{"id":8604,"date":"2022-12-21T12:22:52","date_gmt":"2022-12-21T04:22:52","guid":{"rendered":"https:\/\/www.yieldgroup.com.au\/?p=8604"},"modified":"2022-12-21T12:22:52","modified_gmt":"2022-12-21T04:22:52","slug":"summer-2022-newsletter","status":"publish","type":"post","link":"https:\/\/www.yieldgroup.com.au\/summer-2022-newsletter\/","title":{"rendered":"Summer 2022 Newsletter"},"content":{"rendered":"
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Hello Clients and Friends of Yield<\/strong><\/p>\n We welcome you to our summer 2022 edition of our newsletter where we will update you with some of the exciting developments at Yield and also provide some business tips plus much more.<\/p>\n On a broader level we are very aware of the constant challenges our clients face as we move out of the pandemic into an overheated economy with the challenges of increasing input costs, increasing interest rates and labour shortages.\u00a0 We are well placed to guide you through these challenges and to assist in making wise decisions so that your business’s remain sustainable and you go from strength to strength in the future.<\/p>\n At Yield we have continued our philosophy of development on both a personal and professional level.\u00a0 The amazing staff at Yield continue to develop and learn and it is great to witness the relationships they foster and joy they get from making a difference to our clients.\u00a0 We sincerely hope you are enjoying the holistic approach and the relationships you have with our staff at Yield.\u00a0 They are all incredible.<\/p>\n As we again look towards the Christmas and holiday period it is a great time to reflect on the year that has been, our achievements, things we could have done better and what we have learned.\u00a0 The common thread for nearly everyone in business is that the most precious commodity is time.\u00a0 We encourage everyone to make great choices about how we use the limited time we have.\u00a0 A great starting point is spending quality time with friends and relatives over the Festive season.<\/p>\n We wish you all the very best for a fantastic, prosperous\u00a0 and balanced 2023. We hope you enjoy our newsletter.<\/p>\n <\/p>\n Full Temporary Expensing (FTE)<\/strong><\/p>\n The FTE rules introduced by the government as part of the stimulus package during the pandemic has provided many clients with welcome tax breaks making the purchase of eligible assets completely tax deductible. On a couple of occasions the government changed the status of the FTE and then pushed it forward a year. The present status is that the end for the FTE arrangements is 30 June 2023 and business needs to be aware of the consequences.<\/p>\n Firstly the full deduction continues to be available for eligible assets that are “in use or installed ready to use” at 30 June 2023.\u00a0 Once the FTE concludes we understand that the treatment of business assets will revert back to the Small Business Entity (SBE) pooling arrangements.<\/p>\n Note that most businesses that have taken advantage of the FTE rules have fully depreciated all of their assets. This has the effect that when assets are sold or traded in the future the consideration for those assets will be fully taxable.\u00a0 For example if a farmer traded an existing Tractor fully written off under FTE for $70,000 and bought a new tractor for $100,000 the $70,000 would be fully taxable and under the SBE pooling would be entitled to a $15,000 deduction for the new tractor.\u00a0 This transaction therefore would result in $55,000 of taxable income.<\/p>\n This type of transaction would be very common into the future and clients need to be aware of the consequences and plan for them.<\/p>\n Please refer to Full Temporary Expensing (FTE)<\/a> for more ATO information or be in touch with our office to discuss.<\/p>\n <\/p>\n Budgeting<\/strong><\/p>\n We have recently noticed that the banks are putting a higher emphasis on Cashflow Budgets when assessing clients capacity to borrow for business lending facilities.\u00a0 It seems they are no longer relying on historical performance but wanting predictions about the future.\u00a0 In particular if a business borrowing is for a business activity that changes the capacity of a business, a new farm for instance, they are interested in the result of the investment on a year in year out basis. That is, once full capacity is reached as a result of the investment, what is the expected impact on cashflow and when will it be achieved and also are there funds readily available to assist during the time it takes to reach full capacity.<\/p>\n This has come about as financial institutions have an obligation to provide responsible lending and we agree that it is a critical tool.If the budget is completed realistically and the figures show a shortfall the budget may be a tool that results in not going ahead with a particular project thereby avoiding a potential problem.<\/p>\n Cashflow Budgets aren\u2019t just for Finance but can assist with day to day running of your business. They can show you where there may be low cashflow in a particular month or when there will be additional funds available. These figures are based on estimates you provide and should be continually updated to reflect actuals as each month ends to give you a true indication where you stand.<\/p>\n If you believe a cashflow budget would be useful to your business and would like us to assist with this, please contact our office.<\/p>\n <\/p>\n Native Forest Transition<\/strong><\/p>\n The WA government made the decision in September last year to put an end to the native timber logging industry from 2024. This decision has had varying impact on many businesses in our area and is the end of an era.<\/p>\n The state government also announced that there would be compensation packages to assist business’s effected by the decision. On 2 November 2022, Minister Kelly released an announcement (see here; Grant Applications to Assist Native Forest Industry<\/a>) regarding the first round to open under the Native Forest Transition Industry and Community Development Programs, which is the Small Business Development & Diversification (SBDD) funding round.