Three months – that is how much of the financial year has gone already, and that means a number of things.
The first quarterly BAS is ready to be prepared, but more importantly with 3 months of the year done and dusted it is a time to review your strategy and review how effective it has been.
Have you hit your goals? Have you done the things that you had planned to do? Do you have more cash in the bank or less debt than 3 months ago?
If you are not sure where you are sitting, contact us at Value Beyond to make a time to review your numbers, and set your direction so you can charge into 2014 with the momentum of success.
Change in Government does not equal changes to tax – yet
With the Federal election finalised and a new government in power, there are a number of changes to taxation and other schemes such as Paid Parental Leave that are likely to be introduced in line with the policy announced as part of the election campaign.
This includes the scrapping of the proposed changes to FBT concessions for motor vehicles.
Despite all the political discussion and media hype around this change, the one thing that has remained constant is the law – through this whole process there has not been any change to the legislation, and therefore the FBT treatment of motor vehicles has also not changed at all.
The important lesson to be learned in this is that while announcements need to be taken into consideration when structuring your affairs (particularly for tax), it is when the legislation is actually passed as an Act of Parliament that the changes will be guaranteed to alter the tax landscape.
While this is the case, Value Beyond will continue to monitor any proposed and announced changes, and be sure to keep you up to date should they affect you. In some cases changes will take effect from the date of the announcement, so it certainly pays to keep informed and make an informed decision on whether the changes will impact you or not.
If at any time you are concerned about any proposals that may affect you, contact us to discuss your situation and your options.
ATO chasing directors for unpaid superannuation
During the month of October, the ATO is sending letters to directors of companies that have unpaid super guarantee amounts.
The letter explains the director’s obligations and personal risk in relation to their company’s super guarantee debt.
Changes were made from 1 July 2012 to strengthen director obligations by:
- extending the director penalty regime to apply to unpaid super guarantee charge
- making directors liable for PAYG withholding and super guarantee charge liabilities that are more than 3 months past their due date
- reducing directors’ entitlement to PAYG credits where the company has failed to pay the amounts to the ATO
As these liabilities can fall onto the director personally, there are some key actions required by directors:
- ensure your company lodges and pays its PAYG withholding obligations by the due dates
- pay all superannuation guarantee by the 28th day after the end of the quarter in which the obligation arises
- if you find that the company is unable to pay its PAYG and superannuation obligations within 3 months after they are due, seek professional advice to work out what you need to do next
The moral of the story for company directors is to know your obligations, and to keep on top of your lodgements and payments when it comes to your employees’ entitlements.
Tax focus on financial products
The ATO has released a guide to the taxation of financial products, which aims to advise investors on how various investments will be treated for income tax.
Areas that the guide covers include:
- Whether interest and borrowing costs are deductible
- Commoditised products
- Products designed to circumvent franking credit trading provisions
- Tax treatment of early withdrawal or failure of products
- Capital protected and guaranteed financial products that use notional finance
- Issues with implementation of financial products in a manner inconsistent with the relevant documentation
All too often, investments that are made for tax reasons tend to have a financial cost to them that may not suit the investors circumstances or risk profile.
Before going into any investment, it is a good idea to get independent financial advice and tax advice to ensure that the investment matches the advertised benefits, and that it suits your circumstances.
More specific information can be found on the ATO website.