Interaction

Ever wonder what happens after the Government announces Tax Reforms in the May Budget? 

The Government releases Discussion Papers to allow the opinions of members of the public and its stakeholders to be considered.Once the discussion period is complete a Bill will be introduced into Parliament to be voted on. If the bill is passed it receives Royal Assent and becomes law.  In the last few weeks a number of Discussion Papers have been released. Here's the ones that we think are likely to impact you and should be considered as part of your future tax planning.

Business

• Reduction of the company tax rate to 29 per cent from the 2013-14-income year, with small companies starting from the 2012-13-income year.
• Replacement of the Entrepreneurs’ tax offset with a depreciation scheme allowing small businesses to immediately write-off assets valued at under $6,500 and the first $5,000 of a motor vehicle. 
• Fringe Benefits Tax Introduction of one statutory rate (20 per cent) regardless of the number of kilometers travelled by a car.

Individuals

• Increasing the tax-free threshold from $6,000 to $18,200 in 2012-13.
  
• A standard personal tax deduction for work-related expenses of $500 for 2012-13, increasing to $1,000 for 2013-14 onwards. 
• Introducing a 50 per cent tax discount on up to $500 of net interest income from 1 July 2012, increasing to $1,000 from 1 July 2013.

Superannuation

• The $50,000 concessional superannuation contributions cap to remain post-1 July 2012 for over 50s with balances below $500,000.
• Superannuation Guarantee will be increased to 12 per cent by 1 July 2019
• A $500 government contribution to super will be introduced for low-income earners

Following on from announcements made in the May Budget on changes to tax legislation a number of bills are at various stages on the path to becoming the law. We will keep you updated on the amendments that we think will impact you.

What's New?

Definition of "reportable employer superannuation contributions" will be revised to exclude employer contributions exceeding the compulsory 9% that the employee does not have any influence over because their employer is required under mandates to pay a higher percentage.  This amendment will have affect from 1 July 2009. If you think that this may affect you please contact us here.

The government is proposing a reporting regime for payments made to contractors in the building and construction industry. Businesses in the industry would be required to report payments for labour undertaken by contractors using an ABN annually to the ATO. It will be like the Annual Payment Summary you do for wages paid to employees. We think this legislation will be put in place to catch out tradies who do not declare the full amount of income they earn in their tax return. We will let you know from what date this will take affect.

Another proposal issued is for a tax offset to be provided to superfunds up to $500 on taxable contributions received for individuals who have an adjustable taxable income of less than $37,000. Basically if you a low incomer earner your superfund will not pay tax on contribution made by your employer. Proposed date of affect is 1 July 2012. Great news for those who need $ the most!!!

From 1 July 2011, the fuel tax credit rate for heavy road vehicles travelling on public roads is 15.043 cents per litre.

SMSF

The ATO is going tighten the rules on trustees of a SMSF investing in collectables and personal use assets like artwork, coins, jewelry, stamps and recreational boats. If your SMSF holds these types of assets – click here to read more on how this will affect you. 

In November 2010 Interactive Accounting introduced RSDataWeb & superMate. These two excellent tools enable seamless data integration of banking and investment transactions into an online superannuation financial reporting & tax form preparation platform. This allows the first steps to be taken towards best practice in Super Administration in Australia for tax accountants without off-shoring the work. 

Off-shoring is a current trend amongst the Accounting Industry in Australia. It is the view of Interactive Accounting that off-shoring does not improve efficiency or benefits for clients. Off-shoring simply uses cheaper labour to reach greater profits whilst maintaining inefficient processes. 

RSDataWeb and superMate, in conjunction with direct bank feeds provided by Xero, will allow for the world's first 100% online Superannuation compliance solution. We are announcing the availability of this solution today. 

With this announcement Interactive Accounting demonstrates once again that it is at the forefront of the growing transition towards cloud based platforms for the accounting and tax industry, providing great benefits for clients. In this case, especially for those clients with Self Managed Super Funds, this integration will reduce the costs associated with compliance and help our clients retain their hard earned retirement savings.

New packages incorporating online Superannuation compliance will commence from July 1, 2011. If you are interested in taking advantage of these services should stay tuned to our website or contact our team at hello@interactiveaccounting.com.au and we can have your super up and running prior to 1 July, 2011. 

How was this possible?

RSDataWeb, the "Switzerland" of data feed products, is brought to you by Reward Super use sophisticated character recognition templates to turn all matter of financial forms into data that can be used in accounting platforms. 

superMate, is brought to you by Supercorp who have been delivering SMSF accounting and tax platforms for the last 25 years. Supermate is their first 100% internet based product and allows accounting reports, tax returns and superannuation documentation to be produced from within it's platform.