EOFY Super Contributions

Don’t leave your contributions to the last minute

This is particularly important if you plan to claim a tax deduction for any of your contributions. Contributions are included in a financial year if they are received in your fund’s bank account by 30 June. With 30 June falling on a Sunday this year, it would be prudent to make your contributions by Wednesday 26 June to ensure they are received by your fund prior to the end of the financial year.
Please also remember retail and industry funds can take extra time to process contributions, so we suggest that you make contributions as soon as possible.

Further, please check the payment methodology required by your particular fund as they typically have specific BPAY codes or electronic funds transfer instructions for different types of contributions and it is problematic to have the contributions reallocated after year end if you use the wrong code or EFT account.

Superannuation Contribution Limits

The *concessional and non-concessional contribution limits are as follows:

Financial Year Concessional Cap Non Concessional Cap
2018/19 $25,000 $100,000

1. If you intend on claiming an income tax deduction for your personal contributions, you must complete a notice of intent to claim deduction in the approved form and submit it to your super fund when making the contribution.
2. If your Total Super Balance at 30 June 2018 is greater than $1.6M you are ineligible to make a Non-Concessional Contribution in the 2018/19 financial year. (Your Total Super Balance is the combined total of all balances in super funds of which you are a member.)
3. If you were age 64 or under on 1 July 2018, you may have the ability to ‘bring forward’ the non-concessional contribution limit for the following two years. The amount of the bring forward that can be triggered in a particular year will be driven by the gap between your total super balance and $1.6m. If the gap is less than $100,000, you cannot trigger a bring forward in that year. Rather, you will be limited to the annual limit of $100,000. If your total super balance is less than $1.4m at 30 June 2018 you may be eligible to trigger the bring forward and utilise the whole limit of $300,000.

Work Test

If you are aged 65 to 74 years, you must satisfy a work test in order to be eligible to contribute to super. To satisfy the work test, you must have worked at least 40 hours in a consecutive 30-day period in the financial year before the super fund is eligible to accept your contribution. If you are aged 75 or over, your super fund is only able to accept mandated employer contributions (i.e. superannuation guarantee amounts) on your behalf.

Drawing super pensions

If you are in pension phase, you need to ensure the minimum pension has been paid to you for this financial year. Where these requirements have not been met your fund will be subject to 15% tax on your pension investment earnings, rather than being tax free. For our SMSF clients, please contact us if you are not sure of your minimum pension requirement for 2018/19.

Super tip for employers

Employers only receive a tax deduction for making their employee SG contributions in the same financial year in which the SG contributions are received by the super fund. Therefore, please ensure you make your payments as soon as possible if you want to claim a deduction for them in the current financial year.
Otherwise, please ensure the June 2019 quarter contributions are paid by 28 July 2019. Missed payments may attract the super guarantee charge (SGC), which is not tax-deductible.

*Concessional and Non-concessional Contribution Definitions

Concessional Contributions
These are tax deductible contributions that include:
• employer contributions, such as
o compulsory employer contributions paid by your employer (E.g. 9.5% super)
o additional pre-tax super contributions your employer makes
o salary sacrifice payments of your choice
o other amounts paid by your employer from your pre-tax income to your super fund such as insurance premiums paid on your behalf.
• contributions that you claim personally as an income tax deduction, either to offset investment income or as a self employed person or as an individual topping up your employer contributions to the $25k Cap.
• notional taxed contributions if you are a member of a defined benefit fund.
• life insurance premiums paid into a superannuation life policy.
Non Concessional Contributions
These are after tax contributions from a personal source that are not taxed upon receipt in the super fund.

How can we help?

If you have any questions or would like advice to ensure you and your fund are well prepared for the end of the financial year and beyond, please contact our team of Super advisors at info@taxbook.com.au or use the below button.
CONTACT US

Instant Asset Write Off

Instant Asset Write Off changes announced in Budget 2019 are now law

The measure announced in the 2019 Federal Budget to give medium-sized businesses (turnover greater than $10M but less than $50M) the ability to immediately deduct the cost of assets costing less than $30,000 is now law. The new Act also increases the current threshold for the instant asset write off for small businesses (turnover less than $10M) from $25,000 to $30,000.

