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As the financial year draws to a close remember to organise your financial documents and keep track of your deductions. This will make your life much easier come 30 June. In To further help you prepare for the new financial year, we will take a closer look at the new federal budget and how it will affect you.

In this edition we will also highlight the most important objectives of tax planning. After all, we are all know that failing to plan is planning to fail!

We will also tell you a bit more about Saber attending one of Gold Coast's  biggest social events; The Bruce Lynton Charity Ball. It was a spectacular night and Saber is very pleased about being able to take part in an event that over the last 12 years has raised over $1.3 million dollars for local charities.

Lastly we would like to introduce our CA qualified new Accountant Manager, Mr Eric Flammang.

Happy New Financial Year from the Saber team!

 

2012 Federal Budget Highlights

Due to the expected rise in the cost of living resulting from the introduction of the carbon tax on 1 July, the government is aiming at redistributing up to $20 billion over four years to low and middle income earners through tax cuts and bonuses.

The budget contains a supplementary allowance worth $210 a year for singles and $350 for couples who are either receiving unemployment compensation, youth allowance or the parenting payment system.

Family tax benefit Part A payments will be boosted by $1.8 billion, which is worth as much as an extra $300 a year for families with one child and $600 for families with two or more children.

An additional $2.1 billion has been dedicated to the new ''School Kids Bonus' (formerly known as the "Educational Tax Refund")' in which low and middle income earners will receive $410 a year for each child at primary school and $820 for each high school student.

The budget did not allow for businesses' tax cuts but introduced a concession allowing them to claim up to $300,000 in deductions against losses previously incurred.


Unfortunately,  the plan to allow all taxpayers to contribute up to $50,000 to their superannuation funds at the concessional 15% rate and claim a deduction in their personal tax has been deferred another two years.

The government forecasts a resulting $1.5 billion surplus in the first year (up from a $44 billion deficit in the 2011 financial year).

 

Changes to the 30% Government Rebate & How It Affects You

Up until the 1st July 2012, all individuals purchasing Health Insurance will have had the opportunity to receive a 30 per cent (at minimum) Government Rebate on the contributions towards their Private Health Insurance cover. This rebate was available to all Australians irrespective of income.

Under the new scheme developed by the Government which is planned to take place on the 1st July 2012, all those purchasing Health Insurance will be required to accept a tailored rebate amount according to the income an individual/family earns.

The new legislation change introduces three 'Private Health Insurance Incentive Tiers' based on income thresholds which will be indexed to Average Weekly Ordinary Time Earnings.

For low and middle-income earners, the existing 30, 35 and 40 per cent Private Health Insurance rebates will remain in place. Higher income earners will receive a lower rebate if they choose to hold Hospital Cover under Private Health Insurance, but will face a higher Medicare Levy Surcharge (MLS) if they choose not to hold Hospital Cover under Private Health Insurance.

If you are not defined as a high income earner (The Government defines a high incomer earner as either a single earning above $84,000 or a couple/family earning above $168,000 per year) then your rebate will remain unchanged and this legislation will not affect you.

 Find out more on the Australian government federal budget website: http://www.budget.gov.au

 

Tax Planning

Its that time of year again!

Due to the increase in Tax Rates over the years, tax planning has undoubtedly become an integral part of business life. With the goal to minimise taxes before the 30 June, a thorough knowledge of Taxation Law is required to undertake Tax Planning strategies.

No business is the same and therefore no tax planning strategy is the same. The tax planning strategy will vary depending on aspects such as cash flow, maturity of the business, the age of the owners and the plans for the future.

The main objectives of tax planning is to;

- Reduce taxable income

- Increase allowable deductions

- Reduce the tax rate where available

- Defer or delay payment of tax

- Superannuation Strategies

 All of these factors need to be reviewed prior to 30 June. If you would like to discuss your taxation matters and possible strategies for your business please do not hesitate to contact us on 07 55 264 333 to book an appointment.

