Chesterton Accounting

November Newsletter

Welcome to our November monthly newsletter!

The Federal Budget for the 2021 financial year has been recently passed by Parliament and includes a number of income tax cuts, offsets and benefits for taxpayers. Please see below for just some of the changes that affect individuals and business owners:

Individuals:

  • Changes to personal income tax rates – the 19% income tax bracket has been increased from $37,000 to $45,000 and the 32.5% income tax bracket has been increased from $90,000 to $120,000. This means that taxpayers who earn between $37,000 – $120,000 will benefit from a decrease in income tax
  • Changes to the Low Income Tax Offset – the offset has been increased from $445 to $700

Businesses:

  • JobMaker Hiring Credit – a credit of $200/week will be available for each eligible employee between the ages of 16-29 years old and $100/week for each eligible employee between the ages of 30-35 years old. This incentive covers new employees that are hired from 7th of October and will expire after 12 months. An eligible employee has to work at least 20 hours per week, received the JobSeeker Payment, Youth Allowance or Parenting Payment for at least one month within the past three months before being hired and be in the first year of employment with the eligible employer. An eligible employer has no outstanding tax obligations, is reporting through Single Touch Payroll, can show that the hire is for a new job that has been created (e.g. not an employee that has replaced another) and they cannot be claiming the JobKeeper payments or any other wage subsidy.
  • Uncapped immediate write-off for depreciable assets – businesses with an annual turnover of less than $5 billion will be eligible for the immediate asset deduction for assets acquired from 6th of October. Small business pools can also be immediately deducted, claiming the full balance of the pool for the 2021 financial year.
  • Loss carry-back for eligible companies – companies with an annual turnover of less than $5 billion will be able to carry back tax losses from the 2020-2022 financial years to offset previous taxable profits from the 2019 financial year onwards. This will create a refundable tax offset in the year of the loss.

If you have any questions or require assistance in understanding the new taxation rules from the Federal Budget then please contact our office.

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Monthly tax tip:
The uncapped immediate write-off for depreciable assets is a great tax incentive for a small business. This write-off includes eligible assets only such as plant and equipment, motor vehicles, tools, etc. and does not include capital works assets such as buildings and sheds. This write-off is included in the simplified depreciation regime for small businesses and is optional. If a small business chooses to opt-out of the regime, they would usually have to then wait five years to re-enter. However, this has been suspended so a small business can opt-out and opt-in as they please. So, should your business opt-out or opt-in to the regime? Your business may choose to purchase some equipment this financial year but have it depreciated under the general depreciation rules because a taxable loss has already been made and so the immediate deduction is just not required and will be of no benefit. This will allow for a future depreciation deduction in subsequent years and may provide a tax benefit when a taxable profit has been made. If you have any questions about the simplified depreciation regime or would prefer to opt-out this year then please contact our office to discuss your options.

If you would like to schedule a consultation with us then please jump onto our website where you can see our availabilities and book a time that suits you.

 

 

Important Dates!
14 November:

  • Make the October monthly business declaration for the JobKeeper Scheme

21 November:

  • Lodge and pay October 2020 monthly business/instalment activity statement

25 November:

  • Lodge and pay quarter ending 30 September 2020 activity statement if lodging electronically

28 November:

  • Lodge and pay quarter ending 30 September 2020 superannuation guarantee charge statement if contributions were not paid on time

*Superannuation guarantee charge is not tax-deductible

October Newsletter

Welcome to our October monthly newsletter!

We announced in June that we were going to donate $10 for every individual tax return lodged during tax time to Rural Aid. We have lodged 57 individual tax returns since then and will be donating $570.

Thank-you to all of our individual clients! If you would like to know more about Rural Aid or would like to make your own donation then please head to their website at https://www.ruralaid.org.au/ but don’t forget to keep your tax receipt!

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Monthly tax tip:
Are you like the many individuals around that spend plenty of money on work expenses but seem to always misplace those receipts? Well lucky for you, the ATO allows a deduction of up to $300 to cover those expenses. Yes, you heard right that you do not have to show receipts for work-related deductions up to $300. However, this does not mean that you are automatically entitled to a $300 tax deduction. You do have to explain how you calculated your deductions if the ATO choose to audit your tax return. For example, if you spent $100 on tools for work, $75 on protective clothing and $10 on sunscreen but cannot find the receipts, then you can claim $185. Please contact our office if you are unsure how to calculate deductions without receipts.
If you would like to schedule a consultation with us then please jump onto our website where you can see our availabilities and book a time that suits you.