There have been a couple of changes to the instant asset write off this financial year so here is a quick snapshot of the changes that have occurred:

Date assets purchased Business Turnover Instant Asset Write Off
1/7/2018 – 28/1/2019 Less than $10M Less than $20,000
29/1/2019 – 1/4/2019 Less than $10M Less than $25,000
2/4/2019 – 30/6/2020 Less than $50M Less than $30,000

 

It is important to note that it is the date the asset is installed and ready for use in your business that determines the date that the instant asset write off applies. Also, the cost of the asset includes all costs involved in getting the asset ready for use, such as installation and delivery costs.

For assets that exceed the thresholds outlined above and cannot be instantly written off:

Small businesses (turnover less than $10M) can use the small business pool and claim a 15% deduction in the first year and 30% each year after;

Medium businesses (turnover greater than $10M but less than $50M) must use the general depreciation rules.

For more information on Instant Asset Write Off, visit Australian Taxation Office. 

Single Touch Payroll

Single Touch Payroll: What you need to know

From 1 July 2019, all employers will need to start complying with Single Touch Payroll, which has been introduced by the ATO to streamline payroll reporting.
STP commenced for employers of 20 or more employees as at 1 July 2018.

What is Single Touch Payroll?

When you complete your payroll, you will be reporting the payments made, tax withheld, allowances, deductions and super information for each employee directly to the ATO via your Single Touch Payroll-enabled solution. You do not need to change your payroll cycle to comply with this change and can continue to pay weekly, fortnightly or monthly.

What are the benefits?

Single Touch Payroll will eliminate manual payroll tasks including:
• Providing annual / part-year payment summaries, or for termination payments (provided the employer complies with STP reporting requirements for the full financial year)
• Providing payment summary annual report and copy of employees’ payment summaries to the ATO
• Providing TFN declarations to the ATO
• Filling out paper based TFN and Super Choice forms
Employees will be able to access their year to date tax and superannuation information through their myGov account, linked to the ATO, as well as their payment summary (called an ‘income statement’ in myGov). Whilst it is not mandatory to have a myGov account, employees will not be able to access this information without one, but can instead request a copy of their payment information from the ATO.

Are there any exemptions / concessions?

The Commissioner of Taxation, Chris Jordan, has provided a personal guarantee that the ATO are taking a flexible, reasonable and pragmatic approach, with number of concessions available for employers, as below:
• Micro employers (1 to 4 employees): offered help to transition to STP and a number of alternative options – such as allowing those who rely on a registered tax or BAS agent to report quarterly for the first two years, rather than each time payroll is run.
• Small employers (19 or less employees):
• can start reporting any time from the 1 July start date to 30 September 2019.
• deferrals will be granted to any small employer who requests additional time to start STP reporting.
• will not be forced to purchase payroll software if they don’t currently use it.
• Exemptions from STP reporting will be provided for:
• employers experiencing hardship, or in areas with intermittent or no internet connection.
• closely held payees for the 2019-20 financial year, with STP reporting commencing from 1 July 2020.
• There will be no penalties for mistakes, missed or late reports for the first transition year.
Please contact your Allan Hall advisor should you wish to discuss submitting a deferral application, or for further information regarding closely held payees.

How do I comply with Single Touch Payroll?

There are a number of ways to report, as follows:
• Through your Single Touch Payroll enabled payroll software;
• Through a third party, such as a bookkeeper or accountant; or
• Through a low-cost solution, such as a simple payroll solution, mobile phone app, or portal. These will best suit micro employers, and will cost less than $10 per month. A number are available now and can be found at No-cost and low-cost STP solutions.
If you are on a desktop software package it is unlikely that it will support Single Touch Payroll and you will need to consider updating to a cloud–based accounting software package.
We suggest you contact your software or payroll provider to enquire whether they are Single Touch Payroll ready, or contact us and we can do this for you. Our team of experienced bookkeepers can also assist with transition from desktop to cloud based.
Some payroll software providers have been granted deferrals by the ATO, if they are not Single Touch Payroll ready, and this will also apply to existing customers of the specific software.

