered for GST
• Use the fuel for an eligible activity including but not limited to:   
  • Use in heavy vehicles travelling on public roads if the vehicle has a gross vehicle mass (GVM) greater than 4.5 tonnes.
  • Use in business activities such as agriculture, forestry, mining, construction and manufacturing if the vehicle (including light vehicles) was travelling on private roads and off public roads.

Further details regarding eligible fuels and business activities can be found on the ATO website.

The ATO fuel tax credit calculator can be found here.

Please contact us on 1300 885 761 for more information.  

 

Changes to car expense claims

September 2016

Claiming car expenses is relevant to both individual tax payers and businesses. Prior to 1 July 2015, 4 methods were available for calculating car expense deductions. The government has simplified car expense deductions for the 2015/16 and future financial years.

The changes include:-

2 methods have been abolished:

• 1/3 of actual expenses method; and
• 12% of original value method.

2 methods are available from 1 July 2015:-

• Log book method; and
• Cents per kilometre method.

There have been some changes to the cents per kilometre method. Separate rates based on engine size are no longer available from 1 July 2015. To use this method, the following applies:-

• All vehicles are to use 66 cents per kilometre for the 2015-16 income year;
• A maximum of up to 5,000 business kilometres can be claimed per car;
• No written evidence is required, however you need to be able to show how you calculated your business kilometres (for example, diary records); and
• The rate for future years will be determined by the Commissioner of Taxation.

 If you use the logbook method, you:

• Can claim the business-use percentage of each car expense, based on the logbook records of your car's usage
• Must keep a logbook so you can work out the percentage
• Must have written evidence of your fuel and oil costs, or odometer readings on which your estimates are based
• Must have written evidence for all your other expenses.

For further information or help, please contact us on 1300 885 761 or please visit the ATO website here.

 

New Financial Year Resolutions