ARE YOU AWARE OF YOUR FRINGE BENEFIT TAX OBLIGATIONS?

 

Consider Diane’s case   Diane runs a company with a staff of twelve. Bill is her general manager and receives use of a company car as part of his remuneration. Diane throws a large Christmas party each year to which she invites all her staff, as well as other meal benefits during the year. Diane is concerned that the 49% FBT rate may apply to these benefits.    Motor Vehicle   Whether there is a Fringe Benefit Tax (FBT) obligation depends on the following:   Availability to Bill for private use. Does Bill have access to the car outside work hours? If Bill only uses the car during work hours generally no FBT applies, however if Bill garages the car at his house FBT may apply. Where private use is minor or infrequent FBT may be minimised.   Whether or not Bill makes contributions to the running costs of the vehicle. Personal contributions may reduce any FBT obligations. Meal Entertainment   Entertainment is a complex area of FBT. Some aspects to consider are:   If the entertainment is of a minor and infrequent nature, such as a Christmas party that costs less than $300 per employee, then the entertainment is exempt from FBT.  Diane providing sandwiches during board meetings is less likely to be classified as entertainment as it is for sustenance during work hours.  Alternatively a monthly restaurant dinner for staff on a Friday night would be subject to FBT as it is after hours, offsite and a social nature. Please contact Andrew Marshall or Janine Orpwood at Langley McKimmie Chartered Accountants on (03) 5427 8100 to discuss further. We provide accounting and wealth management services to clients in Woodend, Gisborne and Macedon Ranges areas within Victoria Australia.

IS YOUR DOG TAX DEDUCTIBLE?

Your dog could be tax deductible! If you have a guard dog or working dog the costs associated with their upkeep could be claimed in your tax return. 

Things to consider:

· Is your dog a guard dog on site and used to protect your business?
· Do you take your dog to work with you in order to protect your tools of trade?
· Is your dog a working farm dog?

If any of the above apply to you the costs associated with the upkeep of your dog including food and vet bills may be tax deductible.

Please contact Andrew Marshall or Janine Orpwood at Langley McKimmie Chartered Accountants on (03) 5427 8100 to discuss further.

We provide accounting and wealth management services to clients in Woodend, Gisborne and Macedon Ranges areas within Victoria Australia. 

ATO BENCHMARKS

The ATO provides industry benchmarks for small businesses based on the data they acquire from tax returns and business activity statements. These can be used to compare your business with others in the industry and help identify areas of weakness.

There are two types of benchmarks; performance benchmarks and input benchmarks. These provide a number of different ratios, for example:

-   Cost of sale to turn over
-   Total expenses to turnover
-   Rent to turn

The ATO also uses the benchmarks as an indication of when a tax return may require further investigation.

You can read more about benchmarks and view them by following the below link:

www.ato.gov.au/business/small-business-benchmarks

If you find you are well outside your industry standards you may wish to consider discussing this with an accountant.

Please contact Andrew Marshall or Janine Orpwood at Langley McKimmie Chartered Accountants on (03) 5427 8100 to discuss further.

We provide accounting and wealth management services to clients in Woodend, Gisborne and Macedon Ranges areas within Victoria Australia. 

WHAT IS A CERTAINTY LETTER?

Have you received a “certainty letter” from the ATO?

As part of a trial by the ATO “certainty letters” are being issued to selected taxpayers to confirm their 2014-2015 tax return is finalised.

The letters are provided to acknowledge taxpayers who have done the right thing.

Read more via the link:

 

https://www.ato.gov.au/Individuals/Lodging-your-tax-return/In-detail/Certainty-letter/

Please contact Andrew Marshall or Janine Orpwood at Langley McKimmie Chartered Accountants on (03) 5427 8100 to discuss further.

We provide accounting and wealth management services to clients in Woodend, Gisborne and Macedon Ranges areas within Victoria Australia. 

 

DECEASED ESTATES

Deceased estates have a number of issues that require careful consideration. Provision for dependents, cessation of partnerships, capital gains tax, employment termination payments and superannuation entitlements are some of the many issues that need to be taken into account.

If you have been appointed as executor or administrator of an estate it can be a daunting process but there is help available to assist you through the process.

As a starting point the Australian Taxation Office provides information for some of the key areas at:

 

https://www.ato.gov.au/Individuals/Deceased-estates/

Please contact Andrew Marshall or Janine Orpwood at Langley McKimmie Chartered Accountants on (03) 5427 8100 to discuss further.

We provide accounting and wealth management services to clients in Woodend, Gisborne and Macedon Ranges areas within Victoria Australia. 

 

 

TRUSTEES OF SELF MANAGED SUPERANNUATION FUNDS NEED TO BE READY FOR THE NEW RULES REGARDING COLLECTIBLES FROM 1 JULY 2016

Collectible assets need to be held for the sole purpose of providing retirement benefits and not personal enjoyment in the current day environment.

The website link below from the ATO goes into more detail regarding holding collectibles such as artwork, antiques, coins, motor vehicles, jewellery and other collectibles.

The new rules focus on requirements regarding usage, storage, insurance, selling, leasing and valuations.

 

https://www.ato.gov.au/Super/Self-managed-super-funds/Investing/Restrictions-on-investments/Collectables-and-personal-use-assets/

Please contact Andrew Marshall or Janine Orpwood at Langley McKimmie Chartered Accountants on (03) 5427 8100 to discuss further.

We provide accounting and wealth management services to clients in Woodend, Gisborne and Macedon Ranges areas within Victoria Australia. 

 

REDUNDANCY PAYMENTS

Consider Jim’s case Jim aged 50 years old has recently been made redundant from his position at his football club. Jim had been working for the club for 3 years as the club mascot and the club decided the position was no longer required. Jim wanted to confirm the taxation treatment of his redundancy payment of $30,000.  Taxation Treatment As the club can no longer justify funding for the position of a “club mascot” his payment would be considered a genuine redundancy. The amount above the tax free component is taxed at 32% including Medicare levy as Jim is under his preservation age.  The tax free component is calculated as follows:  Base amount + (service amount * completed years of service)  For the 2015 financial year, the Base Amount is $9,514 and the Service Amount per year of completed service is $4,758 resulting in a tax free component for Jim of $23,788.   Depending on Jim’s other income, he will be taxed at the lower of 32% or his marginal tax rate. Alternatively if Jim’s marginal tax rate is over 32% a lump sum tax offset may be available. Please contact Andrew Marshall or Janine Orpwood at Langley McKimmie Chartered Accountants on (03) 5427 8100 to discuss further. We provide accounting and wealth management services to clients in Woodend, Gisborne and Macedon Ranges areas within Victoria Australia.