Yield’s Autumn 2018 Newsletter.
Welcome, the aim for our seasonal newsletters is to deliver understanding to our clients of emerging accounting issues and opportunities. We wish to provide the information in a concise and easily read manner with an emphasis on areas that solve problems and create solutions for our current and potential clients. In the midst of providing this key technical information we also wish to provide a light side and keep you up to date with the our latest client, staff and office developments. At Yield, as this newsletter goes to print, we are very busy winding up the last of the 2017 lodgements and providing vitally important year end tax planning advice. We hope you enjoy the read…..
Year end tax planning
The end of the financial year will be upon us very quickly and we wish to remind everyone of the tax planning opportunities available prior to 30 June. Note that, a business can be a small business entity (SBE) for the purposes of the SBE concessions if the business and associated entities turnover is under $10 million. Here are some of the available strategies…
- Small business depreciation – instant asset write off – assets valued at under $20,000. This concession was due to end at 30 June 18 has been extended to 30 June 19 via the May Federal Budget
- All primary production businesses can immediately deduct costs of water facilities and fencing, and fodder storage facilities can be deducted over 3 years.
- Business startup costs are immediately deductible – for example advice and establishment of entities for startup or business restructures.
- A reminder that concessional super contributions are now capped for all taxpayers at $25,000 each and non-concessional caps are $100,000 per year and $300,000 using the bring forward rule. These reduced caps make it much more difficult to achieve financial security in superannuation prior to retirement.
- An alternative strategy and a specialist area for Yield is to use a company beneficiary and pay down fully franked dividends as part of retirement planning.
- Company tax rates for companies carrying on a business with a turnover under $25million is 27.5%
- Farm management deposits (FMD) remain a key strategy for farming clients. The maximum you can hold at any time is $800,000 and your non primary production income must be below $100,000 to claim. Note that holding large balances in FMD’s can represent estate planning and succession challenges – they must be withdrawn at the time that primary production activity ceases and they are 100% taxable on death so exit strategies from FMD’s are very important.
- 10% rule abolished – this is a huge bonus for our employee clients who previously could not make deductible personal super contributions. From 1st July 2017 an employed person can contribute to an eligible fund, notify of the intent to claim a deduction and claim the contribution as a tax deduction in their income tax return. (limited to the $25,000 concessional limit including the 9.5% super guarantee paid by their employer). Please see below important information pertaining to GESB West State super fund holders.
Please note that members of untaxed super funds (ie GESB West State) are no longer able to make personal concessional contributions to these funds, they can only salary sacrifice super contributions. Therefore you would need to setup a taxed (public offer or industry) super account to make a personal concessional contribution – which may be problematic given 30 June is approaching – see GESB Rules
The available strategies are certainly not limited to those mentioned above. Please contact our office to discuss your individual requirements.
Client Profile – Mudstone Spa Retreat
Greg & Joy Hamlyn opened Mudstone Spa Retreat to the public in October 2014. Located just 15 minutes from Pemberton, Mudstone Spa Retreat and Suites is dedicated to providing visitors to Pemberton with beautiful, Eco-friendly, comfortable and affordable luxury accommodation with outstanding facilities. They are the quintessential south west getaway in the heart of Pemberton’s Karri rainforest. Mudstone Spa Retreat provides a truly unique and beautiful accommodation experience.The last couple of years have been filled with blood, sweat and tears as Greg & Joy have put in a massive amount of work to expand on the accommodation. The original Spa Cottage is now accompanied by two unique suites and a luxurious villa.
The Mudstone Spa Retreat caters for couples wanting that romantic escape or a special weekend away with all the accommodation being individually designed to cater for the discerning guest.You can choose from: The Moroccan King Suite or The Executive Suite (Jacuzzi & Sauna) at the Guest House suites or The Spa Cottage (Designed around a 1890’s break train carriage) or our Villa Romantica (Designed around a 2 Sea Containers 2m in the air) at our Spa Retreat.
For more information or to book a stay at Mudstone Spa Retreat, please contact Joy & Greg Hamlyn.
