Instant Asset Write-off Changes

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The recent changes to the Instant Asset Write-off have complicated things for this financial year but for many clients, the changes will provide a great addition to their tax planning strategy. Here are the new rules:

  1. Businesses with a turnover less than $50 million are now included in the Instant Asset Write-off rules.
  2. Assets purchased and installed (or first used) from 7.30pm (AEDT) on 2 April 2019 – 30 June 2019 are included. These assets can be new or used.
  3. A deduction of up to $30,000 for the business portion of each asset qualifies for the Instant Asset Write-off.
  4. Businesses with a turnover under $10 million can also claim a deduction for each asset purchased and used (or installed) within various thresholds. This part is complicated so it’s best to call us for specific advice.

Making the most of the new Instant Asset Write-off changes can form part of a clever tax minimisation strategy – but only if it’s well thought out and funded. So talk to us first.

 

For straight-forward, practical accounting, taxation and financial advice
contact our knowledgeable team at SVA and WPA by calling 02 8850 0388.

Gauging the strength of your business

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The end of financial year is only a few months away and as specialist SME accountants, we have begun discussing tax planning strategies with our clients.

The ATO is also getting busy, recently releasing their latest industry benchmark data. This data is extremely useful for any small business owner as it allows you to gauge the strength of your business.

The data compares the financial results of over 1.5 million small Australian businesses and lets you evaluate how your business is going compared to others in your industry.

If your business is operating below these benchmarks, we can discuss ways you could improve the performance of your business.

Not all industries are included yet but every year, the ATO increases the number of industries in its benchmark data. So far they have developed benchmarks for over 100 industries including:

  • Accommodation & food
  • Architectural services
  • Automotive electrical services
  • Building & construction trades
  • Education, training, recreation & support services
  • Health care & personal services
  • Machinery & equipment maintenance/repair
  • Manufacturing
  • Retail
  • Transport, postal & warehousing
  • Veterinary services

To see the ATO’s industry benchmarks click here. For specific advice on how your business can achieve and exceed these benchmarks, contact us to arrange an appointment.

 

For straight-forward, practical accounting, taxation and financial advice
contact our knowledgeable team at SVA and WPA by calling 02 8850 0388.

Eliminate bill shock in 3 easy steps

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We all have those big bills that seem to come around quickly, like our energy bills, car rego and insurance, private school fees etc.

For many of us, it doesn’t matter how well we think we’re going, there will always be those bills that seem harder to budget for.

So here’s a great savings tip to eliminate bill shock. All it takes are 3 easy steps!

Step 1
Work out how much you need to put aside each pay period to cover the annual cost of each large bill.

Step 2
Add 5-10% to cover price increases.

Step 3
Each pay, put this money aside in a separate bank account. Ideally look for one that earns better interest than your everyday account. Treat this account as untouchable and avoid temptations like using it to pay for weekends away or extra holiday spending money. Then, when those big bills come in, you’ll have enough savings to comfortably cover them.

If you find accessing these savings too tempting, check with each service provider to see if you can make regular advance payments. Then, when your bill arrives, the final amount payable will be greatly reduced because you have made those pre-payments.

Self-employed?
If you’re self-employed, try paying yourself a regular amount each week, fortnight or month. Consider this as your wage and follow the same steps as above.

 

For straight-forward, practical accounting, taxation and financial advice
contact our knowledgeable team at SVA and WPA by calling 02 8850 0388.

Congratulations to our client & friend, Jen Harwood

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We are so excited for our client and friend, Jen Harwood. Earlier this month, in front of almost 1000 people, she won the 2019 Australian Small Business Champion Award for New Business.

A single mum and highly accomplished business woman, Jen decided there had to be a better way to brush and style her daughter’s long hair.

Many parents will relate to the tears, arguments and stress of brushing their kids’ hair each day. But rather than persevere, Jen decided she would find a way to eliminate it from their daily routine. Called the Happy Hair Brush, it has now solved the problem for many, many parents. Learn more about it here.

We are so proud of Jen’s achievement that we wanted to share it with you. If you or your business has an achievement to share, please let us know.

ATO clarifies GST withholding steps for new residential properties and subdivisions

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From 1 July 2018, anyone purchasing a new residential property or subdivision is required to pay the GST component directly to the ATO as part of the settlement.

These changes have had some teething problems.

To help clarify things, the ATO has set out a 5 step process that must be followed. Here are the steps:

Step 1
The developer must provide accurate supplier details to the purchaser, including:

  • Their name and ABN
  • The GST-inclusive value of the property
  • The date the purchaser must pay the withholding amount to the ATO
  • How much the purchaser must pay

Step 2
On the Form One (GST Property Settlement Withholding Notification), the purchaser needs to enter these supplier details

Step 3
On settlement, the purchaser needs to pay the withholding amount and lodge a Form Two (GST Property Settlement Date Confirmation)

Step 4
If the details provided in Form One match those of the developer’s GST property credits account, the ATO will then allocate a credit to this account

Step 5
The developer must lodge their BAS, declaring that property transaction

Once all of these steps have been fully and accurately completed, the ATO will process the developer’s BAS and transfer the relevant credits to the developer’s activity statement account.

