Posts Categorized: News
Three proposed changes to super
On Thursday, the Treasurer Mr Scott Morrison announced three proposed changes to super.
The three changes to those changes announced in this year’s Budget are:-
- A new non-concessional contribution (non-deductible) limit system.
- Deferment of the concessional catch-up system.
- Abandonment of the proposal for those aged between 65 and 74 to be able make concessional and non-concessional contributions without having to first satisfy a work test.
Yet not all is as bad as what the press may have you believe. Yes, some of the changes are unpalatable. Yes, future generations will not be able to accumulate significant sums in super as previous generations have. But that all said, there are still some sensible and attractive reform announcements from this year’s Budget. If you want to read more about those tax changes, email accountants@mrsaccountants.com.au and we will forward you a copy of our 2016 Budget briefing paper and addendum thereto.
With all this negativity and uncertainty about super, it is important to remember two things:-
- Super is before all else a low tax environment with current tax rates being 15% on contributions, 15% on earnings within accumulation mode (10% for capital gains) and 0% on the earnings on the balance in pension mode. These tax rates are less than those for many working Australians, often significantly so.
- It is arguably the best asset protection vehicle.
So don’t be misled by all the negativity and political debate. It would though just be nice to return to the position we had from 1983 until 2006 when we had a prolonged period of sustained stability and promotion of super (as both Keating and then Costello understood the benefit to the government purse on encouraging people to look after themselves rather than relying on the age pension at a time of rapidly ageing population).
At MRS, we will spend today planning for your success tomorrow.
Travel expenses made simple
Travel expenses made simple. Most would disagree as keeping, and at times even getting receipts when you’re travelling is difficult. This is a problem that is even more difficult in respect of getting employees to hand over the right records.
Fortunately, the ATO provide some relief. Each year, the ATO issues what are called reasonable travel rates; the determination also covers overtime meal allowances.
Reasonable travel rates are set for:-
- Domestic travel – amounts in respect of overnight stays for accommodation, food & drink and incidentals. These amounts vary for each major centre and high cost remote areas.
- Overseas travel – amounts for food & drink and incidentals (receipts must be kept for all accommodation). Allowance rates vary for each country and the employee’s salary level.
Employers who pay no more than these reasonable amounts are set by the ATO do not have to withhold PAYG withholding.
Employees who receive a reasonable allowance are not subject to substantiation unless their expenses exceed the reasonable amount. You can obtain a copy of the 2016/17 rates at http://tinyurl.com/jft95s2
Please always remember that an overseas travel claim is not deductible unless it is supported by a travel diary or record. The same applies in respect of a domestic trip which is for 6 or more nights.
We would welcome your questions as to how you may benefit from using this system.
At MRS, we will spend today planning for your success tomorrow.
New credit card surcharge rules
New credit card surcharge rules came into effect as of today. You probably heard this on this morning’s news on TV and radio.
But don’t panic, it may not affect your small business yet.
These new rules don’t apply to small businesses until September 1, 2017. It does though already apply to businesses with more than $25 million of turnover or more than 50 employees.
These new laws have been introduced by the Australian Competition and Consumer commission (ACCC). With their past history, it is a given that they will very quickly make someone a scapegoat.
Under these new rules, there are maximum percentage surcharge rates that can be used. And for those businesses that charge a fixed amount, that amount must not exceed the cost to the business.
Most businesses charge a percentage. The set maximum rate for Visa and MasterCard is 1.5%, 0.5% of debit cards and 3% for American Express.
I would expect there to be very loud protests leading up to September next year as many businesses are charged more than the 1.5% on Visa and MasterCard transactions by their bank. And then there are those that use generic solutions such as Square which charges a flat 1.9%. We will keep our clients updated leading up to this second implementation date next year.
If you would like to read more, a good short summary has been prepared by MYOB which can be accessed at:-
http://tinyurl.com/jeyxllv
If you want to read the nitty-gritty or are have trouble sleeping, you can read the Reserve Bank review at:-
http://tinyurl.com/zk2d79u
At MRS, we will spend today planning for your success tomorrow.
Deadline for 2016 PAYG Payment Summaries
The deadline for 2016 PAYG Payment Summaries being lodged was 14th August. Whilst employee should have received their PAYG payment summary by 14th July, employers had until 14th August to lodge a copy of each individual summary as well as the PAYG Payment Summary Statement.
If you haven’t lodged these yet, please do so immediately to avoid the imposition of any fines. And for those lodging paper copies, please remember to keep a copy of the PAYG Payment Summary Statement for your records.
