We are seeking a self-directed, authentic, and focused senior accountant to join our Dubbo team. You will have a strong knowledge of tax compliance, accounting skills and problem-solving abilities. We offer;
Reporting directly to a Partner, your role will be to:
You will be an integral part of a high performing and professional team, in a people focused business. We believe and are motivated by support for each other, service to clients, and “making a difference”.
An attractive remuneration package is on offer for the right candidate.
To apply, please submit your resume and a cover letter outlining what you will bring to the position. For further information contact Pete Debus or Elizabeth Mitchell on 02 6885 5788 for a confidential initial discussion.
The NSW budget champions a business-led recovery, supporting businesses to grow, invest and create jobs in their local communities.
Highlights for Business
Payroll tax thresholds and cuts:
The payroll tax threshold will be increased to $1.2 million with the rate of payroll tax lowered from 5.45 to 4.85 per cent for the next two years. The threshold increase alone will deliver an annual saving of $10,900 (for businesses above the new threshold), with further savings over the next two years due to the lower rate. Recent Business NSW advocacy has resulted in a $450,000 increase to the threshold, saving the typical business close to $25,000 and exempting thousands of businesses from payroll tax.
Dining and entertainment vouchers:
$500 million will be allocated to deliver four $25 vouchers to every NSW adult to spend at entertainment and hospitality venues. This measure will provide a much-needed temporary boost to customer demand in some key parts of the economy that are struggling.
Fee relief for SMEs:
SMEs that do not pay payroll tax will receive a $1,500 digital voucher to use against the cost of NSW Government fees and charges. These vouchers will be accessible online through the MyService NSW portal and work as a rebate, meaning a claim for the voucher is made after the fee has been paid. The vouchers will be available for use from April 2021 to June 30, 2022.
Under the $250 million Jobs Plus program, businesses that create more than 30 jobs will be exempt from paying payroll tax on any additional jobs beyond this threshold for four years. This policy is aimed at attracting new investment in NSW, including businesses looking to expand or relocate to NSW.
In addition to existing drought and bushfire relief, regional NSW will benefit from $8.7 billion in regional road and transport infrastructure spending. The Regional Growth Fund which provides funding for community upgrades and projects, has been expanded by $300 million. More than 90 new and accelerated regional projects totalling $1.8 billion have been supported by the Jobs and Infrastructure Acceleration Fund.
Skills and education:
$80 million will be allocated to support the creation of new apprentices, trainees and cadets on social housing projects delivered by the NSW Land and Housing Corporation. Women will be supported by $5,000 grants for training and support to return to the workforce while $17 million will be spent for upskilling, mentoring and job matching for people working in the care economy.
Property tax reform:
Business NSW has long advocated for the need for state-based tax reform. In a significant advocacy result, the Treasurer announced a proposal for property tax reform with a plan to replace stamp duty with an annual tax on land value. Under the proposal, homebuyers would be able to choose whether to pay stamp duty or the new land tax. The Government is seeking stakeholder feedback on the proposal.
AFR – Wednesday, 4 Nov 2020 – Page 24
There’s been a lot of talk in recent years about the ‘‘ SKI’ ’ phenomenon (spending the kids’ inheritance) but there are many Australians who want to help their children financially – either now or in the future – passing on the wealth they built in their lifetime.
A common option in the past was to base investment strategies on accumulating within superannuation funds (specifically self-managed super funds) to access the attractive tax benefits . This approach has become increasingly difficult after the government’s introduction of strict caps on how much can be contributed to super.
Further, the limits on the types of investments that can be made, on accessing benefits , and the need to wind up the fund upon death, has made super less attractive as a way of structuring wealth.
What are the options for families looking to manage their money in a tax-effective way, to pass that wealth on to their children and grandchildren?
Some of the most popular structures have been family trusts and investment companies. They each have pros and cons; in some cases it makes sense to use both. They are more flexible than super, and worth considering when large sums (say, $1 million-plus ) are to be invested. It is worthwhile getting the structure correct upfront, as reorganising investments later can be costly in terms of fees and tax.
Generally an investment company is better suited when distributing the earnings of an investment portfolio among family members is no longer tax effective, so the size of the investment portfolio is key. Other considerations include:
Tax: Family trusts are typically not taxed themselves; instead, taxable income is allocated among family members and can be decided on year by year. This is useful for using up lower tax thresholds of family members, but may be a problem for big portfolios that generate a lot of income, which may be taxed at the highest individual marginal tax rate.
Capital gains can be distributed to anyone who qualifies for the 50 per cent discount, limiting the tax payable.
Investment companies, on the other hand, pay their own tax, usually at a flat 30 per cent. They can have different share categories, meaning dividends can be paid tax-effectively to recipients on lower tax rates. Investment companies don’t have to distribute income each year and can instead accumulate and reinvest wealth.
