Draft legislation tied to repeal of Minerals Resource Rent Tax (MRRT) cleared by lower house of Parliament
If fully legislated, the present instant tax write-off for "individual" assets costing less than $6,500 (GST excl) will be reduced to $1,000.

This measure is proposed to apply retrospectively from January 1, 2014 once made law.

Plant & equipment
From July 1, 2012 small businesses (with a turnover of less than $2 million a year) that use a small business depreciation pool have been entitled to claim an immediate deduction for plant and equipment costing less than $6,500. The draft legislation that has cleared Parliament means that this immediate deduction is to reduce to $1,000 for all assets acquired after December 31, 2013.

To have been eligible for the higher $6,500 immediate deduction for the 2012-13 financial year, the asset must have been first used or installed ready for use, on or before the last day of 2013. This means you could not write off the asset if you had simply placed an order, or even if you had pre-paid expenditure to acquire the asset by the end of the year. The actual physical installation or taxable use of the asset determined whether you could write it off.

The $6,500 immediate deduction also applied to improvements that have been made to existing items of plant and equipment, but again provided that the cost of these improvements was incurred on or before the relevant year's end.  Read more…

EOFY TAX AND SUPER Planning tips for individuals

End-of-financial year tax and super tips for individuals
With 2013-14 financial year close, now is ideal for individuals to undertake tax and super planning for the year.

tax refundOur checklist outlines some pertinent matters to consider and provides planning tips for the 2014-15 financial year. The list is by no means exhaustive so speak with us for specific tax and commercial advice as the situation differs according to personal circumstances:

Dividend income

  • Has all dividend income been included in the individual's assessable income upon receipt?  Read more…
Present $25,000 concessional contributions cap to increase to $30,000 from 1 July 2014
Many will welcome the $5,000 rise, seeing the cap of $25,000 has been in place since 2009-10.

The imminent increase will bring about a range of changes to various contribution strategies for self-managed superannuation funds (SMSF) members and Australian Prudential Regulation Authority (APRA) regulated fund members alike. It is therefore important to start thinking about planning for the increase.

A temporary higher cap of $35,000 has also been available to those individuals aged 59 and over as of June 30, 2013.  It will extend to those aged 49 years or over on June 30, 2014 (applying from July 1, 2014).

Click here to review our table which summarises these new caps on page 8.

The indexation of the concessional contributions cap has some additional flow-on effects to the non-concessional contributions cap, with this post-tax contributions cap being six times the concessional contributions cap. Therefore, from July 1, 2014, the non-concessional contributions cap will increase from $150,000 to $180,000.

Further, under "bring forward" rules, an individual who is under 65 years of age can bring forward two years' worth of future non-concessional contributions entitlements. From July 1, 2014, superannuation fund members aged 64 or less will be eligible for a higher bring-forward amount of $540,000 (up from $450,000).

Contact GJB on 02 9686 3130 to find out what strategies you can put into place to take advantage of the soon-to-be raised contributions caps.

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INCREASED DEDUCTIONS for simply doing your tax?

Most business owners know they can claim a deduction for paying a registered tax agent to prepare and lodge their tax return
However many may not know that the regulations that provide for this deduction operate in a different way compared with other tax rules that allow expenses.

Why should taxpayers care which particular rule allows them to get a deduction for paying their accountant? Because in this case the specific regulations operating here create unique opportunities for business owners, especially where their affairs involve multiple taxpayers.

What are the basics?
Before discussing how to use this rule to your advantage, let's look at the basics. If your tax agent issues you an invoice for a) managing a taxpayer's tax affairs, or b) complying with an obligation imposed on another taxpayer by a Commonwealth law (insofar as that obligation relates to the tax affairs of that entity), then, as long as the accountant is a registered tax or BAS agent (or legal practitioner) a deduction can generally be claimed by the person on the invoice. This rule is subject to a number of conditions (most of which are common sense, and more specific details on these conditions can be obtained from this office).

Don't I need to earn assessable income?
No. Unlike most expenses that require a taxpayer to earn assessable income before they are able to make a claim, this type of expense can be claimed even where a taxpayer earns absolutely no assessable income. In other words, this type of expense can create a carried forward tax loss for an entity that can be offset against income from future financial years.  Read more…

ATO AUDITS In danger of triggering one?

Ten ways to trigger an ATO audit
As the financial year-end nears, the Australian Taxation Office (ATO) expects to data-match over 640 million transactions to tax returns this year.

With increased ATO scrutiny, private businesses are in danger of triggering an ATO audit, regardless of whether or not they have done anything wrong.

