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Planning for 2013/14

Safeguarding Your

Intellectual Property (IP)

No More CGT Discount For

Non-Residents

Trade Export Market

Development Grants — 50%

Reimbursement of

Export Expenditure

Is Your Vehicle

Registered?

Changes to the SMSF Levy

Electronic Lodgment and

Payment Requirement for

Businesses with more than

$20 Million Turnover

Construction Companies—

Contractor Payment

Reporting to the ATO

Client News

Individual Tax Returns—

Bank Details Required

TRYathlon Event

Business SA 2013

Export Awards

Brentnalls SA News

Issue 66 — December 2011 Issue 80 — June 2013

Planning for 2013/14 The Reserve Bank’s decision to reduce the prime

interest rate to 2.75% (the lowest for 50 years)

confirms the difficult environment in which

businesses are operating.

To survive in difficult times, businesses need to

continually review their business operating

environment. This would include a review of your

marketing strategy, managing costs, innovation,

productivity, preparation of cashflow and profit

and loss budgets for 2013/14.

Based on a survey conducted by CCH, the main

reason why businesses fail, according to SME

operators, is the failure to manage and anticipate

rising costs within their business and the failure to

plan ahead with the preparation of next year’s

budgets.

Other areas of concern identified by SME operators

in the survey included:

Inexperienced management

Poorly designed business model

(eg. no business plan)

Insufficient capital or inadequate access to

capital (borrowings)

Poor marketing

Too much expansion, too quickly

Not enough time on managing the books

of the business

Failure to seek professional advice

While sales growth is important, management

should also be as diligent in cost control.

Many businesses have found that by embarking on

cost control reviews, they have achieved the same

profitability improvement that would otherwise

have had to come from a substantial increase in

sales.

Some options to reduce costs include:

Negotiate payment discount from suppliers

Consider the appointment of cost

consultants to review your utility costs

such as water, electricity, gas, telephone,

internet connection and other similar costs

Check to ensure that credit cards/accounts

are being paid on time so you are not

incurring late charges

Check suppliers’ invoices to ensure that

there have been no other charges, and that

all goods and services are received

Ask, “Why are we incurring this expense?”.

Sometimes a service signed up for a few

years ago, might not be necessary today

Ask “Is the product or service being

properly used to generate bottom line

profitability?”

Consider if the cost of telephone usage

could be reduced by availing yourself of

services such as Skype

Review labour rosters and working

arrangements (full time/part time). Do you

require all of the staff that you currently

employ?

On the counter-side you should also ask yourself

‘what investments in additional cost could assist

the business to grow revenue/profits’.

If you wish to discuss your business’ current

performance and preparation of budgets and

cashflow forecasts for 2013/14, please contact

us.

Quote:

“Planning is bringing

the future into the

present so you can

do something about

it now”.

Alan Lakein

Safeguarding Your

Intellectual Property (IP)

Intellectual property theft is growing and

can be quite expensive for your business.

Intellectual property may include, for

example customer database, pricing and

contracts lists, trade secrets, design and

products being developed, details of how

prices are calculated for various important

customers etc.

The key risk area is when an employee has

indicated that they wish to leave your

employment. Unfortunately, some

employees believe that they can enhance

their value to a new employer or kick start

their own business by stealing key

intellectual property from your business.

This can be done by emailing documentation

to their home email address, downloading it

onto a memory stick or photocopying it and

removing it as a hard copy. In considering

your risk strategies it’s a good idea to

develop policies of limiting access to certain

documentation to any employee so as to

remove the temptation to illegally obtain

copies of your business’ intellectual

property. This can also be dealt with in an

employee’s employment contract.

If you would like to discuss a risk

management strategy for the protection of

intellectual property within your business,

please contact us.

No More CGT Discount For

Non-Residents

The Government has issued for comment

draft legislation proposing to implement its

2012 Budget announcement that it will

remove the Capital Gains Tax (CGT) discount

for non-resident individuals on taxable

Australian property, such as residential and

commercial real estate and mining assets.