When it comes to capital gains, they don’t qualify for a discount and the full company tax rate is paid, but it is only incurred when an asset is actually sold.
Access: A key issue with superannuation is the funds can only be accessed on retirement. Both family trusts and investment companies offer much greater access, but there are still some issues to consider.
Distributions can be loaned back to a family trust by beneficiaries for reinvestment.
But, this creates a liability for the trust to pay that individual at some point. In addition, loans to the trust can be recalled.
Another benefit is that loans can be obtained from a trust with no tax consequences, which can be useful.
Similarly, with investment companies, dividends paid out can be loaned back to the company, or not declared in the first place and, like family trusts, loans to the company can be recalled.
However loans from the company are problematic – they can be treated as unfranked dividends, or subject to interest and repayment rules.
Estate planning: Both family trusts and investment companies are much more suited to estate planning than superannuation.
With family trusts, when a trustee dies a new trustee will need to be appointed, but otherwise the trust can continue uninterrupted, although family trusts typically have a lifespan of 80 years. Likewise, new directors of an investment company will need to be appointed upon death of an existing director, and the shares in the company can be simply passed on or bequeathed to beneficiaries .
It’s also very tax-effective , as there is no tax payable at this point, and the company can continue indefinitely .
Asset protection: This is one area where superannuation is very effective as a complying fund is treated as exempt property when it comes to the bankruptcy of a member.
The terms of the deed of the family trust will be important in dictating the level of asset protection provided, but there is the opportunity to provide some degree of protection.
Investment companies also offer some asset protection through their status as a limited liability company.
Compliance costs: Both family trusts and investment companies need to have tax returns and accounts prepared each year. But there is no need for an audit as there is with SMSFs.
Michael Hutton is wealth management partner at HLB Mann Judd Sydney.
Copyright © 2020 The Australian Financial Review
Our latest TaxWise Business newsletter is now available. Topics covered include; Budget measures now law, JobKeeper updates, what has the ATO been up to? tax tips, ABN details, business structures, superannuation and key tax dates.
We were quietly hoping for something really ground-breaking with this year’s budget. Given all that has happened this year the government were in a strong position to deliver some (desperately needed) tax reform and provide some vision for a better Australia. As Churchill stated: “Never let a good crisis go to waste”.
This budget has not promoted reform or the “vision thing”. Rather, as suggested by the NSW Chamber of Commerce, it is designed to get Australia “back on track”. It’s a budget designed to address an economic crisis, to address an immediate need. The government has simply determined that it will spend $100 billion ($50 billion in tax concessions and $50 billion in spending) to create business investment economic growth, and to reduce unemployment – to take us back to where we were before the COVID crisis
Let’s take a look at the measures most likely to affect you.
The already legislated “stage two” tax cuts are being brought forward two years to be effective from 1 July 2020. This involves raising the 19% bracket from $37,000 to $45,000 and raising the 32.5% bracket from $90,000 to $120,000. The “stage 3” cuts which are aimed at higher income earners are still legislated to start at 1 July 2024. No change here. The impact is as follows:
|Reduction in tax payable||% change in|
The “lamington” offset (low and middle income tax offset, LMITO) which was due to expire is being extend for a year to 30 June 2021. This offset gives a maximum benefit of $1,080 and starts to go down from there once you earn over $90,000 and it gets to zero once you earn $126,000 or more.
The low income tax offset (LITO, no cake-based nickname) has been increased from $445 to $700 for anyone earning $37,000 or less. Earning more than this means it will taper off until it eventually is worth $0 once you get to $66,667.
Instant asset write-off
In one of the largest budget measures, costing approximately $27 billion, the Government has announced that any business with a turnover of less than $5 billion can claim an immediate deduction for the cost (uncapped) of eligible depreciable asset purchased after 7:30pm on 6th October 2020. The assets must be installed and ready for use by 30 June 2022. Note that an Eligible depreciable asset is a new asset or is the cost of improvement to an existing eligible asset.
This measure should be considered separately to the Instant asset write off which allowed businesses with a turnover up to $500 million to claim an immediate deduction for assets, new or second hand, costing less than $150,000. The instant assets write off has been extended to 30 June 2021.
Note that business that have carried forward asset pool balances can write those off in full.
Please note that it is likely the motor vehicle depreciation limit (currently $59,136) will still apply so if you race out to buy a new 7 series BMW, you likely only be able to claim a maximum of $59,136 in depreciation with the rest being lost in the ether.
These rules were around a few years back and are quite neat. Normally you can only carry losses forward to offset future profits, but these rules allow you to go backwards and take a current year loss and apply it to prior year profits – years where you’ve paid tax – so you can get a tax refund.