While ATO audits are now a well-recognised part of our tax system, they are still expensive and disruptive, and there are a number of ways in which a private business may trigger one:

1. Financial performance out of kilter with your industry
With the ATO statistically analysing tax returns, if your performance is inconsistent with your industry peers, this can be an indicator of tax issues such as unreported (cash) income, transfer pricing and other issues.

2. Hiccups in paying employee super
Employees who complain to the ATO that their employer has not paid them the correct amount of super, or not paid it on time, certainly trigger ATO's interest. Often what starts as a review of superannuation guarantee obligations often escalates into an audit of income tax, GST and fringe benefits tax (FBT) if the process isn't properly managed.  Read more…

Across new obligations for SMSF Trustees?

New SMSF penalty regime to kick in on July 1, 2014
Did you know you may have to fork out $10,200 if you lend money to a fellow self-managed super fund (SMSF) member or a relative who is in dire need of some financial assistance? 

Or $1,700 for a breach as minor as failing to keep adequate records? The countdown is on, with only around four months remaining until the new SMSF administrative penalty regime kicks in on July 1.

If all this sounds familiar, it is because the SMSF penalty regime was essentially a measure that was due to be implemented by the previous federal government on July 1, 2013 but due to inadequate legislative support, the measure was held back. With the new government at the helm however, the measure has been given the nod and looks set to come into effect.

Currently, the Tax Office has a few ways in which it deals with non-complying funds. It can:  Read more…

Recent changes to Paid Parental Leave, Family Tax Benefit and other entitlements
The recent passage of the Social Services and Other Legislation Amendment Bill has given rise to changes across a range of entitlements. 

Due to the delayed passage of the bill however, several amendments will take effect from a later date than initially proposed. We run through the various changes below and what they mean for you.

Paid Parental Leave
The Paid Parental Leave has generated much debate in the business community.  This is perhaps why the government has decided to ease the administrative burden on businesses by removing the requirement for employers to provide government-funded parental leave pay to their eligible long-term employees.

From July 1, 2014 (initially March 1, 2014), the Department of Human Services will directly pay employees their parental leave, unless you as an employer opt in to provide parental leave pay to employees and an employee agrees for their employer to pay them.

Pension Bonus Scheme
From July 1, 2014 (initially March 1, 2014), registrations will close for the soon-to-be phased out Pension Bonus Scheme.  Read more…

5 pre-Budget #cloudaccounting tips for the year-end

Already thinking about your end of financial year obligations?
Deduct, provide, finalise, backup and prepare

Many small and medium business owners who have already adopted cloud accounting are getting a head start on the often punishing task of end of financial year (EOFY) reporting.

Preparing for the EOFY early means you can start the next financial year on the front foot. When you look ahead now to the new financial year, you'll have a much better idea of what activity will drive your success so it pays to get organised now:

  1. Contact GJB to discuss deductions, write-offs and rebates. Take action to scrap worthless stock, plant and equipment by reviewing asset registers.
  2. Once deductions have been addressed, provide all necessary financial information to your accountant. There are several options such as having a point-in-time copy from a data file in the cloud made, to providing personnel with a secure copy of backed-up files.
  3. Your accountant may want to make a number of adjustments to reports or accounts. Once any changes have been updated, lock all accounts relating to that year so that data remains accurate to ensure an easy transition into the new financial year.  Read more…

Taken goods for private use?

Here's the latest values

The Tax Office has recently issued a tax determination to guide business owners on the value it expects will be allocated to goods taken from trading stock for private use for the 2013-14 income year. The table below should be used to work out these values.

The basis for determining values is the latest Household Expenditure Survey results issued by the Australian Bureau of Statistics, adjusted for CPI movements for each category. Note that the Tax Office recognises that greater or lesser values may be appropriate in particular cases, and where you are able to provide evidence of a lower value, this should be used. Contact GJB on 02 9686 3130 if you are unsure in any respect.

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FYE on the horizon. What services can GJB offer?

What services can accountants offer? 
As your accountants, we're happy to supply you with a range of services beyond the traditional annual accounts and income tax service. 

The additional services can include:
  • In-depth review of your monthly financial accounts.
  • Preparation of budgets on an annual basis, then monthly or quarterly updates.
  • Preparation of annual cash flow forecasts, then monthly or quarterly updates.
  • Review of your debtors' aged analysis.
  • Advising on strategies to reduce debtors' days outstanding.
  • Assisting in the management of costs.
  • Reviewing your insurance needs.
  • Identification of government grants that might suit your business.
  • Reviewing your operations relative to your exposure to the Personal Property Securities Act.
  • Advising on implementation of systems to ensure there is proper consideration given to tax invoices and location of assets owned by your business, in determining whether a 'security interest' should be lodged on the PPSR.

 If you would like to have a discussion on any of the additional services we can supply to assist you in your operations, please contact us on 02 9686 3130.

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