Under current law, individual taxpayers are

generally entitled to a 50% discount on

capital gains made from assets they have

held for at least 12 months, regardless of

the individual’s residency status. The

proposed changes will introduce new

residency requirements.

Under the changes, non-residents will still be

entitled to a discount on capital gains that

accrued prior to 9 May 2012 (ie, the day

after the Governments announcement),

provided they obtained a market valuation

of the asset as at 8 May 2012.

Note that, if implemented, the changes will

apply to affected individuals irrespective of

whether the gain resulted from an asset

owned by the individual or was a gain from

an asset held by a trust and attributed to the

individual.

We will provide further updates as

announced.

Considered Value Issue 80 – June 2013

This month Brentnalls SA

is supporting Diabetes SA

Trade Export Market

Development Grants —

50% Reimbursement of

Export Expenditure

The Austrade Export Market Development

Grants Scheme is a program providing

financial assistance to businesses

exporting (or looking to export) Australian

made goods. The scheme aims to

encourage small and medium sized

businesses to develop export markets.

Each applicant can receive up to 7 grants

and applications open 1 July and close 2

December 2013.

Companies with less than $50million

income in the grant year can apply. They

must be carrying on export promotion

activities and have incurred at least

$20,000 of eligible expenses under the

scheme.

First time applicants can combine two

years expenses. The sale must be directly

between your business and an overseas

buyer and goods must be Australian made.

Eligible expenses include costs associated

with overseas representatives, marketing

consultants, marketing visits,

communications, free samples, trade fairs,

seminars, in-store promotions, promotional

literature, advertising, overseas buyers

and registration and insurance of

intellectual property.

For further information please visit

www.austrade.gov.au or contact

Brentnalls SA for assistance with your

Austrade registration and grant

applications (closes 2 December 2013).

Is Your Vehicle

Registered?

Due to the SA & NSW governments

changing their procedure when issuing

motor registration renewals, customers

no longer receive registration

stickers to place on their windscreen.

This has caused a number of people to

forget when their registration actually

runs out and they have been fined for

driving an unregistered vehicle. It is also

possible to lose your drivers license.

In addition, under motor vehicle

insurance, if the vehicle is unregistered

there is a specific exclusion that would

apply. It is quite possible that you will

have no cover for your vehicle or

another person’s property in the event

of an accident.

With technology there are several ways

to remind yourself that the registration

is due and ensure that you pay the

renewal on time. One example is the

EzyReg app that can be downloaded

onto an iPhone which allows you to

check the registration renewal date.

Changes to the Self

Managed Super Fund

(SMSF) Levy

The government has announced that it

will reform the supervisory levy

arrangements for SMSFs by:

Increasing the levy from $191 in

2012/13 to $259 per year from

2013/14 onwards and

Bringing the payment of the levy

forward so it is levied and collected

in the same year of income. This

will be phased in over 2013/14 and

2014/15 to give funds time to

adjust.

Electronic Lodgment and

Payment Requirement for

Businesses with More

Than $20 Million

Turnover

The ATO advises that businesses with a

GST turnover that meets or exceeds the

electronic lodgment turnover threshold of

$20 million are legislatively required to:

Lodge their business activity

statements electronically and

Pay their debts electronically

The ATO has been contacting businesses

to notify them of their obligations and

support their move to electronic lodgment

and payment.

Construction Companies—

Contractor Payment

Reporting to the ATO

The ATO has commenced writing to

building and construction businesses

reminding them to finalise their reports on

payments to contractors.

The federal government established a

new reporting regime last year requiring

building and construction businesses to

report annually the total payments made

to each contractor.

Businesses were obligated to collect the

data from July 2012 with the first report

due for lodgement by the 21 July 2013.

Business are required to provide the

contractor’s name, ABN, address and the

gross amount paid (including GST).

If you require any further information

regarding this matter, please contact us.

