Accountants Rule – don’t they?



Now we have your attention, we’d like to welcome you to another tax year from all of us here at Lidgerwoods Accountants.

Due to our continuing growth, our firm has made several changes to our operational structure and personnel in the past six months,

marksophie

Marc & Sophie are back on deck full time after trialling a shorter work week last year, and clients will be interviewed this year in new surrounds. Marie and Peta have both moved on to new pastures and we wish them both well in their new pursuits away from Public Accounting. We are pleased to announce that in April 2016 we appointed Louise Miller – a fully qualified and experienced CPA accountant to our team, together with welcoming Makayla Amery recently to our administration team.

We look forward to again seeing you all soon for the upcoming 2015/16 tax season and can advise that we are already taking appointments for this busy time.

We have attached some articles to this newsletter that may be of interest to you (relating to all types of taxpayers) – so please take the time to peruse these in case something is relevant to your personal situation.

Keep taxing on – and please make your vote count this weekend!
Marc, Sophie, Louise, Kate & Makayla
“The New Team” at Lidgerwoods Accountants


jun03

2016/17 Federal Budget

The government handed down the 2016/17 Federal Budget on Tuesday 3rd May.

It included (among many changes) proposed personal income and company tax cuts from 1 July 2016, the extension of GST to all imports (irrespective of value) from 1 July 2017, an increase in the small business entity (‘SBE’) turnover threshold from 1 July 2016, and (as you may have heard) many, many superannuation changes.

Of course, they are all dependent on the Turnbull Government winning the election on 2 July and the legislation then surviving Parliament after that.

Editor: We'll keep you informed after the election result is known, but we expect the process to issue legislation and make the recommended changes, will take some time thereafter anyway.


Alert for all Employers!

jul16-2

With the 30 June 2016 deadline here any day now, we urge all employers to get on board with SuperStream as soon as possible……….

LAST MINUTE: Extra time to become SuperStream compliant

To support all small business clients, the ATO are offering extra time for them to become SuperStream compliant. They now have until 28 October 2016 to become compliant.

SuperStream is the standardisation of how employers make super contributions on behalf of their employees, and involves employers sending all super payments and employee information electronically in a standard format.

Using it is mandatory. Editor: Unless the employer and the SMSF are related parties . . .

Options for becoming 'SuperStream ready' include using:

  • a payroll system that meets the SuperStream standard;
  • a super fund’s online system; or
  • a messaging portal or a super clearing house like the ATO’s Small Business Super Clearing House (SBSCH)

The SBSCH is a free, optional service for small business with 19 or fewer employees, as well as businesses with an annual aggregated turnover of $2 million or less.

Editor: If you’re worried you won’t be able to use SuperStream as you don’t operate electronically, there is a SuperStream option to suit every business, including using third parties to pay your super using SuperStream on your behalf. If you need assistance with this compulsory law, you should immediately contact our Director Sophie Wade who has already assisted multiple clients with this matter.

 


jul16-32015/16 Car Travel Deductions


The ATO has reminded taxpayers that, in relation to claiming car expenses, two of the four previous methods to claim car costs;

   a) the one-third of actual expenses method, and
    b) the 12% of original value method

were both abolished from 1 July 2015 – thus cannot be used to claim car costs in all 2015/16 income tax returns.
The cents per kilometre method now uses a flat standard rate of 66 cents per kilometre for all cars, rather than differing rates based on a car's engine size.

Employers should also be aware that the ATO set the approved pay as you go (PAYG) withholding rate for cents per kilometre car allowances at 66 cents per kilometre from 1 July 2015.

Employers should withhold tax from any amount above 66 cents for all future payments of a car allowance, as failure to do so may result in the employee having a tax liability when they lodge their tax return.

Employees, who from 1 July 2015 have been paid a car allowance at a rate higher than 66 cents per kilometer, should consider whether they need to increase their withholding to avoid any tax liability at the end of the year.