 

Important Dates!

14 October:

  • Make the September monthly business declaration for the JobKeeper Scheme

28 October:

  • Make super guarantee contributions for quarter ending 30 September 2020 to funds by this date
  • Lodge and pay quarter ending 30 September 2020 activity statement if lodging by paper
  • Pay quarter ending 30 September 2020 instalment notice. Lodge the notice only if you vary the instalment amount
  • Lodge and pay annual activity statement for TFN withholding for closely held trusts where a trustee withheld amounts from payments to beneficiaries during the 2020 financial year

31 October:

  • Final date to be added to a tax agents client list to receive the lodgement concession for the 2020 tax return
  • Lodge 2020 tax return if not using a tax agent
  • Lodge PAYG withholding annual report no ABN withholding

September Newsletter

Welcome to our September monthly newsletter!

The JobKeeper payment scheme has had some changes once again due to the increase in COVID-19 cases in Victoria. Fortunately for us, they apply to all states. The Government has made changes to the current scheme that runs until the end of September so if your business is currently receiving these payments then this will apply to you. Previously, only employees who were employed prior to 1 March 2020 were eligible for the scheme. Under the new changes, employees who were employed prior to 1 July 2020 are now eligible. Businesses are required to offer the scheme to all employees who are eligible so if you have hired a new employee between 1 March and 1 July 2020 then you will be required to offer them the scheme payments. If you require assistance in assessing eligibility or applying for the payments then please contact our office.

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Monthly tax tip:
Husband and wife partnerships can be quite the tax saving entity for some family businesses. The typical scenario is the husband acts as a sole trader paying all tax on the income earned, however the wife plays a vital role in the business as well but doesn’t receive a tax distribution. As individuals pay marginalised rates, the husband would be in the higher tax margin. If the business was instead to act as a partnership then the taxable income would be split which would lower their overall family tax by placing both partners in the lower tax margin. Please ensure that you consult your tax agent to set up this type of entity to avoid illegal income splitting situations.
If you would like to schedule a consultation with us then please jump onto our website where you can see our availabilities and book a time that suits you.

 

Important Dates!

14 September:

  • Make the August monthly business declaration for the JobKeeper Scheme

21 September:

  • Lodge and pay August 2020 monthly business/instalment activity statement

August Newsletter!

Welcome to our August monthly newsletter!

The Government has just recently announced a six month extension to the JobKeeper payment scheme. The modified scheme will apply until March 2021 and will include different payments. The first three months of the modified scheme will include payments of $1,200 per fortnight for employees who work for 20 hours or more per week and $750 per fortnight for all other employees. The final three months will include payments of $1,000 per fortnight for employees who work for 20 hours or more per week and $650 per fortnight for all other employees. Businesses will be required to reassess their eligibility, meeting the decline in turnover test in each quarter to claim the subsidies. This is great news for businesses that are still struggling and quite heavily affected by the result of COVID-19.
Monthly tax tip:
Travel expenses are an ATO audit target this year as many taxpayers are incorrectly claiming them. Travel from home to work is generally not tax deductible unless transporting bulky tools and equipment when there is no secure area to store them at your workplace. Other travel situations e.g. travel to another city for a work conference or training can generally be claimed. They can be claimed if they were not reimbursed by an employer, even if a travel allowance was received. There are two ways that a taxpayer can claim travel expenses. The first is simply keeping receipts for meals, accommodation, fare fees, etc and claiming what was actually spent. The other way is by claiming the reasonable amount set out by the ATO each year but you must have received an allowance by your employer. This method is more attractive as you do not need to keep receipts but you do need to show some evidence that you did spend the allowance received for work related travel e.g. a diary. If you are unsure how to keep appropriate records or if you can claim travel expenses then please contact our office for a consultation.
If you would like to schedule a consultation with us then please jump onto our website where you can see our availabilities and book a time that suits you.
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Important Dates!