Under the measure, losses incurred in the 2019/20, 2020/21 or 2021/22 income years may be carried back against profits made in or after the 2018/19 income year. Eligible companies may elect to receive the tax refund when they lodge their 2020/21 and 2021/22 tax returns. The tax loss carried back cannot exceed the prior year taxed profits or generate a franking account deficit.
The new “JobMaker” credit is available to subsidise the cost of hiring someone previously on a government allowance. Eligible employers can claim a JobMaker Hiring Credit for each additional new job they create for an eligible employee from 7 October 2020 to 6 October 2021. The JobMaker Hiring Credit will be available from the date of employment for up to 12 months and capped at $10,400 for each additional new position created. Eligible employers will receive $200 per week if they hire an eligible employee aged 16 to 29 years, or $100 per week if they hire an eligible employee aged 30 to 35 years. The employee must have worked at least 20 hours per week, averaged over a quarter and have received the JobSeeker Payment, Youth Allowance (Other) or Parenting Payment for at least one month out of the three months before they were hired.
Support for mental health of small business owners
The Government will provide $ million in 2020-21 to support the mental health and financial well being of small businesses impacted by COVID-19, including:
While much of the Australian economy has been hit hard by coronavirus, Australian agriculture finds itself in a very different position. Though the virus has undoubtedly had an impact on agriculture, people still need to eat and many parts of the industry (particularly in staples), have continued to perform. Indeed, coronavirus is arguably not the biggest challenge facing Australian agriculture at present.
National Water Grid
The budget sets out an additional $2b over 10 years to fund priority water infrastructure projects for agriculture and to increase water security. This includes (alongside states) an additional $162.5m for Wyangala Dam and $121.0m for the Dungowan Dam. However, the budget also announced that the government will now not proceed with the National Water Infrastructure Loan Facility, previously announced in 2017. This facility was intended to provide concessional loans to state and territory governments for water infrastructure. Not entirely coincidently, this facility was intended to cost $2b when it was set up. In effect, 2020-21 budget has redirected the priority from concessional loans to grant funding.
Modern Manufacturing Strategy
The Modern Manufacturing Strategy sets out $1.5b over five years to improve competitiveness, scale and resilience in Australian manufacturing. The strategy will focus on six areas: resources technology and critical minerals processing, food and beverages; medical products, recycling and clean energy, defence and space. The strategy includes:
• $1.3b to establish the Modern Manufacturing Initiative
• $107.2m for supply chain vulnerabilities
• $52.8m for manufacturing modernisation
• $30m to improve competitiveness
• $20m to Industry Growth Centres
Supporting regional Australia
While not an explicit support to agriculture, the budget does provide $552.9m over the forward estimates for support for regional Australia, including for community infrastructure, health, R&D, tourism, regional recovery and digitisation.
Support for agricultural exporters
The budget provides $328.4m over the forward estimates to help agricultural exporters do business. This includes $222.2m to modernise ICT systems and business processes, $71.1m for the financial sustainability of export certification services and $35.2m for “targeted interventions” and regulatory reforms.
Murray-Darling communities investment package
The budget provides $269.6m for the Murray-Darling basin. This includes:
• $37.6m to extend the Murray-Darling Basin Economic Development Program;
• $24.5m for community grants for river and wetland health;
• $4.2m for Indigenous River Rangers;
• $38.7 for compliance, including to set up the Inspector-General of Water Compliance;
• $25m to improve metering systems, particularly in the northern basin;
• $7.5m track and ecological, economic and social conditions;
• $6m for improved information;
• $70.5m to accelerate at-risk projects in the Basin Plan; and
• $18m for Basin Plan implementation.
The budget sets out $155.6m for drought support, including:
• $50m in 2020-21 for the On-farm Emergency Water Infrastructure Rebate Scheme;
• $19.6m in 2021-22 to extend the drought function of the National Drought and North Queensland Flood Response and Recovery Agency for a further year,
• $86m over four years to establish eight Drought Resilience and Adoption Hubs.
Other measures include:
• $36.6m for changes to the Environment Protection and Biodiversity Conservation Act
• $2.4m to extend the Improved Access to Agricultural and Veterinary Chemicals program.
These are the core measures likely to be of interest, but if you’d like more information there is a good summary here. Please also remember that none of this is legislated just yet, but it doesn’t appear too controversial so I imagine it’ll mostly get waived through.
The PrincipleFocus Federal Budget edition of TaxWise covers:
As always, if there is anything the team can help you with, please give us a call.
As official interest rates hover at an all-time low of 0.25%, SMSFs are being challenged to generate acceptable returns through defensive assets such as cash and term deposits.
SMSF trustees are now starting to look towards investing in high-risk assets such as derivatives because they think they can outperform the market and get a quick return.