Does this change BAS Reporting?

Yes, the W1 and W2 on your activity statement will be pre-filled with amounts that have been reported through Single Touch Payroll. Employers will still have the ability to adjust or correct information in their activity statement.

How do I find out more?

The ATO have created a helpful STP get ready checklist for employers. For more information on Single Touch Payroll, visit Australian Taxation Office.
In the meantime, if you would like to discuss the implications Single Touch Payroll may have on your business, please feel free to contact Bookkeeping team. Our team of expert Consultants can support you with all your people needs and is currently offering a FREE HR Health Check to identify possible risks and provide you with comfort that you are meeting your compliance obligations. Please use the button below to register
REGISTER FOR A FREE HR HEALTH CHECK

Family tax benefit payments

Reminder: Tax Returns must be lodged by 30 June 2019 for lump sum claims for family assistance and for balancing family tax benefit payments

The Dept of Human Services allows a period of one year to submit a lump sum claim for family assistance and confirm your income for that year.

If you wish to submit a lump sum claim for the 2018 financial year for the following:
• Family Tax Benefit (FTB);
• Child Care Benefit (CCB); or
• Single Income Family Supplement (SIFS) if you do not receive FTB for the whole year;
you and your partner need to confirm your income by lodging your tax return for the 2018 year, or advising that you do not need to lodge a tax return, no later than 30 June 2019.
If you don’t submit your lump sum claim for CCB by 30 June 2019, you will not be assessed on your eligibility for a Child Care Rebate.

The 2017–18 financial year is the last year you can claim child care payments as a lump sum. After this date the Child Care Subsidy started and if you are eligible, it is paid directly to your child care provider to reduce the fees you pay.

Note that you will also need to lodge your 2018 tax return no later than 30 June 2019, in order to be eligible for any top ups or supplements to Family Tax Benefits if you received payments during the 2018 year.

To ensure both you and your partner’s Tax Returns are lodged on time,Please simply click on the button below. To enable us to lodge your returns by this deadline, we will need your work no later than Wednesday 19th June 2019.

CONTACT US

Finance EOFY Wrap-up

Finance Market

It has been an interesting year for the finance market with a lot of uncertainty which was highlighted in the way of a royal commission. The BIG4 banks were put under the microscope but tried their best to shift the spotlight to every other part of their world. This meant that the mortgage broking industry and others had the spotlight put on them.
This wasn’t and is never a bad thing and whilst the initial recommendations were off the mark, the outcome proved what the customers have been saying – keep business as usual as 96% of customers are happy with their broker and the service they continue to provide.
With 60% of all loans now written through a broker and growing, customers have spoken for the industry by continuing to come back and refer others.

Interest Rates Wrap-up

Movement in interest rates has been very sporadic for the past 12 months with the majority of lenders increasing rates throughout the year noting an increase in funding costs.
In more recent times, lenders have been focusing on decreasing their fixed rates to get customers before the anticipated RBA cash rate cut. In the month of May, there were 531 interest rate movements with 85% of these being cuts to fixed rates.
The RBA has now finally moved the cash rate after 3 years, with a decrease by 0.25% which all lenders have passed on in part or full.

Health Check

There is a real difference in what all lenders will give in regards to interest rates to new business versus what they give to existing customers which is concerning.
This means that your existing lender may be giving new customers up to 1% less on their interest rate than what you are currently paying.
And with interest rates now hitting an all time low, there is no better time to come in for a full financial health check to ensure you are continuing to get the best deal in the market.
Our Finance team are always available for a FREE consultation and are ready and geared up to help you. Contact us use the button below.
CONTACT US