14 August:

  • Make the July monthly business declaration for the JobKeeper Scheme

21 August:

  • Lodge and pay July 2020 monthly business/instalment activity statement

25 August:

  • Lodge and pay quarter ending 30 June 2020 activity statement if lodging electronically

28 August:

  • Lodge taxable payments annual report (TPAR) for the year ending 30 June 2020*
  • Lodge and pay quarter ending 30 June 2020 superannuation guarantee charge statement if contributions were not paid on time*

*TPAR is required if you paid contractors in the following industries: building/construction, cleaning, courier, road freight, information technology and security
*Superannuation guarantee charge is not tax deductible

July Newsletter

Welcome to our July monthly newsletter!

Happy Financial Year! We have been extremely busy assisting our small business clients through the pandemic and have somehow fallen upon tax time already! We hope to continue to provide assistance to your business this financial year amidst the busyness. We will commence tax appointments from mid-July and will be providing face to face appointments as usual, but will be offering phone consultations for those who would prefer not to have a face to face appointment. We have also made the decision to donate $10 from every tax return lodged between July-September to Rural Aid Australia. Our Aussie farmers have had a tough year and we would love it if you would help us give back to them for feeding our families. How can you help – you can donate directly to Rural Aid Australia, advertise your business as we are to donate a portion of your profits, share this message to others.

Head on over to our Website
Monthly tax tip:
Donations are a great tax deduction if made correctly. When you make a donation to an organization, it will be classified as either tax deductible or non-tax deductible – so how would you know the difference? Majority of tax deductible donations will come with a receipt stating this information however some do not. For a donation to be tax deductible, you should ensure the following: a receipt is kept, it is a legitimate donation and not just money spent at a fundraiser for something in exchange (e.g. a wristband for a mental health charity or a teddy bear for a cancer charity), the organization is a registered charity that is a deductible gift recipient (this information can be found on ABN Lookup by searching the name of the organization).
If you would like to schedule a consultation with us then please jump onto our website where you can see our availabilities and book a time that suits you.
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Important Dates!
14 July:

  • Make the June monthly business declaration for the JobKeeper Scheme
  • Finalise STP (single-touch payroll) for the 2020 financial year for employers with 20 or more employees

21 July:

  • Lodge and pay June 2020 monthly business/instalment activity statement

28 July:

  • Make super guarantee contributions for quarter ending 30 June 2020 to funds by this date
  • Lodge and pay quarter ending 30 June 2020 activity statement if lodging by paper
  • Pay quarter ending 30 June 2020 instalment notice. Lodge the notice only if you vary the instalment amount

31 July:

  • Lodge TFN report for closely held trusts for quarter ending 30 June 2020
  • Finalise STP (single-touch payroll) for the 2020 financial year for employers with 19 or fewer employees
Click to email us about the above

June Newsletter

Welcome to our June monthly newsletter!

There are exciting things happening for the Chesterton Accounting team this June, a baby will be joining us! Our managing senior accountant, Zoe Chesterton, will be taking some time off to enjoy her new bundle of joy. During this period, the team will still be able to continue to provide services as usual to you and your business. However, if you require more complicated business or taxation advice then Zoe will be available for phone appointments or correspondence via email.
Monthly tax tip:
Superannuation contributions to employees are a usual deduction, however they are only claimed on a cash basis. This means that the amount that will be claimed as a deduction will be the amount that your business physically paid throughout the financial year – even if your accounting is on an accruals basis. If you accrue superannuation during April to June but do not pay it until July then you will be unable to claim the deduction in your 2020 tax return. You will however be able to claim it in your 2021 tax return. So either way, you will be able to claim the deduction but you will need to decide if you will claim it this financial year or the next. We recommend having a tax planning service completed so you have an estimate of how much income tax your business will be paying, then you can decide which financial year to pay and claim the contributions in. If your business won’t be paying any income tax this financial year then it is probably the best choice to pay and claim the contributions in the next financial year. If you do decide to claim the contributions in your 2020 tax return then please ensure that the contributions are processed and paid by 30 June 2020.
If you would like to schedule a consultation with us then please jump onto our website where you can see our availabilities and book a time that suits you.
Book an Appointment

 

Click to email us about the above
Important Dates!

21 June:

  • Lodge and pay May 2020 monthly business/instalment activity statement

30 June:

  • Make super guarantee contributions for quarter ending 30 June 2020 to funds by this date to qualify for a tax deduction in the 2020 financial year
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