Month: April 2019

NOW is the time to consider your Year-End Super Contributions

A superannuation fund with a healthy and prospering balance is an important lifetime investment. Super contributions are governed carefully in Australia and caps exist, indexed annually, which must not be exceeded if you want to avoid paying additional tax penalties on the excess you contribute beyond the cap limit.

Concessional Contributions

The annual cap for total concessional contributions has fallen to $25,000, regardless of your age, however a work test is applicable once you reach 65 years of age. A concessional contribution is a contribution such as your employer contributions, including salary, salary sacrifices, bonuses, or an extra personal contribution you make yourself to ‘top up’ your super investment and on which you may claim an income tax deduction.

These concessional contributions are ‘before tax’ contributions and are subject to a tax liability of 15%, known as ‘concessional tax’.

Non-Concessional Contributions

If you make a personal contribution in to your SMSF on which you do not claim an income tax deduction, this is called a non-concessional contribution and is an ‘after tax’ contribution.

Consider using cash proceeds from share sales, property sales or an inheritance you have to move these investments in to your SMSF. The increasing value of cash proceeds may mean a transfer in to your super fund helps you to control the amount of tax you will pay. The annual cap for non-concessional contributions in the 2018/2019 financial year is $100,000. However, be aware that if you are nearing 65 years of age, you have an option to contribute up to $300,000 with the ‘bring-forward’ rule.

Co-Contributions

If you make a non-concessional contribution in to your SMSF and you are a lower to middle income earner, the government automatically makes a contribution – up to $500 – in to your SMSF upon receipt of your annual tax return.

Spouse Contributions
You may be eligible to claim a tax off-set of $540 if you contribute to your de-facto/spouse’s super fund and your de-facto/spouse earns up to $37,000 per annum. There is a phasing out of this tax off-set amount after $37,000 per annum income, stopping at $40,000 per annum income.

Splitting Contributions (De-facto/Spouse)

The government is looking at limiting the tax-free balance of super funds, so it would behove you to consider splitting superannuation contributions with your de-facto/spouse.

Splitting contributions makes sense in the following scenarios:
Take the time today to check your year-end retirement investments. Ensure that you are taking full advantage of your super contribution opportunities.

How can YML help?

Talk to our YML Super Solutions Team today to see how YML Group can assist you with your retirement wealth strategy. Contact us on (02) 8383 4400, or by visiting the Contact Us page on our website.

Federal Budget 2019 – Immigration to Australia NEWS

Australia’s immigration programme is set to mostly benefit from the Australian government’s recent Federal Budget 2019. Treasurer Josh Frydenberg outlined several important new pronouncements for the betterment of Australia and Australian employers.

Annual Migration Cap – Reduction

First, with the aim “to better manage population growth”, the government will reduce the annual immigration cap by 30,000 to a total of 160,000 per annum for four years from 2019-2020. With a view to ensuring infrastructure keeps up with Australia’s growing population, the government has determined to lower the cap for now.

New Skilled Visas – Regional

To encourage settlement across Australia, two new regional visas will replace the existing subclass 187 and subclass 489 visas. To be called Skilled Work Regional (Provisional) visa and Skilled Employer Sponsored Regional (Provisional) visa, these new visas will require visa holders to live and work in Australia’s regional areas for five years. Commencing in November 2019, after three years visa holders will be eligible to apply for permanent residency in regional areas from November 2022.

Skilled Migration Points Test – Adjustment

Both single applicants and partnered applicants will be awarded additional points when they or their partner, respectively, demonstrate/s competent English skills. This adjustment is to be used when a primary applicant’s partner does not meet the current number of points for skilled partner status.

‘Social Cohesian’ – Community Integration

Over $64 million has been allotted to helping migrants “become established and integrated in their [Australian] communities” – funding for local community and youth hubs, sport and language programmes and support and learning to both “foster belonging” and “celebrate diversity”.

Visa Fees – Increase
From 1 July 2019 visa application fees will incur a 5.4% increase for nearly all subclass visas.

To find out more about how Federal Budget 2019 changes may affect your visa application, consult YML Migration’s experienced migration agents soon to take advantageous of lower visa application fees prior to 1 July 2019.

How can YML help?

Talk to our YML Migration Team today to see how YML Group can assist you with sponsorship and visa applications. Contact us on (02) 8383 4400 or by visiting the Contact Us page on our website.

Tax Planning and Restructuring to suit your Business

Tax planning is a legitimate discipline used in business to minimise, within legal limits, taxes paid by businesses. This is not a tax avoidance undertaking to deliberately exploit the tax system, so it is important to consider carefully which areas to explore. In 2019, consider the following areas:

As your business builds, it may be that it makes sense to restructure the business to suit your business’s needs. Four main business structures are: company (a legal entity separate from its shareholders), partnership (a group of people or entities but not a company), trust (a holding entity for income or property), sole trader (a single person legally responsible, with or without employees).

Restructuring means changes to your existing liabilities and taxes, so seeking professional financial advice is essential to understanding which structure can help your business optimise its future tax planning whilst ensuring the new structure makes sense operationally.

Earlier this year, the Australian Government determined to not only increase but also to extend the instant asset write-off until 30 June 2020. This is a consequential opportunity for small businesses wanting to decrease tax payments. To be eligible:

Have an annual turnover of up to $10 million and the business asset must have cost up to $25,000, be in use and have been purchased during this financial year up to 30 June 2019.

The $25,000 threshold is a 25% increase on last financial year’s threshold.

