mackay accountants

Vision Financial Group has moved!

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Vision Financial Group is delighted to announce that we have relocated to new business premises (with on site and street parking available).

We are now at Shop 10, Northpoint Retail in the Harvey Norman complex Mackay.

Please note our office number is still 0749 517900 following the move to our new premises, and all other contact details including e-mail, postal address and mobile number will remain the same.  Thank you for your continued support and the opportunity to be of ongoing service to you and look forward to meeting you at our new premises in the near future.

What every employer needs to know about fringe benefits

On 31 March 2017, the Fringe Benefits Tax (FBT) year ends. The ATO will be reviewing whether all employers who should be paying FBT are, and that they are paying the right amount.

To help you meet your fringe benefits obligations, we’ve put together a list of essentials every employer needs to know about FBT and review every year, such as:

  • Should I be registered for FBT?
  • What information do I need to give my accountant?
  • Are there any changes to the FBT rates come 1 April 2017?
  • What is exempt from FBT?
  • How can I reduce my FBT liability?
  • Do I need to review our salary sacrifice agreements?

These questions are all answered for you below, as well as some log book management tips and new rules that have been introduced to salary sacrificed meal entertainment benefits.

 

FBT Rate changes

On 1 April 2017, the FBT rates will decrease to:

FBT Rate                                    47%

Type 1 Gross Up Rate           2.0802

Type 2 Gross Up Rate           1.8868

 

Should you be registered for FBT?

Generally, if you have employees, including directors and you provide them with cars, car parking, entertainment (food and drink), employee discounts, reimburse private expenses etc, then you are likely to be providing a fringe benefit and we will need to register your business for FBT.

It’s important you start gathering all of the details of these provided benefits as soon as possible using our annual FBT Questionnaire so we can calculate any potential FBT liability and lodge your FBT return on time – due 25 June 2017 with payment to be made by 28 May 2017.

 

What items are exempt from FBT?

If you’re providing items like mobile phones, laptops, tablets, portable printers, protective clothing, tools of trade etc., or minor and infrequent benefits that are less than $300 in value, you are unlikely to have to worry about FBT.

You can fill out our short FBT Questionnaire to 100% sure.

 

An easier way to manage your vehicle log books  

For employers with 20 or more ‘tools of trade’ cars – a car required for the job, like for a sales rep travelling extensively for the business – the ATO has a new process for validating the business use percentage of the car.

It’s called the ‘simplified method’, and if you meet the access conditions, you can apply an average business use percentage to all ‘tools of trade’ cars in your fleet for first log book year and the next 4 years. Conditions to be met are:

·     valid log books kept for at least 75% of the cars in the log book year;

·     the employer chose the make and model of the car, not the employee;

·     each fleet car has less value than the ‘luxury car’ limit when purchased, generally $64,132 in 2016/2017;

·     the cars aren’t provided under a salary packaging arrangement / employee remuneration package; and

·     your employees can’t choose to receive additional remuneration in lieu of using the cars.

Is it time to review your salary packages?

With the FBT rate changing again on 1 April 2017, it’s a good time to review all existing agreements so that you and your employee know what the package will look like once the rate drops to 47%.

The lower rate will, in general, make salary packaging less expensive to provide and an opportunity to look for potential savings. For example, for employees earning above $180,000 there is a one-off opportunity between 1 April 2017 and 30 June 2017 to reduce their taxable income with the FBT rate drop covering the 2% Debt levy imposed.

Be careful though not to drop the individual’s income below the Debt levy threshold, and make sure the benefits provided under the salary sacrifice agreement replace amounts that would have been payable as salary, the employee agrees in writing to forego income before it is earned in return for benefits of a similar value, and the sacrificed amount comes out of the employee’s wages and not reimbursed into their bank account.

 

New rules for meal entertainment benefits that are salary sacrificed

Where an employee agrees to receive meal entertainment benefits instead of future salary, i.e. as part of a salary sacrifice arrangement, concessions have been removed as of the 2017 FBT year. There are 3 key changes to note:

·     these benefits are to be included in the employee’s individual fringe benefits amount being reported on the payment summary when it exceeds the $2,000 reporting exclusion threshold;

·     you can no longer use the 50-50 split or 12-week register methods to value these benefits; and

·     a new separate $5,000 cap for ‘salary sacrificed’ meal entertainment benefit now exists for employees of charities and not-for-profits. If these benefits exceed the cap the excess will be counted toward their current $31,177 exemption or $17,667 rebate cap.

 

Ways you can reduce your FBT liability

Here are some ways in which you can reduce your FBT liability:

·     replace your fringe benefits with cash salary;

·     provide benefits that your employees would be entitled to claim as an income tax deduction if they had to pay for the benefits themselves;

·     look at providing benefits that are exempt from FBT; and

·     use employee contributions, for example, an employee paying for some of the operating costs of car fringe benefit such as fuel that you don't reimburse them for. Though you should note that employee contributions may be deemed assessable income to you and subject to GST.

 

How we can help you!

The FBT year ends on 31 March 2017, so be sure to complete and return the FBT Questionnaire as soon as possible so you don’t miss the lodgment date of 25 June 2017, and meet the payment due date of 28 May 2017.

We look forward to helping you meet your FBT obligations and are available anytime to answer any questions you have around reducing your FBT liability or creating effective salary sacrifice arrangements.

Tax Planning Starts Now

There are 5 key things all business owners must consider right now. Some of them are brilliant wealth creation ideas. Please read on…

30 June will be here before we know it. Let us help you get the most out of the upcoming months.

Too often, we end up suffering because we have procrastinated and not made a positive decision to do something. If we all leave your tax planning until the end of May and early June, quite frankly there may not be enough time to do anything significant to legally reduce your tax.

So, for 2017, our invitation to you is to start now with your tax planning.

5 Key Tax Planning Strategies

Over the next five weeks, we will send you one email per week covering one of our five key tax planning strategies. These are:

  1. The Secrets to Tax Planning

  2. Last Chance for big super contributions

  3. Why use a “bucket” company?

  4. Why use a SMSF?

  5. Trust Distribution Resolutions before 30 June

So, keep an eye out for our emails over the next 5 weeks, and we’ll outline in detail for you how to save $ and at the same time grow your family’s wealth in a low-risk manner.

How our tax planning service works

1     First, we request from you details of your expected income and business profits for the 2017 tax year (1 July 2016 to 30 June 2017). This includes all:

  •  wages / employment income
  • interest, dividends and rental income received

  • business profits / losses; and

  • any capital gains / losses you expect to make.

Based on this information, we estimate your taxable income and your tax payable before any tax planning strategies. For example, we may calculate (based on your information) that you have a taxable income of $100,000 for 2017. This would result in $26,832 tax and Medicare levy payable.

2     Secondly, we discuss all your tax planning options. Some of these may be things to do in your business, and some of these may be investment / wealth creation options.

 

3     Third, we provide you with a report that explains in plain English the tax planning strategies we recommend and exactly how much tax you will save.

 

4     And finally, we provide you with an easy-to-follow action plan to ensure that both you and we can do everything that needs to be actioned before 30 June.

Contact us today to get started!

Don’t wait until June, now is the time to have a chat to us.  

General advice disclaimer
General advice warning: The advice provided is general advice only as, in preparing it we did not take into account your investment objectives, financial situation or particular needs. Before making an investment decision on the basis of this advice, you should consider how appropriate the advice is to your particular investment needs, and objectives. You should also consider the relevant Product Disclosure Statement before making any decision relating to a financial product.]