 

Saber dances the night away at the Bruce Lynton Charity Ball

Bruce Lynton Charity Ball is one of the biggest events on Gold Coast's social calendar.  Held for 12 years running it has raised over $1.3 million dollars for local charities. Members of the Saber team attended the event held on Saturday the 21 April to help support charities such as the Cancer Council Queensland, Guide Dogs Queensland, Youngcare and Surf Life Saving. The theme of the night was Circus inspired and the evening was a whirlwind of fireworks, bumper cars, acrobats and candy floss. The silent and grand auctions were a big hit with amazing items donated by local businesses. The Saber team had a fantastic evening and danced the night away to the tunes of local bands- and the best part was knowing that it was for a great cause!

To find out more about the event please visit: http://www.brucelyntoncharityball.com/index.php

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Posted by Saber Chartered Accountants on: Wed May 16th at 03:11:27 PM

Everyone remembers the raging debate that unfolded after the federal government announced its plan to introduce a new resource rent tax in May last year. But what many don’t remember is that one of the accompanying components of that reform package was the commitment to introduce a 50% discount on interest earnings – something that many of us have been urging the government to do for a long time.


The structure of our current tax system delivers advantages for investors who direct their savings into real property or shares, often entitling them to offset any losses generated against other assessable income. Additionally, capital gains on an investment property or shares can be discounted by up to 50%, which serves as a significant tax incentive for investors when they are deciding where to direct their funds.


The same incentive does not currently exist for investors who choose to hold their funds in an interest-bearing account with a financial institution, or even in a debenture, bond or annuity product.
From a tax policy perspective, this inconsistency is a flaw in the structure of our tax system, highlighted in the Future Tax System review.


In response to the review, the government plans to introduce a 50% discount on interest income up to $500 for the 2012-13 year, rising to $1000 in the 2013-14 financial year.
 

This is a good policy proposal that allows for a slightly more balanced tax system where appropriate incentives exist for all major investment classes. In the future, when budget conditions permit, we should look to do away with the upper limit on the interest income discount.
 

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Posted by Mr Yasser El- Ansary on: Wed Aug 17th at 08:59:07 AM

Budget Update -2011/2012


While there was early speculation of a tough budget, there were a mixture of announcements that will both advantage and disadvantage taxpayers. There were a number of changes announced relating to income tax, small businesses, FBT and other indirect taxes but some of these do not actually take effect until 1 July 2012.
 

Below is a brief summary of some of the more relevant changes:
 

Personal Taxation:

  • Income Tax rates remain the same: But with the inclusion of the Flood Levy at 0.5% of Taxable Income between $50,001 and $100,000, and 1% of Taxable Income above $100,000 as at 1 July 2011
  • No Low Income Tax Offset for unearned income of minors: This means that for the 2010 - 2011 Financial Year minors can receive $3,333 tax free but from 1 July 2011 this will reduce to $416.

 

Superannuation:

  • Minimum Pension drawdown 25% reduction for 2011-2012: As a result of the GFC the minimum drawdown was reduced by 50% for 2009, 2010 and 2011. This has been reduced by 25% for 2012 and will return to the full amount in 2013.
  • Increase to SMSF Levy: The SMSF Levy has been increased from $150 to $180 and is payable on the lodgement of 2011 SMSF Tax Returns.


Business Taxation:

  • Small Business motor vehicle tax write-off to replace Entrepreneurs Tax Offset: Small Businesses will be able to claim an immediate $5,000 deduction in relation to motor vehicles purchased after 1 July 2012 and then depreciate the remaining balance as normal. This measure will also coincide with the abolishing of the Entrepreneurs Tax Offset from the same date.
  • FBT and cars - Flat 20% Statutory Rate: Over the next 4 year the statutory rate will be phased to a flat 20% rate regardless of kilometres travelled.Countering fraudulent phoenix activities by company directors: The tax law will be strengthened to counter fraudulent phoenix activities with the following:
    1. Director Penalty regime will apply to superannuation guarantee
    2. Directors will be liable for company failing to pay employee superannuation
    3. ATO can commence recovery from Directors without the 21 day grace period
    4. Directors and associates may be disallowed Withholding credits in personal returns where the company failed to pay it to the ATO
     

If you would like further advice on the above changes or any other aspect of the 2011-2012 Budget please do not hesitate to contact us.
 

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Posted by Saber Accountants on: Tue Jun 14th at 01:10:14 PM

Small business are being audited in a Federal Government cash grab with the Australian Tax Office targeting  small business in the cash economy.


