Newsletter

Welcome to our December monthly newsletter!

The Chesterton Accounting team are taking a two week break this year and will be closing on Friday, the 23rd of December from 12pm and opening again on Monday, the 9th of January at 8.30am. We would love to thank all our loyal clients for their support this year and can’t wait to see what next year holds for our South Burnett businesses.

Monthly tax tip:

It’s the time of year again for gifts, bonuses and parties! But what exactly is tax deductible? Gifts to customers can be tax deductible if they are given in hopes of increasing your taxable income (e.g. to retain a client or to encourage further sales) and are non-entertainment based. Gifts to employees are also tax deductible if they are non-entertainment based and are given to retain employees. Christmas parties are generally considered non-deductible entertainment however can be claimed in the correct circumstances. If the Christmas party is held on business premises, during paid staff hours and work continues once it ends then the food purchased would be considered a staff expense (e.g. a lunch-time pizza party). If however, the party happens after work hours at an external location then it won’t be tax deductible (e.g. drinks and nibblies at the local pub at 5pm after work). Please contact our office if you would like to know if your Christmas gifts and party expenses can be tax deductible. Please see below for more examples.

Non-entertainment-based gifts – hampers, wine, gift vouchers, flowers, jewellery, etc.
Claim tax deduction/GST credits? Yes, for both employees and clients
Fringe benefits tax liability? Only if spending more than $300 per employee

Entertainment-based gifts – movie tickets, tickets to sporting event, travel costs for a holiday/vacation
Claim tax deduction/GST credits? Clients – no. Employees – no tax deduction unless FBT applies (FBT applies once the gift is over $300 per employee)
Fringe benefits tax liability? Only if spending more than $300 per employee

Staff Christmas lunch – light refreshments provided to all staff during work hours in the office
Claim tax deduction/GST credits? Yes
Fringe benefits tax liability? No

Christmas party – food and alcohol provided to staff/clients after work hours
Claim tax deduction/GST credits? Clients – no. Employees – no tax deduction unless FBT applies (FBT applies once the gift is over $300 per employee)
Fringe benefits tax liability? Only if spending more than $300 per employee

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!

21 December:

•       Lodge and pay November 2022 monthly business/instalment activity statement

23 December:

•      Chesterton Accounting office will be closed from 12pm for the holiday period

Welcome to our November monthly newsletter!

The wet season has started and major floods have already affected parts of Victoria, Tasmania, Queensland and NSW. The ATO have support options available for flood-affected taxpayers. Tax would certainly be the last thing to focus on if you have been affected, so please reach out to ensure lodgement and payment deadlines can be postponed.

Monthly tax tip:

If your business holds trading stock then the closing value at the end of the year must be recorded as an asset which does reduce the amount than can be claimed as a tax deduction. E.g. a new business buys $10,000 worth of stock throughout the year and holds a value of $2000 on the 30^th of June which means the business will claim a total of $8,000 in stock deductions for that financial year. Trading stock can be valued at cost, replacement or selling price. The cost price valuation usually provides the highest tax deduction, so it is the most popular valuing method. However, for some, the other methods can be the best calculation for their situation. Trading stock deductions should also be reduced by private use. Some business owners may use their own stock for private use e.g. a café owner eating café food items each day whilst working or a cattle farmer that kills a beast for their own personal meat. The stock deductions should be reduced by the cost price of these items used personally. The ATO have provided set rates for hospitality business owners who use their own food for private use, to reduce paperwork (listed below). Please ensure you contact us about your stock deductions if you are unsure what is unable to be claimed at tax time.

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!

21 November:

•       Lodge and pay October 2022 monthly business/instalment activity statement

25 November:

• Lodge and pay quarter ending 30 September 2022 activity statement

28 November:

• Lodge and pay quarter ending 30 September 2022 superannuation guarantee charge statement if the contributions were not paid on time*

*Superannuation guarantee charge is not tax deductible

Monthly tax tip:

The skills and technology boost was announced in the federal budget earlier this year but is definitely not a tax incentive to forget about. The boost allows small business entities to claim an extra 20% tax deduction on skills and training expenditure for employees and technology expenditure. E.g. a business pays $1,000 for an employee to complete a course for skills used in their job so they are able to claim a total tax deduction of $1,200 under this incentive.

This incentive became active from 29 March 2022 (budget release date), however cannot be claimed until the 2023 tax return is prepared. This means that business owners (with the help of their accountants) will need to keep track of these expenses to ensure that they are not forgotten about. As usual, there are many rules, exclusions and caps that will be applied to these incentives so please contact our office before getting too excited about it so we can let you know exactly how this will affect your tax claims.

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!

21 October:

•       Lodge and pay September 2022 monthly business/instalment activity statement

28 October:

• Lodge and pay quarter ending 30 September 2022 activity statement if lodging by paper
• Make super guarantee contributions for quarter ending 30 September 2022 to funds by this date
• Pay quarter ending 30 September 2022 instalment notice. Lodge the notice only if you vary the instalment amount

31 October:

• Final date to sign up with a tax agent to receive the lodgement concession for the 2022 tax return
• Lodge 2022 tax return if lodging without a tax agent by this date

Welcome to our September monthly newsletter!

The ATO have recently released data showing that over 180,000 tax returns that were lodged early in July have had to be amended. This has been due largely to taxpayers ignoring advice to wait for all tax information to be received before reporting to the ATO. This has resulted in income received from banks and investment funds, Government allowances and capital gains made from selling a taxable asset not being reported and assessed for tax. If you believe that your tax return was lodged with missing information then please contact our office to assist with an amendment.

Monthly tax tip:

The ATO are certainly coming down harder this financial year on audits and one area that is in the spotlight is motor vehicle expenses. A taxpayer can claim one of two methods available for each car used to produce taxable income. The cents per kilometre method is quite popular as there isn’t much record-keeping involved. This method allows kilometres driven (for taxable purposes) to be claimed under a set rate up to a maximum of 5000kms. However, the most common error that we find taxpayers making with this method is claiming the maximum of 5000kms without records or proof that they did actually drive that distance for work purposes. Another common error with this method is that it is only available for cars. A motorcycle or vehicle that is designed to carry either one tonne or more, or nine passengers or more is considered an other vehicle and can only claim the logbook method. The logbook method allows a taxpayer to claim a portion of all vehicle costs (e.g. fuel, insurance, registration, etc). A logbook must be kept for twelve weeks which records all trips made by the taxpayer. These records can then be used to correctly calculate the portion used for taxable purposes. The calculation can be used for three years unless the taxpayers situation changes. Motor vehicle expenses can add up to a great deduction so it’s important that calculations are made correctly. Please contact our office if you would like to discuss your motor vehicle deductions and the options available to you.

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!

21 September:

•       Lodge and pay August 2022 monthly business/instalment activity statement

30 September:

• Lodge annual TFN withholding report for 2022 financial year if a closely held trust has been required to withhold amounts from payments to beneficiaries