Email : Reservations@mudstonesparetreat.com.au
Website : www.mudstonesuites.com.au
Phone : 0477 975 867
Address : Corner of Old Vasse Road & Hawke Road, Pemberton
Yield Trip to Yallingup
In recognition of the amazing efforts by everyone this financial year so far and to recharge the batteries prior to the final run to June 30 the Yield staff and partners ventured to Yallingup to stay at Smiths Beach for the weekend. It was great for everyone to be able to spend the time together in a non work environment. The weekend was designed to be low key, however we had to have one competitive element and that took the shape of an amazing race around Dunsborough on Saturday morning. Four teams were formed and each given about twenty tasks to do around town – challenges ranged from riding a tandem bike, riding a surfboard in a wetsuit, making a coffee in a coffee shop to catching a fish. Each team had to think outside the square. It was a fun event, closely fought and the weather was fantastic. In the end the result hinged on some poor locals being pushed off their tandem bike so one of the teams could hop on to gain maximum points. Just kidding.
So we enjoyed great food, a few drinks and each others company for the weekend – a real treat. We are blessed to have at truly awesome team at Yield.
Single Touch Payroll
A Reporting Change for Employers
Single Touch Payroll (STP) is the next initiative in the Australian Government’s Digital Transformation Agenda. In addition to MyGov and SuperStream the introduction of STP is designed to streamline business reporting obligations. It means employers will report payments such as salaries and wages, Pay As You Go (PAYG) withholding and superannuation information directly to the ATO from their payroll software at the same time they pay their employees.
If you have 20 or more employees on 1 April 2018 you will be a ‘substantial employer’. You will need to report through Single Touch Payroll from 1 July 2018.
This is now law. If you have 19 or less employees, Single Touch Payroll reporting will be optional until 1 July 2019 and mandatory from that date, subject to legislation being passed. Reporting under STP removes the requirement to issue payment summaries, provide annual reports and tax file number declarations to the ATO. During the first year of its introduction, the ATO says employers will not be liable for a penalty for a late Single Touch Payroll report.
Important points for employers to keep in mind for the transition to Single Touch Payroll include:
- Employers will report salary or wages, Pay As You Go (PAYG) withholding and super guarantee information to the ATO when they pay their employees.
- An employer may have the option to invite their employees to complete tax file number (TFN) declaration and super standard choice forms online.
- Business Activity statements will be prefilled with W1 and W2 information reported via STP
- Payroll software will need to be updated to a version that supports Single Touch Payroll.
- The STP report will appear as a year to date balance and will allow employers to make adjustments (even for prior year periods) in future period reports. This flexibility gives employers an opportunity to correct errors or omissions in subsequent pay runs.
- The ATO will be able to identify and deploy early assistance to employers struggling to meet their employer obligations.
- Employee End-of-Year Pay Information – Employers who report an employee’s details through Single Touch Payroll will not have to provide that employee with a payment summary at the end of financial year. The obligation to provide employees and/or the ATO with a payment summary will be fulfilled through STP.
- Employers will need to notify the ATO when the payment summary data is considered final. The ATO will make that information available to employees and their tax professionals through MyGov, and as pre-filled information in their tax return.
- Employees will be able to view and manage their tax position via MyGov in terms of consolidating super balances or correcting TFN declaration details if necessary. STP also means employees no longer have the responsibility of reporting non-payment of Super Guarantee amounts to the ATO.
For more information on STP go to ATO STP
Staff Update – Nicola Brennan
The end of the 2017/18 financial year is in sight and this year has been a great one for me work wise, it’s true what they say you learn something new everyday. Many think that this is “quiet” time but the fun never stops. With all of my financials and tax returns now completed I am now focusing on tax planning preparation for my clients which is currently in full swing. Our superfund program “Class” has also enabled me to have all my self-manged superannuation funds up to date and I am am currently monitoring contributions cap limits and pension withdrawal requirements
On a personal note, we recently added a new addition to our family a puppy named Merlin. He’s so energetic and loves cuddles. And after winning a competition to go to the Wedding Expo in Perth on 27 May as a VIP, I can truly say that the wedding preparations are in full swing!!! Watch this space.