A new policy briefly explained on the tax office website targets businesses for audit by using benchmarks. Benchmarks calculate prices and costs a business should have in a certain industry. The ATO does not reply on  averages instead it provides a range of values to account for both high and low margin businesses. If your business operates outside of these bench marks  you need to show records to survive the audit.  With hundreds of business being audited across the Gold Coast, it is imperative that small business are keeping accurate records. 
 

For more information please phone our office on (07) 5526 4333

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Posted by Gold Coast Sun Newspaper on: Mon Apr 18th at 10:20:29 AM

Tax help  is still available for those affected by natural disasters

The extended lodgment dates for those affected  by natural disasters is coming to an end, however help is still available.
The Australian Taxation Office (ATO)  gave individuals and businesses affected by natural disasters in QLD, NSW. VIC and WA additional time for tax-related lodgments.
 

Those in affected postcodes automatically had the following deferrals applied to their lodgment due dates where lodgments had been received 

• 21 March 2011 for December 2010 and January 2011 monthly actively statements.
• 28 March 2011 for 2010-11 quarter 2 activity statements ( this does not apply to large pay as you go withholders)
• 28 March 2011 for any other lodgments (including income  tax returns) originally due on 28 February 2011.
The associated payment dates for all lodgments listed above were also deferred accordingly. Lodgment of quarterly superannuation guarantee  charge statements was automatically deferred from 28 February 2011 to 28 March 2011.
If you  require additional time please let us know and we will contact the ATO on your behalf.
 

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Posted by ATO on: Fri Mar 25th at 04:12:53 PM

Are you providing Fringe Benefits to your employees?

With a lot of the focus of business owners being on meeting their Income Tax, GST and Superannuation obligations, there can be a risk that you are not considering whether you are providing Fringe Benefits to employees and if you are required to lodge a Fringe Benefits Tax Return and pay tax on these Fringe Benefits.

Fringe Benefits Tax (FBT) is a tax paid on certain benefits that you may provide to your employees or their associates. The FBT year runs from 1 April to 31 March and the current FBT Rate is 46.5% on the taxable value of the benefits you provide to employees or their associates.

Some examples of benefits provided to employees that may constitute a Fringe Benefit are:

• Allowing an employee to use a company car for private purposes
• Lending money to an employee and charging little or no interest on the loan
• Reimbursing the cost of an employee's private expenses (Eg. Home Loan payments or School Fees)
• Providing entertainment for an employee by way of food, drink or recreation (Eg. Christmas Parties or Gym Memberships)

There are some limits and exceptions as to when these types of benefits will lead to the requirement of paying FBT, such as what industry your business is in and the value of the benefits provided, but it is important to consider whether or not any benefits you provide constitute taxable Fringe Benefits.

If you believe you need to assess whether you are liable to pay Fringe Benefits Tax, or would like more information in relation to this area of taxation, please do not hesitate to contact our office on (07) 5526 4333.
 

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Posted by Saber Accountants on: Mon Feb 7th at 01:30:49 PM

Don't like paying too much tax? Join the club!
 
You can SAVE tax with a bit of planning,  with the financial year fast approaching now is the perfect time to start thinking about tax saving options for your business.   Tax planning is an essential part of wealth creation, tax planning can involve one of the more items listed below. 

  • Maximising your after tax income
  • Remuneration packaging (salary packaging)
  •  Capital Gains Tax (CGT) management
  • Gearing
  • Utilising franked dividends
  • Borrowing to invest
  • Small Business and capital gains tax exemptions

Take control of how much tax you pay and call us today on (07) 5526 4333.

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Posted by Sue Dikmen on: Tue Jan 25th at 10:55:15 AM

 

If you do not lodge  your overdue tax returns by 17th February 2010, you will receive a default assessment from the ATO and this will be based on taxable incomes included in the letter sent to you, together with any applicable administrative penalties.

To avoid a default assessment It is important to take action now and contact us to get your overdue returns lodged with the ATO as soon as possible.

What is a default assessment? 
This means that the ATO will be basing your tax returns on your previous years lodged and this could result in you paying more tax then necessary as well as incurring additional penalty charges.
 

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Posted by Sue Dikmen on: Wed Dec 8th at 11:56:03 AM

Unsure about your businesses current financial performance?

