Adams Accounting Blog

2015/16 Federal Budget - effect on your business

Parliament announced the budget changes last night 12th May 2015 with some exciting news for many small business owners. CHANGES EFFECTIVE 7:30pm 12th MAY 2015 UNTIL 30 JUNE 2017 - Accelerated depreciation for small business is back. Allowing small businesses with aggregate annual turnover of less than $2 million to immediately claim a tax deduction in the year they start to use or the item is installed ready for use, provided the asset costs less than $20,000 net of GST (currently, an immediate write-off is generally available for assets costing less than $1,000). This will apply for assets acquired and installed ready for use between 7.30pm (AEST) 12 May 2015 and 30 June 2017. From 1 July 2017 the limit will revert back to the existing $1,000 threshold. CHANGES EFFECTIVE 1 JULY 2015 - Tax rate cuts for small business If aggregated annual turnover of less than $2 million the following apply; (a) Company tax rate reduced by to 28.5% (currently 30%) (b) Non company ent...

Running a home based business

If you operate your business from home, you may be able to claim some of the costs in doing this: • if you work from home occasionally and your place of business is somewhere else (for example, a tradie who does most of his work on clients’ premises) • have an area of your home set aside that is only used for your business (for example, a naturopath who has converted her garage to a reception area and consulting rooms). You may be able to claim tax deductions for: • a proportion of the cost of your electricity, gas and phone use • purchase of office furniture and equipment. You may also be able to claim a percentage of expenses like rent or mortgage interest, rates and insurance. To be eligible, the area where you conduct your business must be: • used exclusively for business purposes • be clearly identifiable as a place of business, and • not be easily adapted for private purposes. If you are unsure of what you may be entitled to claim, speak to one of ...

Unpaid superannuation

The ATO receives around 18,000 complaints a year about employers failing to pay staff superannuation and approximately 70% of the complaints relate to small businesses. If you have a business and do not pay employees’ superannuation guarantee contributions (SGC) within 28 days of the end of a quarter, you will incur interest at 10% per annum on the missed payments as well as an administration fee of $20 per employee. You are also required to lodge a Superannuation Guarantee Statement and remit the payment directly to the ATO. On top of this the business will also lose the tax deduction because the super guarantee charge is not tax deductible. To make matters worse even if you operate thorugh a company, the government green lit directors liability for unpaid super guarantee. Meaning if you operate your business through a company (or trust with corporate trustee) the limitations of corporate liability will be waived and the directors of the company will be held personally liable...

Fuel Tax Credit rates increase

Fuel Tax Credit rates increase bi-annually from 1 February 2015 The Government announced in the 2014-15 Budget that it would be reintroducing bi-annual indexation on all fuels except aviation fuels. What this means is that the Fuel Tax Credit (FTC) rates to claim on eligible fuel purchases is set to increase in February and August each year, based on the Consumer Price Index (CPI). So, if you claim the credit you need to make sure you are using the correct rates. Any eligible fuel purchased in January 2015 will be claimed at the old FTC rate and eligible fuel purchased from 1 February 2015 to 31 July 2015 will be claimed at the rate as indicated below. Each year in February & August we will post a blog article indicating the new FTC rates. Business use In a heavy vehicle (including emergency vehicles) for travelling on public roads From 1 July 2014..................12.003 From 10 November 2014....12.46 From 2 February 2015.........12.76 All o...

Superannuation tax deduction for the self-employed

Are you self-employed and plan on claiming a tax deduction for superannuation contributions? You are able to claim a tax deduction for contributions that you make to your superannuation fund, but only if you are self-employed. To be able to claim a deduction you need to do a couple of things. First, you need to complete a ‘notice of intent to claim a deduction for personal super contributions’ form from your superannuation fund. The notice simply states the amount you wish to claim as a tax deduction and confirms you haven’t lodged an earlier notice regarding the same contribution. Second, you must lodge the deduction notice with your superannuation fund before you lodge your personal tax return. Once the superannuation fund is satisfied that your deduction notice is valid, they must formally acknowledge its receipt. This acknowledgement will be in writing and should be provided to your accountant at tax time. Your accountant cannot lodge your Income Tax Retur...

