Connect March 2014

INSIDE THIS ISSUE

2 Let’s talk about... Privacy, Protection and the PPSA

Powers Corporate Solutions A new name and face behind Powers Business Consulting

3 Apply for Farm Assistance The QLD State and Federal Governments are offering assistance to eligible Primary Producers

4 An Inspector Calls How to be at your best when managing an enquiry from the ATO

The changes relate to the launch of the National Disability Insurance Scheme, Fringe Benefits Tax (FBT) rates and the Superannuation Guarantee rate.

New FBT rates – 1 April 2014

While the increase in marginal tax rates will take effect from 1 July 2014, the corresponding increase in the FBT rate to 47% will commence on 1 April 2014.

This change will affect the ‘Gross-up rates’ in the calculation of FBT, which will affect salary packaging arrangements.

The following gross-up rates will apply from 1 April 2014, ie they will start to apply for the FBT year ending 31 March 2015

Gross-up ratesType 1 (GST-inclusive) 2.0802 Type 2 (GST-exclusive) 1.8868

The change in the gross-up rates will also affect the annual FBT exemption capping threshold applicable to employees of public benevolent institutions, public hospitals and rebatable employers.

The maximum cash values of fringe benefits that can be provided to employees

before incurring any FBT are as follows:

$17,000 gross-up

$30,000 gross-up

Type 1 (GST-inclusive)*

$8,172 $14,421

Type 2 (GST-exclusive)*

$9,009 $15,899

*If both Type 1 and Type 2 fringe benefits are provided to an employee, the total gross-up value of the benefits must not exceed $17,000 or $30,000, depending on the employer’s FBT status, to avoid incurring any FBT liability.

Accordingly, salary packaging arrangements may need to be reviewed and updated to reflect the reduction in the extent of FBT exemption that is available to the affected employees. As an indicative, the reductions are estimated to range from approximately $3.00 to $7.00 per fortnight.

Other changes to keep in mind

• Benchmark interest rate for the FBT year ending 31 March 2015 is 6.45%

• Car parking threshold for the FBT year ending 31 March 2015 is $8.03.

National Disability Insurance Scheme &New income tax rates – 1 July 2014

The launch of the National Disability Insurance Scheme (NDIS) will see the Medicare levy increase from 1.5% to 2.0% effective from 1 July 2014.

As a result, all marginal tax rates will also increase by 0.5% from this date as follows:

Income 2013-14 2014-15$0 - $18,200 Nil Nil $18,201 - $37,000 20.5% 21.0%$37,001 - $80,000 34.0% 34.5% $80,001 - $180,000 38.5% 39.0% $180,001 + 46.5% 47.0%

New Superannuation Guarantee rateAs a reminder, since 1 July 2013, the Superannuation Guarantee rate is now 9.25% of ordinary time earnings.

This rate will increase to 9.5% from 1 July 2014, subject to draft legislation introduced by the Government, which may delay the increase to 9.5% for 2 years to 1 July 2016.

Remember to speak to your Powers Accountant about tax planning to avoid any last minute issues that could arise. Call us in Brisbane on 07 3906 2888 or in Biloela on 07 4995 6677.

Business owners take note; the coming months will see a number of tax and superannuation changes come into effect for Australian businesses.

Tax updates leading into the end of financial year

MARCH 2014 ISSUE

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DID YOUKNOW?

Our blog is filled with information that is useful to businesses and individuals. Make sure you head to our website to see our recent article on Fringe Benefits Tax; FBT – What has changed?

Fringe Benefits have always been an area which is misunderstood and a bit of a mystery to employers. To get a better understanding head to www.powers.net.au/news for information on FBT and other pressing issues.

Privacy PoliciesThe Privacy Commissioner is waiting just around the corner with a great big new stick for Australian Businesses.

From 12 March 2014, altered privacy laws will introduce a new set of Australian Privacy Principles- (APP’s); a more comprehensive credit reporting system and enhanced powers for the Commissioner.

The APPs outline standards, rights and obligations imposed on Australian companies in relation to handling, holding, accessing and correcting personal information.

If your turnover is more than $3 million – you are caught in the compliance net and you could lose more than customers if you are found to be in breach.

To understand your compliance requirements, speak to Kevin Lovewell in Brisbane on 07 3906 2888.