Editor: Few clients used the abolished car claim methods, but most of our clients have claimed car costs in the previous return at higher rates than the new 66c flat rate per kilometre – thus many car claims will be significantly less in 2015/16 personal tax returns. Employers should also ensure they are correctly taxing vehicle allowances paid to employees, otherwise tax bills may result in employee’s personal tax returns.



jul16-4What's new for small business in 2016?

Following the 2015/16 year budget released in May 2015, a few of the proposed changes have become law and will affect most business clients when preparing 2016 tax work.

Instant asset write-off – simpler depreciation rules

Small businesses can immediately deduct the business portion of most (new or secondhand) assets if they cost less than $20,000 (ex GST) and were purchased between 7:30pm on 12 May 2015 and 30 June 2017.

From 1 July 2017, the threshold will return to $1,000.

Accelerated depreciation for primary producers

From 12 May 2015, primary producers can immediately deduct the costs of:

  • fencing – previously deducted over a period up to 30 years; and
  • water facilities – previously deducted over three years.

They can also deduct the cost of fodder storage assets over three years, instead of 50 years.

Small business income tax offset

From the 2015/16 income year, an individual is entitled to a tax offset on the tax payable on the portion of their income that is from:

  • net small business income from sole trading activities; and/or
  • their share of net small business income from a partnership or trust.

The income tax offset can reduce the tax payable that relates to the individual’s small business income by 5% (up to $1,000) each year.

The ATO will work out the offset based on the total net small business income reported in a client's income tax return.

Company tax cut for small businesses

For income years commencing on or after 1 July 2015, the small business company tax rate has been reduced from 30% to 28.5%.

The maximum franking credit that can be allocated to a frankable distribution is unchanged at 30%, even if a small business is eligible for the 28.5% tax rate.

Editor: If you need to discuss any of the above please contact our office. The drop in company tax and the 5% small business income tax offset will affect most of our business clients and we will advise you how this applies to your circumstances when your 2016 tax work is completed.

 


jul16-5New Simpler BAS on the way

The ATO has been working on ways to deliver a simpler business activity statement (BAS) to simplify account set-up, record keeping, BAS preparation and lodgment for agents and their clients, and make it less costly.
To achieve this, several GST labels will be removed from the BAS, with small businesses only required to report:

  • GST on sales (1A);
  • GST on purchases (1B); and
  • Total sales (G1).

They will begin user testing from 1 July 2016 and a simpler BAS should be the standard option for all small business from 1 July 2017.

Editor: This sounds great – but it will be a year away before we see any changes, and with an election looming this weekend, who knows what will happen?


jul16-6New rules for selling property over $2 million

From 1 July 2016, new rules will apply to sales of taxable Australian property (e.g., real estate) with a market value of $2 million or above.

A 10% non-final withholding tax may be applied to all contracts to sell such property entered into on or after 1 July 2016.

Australian resident vendors selling such property will need to obtain a clearance certificate from the ATO prior to settlement to avoid the 10% non-final withholding tax.

Editor: This new 10% withholding tax was really only intended to apply to non-residents selling Australian property.

However, it equally applies to Australian resident vendors and forces them to obtain a clearance certificate from the ATO to, in fact, prove that they are Australian residents.

Generally speaking, clients will be affected for sales of residential and commercial properties, or companies or trusts that hold such properties.

We see this to being a pre-cursor to lowering the threshold in future years to apply to more and more properties so that the ATO ensure they collect capital gains tax on all property transfers in the future – wait and see here.


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.


Lastly we welcome your feedback.  If you found this E-Newsletter very useful (or not?),
we’d appreciate your feedback either way.

Marc, Sophie, Louise, Kate & Makayla - 'The New Team' at Lidgerwoods Accountants

PS – Don’t forget about our website – with all our contacts and basic information about our firm at www.lidgerwoods.com.au

cpa

e-Newsletters

Subscribe here: