Small Business

March Newsletter

Business Activity Statements, Income Tax, Small Business

Chesterton Accounting is growing again and we are currently looking for an experienced accountant to join our small team in preparation for tax time. The accounting position will commence in April and we are very excited to introduce our next team member to all of our clients. Stay tuned by following our Facebook page to see who our new accountant will be next month.

Monthly tax tip:
Investment properties, including residential and commercial can be a great tax deduction. Any investment losses, including that from an investment property can actually be used to offset taxable income, which will reduce the tax liability. Investment property deductions can include council rates, landlord insurance, garden maintenance, general repairs, advertising, depreciation of fixtures and fittings as well the interest and fees paid on the property loan. These deductions will offset the rental income received and may result in a loss. This loss can then be claimed against other income received including wage, business and other investment income. Majority of investment properties are negatively geared, meaning that they are a long-term investment and you shouldn’t expect to really make some earnings until you sell the property. So, this investment can be a great choice for someone who has a high taxable income and can afford to invest some of their personal capital whilst reaping the tax benefits. We do recommend discussing your options surrounding investments with your financial advisor. However, if you would like to know more about claiming rental property deductions and losses then please contact us.
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 March:

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

31 March:

  • Lodge and pay tax returns for companies and self-managed superannuation funds with income of more than $2 million
  • Lodge and pay tax returns for individuals and trusts whose latest return resulted in a tax liability of $20,000 or more
Click to email us about the above

February Newsletter

Small Business

Welcome to our February monthly newsletter!

Bushfires have been spreading over Australia during the last few months with many individuals, business owners and farmers affected. The Australian Taxation Office have created a list of the impacted areas that will automatically receive lodgement and payment deferrals for income tax, activity statements, SMSF and FBT returns until 28 May 2020. You can check if your postcode is listed online or call the emergency support Infoline on 1800 806 218 for more information on what these concessions cover. There are also some other support services offered which include:
  • give you extra time to pay your debt or lodge tax forms such as activity statements
  • help you find your lost tax file number (TFN) by using methods to verify your identity such as your date of birth, address and bank account details
  • re-issue income tax returns, activity statements and notices of assessment
  • help you re-construct tax records lost or damaged in the bushfires
  • fast track any refunds you are owed
  • set up a payment plan tailored to your circumstances including an interest-free period
  • remit penalties or interest charged during the time you have been affected by the bushfires

We strongly recommend taking advantage of these concessions if you have been affected. We, as a firm have also made the decision to donate hours to those that are struggling to keep up with their accounting requirements. If you have been affected or know someone who has been, then please contact us to discuss what pro-bono services we can offer you to assist you and your family through this hard time and get you back on track.
Monthly tax tip:
 Do you contribute anything to your superannuation fund? A study by MYOB has found as many as one-third of the self-employed are not making any contributions to their own superannuation.
When you are employed by another person, they must contribute 9.5% on earnings to your superannuation account, but what happens when you are employed by yourself? The self-employed cannot rely on anyone else to make contributions for them, this can now only be made by them. This of course isn’t mandatory but can be a great way to ensure you set yourself up for your own retirement.
Personal superannuation contributions can be claimed as a tax deduction simply by completing a form and sending it to the superannuation company you use. The maximum amount that can be contributed and claimed is currently $25,000 for this financial year. This amount does include any contributions that can also be made by employers so if you are also employed by another person then you will have to ensure your contributions and their contributions will fall under the cap.
So why would you use this tax deduction? Well superannuation is taxed at 15% on earnings which is generally a fair bit less than what the average taxpayer would pay. The other benefit to this tax deduction is the fact that you are saving for your retirement. We recommend discussing your options surrounding retirement savings with your financial advisor. However, if you would like to know more about claiming superannuation contributions then please contact us.
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
Important Dates!

21 February:

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

28 February:

  • Lodge and pay quarter ending 31 December 2019 activity statement
  • Lodge and pay tax returns for new registrant self-managed superannuation funds
  • Lodge and pay annual GST return for the year ending 30 June 2019
  • Lodge and pay quarter ending 31 December 2019 superannuation guarantee charge statement if contributions were not paid on time*

*Superannuation guarantee charge is not tax deductible
Click to email us about the above

January Newsletter

Small Business

Welcome to our January Monthly Newsletter! 

Happy New Year! We hope you have had a great Christmas. We are looking forward to being back in the office when we open on Monday, 6th of January at 8.30am. If you would like to get in early then we encourage you to schedule your own appointment through our website whilst we are out of the office.

Monthly tax tip:

We are currently in the middle of a terrible drought which affects many Australians but will greatly affect primary producers. As our grounds dry up and the grass becomes non-existent, farmers are relying on fodder and bought water to keep their livestock alive. In these circumstances it may be appropriate to sell livestock that aren’t able to be properly maintained due to the increasing cost of fodder and water in the midst of a drought. After a large sale, the farmer may have profited quite substantially when compared to other income years – which of course creates a tax problem. Luckily enough, there are some tax relief options available to avoid paying large tax rates for forced livestock sales. A primary producer can elect to spread the income from a forced sale or defer the profit and use it to reduce the cost of replacement livestock over a period of five income years. This deferred profit can then be brought back in a low income year or just spread evenly over the five year period. You can use this method if you dispose of livestock or they die because:

  • Your land is compulsorily acquired or resumed under an Act
  • A state or territory leases land for a cattle tick eradication campaign
  • Pasture or fodder is destroyed by fire, drought or flood and you will use the profits mainly to buy replacement stock or maintain breeding stock for the purpose of replacing the livestock
  • They are compulsorily destroyed under an Australian law for the control of a disease (including bovine tuberculosis) or they die of a disease
  • You receive official notification under an Australian law dealing with contamination of property.

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

Important Dates!

21 January:

  • Lodge and pay December 2019 monthly business/instalment activity statement

28 January:

     •    Make super guarantee contributions for quarter ending 31 December 2019 to funds by this date

31 January:
•     Lodge TFN report for closely held trusts for quarter ending 31 December 2019

Click to email us about the above

December Newsletter

Payroll & Employees, Small Business

Welcome to our December Monthly Newsletter! 

We are now in December, the season of joy! We hope that all of our small business clients are able to take some time out with their families over the holiday period. Our office will be closed from Monday, 23rd of December 2019 and will re-open Monday, 6th January 2020. Please contact our office if you wish to discuss anything before we close or you require assistance with payroll and working out those annual leave payments for employees.

Monthly tax tip:

Now that Christmas is just around the corner, you will probably be wondering what to do about gifts for clients and staff members. Well we have some good news for you, majority of small gifts to staff and clients are tax deductible with just a few exceptions. Small gifts for clients are generally tax deductible if they are given in hopes of making a future profit and are not a private gift, e.g. a bottle of champagne might be gifted to your larger clients as a Christmas gift to thank them for their business – this is tax deductible but if you were to also gift a family member that happened to be a client (not considered one of your larger clients) then it would be considered a personal gift and not tax deductible.

Small gifts to employees are also tax deductible as long as they are a standard gift and not an entertainment based gift, e.g. a watch is tax deductible but a ticket to a sports game is not. If you do plan on gifting employees at Christmas time then you may also want to keep an eye on the cost – if the gift totals $300 or over then it could trigger fringe benefits tax. A way around this could be buying a gift for less than $300 and also providing the employee with a bonus in their pay cheque. Just keep note that the bonus will be taxed at the employees individual tax rates.

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!

1 December:

Pay income tax for the 2019 tax year if taxpayer is a taxable medium/large company or superfund

Pay income tax for the 2019 tax year if taxpayer is a company or superfund and lodgement was due by 31 October 2019

21 December:

Lodge and pay November 2019 monthly business/instalment activity statement

November Monthly Newsletter

Income Tax, Small Business

Welcome to our November Monthly Newsletter! 