Income ProtectionThe Australian job market is volatile at present and it can pay to be prepared.

Income Protection is designed to cover you temporarily if you are unable to work due to injury or illness, so that you’re able to maintain your day-to-day living expenses during your recovery period.

While nobody expects an interruption to their income as a result of an injury or illness; accidents and sickness can strike when you least expect it.

With income protection, at least if your situation does change temporarily, you will be able to continue to pay your bills and support your family.

To discuss whether income protection may be right for you please contact Warwick French in Brisbane on 07 3906 2888 or Marc McMahon in Biloela on 07 4995 6655.

The PPSA & PPSRThe Personal Property Securities Act (PPSA) became fully operational from the 31st January 2014.

The PPSA allows a ‘security interest’ in personal property to be registered and searched by anyone at any time. ‘Personal property’ applies to everything, except land and buildings.

Whilst there is no compulsion to register any asset with the PPSR, if you don’t register assets to which the legislation has deemed a requirement, you could end up losing those assets (even though you paid for those assets) to someone else who has a superior claim to you, because they have registered in accordance with the PPSA.

To find out more about the PPSA & PPSR, contact your Powers accountant in Brisbane on 07 3906 2888 or in Biloela on 07 4995 6677.

Kevin Lovewell is a business planner and ideas catalyst. Originally qualified and working as an accountant, upon completion of his MBA, he began working primarily with small businesses with a focus on systematic processes that enable swift implementation.

As the author of the workbooks “Writing a successful business plan” and “Business planning on a Postcard” Kevin has applied his many years of experience and developed a simple formula for small business strategy. Now utilized by private institutions and Chambers of Commerce in Queensland, these workshops assist small business and micro business start-ups.

Kevin also consults at Queensland University of Technology and is engaged as an external consultant in PHD research on small business.

Powers Corporate Solutions consults to SME clients within industry sectors such as Service, Retail and B2B. It provides broad management advice, business strategy and practical solutions that work.

Core areas include business growth and development, strategy in marketing, finance, organisational change and commercialising ideas. Kevin states his principal objective when working with SME’s is to introduce ideas that lead to increased revenue,

reduced costs and improved profitability.

To get some understanding of how you can improve your business practices, talk to Kevin today at our Brisbane Office on 07 3906 2888.

Powers Business Consulting has changed its name to Powers Corporate Solutions and Kevin Lovewell (pictured right) joined Powers earlier this year to as its new director.

Introducing Powers Corporate Solutions

Let’s talk about...

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The purpose of which is to support farm families and farm businesses in managing and recovering from periods of hardship, including drought. There are two avenues from which funding/assistance is available – QLD State Government and Federal Govt.

QLD State Govt scheme – Drought Relief Assistance Scheme (DRAS)

DRAS provides freight subsidies on:

• transport of fodder and water during the drought

• transport of animals returning from Agistment and

• animals purchased for restocking after the drought.

For Grazing industries DRAS will now also provide a rebate on water infrastructure purchased for emergency animal welfare needs. The farm must be in drought declared area or have an Individually Droughted Property (IDP) completed. There is a maximum of $20,000 per property per financial year available, unless a Drought Management Plan is completed where up to $30,000 available.

If applying for emergency water infrastructure, you need to complete a

water availability statement. This can allow for the purchase and installation of:

• Pipes, tanks, troughs• Bores and pumps• Items necessary to install above and

installation costs by profession and freight

The rebate on these items is up to 50% but it counts in the $20K PA available in the DRAS scheme. Larger projects may be eligible for a further $30k of federal funding.

Federal Government Assistance

Interim Farm Household Allowance (FHA)Interim FHA helps with daily living expenses and is available to eligible farmers Australia-wide. Payments under the Interim FHA commence from 3 March 2014 for new applicants.

Drought Concessional Loans SchemeThe Australian Government is offering up to $280 million in concessional loans. There are two components to the drought concessional loans:

• Debt restructuring Applicants can use a concessional loan to restructure a proportion of their existing eligible debt at a lower interest rate.

Apply for Farm Assistance

• Finance for drought recovery Loan funds are available to finance operating expenses and/or recovery costs.

Loans of up to $1 million, or 50 per cent of the farm business’s debt, whichever is lower, will be available.

Additional funding for water-related infrastructure rebatesDrought-affected farmers in Queensland and New South Wales will benefit from additional funding for water-related infrastructure rebates.