BreConsidered Value Issue 80– June 2013

Brentnalls SA Chartered Accountants

and Advisors

Partners

John Crouch Craig Farrow

Rick Albertini Karen Nyberg

Matthew Holden

Associates

Sharon Lloyd Shali Manolev

Renee Feltrin Aimee Campbell

Gavin Mitchell Sally Storey

Brentnalls SA Advisors Pty Ltd

Australian Financial Services Licence Number 264083

Directors

John Crouch Craig Farrow

Rick Albertini Karen Nyberg

Matthew Holden

255 Port Road

PO Box 174

HINDMARSH SA 5007

Tel: 08 8241 8444

Fax: 08 8241 8488

Email: admin@brentnalls-sa.com.au

We welcome the opportunity to assist

you and discuss any matters in our

newsletter

Should you wish to receive our

Newsletter electronically, please

E-mail us with ‘Newsletter’ in the

Subject line.

Disclaimer

The information provided in this

newsletter does not constitute advice. The

information is of a general nature only and

does not take into account your individual

objectives, financial situation or needs. It

should not be used, relied upon, or treated

as a substitute for specific professional

advice. We recommend that you contact

Brentnalls SA before making any decision

to discuss your particular requirements or

circumstances. Brentnalls is not a

partnership or a joint venture. Instead, the

business of Brentnalls SA is independently

owned and operated and it is an

independent member of the Brentnalls

Affiliation of Accounting Firms. Individual

member firms do not accept responsibility

or liability for the actions or inactions

of any other individual member firm.

Client News

Congratulations to Jane Wundersitz

and the team at Wundertraining

(www.WunderTraining.com.au)

celebrating their first year and

launching their new workplace

wellbeing, business coaching and

leadership training courses this month.

Individual Tax

Returns—Bank Details

Required

The ATO has announced from

1 July 2013, individual tax returns will

generally require bank account details,

including BSB and account number, to

be entered, where a refund is

expected.

TRYathlon Event

As a corporate supporter

member of the Rotary Club

of Adelaide South, we had a

team of 6 employees

volunteer to be part of the “Help Team”

for the Weetbix Kids TRYathlon Event

at North Adelaide Aquatic Centre on

Sunday the 14th of April. The

participation event was open to

children from 7-15 years old with over

1,000 participants taking place this

year—a record for Adelaide. The kids

had a wonderful time and put in a huge

effort to complete the course. Our

staff enjoyed helping out with crowd

control and participant preparation on

the day. Thanks everyone for getting

involved.

Business SA 2013

Export Awards

South Australian businesses currently

exporting, no matter how big or small are

encouraged to apply for the Business SA

2013 Export Awards.

Applications close 12 July 2013

For further information go to

www.business-sa.com

Brentnalls SA News

Congratulations to Kosta Dimopoulos

who recently passed the Tax Institute

Foundation Tax Course with a merit

result.

We welcome back Nicole Harris who has

returned from maternity leave.

We congratulate Matthew and Makella

Holden on the birth of Nate Matthew

Martin Holden, a baby brother to Isla.

Meet Renée Feltrin

Hi my name is Renée Feltrin.

I have been with Brentnalls SA for 16

years. I started with Brentnalls SA as an

Undergraduate Accountant in 1997 and

over that time have progressed with my

career where I am now an Equity

Associate.

I have a diverse client base from a

variety of industries ranging from

individuals to small-to-medium size

businesses and several large

organisations.

I am happily married to my partner of 10

years, Liam Robertson.

In my spare time I enjoy spending

weekends at our property on the Murray

River at Pelican Point, cooking up a feast

for our family and friends and reading

the latest “must read” novel.

Key Dates

28th June (Friday) Last day to have cheque cleared by the bank

in order for the Superannuation paid to be

Tax Deductible in the 2013 financial year.

Tip—make superannuation payments by

the 21st June. If your final pay is

scheduled for the 27th June 2013 please

contact Brentnalls SA for advice.

15th July (Monday) PAYG Payment Summaries must be issued to

employees.