There are however two exemptions:-
- September 30 where we as tax agents have been involved in there preparation.
- The date of lodging the 2016 Tax Return where only family members have been employed.
Even though you may have until as late as March 31, 2017 to certify your 2016 WorkCover remuneration, now would be a good time to do so, particularly if your estimated remuneration for 2017 will be less than for 2016.
And as always, please don’t hesitate to ask as for assistance with any part of this.
At MRS, we will spend today planning for your success tomorrow.
Lessons from the Olympics
And so another Olympics has come and gone. Two things struck me whilst watching these games – how small the crowds were and the number of shows of sportsmanship amongst the cut and thrust of a once in a four year competition. I was also reminded about the importance of a coach.
This was particularly evident in “turn” events such as the high jump, long jump and pole vault. After their turn, every athlete seemed to engage their coach in a quick chat. No doubt it was usually positive affirmation but it also seemed to frequently be a reminder of the basics; to follow a system, to do the right things the right way.
So what systems do you have in your business? How clear are those systems? Do you practice them? Does your team clearly understand what they are and are trained in them? How often do you focus and remind yourself about doing the right things the right way – or are you just dealing with the issue of the day (whatever that may be and regardless of how unimportant that may be in the long run).
So who is your coach? Are you guilty of trying to wearing both hats? Who is reminding you and training you on doing the right things the right way? Maybe it’s time for you to appoint a coach. We can help you as we do with so many clients – and from that we can provide you with insight and skills into many areas that we have gained from a vast array of experiences. Our service offering will be further improved with the introduction of an upcoming key performance indicator monitoring system – keep an eye out for that.
At MRS, we will spend today planning for your success tomorrow.
Lencioni & The Five Temptations of a CEO
I took the opportunity whilst away last week to read a couple of books including another by one of my favourite business authors. On this occasion, I read Patrick Lencioni’s The Five Temptations of a CEO.
Not all of the temptations explored relate to everyone in the same way. But as no-one is perfect in all areas, some of the temptations will resonate more for some than with others.
The two that resonated most with me were:-
- Choosing certainty over clarity – in exploring this, Patrick sets out that too much time is wasted in analysis rather than getting on with it and at the risk of clearly setting out the desired result. Whilst products and services must be precise in their delivery, the CEO should not be aiming for precision themselves in the filling their role; if they drive to be precise, they risk over analysis and paralysis within the business.
- Choosing harmony over productive conflict – Patrick argues that the best decisions acknowledge all perspectives. Whilst all perspectives and ideas can’t be agreed upon, they can be considered. As such, discord and opinions should be encouraged in an environment that encourages debate and a consensus approach. This reminded me of talk by a CEO of one of the world’s major franchises in which he spoke at length about the blood on the floor during meetings but how they walked out united and focused on the same goals and actions. That franchise made many difficult decisions that saw it transition successfully through a period of great change in consumer behaviour.
Unlike all other Lencioni books, don’t start reading it before you go to bed. If you do make that mistake, you won’t sleep!
At MRS, we will spend today planning for your success tomorrow.
PAYG Withholding Rate tables
For those of you who need to access PAYG Withholding Rate tables, we now have an easier option for you in that our new firm app links directly to the ATO’s very useful PAYG WH (wages tax) calculator.
I take this opportunity to remind you that PAYG Payment Summaries were due to be issued to employees by 14th July and that copies of those Payment Summaries as well as the PAYG Summary Statement are to be sent to the Tax Office by 14th August. Please ensure you keep a copy of those documents. However, employers that employ only family members have until the date of lodging their 2016 Tax Return to lodge their payment summary stationery (provided they have a good lodgement record).
I also take this opportunity to remind you that the Superannuation Guarantee rate remains at 9.5%.
Even if you have tax tables within your software, we remind you download our firm app which has many useful tools and calculators. It is designed to be on your front screen from where you can undertake any number of business activities and to attend to your tax affairs. Tell your family, friends and business colleagues about it as there the app has many uses for everyone.
Please do not hesitate to call us if you have any queries in relation to the above or require any assistance in loading a new tax table into your software.
At MRS, we will spend today planning for your success tomorrow.
An app for your log book
The one thing that clients complain about most is having to prepare a log book. This became even more important in the last financial year with the removal of two of what were once four methods of claiming a motor vehicle. We can now make that task easier as we have an App for your log book.
Our firms App has been just published in the Play Store and iTunes.
