The end of the 2013/14 financial year is almost here so we welcome you to yet another edition of our bi-annual newsletter.

This year presented some big challenges for our team here at Lidgerwoods, with our premises fully renovated for an entire month in March 2014.  For those who didn’t know we moved our entire office infrastructure and operated our firm from Marc’s house during this time, and then returned to not one, but two newly renovated offices.  Due to our ever increasing growth we have now doubled our floor space at our Stanley Street office and we welcome all our clients to call in and have a look.

Marie BarnesWith more room here now, it has allowed us the opportunity to welcome the newest member of our team Marie Barnes who arrives here with a wealth of experience in GST compliance, bookkeeping and administration.  Marie will be working part-time in our office and working closely with the numerous clients who engage us to prepare their quarterly GST compliance and accounting records.

Attached to this newsletter are some tax related articles and tables that you may find helpful and if you have any questions in relation to any of these or any tax matter just drop us a line

Marc, Sophie, Kate & Marie
“The Team” at Lidgerwoods Accountants


Australian Tax Office

Tax, Car and Super Rates

Income Tax Rates – 2013/14 & 2014/15 Years

The tax rates for resident individual taxpayers for the 2013/14 income year are as follows:

Income threshold
0 – $18,200
$18,201 – $37,000
$37,001 – $80,000
$80,001 – $180,000
$180,001 and over
Tax payable
Nil
19% of excess over $18,200
$3,572 + 32.5% of excess over $37,000
$17,547 + 37% of excess over $80,000
$54,547 + 45% of excess over $180,000


Note: The Medicare levy of 1.5% (to increase to 2% from 1 July 2014) generally applies in addition to these rates.  It is also important to note that as part of the 2014/15 Federal Budget, the federal government announced that it proposes to introduce a ‘Temporary Budget Repair Levy’ effective from 1 July 2014.  Under the proposed measure, a 3-year temporary levy of 2% will be imposed on that part of a person’s taxable income which exceeds $180,000 (i.e., a temporary increase in the top marginal tax rate from 45% to 47%)
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Car expense rates per km – 2013/14

The car expense rates per kilometre have been set for the 2013/14 year (and they have been increased for the first time since 2008/09).

Year Small car Medium car Large car
2012/13 63c 74c 75c
2013/14 65c 76c 77c

Superannuation


Superannuation Guarantee Rates

Per the recent May 2014 budget announcements, the levy payable by employers increases at 1st July 2014 from 9.25% (2014 tax year), up to 9.5% (2015 year onwards) as outlined in the table below. 
It will then gradually increase over a number of years to eventually reaching 12% by the 2022-23 year.

Year SG Rate
2012/13 9.0%
2013/14 9.25%
2014/15 and following three years 9.5%
2022/23 year 12%

construct

ATO compliance: Taxable payments annual reports (Sub-Contractors)

The ATO has advised that it is phoning some businesses in the building and construction industry to:

  • test the levels of understanding of the new reporting requirements for businesses in that industry; and
  • help those businesses to comply with their taxable payments annual reporting obligations.

They have also been contacting them to:

  • ensure lodged reports are correct and complete;
  • follow up with businesses that have not yet lodged a report (where ATO records indicate they should have); and
  • follow up with businesses who have advised that they are not required to report (where ATO records indicate they have a reporting requirement).

Editor: If your business is contacted, please let us know.


High risk industries targeted for super obligations

The ATO has identified that employers in the following industries have a higher risk of not meeting their super obligations:

  • hairdressing and beauty;
  • clothing retailing; and
  • management advice and consulting.

The ATO is currently running an education campaign for business owners in these industries to help them better understand their super obligations.

Further, from July 2014, it will be undertaking audits of employers who continue to not meet super obligations for their employees – including:

  • paying their minimum super contributions quarterly (or lodging an SGC statement);
  • offering employees (and some contractors) a choice of fund;
  • keeping accurate records; and
  • passing on an employee's TFN to their super fund as required.

Editor: These audits would be covered under the Accountancy Insurance policies that we offer to all clients in October each year.  If you did not take up the offer, but are concerned about being subject to such an audit, please call our office to discuss further.


The ATO, TFNs and Australia Post

The ATO has announced that red tape affecting Tax File Number (TFN) applications has been removed thanks to a partnership between the ATO and Australia Post.

TFN applications are now simpler and easier, as they can now be applied for online at www.ato.gov.au/TFNapply and a printout of the application summary can then be verified at one of the 460-odd Australia Post retail outlets throughout the country.

Additional services also now available at Australia Post include updating a date of birth on a taxpayer's ATO record and providing notification of a deceased person.

Parents and guardians can also apply for a TFN on behalf of their children


scamATO keen for taxpayers to avoid tax-related scams

The ATO is concerned about the number and frequency of email and mobile phone scams that are occurring.

These scams claim to come from the ATO and usually offer a tax refund.  Generally, they link to a bogus ATO website asking for personal information and credit card details.

The ATO advises that while it may email, SMS message or phone taxpayers, it will never ask for:

  • personal details, such as driver's licence, mother's maiden name; or
  • credit card, including CVN, or bank details.

Where this happens, they advise that taxpayers should not progress with the email, SMS or phone call.  If a taxpayer is in doubt about the authenticity of a call that they receive from the ATO, they should contact the ATO on one of its publicly listed numbers to verify the legitimacy of the call.

Editor:  If you have any doubts in relation to any emails or messages that you receive from our office, please simply call our office to confirm that the message is legitimate before opening.  Our firm operates under very strict privacy policies and would never divulge any information to any third party without client pre-approval.

 


Repairs to a rental property formerly used as a home

In recent years, there has been an increasing tendency for home owners to use an existing home as a rental property, especially where a new home has been purchased. 

In these situations, it is common for taxpayers to undertake repairs and maintenance to their existing home in order to make it more attractive to prospective tenants before the property is available for rent and/or actually rented to tenants. 

However, according to the ATO, no deduction will be available for repair expenditure that is incurred before a taxpayer’s home is held or used for income-earning purposes (e.g., before the property is genuinely available for rental). 

Undertake repairs when property is available for rent

Where appropriate, a taxpayer should consider ‘holding-off’ undertaking repairs to the former home until the property is either genuinely available for rent (e.g., listed with a real estate agent for rental) or actually rented to tenants.
In these circumstances, a deduction for repairs may be available even though:

  • the property was previously used by the taxpayer for private purposes (i.e., as the taxpayer’s home); and
  • some or all of the defects, damage, or deterioration are attributable to the period the property was used as the taxpayer’s home.

Editor:  Timing of these transactions is everything – so please ensure you contact Lidgerwoods Accountants well before you ever decide to rent out your own home so you can maximise your deductions that may be allowed.


superSuper caps increased for 2014/15

The ATO has announced the following changes to the superannuation contributions caps.

Concessional contributions cap
These include:

  • employer contributions (including those under a salary sacrifice arrangement); and
  • personal contributions claimed as a tax deduction by a self-employed person.

The amount of the cap will be $30,000 in 2014/15 if under age 50, and $35,000 if over 50 years of age.

Non-concessional contributions cap

Non-concessional contributions include personal contributions for which taxpayers do not claim an income tax deduction.

The amount of the cap will be increased from $150,000 in 2013/14 to $180,000 in 2014/15.

Editor:  Please ensure if you have any issues concerning superannuation that you contact Sophie who is our Superannuation Director at Lidgerwoods Accountants.


Please Note: Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.

cpa

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