21st July (Saturday) Taxable payment reporting due to the ATO

for the Construction Industry for businesses

who lodge their BAS monthly.

22nd July (Monday) Payroll Tax remittance is due for June and

Reconciliation for the 2013 year.

Revenue SA requires all Payroll Tax Annual

Reconciliations to be completed via the

internet. You will receive from Revenue SA

in the forthcoming weeks a letter providing

details of a login and password to be used at

Revenue SA’s Website(RevNet)

http://www.revnet.sa.gov.au to complete

your annual return.

26th July (Friday) Superannuation: last date to pay required

Superannuation Contributions for 2013 to

avoid paying Super Guarantee Charge (this

charge incurs penalties and amounts paid are

not tax deductible).

29th July (Monday) Taxable payment reporting due to the ATO

for the Construction Industry for businesses

who lodge their BAS quarterly.

31st July (Wednesday) Workcover - All payers– 2012/2013

Reconciliation Statement and Remittance

due.

Workcover Reconciliations can also be

completed online at their Website

https://internet.workcover.com/secure. You

will receive from Workcover a letter

providing details of a User Name and

Password.

The table below lists common remuneration

items that need to be included in your annual

reconciliations.

14th August (Wednesday) Payment Summaries must be sent to the Tax

Office. Reconciliation due if not lodging

electronically through your software

package. Date for lodging Superannuation

Guarantee Statement and paying

Superannuation Charge (if applicable).

Superannuation Guarantee

Contribution (SGC) Changes From 1 July 2013 the SGC rate will

increase from 9% to 9.25%. You will also be

required to pay SGC for employees over the

age of 70 from 1 July 2013.

Reporting employees’ extra super You must include all reportable employer

super contributions you make for an

employee on their payment summary. Any

one with a reportable employer super

contribution amount must be issued with a

payment summary.

Reportable employer super contributions are

those contributions you make for an

employee where these include:

Salary sacrifice Superannuation

Additional amounts paid to an

employee’s super fund (for example an

annual bonus paid to super).

An employee negotiating for increased

superannuation contributions as part of

their salary package (for example under

individual employee and package

contracts).

Compulsory employer superannuation

payments such as superannuation guarantee

are not reportable employer superannuation

contributions.

*Refer Disclaimer Issue 80, June 2013

Remuneration Superannuation Workcover Payroll Tax

Salary and Wages Payments Yes Yes Yes

Sick Leave Yes Yes Yes

Overtime No Yes Yes

Commissions Yes Yes Yes

Annual and Long Service Leave Taken Yes Yes Yes

Accrued Annual and Long Service Leave paid on Termination No No Yes

Employer and Sacrificed Superannuation No Yes Yes

Allowance by way of unconditional extra payment (e.g. first aid,

site, dirt)

Yes Yes Yes

Expense allowance expected to be fully expended No No No

Shift Loadings Yes Yes Yes

Performance Bonus Yes Yes Yes

Christmas Bonus Yes Yes Yes

Parental Leave No No No

Work Reimbursements No No No

Lump Sum Payments on Termination e.g. Eligible Termination

Payments, payment in lieu of notice, redundancy pay

Payment in lieu of

notice – Yes

Redundancy

Payment - No

No ETP’s – Yes

(5% of pre 83)

(100% of post 83)

Tax Free Portion of

Redundancy Pay - No

Payroll Update and Key Dates to Remember

Fair Work Australia Annual Wage Review

On 3 June 2013, Fair Work Australia (“FWA”) handed down its Annual Wage Review¹ under the Fair Work Act 2009 (Cth)

(“Act”). This increase is effective from the first full pay period on or after 1 July 2013.

Increases to Modern Award and Transitional Instruments

FWA has adopted a uniform percentage increase of 2.6%, with weekly wages being rounded to the nearest 10 cents. This

increase will be applied to each Award level as applicable, rather than a flat dollar amount increase.