Simply search on Maggs Reid and at the top list you should see our logo, Maggs Reid Stewart and Digital Disruption Solutions. Simply download the app, go to the ATO button which will then let you run a log book by using Google maps. It cannot be made any easier. And it’s one of the main reasons we decided to publish our own App.
Although more content is still to be published, the App is already full of really useful tools, calculators and information.
As have we advised in newsletters and blogs, one can now only claim a car under the log book method or cents per kilometre method. You either have a complying log book or you don’t. The problem is if you don’t, your maximum claim under the cents per kilometre method is limited to $3,300. So download that app!
At MRS, we will spend today planning for your success tomorrow.
Year end processing tips
We are accountants because we like being accountants. But I can assure you that we gain no joy from fixing fundamental book-keeping tasks, particularly when the result is our fees being higher than what they should otherwise be. We therefore provide you with the following year end processing tips.
You can make our life more enjoyable and reduce your accounting fees by attending to the following accounting tasks before inviting us to work on your file:-
- Reconcile all bank accounts, loans and credit cards.
- Investigate any reconciling items.
- Reconcile payroll before issuing any payment summaries.
- Count and value stock.
- Review last year’s depreciation schedule and advise us what has been sold or scrapped.
- And the most time consuming one – do not change a period’s figures if we have lodged a Tax Return or BAS for that period. If you need to change an old debtor or creditor balance or make some other change then please call us and we will happily either (1) advise you how to correct the item, (2) use Logmein to make the adjustment and/or show you how to make the adjustment without affecting the prior period, or (3) easier yet, we will log into your cloud accounting system and make the change the correct way.
You can also find how to guides for MYOB, Reckon, QuickBooks Online and Xero at:-
MYOB
http://help.myob.com/wiki/display/ar/Closing+a+financial+year
RECKON
http://kb.reckon.com.au/issue_view.asp?ID=4155
QUICKBOOKS ONLINE
http://www.intuit.com.au/r/product-updates/end-financial-year-using-quickbooks-online/
XERO
https://help.xero.com/au/Q_YearEnd
At MRS, we will spend today planning for your success tomorrow.
Super Stream tips
Some employers may think it is another compliance burden. What it is though is a streamlined system – and many experienced book-keepers that I have spoken to have been glowing in their stories about the great time savings even in these early stages. Thankfully, gone are the days where an employer with 18 employees can be paying separately into 8, 10 or even 18 different funds – now they have just one reporting and payment process. As some are still to register, here are some Super Stream tips.
- You can use either your payroll software, a clearing house or one of the large super funds.
- I would avoid using the large super funds and anything but the ATO’s clearing house as their processing times can be as long as 10 business days – which means to meet the deadline of the 28th day after quarter end, some will have to report and contribute two weeks beforehand.
- The ATO provides a free clearing house for those employers with less than 20 employees. Not only is it a free service but contributions made to this clearing house are treated as being made on the day they are made to the clearing house (as it is an approved clearing house).
- It is called the Small Business Super Clearing House (SBSCH). You can register for it at – https://www.ato.gov.au/business/super-for-employers/paying-super-contributions/small-business-superannuation-clearing-house/#
- To register, you will a number of items at your fingertips.
- Apparently the registration works best when done in Chrome.
- Employers have since 2005 been required to provide their employees with choice of super fund (and which nominates a default super fund if the employee does not exercise their choice). An old form though will not have some information that you will need to complete the registration and make payment.
- You will need the USI (Unique Superannuation Identifier) and ABN of each super fund.
- You need every employee’s TFN and their super fund member number.
- You can get the USI from your employee’s last member’s statement, by ringing the fund or checking a USI register which you can find at http://superfundlookup.gov.au/DownloadUsiList.aspx
- If an employee nominates their complying self managed super fund, then they will need to provide you with its electronic service address.
- Please be very careful when selecting the fund when setting up your clearing account as payment to the wrong fund will mean you still have to pay the correct fund. The registration will bring up the name of the selected fund but as many names are very similar, please ensure you select the right one.
- You will be asked for your banking account details in case there is a refund to be paid back.
- You will still need to make payment by EFT or BPay; payment will not be automatically deducted from your nominated bank account.
- Please note that you will be issued with a different account number to pay into for each entity. To avoid paying into the wrong account and having the payment returned, you will need to give each SBCH bank account a different name within internet banking.
- It is a legal requirement that you send the payment and message on the same day – so don’t do it at 5 minutes to 6pm and then miss the banking cut-off.
Please don’t hesitate to ask us any questions you may have.
You may also like to watch the ATO’s video (but don’t panic s it was published before the October extension was announced).
At MRS, we will spend today planning for your success tomorrow.