Chesterton Accounting

October Newsletter

Welcome to our October monthly newsletter!

If you are an employer or intend to be then you should know about the new super choice rules which will start from 1 November 2021. Current rules allow an employee to choose whether their super is paid into their own super account or an account their employer creates for them however individuals are now holding multiple super accounts and paying extra account fees hence the new rules which should stop the creation of multiple super accounts. If you hire a new employee after the 1st of November then you need to ask them for their super account details to pay their super into, but if they do not provide them then you will need to obtain their stapled super fund details which can be found through ATO online services in “Employee Super Accounts” or you can ask us for assistance.

 

 

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Monthly tax tip:

Staff expenses and amenities are often a point of confusion for business owners when it comes to deductibility – so let’s look at what can actually be claimed and what is often accidentally claimed. Amenities for staff can include toiletries and hygiene expenses, water, food and drinks. These expenses are deductible but only to the extent that staff are using these items to continue their work activity. For example, toilet paper, handwash, tea, coffee and biscuits used by employees in an office throughout a working day are all deductible for the employer. Light refreshments can also be deductible if staff are eating them to continue work, e.g. snacks provided to staff for morning tea or sandwiches purchased in the evening for staff that are working overtime hours and continuing work after the meal has been eaten. If the food and drink is consumed outside of work hours when staff are no longer being paid then it is generally non-deductible and viewed as entertainment, e.g. drinks at the pub after work. This can be a very confusing area when working out the deductibility of expenses for staff and not only income tax needs to be considered but so too does fringe benefits tax and GST.

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!

21 October:

  •       Lodge and pay September 2021 monthly business/instalment activity statement
  •       Pay annual PAYG instalment notice

28 October:

  • Lodge and pay quarter ending 30 September 2021 activity statement if lodging by paper
  • Make super guarantee contributions for quarter ending 30 September 2021 to funds by this date
  • Pay quarter ending 30 September 2021 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 2021 financial year

31 October:

  • Final date to sign up with a tax agent to receive the lodgement concession for the 2021 tax return
  • Lodge 2021 tax return if lodging without a tax agent by this date
  • Lodge PAYG withholding annual report no ABN withholding

 

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September Newsletter

Welcome to our September monthly newsletter!

The Government has expanded the SME Recovery Loan Scheme to now include businesses that didn’t receive JobKeeper payments. Previously to be eligible to apply for the scheme, a business needed to receive JobKeeper payments but now any small or medium business with a turnover of less than $250 million can apply as long as they can show that they are facing sustained economic impact as a result of the pandemic. If eligible, a business could receive a loan of up to $5 million over a 10-year term.
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Monthly tax tip:

Laundry is an expense that most of us don’t even notice but it can be claimed as a clothing deduction. To be eligible, a tax-payer has to be laundering clothes that can be claimed as a deduction. Examples of this are protective clothing (e.g. hi-vis shirts), uniforms that have a logo/business name displayed or occupation specific clothing (e.g. medical scrubs). Unfortunately, plain clothing cannot be claimed and laundering of this clothing is also considered of a personal nature even if you have been asked to wear a certain type of clothing for work (e.g. black clothing only required, gym clothes). If you are eligible to claim the laundering of your work clothes then you can claim 50 cents per mixed load (mixed with personal clothing) or 1 dollar per full load of clothes up to a total limit of $150 without receipts. If you work in an industry that requires a large amount of laundry then it may be helpful to keep receipts for the laundry items you purchase specifically for your work clothing to claim more than $150.

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!

21 September:

  • Lodge and pay August 2021 monthly business/instalment activity statement

30 September:

  • Lodge Annual TFN withholding report if a trustee of a closely held trust has been required to withhold amounts from payments to beneficiaries

August Newsletter

Welcome to our August monthly newsletter!

We would love to welcome Shalee to our team! Shalee is our new administration assistant and will be the first point of contact in our office so please make sure you introduce yourself next time you’re around.
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Monthly tax tip:
The Medicare levy surcharge (MLS) is payable if an individual has a taxable income of $90,000 or a family taxable income of $180,000 and does not have private patient hospital cover. The Medicare levy surcharge starts at 1% of taxable income and increases to 1.5%, where an individual’s taxable income is $140,000 or for families $280,000. So to avoid paying this surcharge, an individual or family can instead pay for private health insurance with private patient hospital cover. This means a single person with a $100,000 taxable income and no private hospital cover which would typically be hit with a $1,000 Medicare levy surcharge can avoid it by spending $500 to take out a basic private patient hospital cover policy. A taxpayer can save a bit of money by just paying for the basic hospital cover and they get something out of it, unlike paying for the surcharge – it’s a win-win!

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!
21 August:

  • Lodge and pay July 2021 monthly business/instalment activity statement

25 August:

  • Lodge and pay quarter ending 30 June 2021 activity statement

28 August:

  • Lodge and pay quarter ending 30 June 2021 superannuation guarantee charge statement if contributions were not paid on time*
  • Lodge taxable payments annual report (TPAR)*

*Super guarantee charge is not deductible.
*TPAR will need to be lodged for the following industries: building and construction, cleaning, courier services, security and IT services.

July Newsletter

Welcome to our July monthly newsletter!