The ATO permits your business to deduct in this financial year certain prepaid expenses incurred for work or services to be performed in the next financial year. There are prepayment rules that apply and it is important to follow these rules including ‘eligible service period’, ‘excluded expenditure’ such as amounts less than $1000 and salary and wages, ’12-month rule’ and ‘pre-RBT obligation’.

Recording debtors and creditors in an accrual accounting system – that is recording income and expenses when work or services are completed, whether or not payment has yet been received or paid – will enable your business to determine actual income and expenses for the financial year to 30 June 2019.

Superannuation payments made to your employees by financial year end constitute a tax deduction for your business. It is essential that payments made to super funds are made timely and no later than 30 June 2019 to be eligible.

Have your trust distributions been calculated to meet ATO legislation? Do you need your trust minutes prepared and signed prior to 30 June 2019?

Arrange a tax planning meeting with us and we will discuss ways you might hone tax planning and evaluate restructuring your business to your advantage this year and every year hereafter.

How can YML help?

Talk to our Accountants today to see how YML Chartered Accountants can assist you with tax planning and restructuring your business. Contact us on (02) 8383 4400 or by visiting the Contact Us page on our website.

Single Touch Payroll – NOW Mandatory for ALL Businesses

STP, Single Touch Payroll, is an initiative introduced by the ATO to streamline company reporting of salaries, wages, PAYG withholding taxes and superannuation contributions. STP was initially applicable only to businesses with 20 or more employees. As of this year, from 1 July 2019, all employers will be required by the ATO to have adopted STP regardless of the number of employees, so small businesses with 19 or fewer employees now also need to report via STP-enabled software.

With mandatory reporting via STP, small, medium and large employers need to ensure they are complying with the ATO’s new requirement. To do so, a business needs to consider its digital connectivity capacity and, where applicable, upgrade with STP-enabled software.

There are many options available – from purchasing in-house software packages to using a third party and subscribing to a STP software provider who works out and lodges the necessary reportable data to the ATO on your behalf.

Your business’s pay cycle does not need to change. As you pay your employees, whether it be weekly, fortnightly or monthly, you will simultaneously file with the ATO that payroll cycle’s data including employee payments, taxes withheld and super amounts. This will result in a smoother transition, allowing you to timely report to the ATO.

You will still need to prepare and submit a quarterly BAS, but payment summaries and end of financial year payment summaries will be automatically produced by the STP system.

YML Group helps many clients with STP and we can help your business set up its STP system. There are many low cost solutions such as Xero, MYOB, Reckon and others that YML Group can assist you with for ongoing compliance of the ATO’s STP regulations.

Lodging payroll with the ATO has never been easier. Let us help you set up STP today.

 How can YML help?

Talk to our YML Innovation Team today to see how YML Group can assist you with ensuring your company is STP-compliant. Contact us on (02) 8383 4400, or by visiting the Contact Us page on our website.

FBT 2019 – What’s new?

The FBT year in Australia is from 1 April and ending 31 March the following year, so now is the time to ensure that you are up-to-date with the latest FBT developments in the areas of focus for the ATO.

For the FBT year ended 31 March 2019, the FBT rate remains at 49% in line with last year’s FBT rate.

FBT applies to benefits, given to employees in lieu of or in addition to salary or wages, received and this tax is paid directly to the ATO by employers. Benefits received may include such items as vehicles, car parking, housing, private loans and even, these days, Bitcoin.

The ATO has identified two concerns - employers’ failure to identify and report FBT on items and employers’ incorrect application of exemption provisions when reporting taxable value on items – in areas of concern for the ATO. Let’s delve further…

Where an employer is required to lodge a FBT return, what do you need to know about:

FBT Rebate?

Some employers claim a FBT rebate despite being ineligible to do so. You need to check that you are a rebatable employer and if you are not, then you should ensure you are eligible to receive a FBT rebate before making a claim.

Employee Contributions?

To ensure that an employer reports employee contributions as income on their income tax return and does not overstate the employee contribution amount in order to reduce an FBT liability, the ATO focuses on finding accurate declarations on both the FBT return and the employer’s income tax return.

Motor Vehicles?

It is necessary for an employer to verify that a FBT exemption applies to the provision of a motor vehicle to an employee for private use. In addition to supplying this verification to the ATO, the ATO is looking for an employer to keep sufficient records to support an exemption.

An employer will need to look carefully at the complex rules of FBT car parking (slight increase in car parking threshold 2019) and will need to be aware of the Practical Compliance Guideline 2018/3, applicable to car and residual benefits claimed in 2019 and later FBT years. If an employer provides an employee with an eligible vehicle to perform work duties, then this guideline may be applicable. 

Living Away From Home Allowance (LAFHA)?

An employer pays a LAFHA to an employee to compensate an employee for additional expenses incurred and for the fact of being away from home whilst employment duties require an employee to live away from their usual residence.

It is important to only claim FBT for eligible employees and to obtain declarations from those eligible employees. Claiming for invalid circumstances or keeping insufficient records of the accommodation and meal components is also closely looked at by the ATO.

The ATO’s LAFHA reasonable total food and drink expenditure for one adult in Australia increases in 2019 by just under 7.5% from 2018. It would behove an employer to check the ATO’s LAFHA guidelines for 2019.

It pays to understand how FBT applies in these areas. To minimise your FBT liability, at YML Group we can prepare and lodge your FBT return and/or calculate any employee contribution.

Our fee for the preparation and lodgment of an FBT return is from $530 + GST and for the calculation of an employee contribution is $260 + GST per item.

How can YML help?

Talk to our YML Chartered Accountants Team today to see how YML Group can assist you with FBT. Contact us on (02) 8383 4400, or by visiting the Contact Us page on our website.