 

The due date for lodgement of an income tax return for the financial year ending 30 June 2019 was on the 31st of October. If you have returns that have not been lodged yet then do not stress – chances are you have quite awhile longer to lodge. If you are signed up as a client with a registered tax agent then you get to reap the benefits of the tax agent lodgement concession. This concession provides a later due date for lodgement and payment of your income tax return up until 15 May 2020.
We do however still encourage everyone to not hold off on lodgement as this can tie up other areas e.g. you may require your return to process Centrelink payments, to review or commence a loan or perhaps you would like to sell your business and a potential buyer would like to see some documents from your tax agent. So you can see there are benefits to lodging even before you are required to.

Monthly tax tip:

There is a lot of confusion surrounding food and drink for business purposes. Food and drink can sometimes be classified as entertainment which is generally not deductible but in certain situations it is a legitimate deduction. Food and drink which are purchased during travel (for business purposes of course) are tax deductible and the GST component can also be claimed. However, if you are purchasing food and drink at the work place then there is some criteria to be met. If you are purchasing general sustenance for your employees (e.g. tea and coffee, snacks) so that they can comfortably continue working then this type of food can be claimed. This may also include lunch purchased during a work day for staff, snacks for the conference room to be eaten by staff and clients and even dinner if your staff have been asked to work overtime.
If food has been purchased for simply entertainment purposes like food for a staff party then this cannot be claimed. Other non-deductible entertainment can also include a business meal with a client, after work drinks with staff, food and drink purchased at networking events. Categorizing food and drink can be a huge gray area when it comes to tax but when in doubt, please call your tax agent to confirm.

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

Important Dates!

21 November:

  • Lodge and pay October 2019 monthly business/ installment activity statement

25 November:

  • Lodge and pay quarter ending 30 September 2019 activity statement if lodging electronically

28 November:

  • Lodge and pay quarter ending 30 September 2019 superannuation guarantee charge statement if contributions were not paid on time*

*Superannuation guarantee charge is not tax deductible

October Monthly Newsletter

Business Activity Statements, Payroll & Employees, Small Business

Welcome to our October Monthly Newsletter! 

Single Touch Payroll registration became mandatory on 1 July 2019, however if you were considered a “small employer” which is defined as having less than 20 employees, you had a concession date of 30 September 2019 to start reporting. If you missed these deadlines then you can apply for a deferral with the ATO but must have good reason, e.g. transitioning to appropriate software, no access to internet, etc. From our experience, the STP process is super easy and takes only a matter of minutes to become connected (if you are already using appropriate software). Lodging STP pay events are also an extremely simple process so do not be alarmed if you haven’t jumped on the band wagon yet – it’s easier than you might think! If you are unsure where to even start with this process then we suggest contacting your software provider. If you are not using appropriate software or would prefer that we manage your payroll then please contact us to discuss your options.
Monthly tax tip:
Is your business registered for GST? It may not be required to just yet (you must register once you reach $75,000 in gross revenue) but registering for this can have some great benefits! GST is a consumer tax and shouldn’t actually be paid by business’ however you will be paying for it if you are not registered for GST. When you register, you can claim the GST that was paid on expenses relating to your business. Many business owners will actually avoid registering for GST because they are worried that they will have this new tax to pay – this is a common mistake. When you are registered, you actually collect GST from your customers so it is added to your sale price – not taken from it. For example, if you are going to invoice a customer for $100 you would then add the 10% of GST which is $10, making the total $110. You would then keep the $100 that you earned and pay the $10 to the ATO. So you don’t actually have to pay any new taxes and you are refunded directly for GST that you paid on business expenses! If you are interested in this and would like more information or assistance in registration then please contact us.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
Important Dates!

21 October:

  • Lodge and pay September 2019 monthly business/instalment activity statement
  • Pay annual PAYG instalment notice. Lodge the notice only if you vary the instalment amount

28 October:

  • Make super guarantee contributions for quarter ending 30 September 2019 to funds by this date
  • Lodge and pay quarter ending 30 September 2019 activity statement if lodging by paper
  • Pay quarter ending 30 September 2019 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

31 October:

  • Lodge and pay 2019 income tax return if not lodging through a tax agent
  • Lodge PAYG withholding annual report for no ABN withholding
  • Lodge TFN report for closely held trusts for quarter ending 30 September 2019
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