This increase will apply to:

Modern Awards (“Award”);

Transitional APCSs (pay scales);

State Reference Transitional Awards; and

Division 2B State enterprise awards.

National Minimum Wage

The national minimum wage will be increased to $16.37 per hour, or $622.20 per week. This rate has been calculated on

the basis of a 38 hour week for a full-time employee. This is an increase of $15.80 per week.

Casual Loading

The standard casual loading in Awards remains at 25%. However, transitioning to this amount from a lower casual loading

will continue to apply where applicable.

The casual loading for Award/Agreement Free Employees will be 24%.

Transitional Provisions

Most Awards require transitioning from 1 July each year in accordance with the transitional provisions of the Award. Please

note the effective date for the purpose of transition is different to that of the adjustment to the minimum wage.

The date of transitional change is a lawful entitlement and the employer is technically obliged to pay from that date

regardless of the inconvenience that it may create. From a practical perspective, employers may consider making a sole

adjustment incorporating both the wage increase and any transitional change effective from the same date. We recommend

if an employer chooses this option that it applies the earlier date being 1 July 2013.

Effect of Decision

Most Awards allow absorption of the Award’s monetary obligations into over award payments. If this is the case, you may

be able to absorb the increase into any over award payments. We recommend that you seek advice before making a

decision to absorb the increase.

The increase may also affect employers covered by enterprise agreements or transitional agreements that are expressly

linked to an Award or where the minimum rate of pay in the agreement falls below the equivalent minimum rate in the

Award. Again, we recommend that you seek advice about your obligations.

Issue 81— June 2013

Special Edition

Key Tax Planning Strategies Prior to 30 June 2013

Bad Debts

Review your aged debtors and determine if any debts are bad debts. If they are, write them off prior to 30 June 2013. For a debt to be

bad, there must be little or no likelihood of recovery, such as when the debtor is in receivership or cannot be traced. Records should be

kept to show you have taken reasonable steps to recover the debt prior to writing off. If circumstances later change, you can

recommence pursuing the debtor.

Stock Management

Review your stock and identify any obsolete or unusable stock. Write off these stock items prior to 30 June 2013.

Capital Gains Tax

If you have derived any capital gains from the sale of your investments this year, consider whether you are able to offset them by

crystallising any capital losses on the sale of other investments (where possible).

Farm Management Deposits (FMDs)

Investing in Farm Management Deposits (FMDs) is a useful product available to Primary Producers to make provision for

fluctuations in earnings caused by adverse economic and seasonal changes to your Primary Production Income. Interest is paid on

such FMDs and they must be held for at least 12 months otherwise the tax benefit of investing in an FMD will not be retained.

Consider whether FMDs would be useful to reduce this year’s taxable income or whether you have any FMDs to withdraw if your

income is lower than average.

Superannuation Contributions

Maximise your superannuation deductions prior to 30 June 2013 by:

Ensuring all superannuation contributions for employees are paid and cleared before 30 June 2013;

If you are an employee, consider maximising salary sacrifice superannuation prior to 30 June 2013 to reduce your taxable

income and maximise your superannuation contribution up to $25,000 p.a. (including any superannuation guarantee from your

employer);

For those who are self employed, maximise your personal superannuation contribution up to $25,000 p.a.

For those expecting to have a much larger taxable income in the 2013 financial year compared to the 2014 financial year, a

contribution of up to $50,000 (i.e. 2 x $25,000) is available for deduction in some circumstances. Please contact our office to

discuss if you think this would benefit you.

If you earn less than $46,920, you could be eligible for the government co-contribution. The government will contribute 50

cents for every dollar of after-tax contributions you make to your superannuation fund up to a maximum of $500. The full

benefit is available for income earners under $31,920 and phases out where taxable income is between $31,921—$46,920.

New government announcements regarding superannuation are not yet in effect and have therefore not been included above.

Refer to our Australian Super Reforms Fact Sheet for further details.