Small business benchmarking can help businesses to:

* Meet tax obligations
* Enable them to compare performance against similar businesses in industry
* Identify record keeping deficiencies
* Assess whether business is likely to be selected for an Australian Taxation Office review or audit

The Australian Taxation Office use small business benchmarking to identify entities that may be avoiding current tax obligations by not reporting income.

Businesses operating outside their industry benchmarks will be reviewed by the Australian Taxation Office for an immediate audit.

Heavy penalties apply to businesses that are audited and found to be negligent in their reporting processes in regards to their specific industry benchmarks.

Call our office today for advice regarding correct reporting procedures to ensure your business is operating within the industry specific benchmarks and avoid potential audit activity.

 

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Posted by Ben Merrett on: Wed Dec 1st at 09:28:38 AM

Saber Chartered Accountants will be working closely with the Australian Taxation Office next week.

There are two aspects to the visit:
1 The usual components of the Relationship Manager visits that the ATO tries to arrange with tax agents every 1 to 2 years
- update on ATO developments (such as Portal improvements, Lodgement concessions, plans for future changes)
- provide a profile report for the practice confirming what shows on ATO systems for client numbers & lodgement patterns etc.
- get feedback on what we think the ATO should try and improve on
2. The ATO will outline a project that is underway to deal with outstanding lodgments in a more coordinated way
- providing a list of clients with outstanding lodgments showing which of these the ATO consider higher priority
- get a better understanding of the situation in relation to these clients (the ATO expects some will have extenuating circumstances, some do not respond to our requests for them to bring their information in, some we are no longer in contact with and there may also be other practice management factors for the ATO to take account of)
- look at options for cleaning up the client list accordingly and encouraging a response from our clients with emphasis on those considered higher priority

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Posted by Australian Taxation Office on: Wed Sep 8th at 11:00:08 AM

 An entity that only provide 'BAS services'( or a fee or reward) must register as a BAS agent rather than a tax agaent. BAS agents are limited in the range of services they can provide.

Broadly, a BAS service is a type of tax agent service, except that it only includes those services that relate to ascertaining or advising about the liabilities, obligations or entitlements of an entity under a BAS provision (basically any provision that relates to preparing a BAS e.g the GST Act) rather than a taxation law. Refer to S.90-10.

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Posted by National Tax & Accountants Association Ltd on: Thu Jun 17th at 02:52:26 PM

 

Division 147 of the GST ACT, has been replaced by Division 58 which applies retrospectively from 1 July 2000. This amendment ensures that Directors and representatives of incapacitated entities are liable for GST consequences during the term of their appointment.
The amending legislation received Royal Assent of 4 December 2009.
 
 
 
Non Commercial Losses
 
New Non-commercial loss rules apply for the 2009-2010 and later income years.
The key changes include:
Ø       A new income requirement to restrict the circumstances where a business loss can offset other income. The individual will meet the income requirement where their income for non-commercial loss purposes is less than $250,000.
Ø       A new exception for business losses solely caused by deductions claimed for the small business and general tax break.
Ø       A new Commissioner’s discretion for individuals who do not meet the income requirement but whose business activity is subject to a lead time.
Ø       Existing Commissioner’s discretions continue apply.
 
These new rules became law on 14 December 2009.
 
For income years prior to 2009-2010,
Individuals can only offset their non-commercial loss against assessable income from other sources if:
Ø       One of the exceptions for primary production of professional arts businesses apply
Ø       They business activity passes one of four tests (profits test, assessable income test, other assets test, real property test), or
Ø       The Commissioner exercises discretion to allow the loss to be offset against income.
 
For the 2009-2010 and later income years,
Individuals can only offset their non-commercial loss against assessable income from other sources if:
Ø       One of the exceptions for primary production or professional arts businesses apply
Ø       They meet the income requirement and one of the four tests is satisfied (profits test, assessable income test, other assets test, real property test)
Ø       The Commissioner has exercised his discretion to allow you to claim the loss, or
Ø       The loss is solely due to a deduction claimed under the small business and general tax break.

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Posted by Deanna Richards on: Thu Mar 25th at 09:47:14 AM

 Welcome to the Saber Group Blog!

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Posted by Saber on: Fri Jan 29th at 11:44:41 AM