Happy New Financial Year! We are ready for another crazy tax season so please contact our office to schedule in for a tax consultation. We do however recommend waiting until the 15th of July to have your tax return prepared as this allows time for the ATO (and yourself) to have the information required and to reduce the need for an amendment should any information be missed. Please contact us if you are unsure what information is required to complete your tax return.
Monthly tax tip:

A property owner has many deductions at their finger tips but one deduction that many owners don’t consider is depreciation. When a new asset is purchased for a rental or commercial property then it would usually need to be depreciated over a number of years, but what about the existing assets and buildings on the property? Existing assets can too be depreciated and claimed as a tax deduction, maximizing tax savings! However, the value of the existing assets and the depreciation rules that can be applied are often unclear. We suggest contacting a quantity surveyor to value the existing assets, including any buildings and provide a depreciation schedule to allow for higher tax deductions against your property. Please contact our office for more information if you are interested in this service.

Important Dates!

7 July:

  • The ATO will start processing tax returns for the 2021 financial year

14 July:

  • STP finalization is due in payroll software on this date

16 July:

  • The ATO will start paying refunds for tax returns lodged for the 2021 financial year

21 July:

  • Lodge and pay June 2021 monthly business/instalment activity statement

28 July:

  • Lodge and pay quarter ending 30 June 2021 activity statement if lodging by paper
  • Make super guarantee contributions for quarter ending 30 June 2021 to funds by this date
  • Pay quarter ending 30 June 2021 instalment notice. Lodge the notice only if you vary the instalment amount

June Newsletter

Welcome to our June monthly newsletter!

It is now June which means the financial year has almost ended! If you would like to book in early for your annual tax then please contact our office for an appointment. We are also more than happy to correspond electronically should you be unable to come into our office. We will be offering our discounted rates at tax time again so make sure you book in before October to save on your accounting fees.
Monthly tax tip:
The Federal Budget revealed a change in the way self-education expenses can be claimed. Previously, the first $250 of the expense was non-deductible, e.g. $1000 paid on course fees would result in a $750 tax deduction. This has now been scrapped, making all self-education expenses tax deductible. But of course we all know that tax law is not black and white and there are still hoops to jump through to make a legitimate claim. The study that you are undertaking must relate to your current employment to the extent that a nurse cannot claim self-education expenses to become a doctor – it really has to relate to only the current taxable income that you have made in the year of claiming.

The expenses that can be claimed include course and tuition fees, internet and computer costs, stationery and office expenses, textbooks and resources, student union fees and travel costs if travel is required for classes, exams, etc. You would also need to be able to show that the study that is being undertaken maintains or improves the specific skills or knowledge you require in your current employment activities or that it results in or is likely to result in, an increase in your income from your current employment activities.

If you are an employer and choose to pay for your employees to undertake study then that can be claimed as a business expense, however fringe benefits tax would apply if the employee wouldn’t usually be able to claim the costs as a deduction if they were to pay for it themselves. If you are unsure about this and what can be provided for your employees or what can be claimed as self-education expenses then please contact our office.

Important Dates!
5 June:

  • Lodge 2020 tax return by this date to avoid failure to lodge on time penalties when lodgement due date is 15 May

21 June:

  • Lodge and pay May 2021 monthly business/instalment activity statement

30 June:

  • Superannuation contributions must be paid by this date to claim a tax deduction for the 2021 financial year
  • 2020 tax return must be lodged by this date to continue receiving child care subsidy and family tax benefit payments

May Newsletter

Welcome to our May monthly newsletter!

“A person doesn’t know how much he has to be thankful for until he has to pay taxes on it” – Ann Landers

We are now nearing the end of the financial year with tax time approaching. Now is the time to make an assessment of your profits and apply any tax saving strategies that you can! We are now taking tax planning appointments and are happy to provide anything from a simple chat about your potential taxes to a full tax planning service which includes a detailed estimate of taxable income, income tax payable and a tax savings report which explains which strategies can be applied to reduce income tax this year and potentially in future years. If you are unsure if this service would be beneficial or would like to know more then please contact our office for more information.

Monthly tax tip:
The pandemic has certainly taken a financial toll on all of us with bills and debts being postponed or potentially written off for some. Small business owners may find their debtors quickly piling up faster than they are being paid. We often find that this is an area of a business that is ignored with very few small businesses following up with unpaid accounts let alone knowing how much is owed to them. Unpaid invoices can become what is considered “bad debts” and not many will claim this as a tax deduction. A debt is considered “bad” and can be claimed if the following conditions are met:
  • The debt was included as taxable income in a current or previous income year (e.g. a business using the accruals method of accounting for income tax purposes)
  • The debt must be considered non-recoverable (this means that it is extremely likely that it will not be paid not just currently but also at any time in the future)
We suggest reviewing your debtor accounts at the end of each financial year and discussing this with your accountant prior to tax return lodgement to ensure that you are not paying taxes on income that you will not be receiving.

Important Dates!
15 May:

  • Lodge 2020 income tax return for all entities
  • Pay 2020 income tax for companies and superannuation funds

21 May:

  • Lodge and pay April 2021 monthly business/instalment activity statement

26 May:

  • Lodge and pay quarter ending 31 March 2021 business/instalment activity statement

28 May:

  • Lodge and pay quarter ending 31 March 2021 superannuation guarantee charge statement if contributions were not paid on time*

*Super guarantee charge is not deductible.

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