planning for 2013/14 - brentnalls sa · copies of your business’ intellectual property. this can...
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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.
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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.
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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.
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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: [email protected]
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.
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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
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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.
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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.
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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%
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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.