Bringing Forward Deductions For Businesses With Turnover Under $2m:

If you are a small business (i.e. turnover under $2m) you will be eligible to claim a 100% deduction for prepaid expenses such as

interest, office supplies, insurance, rent, lease payments, advertising and maintenance where the relevant services will be wholly

provided within 12 months of the date of the expenditure.

Payments of capital expenditure costing under $6,500, will also be eligible for a 100% deduction in 2012/13. There is also an

accelerated write-off of $5,000 for the purchase of cars and utility vehicles used in a business, operational from the 2013

financial year.

Prepay Interest on Investment Loans

Taxpayers who have borrowed money for business or investments can check with their lenders to see if they can prepay interest

so as to gain an early tax deduction by paying 12 months’ worth of interest in advance. This is an option for investment loans on

properties and margin loans on shares. Please note this is a one-off benefit as once you start this process, this must be continued

annually or there will be one year where no deduction can be claimed.

Private Health Insurance Rebate Changes

An individual’s entitlement to private health insurance rebate is now income tested. Taxpayers rate of rebate entitlement is based

on the income for Medicare Levy surcharge purposes using the following thresholds for 2013:

When you move into the next tier, the level of rebate and surcharge applicable will change. In view of these changes,

consideration should be given as to the financial effect of private health insurance cover. The test is taken when your private

health insurance is paid. If you believe you are going to move into the next tier in the next financial year, thought should be given

into paying your health insurance premiums now, this will entitle you to your current level of rebate.

Interest Deductibility on Financing Business Expenses

Interest on financing of business expenses is tax deductible in most circumstances. If you are maintaining a line of credit or

overdraft to finance your day to day business expenses, the interest will be tax deductible except in the following cases:

Payments from the account are for personal purposes

Payments made for the payment of personal income tax (this includes PAYG instalments)

Payments made for personal superannuation contributions

Consideration should be given to external finance if you are currently using your personal funds to finance your business activities

and would prefer to use your personal funds elsewhere.

No surcharge &

maximum rebate

Tier 1 Tier 2 Tier 3

Singles $84,000 or less $84,001-$97,000 $97,001-$130,000 $130,001+

Families $168,000 or less $168,001-$194,000 $194,001-$260,000 $260,001+

Rebate under

Age 65

30% 20% 10% 0%

Rebate under

Age 65-69

35% 25% 15% 0%

Rebate under

Age 70+

40% 30% 20% 0%

Issue 82— June 2013

Special Edition

First Home Saver Accounts— Consider before 30 June 2013

Are you or your children currently building a deposit for your first home? Are you or they planning to buy or build your first home

in the next 2 or more years? Then a first home saver account may be able to help. Below are some facts about the accounts:

Planning Opportunities and Benefits:

The government will contribute an extra 17% of your personal contributions up to a maximum of $1,020 (17% of

personal contributions of $6,000) provided you are an Australian resident for tax purposes

Interest earned on the account is taxed at 15% rather than your marginal tax rate

Account balance and interest are not applicable to the income and assets test for government benefits including family

tax benefit

You can hold your account for just over 2 years if timed correctly and still meet the 4 year rule. The first deposit should

be made before the end of this financial year

Eligibility and Other Factors:

Aged between 18-65 years old and never owned a home in Australia or Norfolk Island

Hold the account for 4 financial years and contribute at least $1,000 in each financial year to be eligible to withdraw the

funds. The first home can be purchased within the 4 years, but the funds are not accessible for the deposit. They can only

be applied to the mortgage once the 4 year rule has been met

Account balance cap of $90,000

Move in and live in the house for at least 6 months

If funds are not used for your first home, they have to be contributed into your superannuation fund

Accounts are available from most leading financial institutions

Government Backflip on Off-Market Transfer for Self-

Managed Superannuation Funds (SMSFs) The Government has decided not to proceed on banning off-market transfers to SMSFs from 1 July 2013. Previous

announcements had indicated that transfers done after 30 June 2013 will need to be done “on-market” which would mean

brokerage and other costs would be incurred.