Small business capital gains tax concessions

SMALL BUSINESS CAPITAL GAINS TAX CONCESSIONS The CGT small business concessions can significantly reduce the CGT liability for small business owners upon the sale of their business or business assets. There are a number of concessions available to small businesses: 1. The 15 year ownership rule If you qualify, the business can disregard the entire capital gain from the sale of an asset if: • The asset has been continuously owned for 15 years or more; and • The owner is 55 years or over and retiring, or is permanently disabled at the time of the sale 2. The 50% reduction for the sale of active assets This test requires the CGT asset to be an active asset for: • 7 ½ years if owned for more than 15 years; or • Half the period of ownership if owned for less than 15 years If a small business satisfies the active asset test, it can reduce its capital gain by a further 50% 3. Retirement exemption This concession allows you to disregard a capital gain from a CGT...

Finding Lost Super

Have you searched for lost super? Have you kept track of all your super? If you've ever changed your name, address, job, or done casual or part-time work, you may have lost track of some supe. The Australian Taxation Office's (ATO's) quick online search can help you see if you have any lost or unclaimed super. Do a quick search by providing your name, date of birth and tax file number. If the ATO’s Super Seeker tool lists any lost super it will give you further details on how to access the money and roll it in to your active superannuation fund account. Copy and paste the following link into your browser to start. https://superseeker.super.ato.gov.au/SuperSeekerWeb/Super/PrivacyAgreement.aspx?Task=941b375d-c1d4-47c3-908a-7c362729ad79&NavGraph=Privacy&View=Privacy&pid=71

Have you considered Self-Managed Superannuation

Have you considered a Self-Managed Superannuation Fund (SMSF)? As at 30 June 2014 there are roughly 534,000 Self-Managed Superannuation Funds in Australia totalling assets of $557 billion. That’s 1/3 of the Australian superannuation pool assets. SMSF provides the opportunity for you to have a say in what your fund invests in, as well as cut down on annual compliance costs. In order to make an SMSF affordable compliance wise, the estimated start-up balance required of the fund is $150,000. A SMSF can have up to 4 members, meaning you personally don’t need $150,000 to get started - split evenly you could get started on as little as $37,500 each (based on 4 members). You could engage financial planners or stock brokers to do the investing for you, or take full control and DIY. 24 September 2007 marked an important date in Australian superannuation history. This day marked the beginning of limited recourse borrowing arrangements (LRBA) for SMSFs. This allows SMSFs to bo...

ATO Debt Collection

ATO CHANGING DEBT COLLECTION APPROACH Over the GFC period the ATO took quite a lenient approach to collecting both income tax & GST debts. Towards the end of the Labour Governments period in office this started to change and has now turned full circle. The ATO are now issuing garnishee notices to business clients in order to collect debts owing to them. The process the ATO go through; - Send out overdue notices - Make telephone contact with the taxpayer - Offer terms payment option over a period - Should the taxpayer not adhere to the terms payments conditions - Garnishee notice can be issued WHAT IS A GARNISHEE NOTICE? The ATO send a notice to your bank to advise them that you owe the ATO an amount and advise the bank that they are required to pay this amount to the ATO from any funds the taxpayer has in the bank. If the full amount can’t be paid then the ATO require the bank to pay 30% of the available funds in the bank to the ATO. This action by the ATO can have a...

Supporting staff through stress

What should I do if one of my staff members seems to be suffering from stress? When a staff member seems out of sorts and you think they could be struggling to cope with stress, it can be difficult to know what to say. However, it is best not to ignore the situation as stress can snowball to more serious health issues. Stress affects everyone differently, but there are a number of common signs. These include headaches, upset stomachs, difficulty performing usual work tasks, irritability and tearfulness. Ongoing stress without support can lead to burnout or contribute to mental illness such as depression or anxiety. Mental health problems are common in the workplace, with about one in six people affected at any given time. How to help There are a number of things an employer can do to support a staff member affected by stress and other mental illnesses: - Time pressures: Check to see if you’ve set unreasonable and unrealistic demands on your employees’ time. If y...