 

For more information and advice contact us on 02 8850 0388

Downsizing your home? Changes you need to know

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Since 1 July 2018, the ‘Contributing the proceeds of downsizing into superannuation” reform came into effect. In essence, it means if you have sold or are selling your home after that date AND meet the eligibility requirements, you may be able to contribute up to $300,000 into your superannuation fund from the proceeds of the sale.

The ATO has now released guidelines on the eligibility to make this type of superannuation contribution.

Could you be eligible for making a downsizer super contribution?

To meet the eligibility requirements, you must:

  • Be 65 years or older
  • Have exchanged the sale of property contract on or after 1 July 2018
  • Be selling an eligible Australian dwelling that you (or your spouse) have owned for at least 10 years which qualifies for a full or partial capital gains tax exemption as your main residence
  • Submit the approved form to note that this is a downsizer contribution either before or at the time of making the contribution
  • Make the contribution within 90 days of receiving the funds from the sale
  • Not made a downsizer contribution in the past

It’s important to note that downsizer contributions are not tax deductible. They will also be considered when determining your eligibility for the age pension.

If you are considering downsizing your home or have recently done so, contact us for more specific advice based on your situation.

 

For straight-forward, practical accounting, taxation and financial advice
contact our knowledgeable team at SVA and WPA by calling 02 8850 0388

How Australian’s will be spending this Christmas

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🎄 Aussies will collectively spend $25 billion this Christmas – that’s an average of $1325 per person

🎄 Over half of us will have a Christmas ham – it’s our most popular Christmas food

🎄 Unlike our US cousins, turkey is our least popular choice with around 30% of households enjoying it this Christmas

🎄 Our food bill will be approx. $122 per person

🎄 Our alcohol bill will be approx. $131 per person

🎄 60% of us, don’t set a budget to control our Christmas spending

🎄 Last year, 40% of our Christmas spend was made on our credit cards

🎄 In a survey conducted in January 2018, 2/3 of respondents regretted the amount of money they spent on Christmas

🎄 1 in 5 online purchases will be made on a mobile device with our phone being the most popular device

🎄 While considered a popular choice, almost ¼ of us will receive a gift card we don’t want

Four easy ways to shape up your finances before summer

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Getting financially fit doesn’t have to be hard slog. Follow these tips to get on the fast track to financial wellbeing.

  1. Review your commitments: money can easily trickle away on things we don’t need or value. Reviewing things like mobile phone plans, insurance policies, loan rates and utilities means you can compare prices, ask your provider for a better deal or shop around for one.
  2. Start a budget: once bills are sorted, check whether other areas of spending have room for improvement. The key to budgeting is ensuring you include everything you spend money on – from school fees to champagne. You might be surprised how quickly that daily latte adds up! Various websites and apps are available to help with this, such as Money Smart’s budget planner.
  3. Sell some stuff: this will not only line your wallet, but free up space in your home or workplace. Decluttering is hugely popular and it’s easy to sell the things you no longer want using sites like Gumtree. Or gather your unwanted items and have a garage sale. After all, if you don’t need three bicycles and the pram anymore, why not turn them into cash?
  4. Organise your tax: a good filing system will save you time and money. A simple fix – whether you manage tax digitally or the old-fashioned way – is to separate paperwork pertaining to income and expenses with folders for main categories like rent and insurance. File each piece of paperwork straight away, and you’ll be set come June 30

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For straight-forward, practical financial, taxation and accounting advice
contact our knowledgeable team at SVA and WPA by calling 02 8850 0388.

Don’t settle for simmering super!

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Superannuation may be a long-term investment strategy but that doesn’t mean you should leave it on a mental back burner. In fact, ignoring your super leaves it at risk of stagnation when it could be cooking up a healthy retirement nest egg.

Reviewing your current super strategy doesn’t have to be an overwhelming process and it could be a great way to beef up your retirement savings.

Is your super still meeting your needs?

If it’s been a while since you began your superannuation policy, you may discover the choices you made are no longer the most appropriate. To find out, check with your fund to see how your money is being invested and compare this with what else the fund has on offer.

Every super fund has a range of investment options, including:

  1. Balanced: this option is designed to suit most people most of the time, offering above average returns with below average risk. The mix might hold 60 – 75% of its investments in shares and property with the rest in cash, bonds and fixed interest.
  2. Growth: this option offers higher average long-term returns, but with potential for more ups and downs. Losses are often higher in bad years and happen in four or five years out of 20. Growth options usually hold around 85% of funds in shares and property with the balance in cash and fixed-interest investments.
  3. Conservative: these portfolios tend to deliver lower average returns than growth options but with less risk of loss in any year. They typically hold around 70% in low-growth, low-risk cash and fixed interest deposits with the balance in shares and property.
  4. Cash investments in short-term deposits with Australian institutions: these offer relatively low, stable returns with no risk of loss. The downside is the risk that returns won’t keep pace with inflation.

When deciding what’s best, it’s important to consider your attitude to risk and how close you are to retirement. For example, if you’ve got 20 years of work left, a growth option may be more suitable for you than for someone with only a few years left until retirement. That’s because you’ll have time up your sleeve for the market to recover from any downturns.

Superannuation reviews are one of our specialities so call us to arrange a complimentary meeting

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For straight-forward, practical financial, taxation and accounting advice
contact our knowledgeable team at SVA and WPA by calling 02 8850 0388.