Assistance for farm businesses to manage pest impacts in drought-affected areasThe Australian Government will contribute $10 million to help reduce the impacts of:

• wild dogs and other pest animals• manage total grazing pressure in

drought-affected regions.

Social supportThe Government is providing up to $10.7 million to increase the delivery of social support services in drought-affected areas to support the health of farming families.

To discuss your eligibility for assistance, contact Murray Davis or Jason Webster on 07 4995 6677.

With the drought now declared a natural disaster, on 26 February 2014 the Federal Government announced a package of measures offering financial, social and mental health support to farm families, farm businesses and rural communities suffering from drought.

The information in this document is of a general nature and is provided for information purposes only. It does not take into account your particular objectives, financial situation or needs and should not be used as a substitute for independent advice from a qualified professional. Limited liability by a scheme approved under Professional Standards Legislation other than for the acts or omissions of financial services licensees. All financial advice is provided by Authorised Representatives of Professional Investment Services Pty Ltd AFSL 234951 ABN 11 074 608 558.

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Contact us For further information on any of the articles in this issue contact your local office:

MONTO3 Newton StreetMonto QLD 4630PO Box 69Monto QLD 4630P 07 4166 1366F 07 4166 1343

BILOELA54 Callide StreetBiloela QLD 4715PO Box 98Biloela QLD 4715P 07 4995 6677F 07 4992 1787

www.powers.net.au [email protected]

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An Inspector Calls is a play written by English dramatist J. B. Priestley, and considered to be one of the classics of mid-20th-century English theatre.

One of the characters is a mysterious interrogator who introduces himself as “Inspector Goole” and forces the characters to question their very own lives, and if the ones they were living were true.

So when the ATO calls with some questions, “What happened here... a chain of events.”

More and more the ATO is asking about what is happening when they get sent information in returns. They examine the BAS, IAS or the annual return. They are driven to understand what is being given to them.

Often the questions they ask may just be for clarification, other times it may be that they think they have found the pot of gold (more tax revenue) at the end of the rainbow.

Looking for a supposed pot of gold often means an audit and there may even be a new assessment.

Managing a tax query requires thought to see what is actually being asked for and then providing what is actually being requested. At Powers we work through

How to be at your best when managing an enquiry from the Australian Tax Office.

Written by Charles PageDirector of Powers Superannuation Services

that with you.

As an example

In my world of Self Managed Superannuation I recently attended a presentation about the best approach to dealing with the tax office and their questions. The key points that I picked up were:

Do• Interact early and make good first

impressions• Identify the relevant issues• Identify the precedent material the ATO

will use• Consider voluntary disclosure• Match facts to precedent materials

Don’t• Delay or ignore ATO’s request for

response• Provide a long-winded response• Think the ATO will be less harsh if there

is hardship• Forward the client’s response without

testing it• Ignore the precedent material

It is a matter of painting a picture for the ATO so they can see what has happened. As the inspector wonders “The public... have responsibilities, as well as privileges...”.

An Inspector Calls

BRISBANEUnit 10/8 Metroplex AveMurarrie QLD 4172PO Box 518Cannon Hill QLD 4170P 07 3906 2888F 07 3906 2889

Key DatesApril-June 2014

BAS DatesTo assist us in helping you avoid late lodgement penalties and interest payable, please ensure you get your Business Activity Statement records in as soon as possible after the end of the month or quarter to allow us time for processing.

If you have any questions, phone us on 4995 6677 for Biloela or 3906 2888 for Brisbane.

March31 Mar • End of FBT Year

April18 Apr • Good Friday

Public Holiday21 Apr • Monthly Activity

Statement due for March

• Easter Monday Public Holiday

25 Apr • Anzac Day Public Holiday

28 Apr • Super guarantee contributions due for March Quarter

• Activity statements due for March Quarter

• March PAYG instalment due and dead-line for variation instalments (two-instalment payers)

May12 May • Mothers Day15 May • Income tax returns due

for lodgement• Company and

Superannuation funds 2012 Income Tax Assessments payment due

21 May • Monthly Activity Statement due for April

28 May • Fringe Benefits Tax Return - lodgement and payment

June09 Jun • Queens Birthday

Public Holiday30 Jun • End of Financial Year