Typically, very few SMSFs make a profit from these types of investments. And unless they’re professional stockbrokers, most of them post losses (sometimes significant ones) and take only short-term gains.
With the ATO warning SMSF trustees not to use derivatives as a speculative tool, here’s what you need to know thanks to ASF audits.
Legislation was recently passed to bring in a new registration system for directors of companies in Australia.
Under the new regime, every director will be assigned a unique identifier known as a Director Identification Number (DIN) that will stay with them across all companies they are, or become, a director of.
If you are a director, you will need a DIN.
If you are not yet a Director, you can apply for a DIN, provided you will become a director within 12 months of applying.
The exact start date for the system has not been determined yet, but all reports suggest it will be introduced in early 2021 or before June 2022 at the latest.
When the system is introduced, a 12-month transition period will commence where:
When the 12-month transition period expires, a new director must register for a DIN before being appointed.
Only the Registrar will have the power to cancel, change, or reissue a DIN. The exact process has not been confirmed yet, but we do know each individual will be required to verify their identity.
There can be significant financial and criminal penalties if you:
It’s not small penalties either – it could be hundreds of thousands [even millions] of dollars and potentially lead to imprisonment. Therefore, it is important to get it right when the time comes.
Given the implications of getting it wrong, directors, companies and aspiring start-ups should be prepared. Make sure you are across the upcoming changes and speak to your accountant or lawyer to ensure you are ready to organise a DIN when the time comes.
The following changes will apply to JobKeeper fortnights commencing 28 September 2020.
Actual decline in turnover test:
For JobKeeper fortnights from 28 September 2020 you will need to meet an actual decline in turnover test. An actual decline in turnover test will need to be met for each extension period:
The actual decline in turnover test is similar to the original decline in turnover test. However:
If you are not eligible for JobKeeper under Extension 1 because you do not satisfy the turnover test, you may still be eligible for JobKeeper under Extension 2 if you satisfy the later turnover test. If the “basic” actual turnover test is not appropriate to your circumstances, an alternative turnover test may be available. Details of the alternative tests are yet to be released by the ATO or Treasury.
Rates of payment
For an employee or eligible business participant to receive the Tier 1 (higher) rate of JobKeeper payments in each extension period they will need to satisfy the 80-hour threshold:
The Tier 1 rate will apply to:
In some circumstances, alternative reference periods may apply for determining the 80 hour threshold (e.g. where the employee was on unpaid emergency leave during the relevant 4 week period).
For further information please see the ATO website or contact us at PrincipleFocus.
This toolkit prepared by the ATO includes a helpful directory of links to help small businesses find information, tools, calculators and services to help them at tax time and throughout the year, as well as several fact sheets for small businesses. This includes information on home-based business expenses, motor vehicle expenses, travel expenses and using your company’s money or assets.
This clipping is from the September 14 issue of The Australian Financial – Monday, 14 Sep 2020 – Page 35
After five years of strong gains, little growth is forecast for agricultural land prices over the next 18 months as east coast farmers focus on drought recovery and the economic slowdown weighs on farm revenue and confidence .
After notching up healthy compound annual growth rate of 8.8 per cent over the past five years – concentrated in 2017 and 2018 – Rabobank’s index for farmland prices rose 5 per cent in 2019. And from this year, land markets will enter a new phase, according to the lender’s latest Australian Agricultural Land Price Outlook.
‘‘ The aggressive rise in land prices is behind us, and we are expecting a period of low, if any, growth in 2020,’’ report author, Rabobank agricultural analyst Wes Lefroy said. ‘‘ Ultimately though, this will vary by quality, region and production type. If agricultural land prices can hold the significant gains they have made over the past five years in the year ahead, through the worst economic crisis we are facing in decades due to the coronavirus pandemic , this will be a great result for landholders.’’
Such is the diversity of agricultural land markets, though, that marquee sales were still likely in some districts, especially for high-rainfall properties with scale. However, median agricultural property prices in some regions may contract over the next 18 months, the report said.
Any decline would not be major, though, thanks to macro-economic factors including low interest rates and the expected weakening in the Australian dollar – along with the overall healthy state of farm balance sheets across the country, it said.
The report notes that the impact of drought on land prices can be delayed, with low or zero growth in prices even as rainfall improves.
‘‘ In drought-affected regions, there has been a shortage of properties on the market with many potential sellers choosing to hold off until conditions improved, and this reduced supply had been supportive of price growth,’’ Mr Lefroy said. ‘‘ However, as seasonal conditions have improved, we will see an increased stream of lower-quality properties come to the market, with sellers trying to take advantage of the high price environment.’’
Prices for agricultural commodities are expected to decline over the next 18 months on the back of weakening demand as the economy contracts and government stimulus is reduced, the report noted.
Copyright © 2020 The Australian Financial Review