You may want to keep these in mind if you are in the market (or planning) to buy an asset (or some) in the short term.

• The Government will provide Australian small businesses with an instant tax write-off of the first $5,000 of any motor vehicle purchased from 2012-13. The remainder of the purchase value can be transferred into the general small business depreciation pool, which is depreciated at 15% in the first year and 30% in later years.
• An immediate write-off of all assets valued at under $6,500 (up from $1,000 presently)
• A write-off of all other assets (except buildings) in a single depreciation pool at a rate of 30%
• A reduction in company tax rate. The changes will result in a small business company tax rate of 29% from 2012-13 onwards. To be eligible to access this lower rate in 2012-13, the aggregated turnover of the small business for that year must be less than $2 million. < Scrapped by the Budget

These reforms will be available to all small businesses, including sole traders and businesses operating through trusts, partnerships and companies.

Further information and detailed examples should be available in June or July.

For now, it is worth noting they are in the pipeline and due to commence from 1 July 2012. To confirm, these changes are due to commence from 1 July for assets purchased from 1 July and NOT at the moment.

• You didn’t work this year so no tax was actually paid on your behalf
• New employer actually withheld the right amount of tax as opposed to your former one which just withheld willy nilly OR vice versa.
• You changed employers throughout the financial year and got paid out a significant amount of leave etc which was not taxed properly, leaving you a lump sum liability in your tax return
• You now have a HELP (formerly HECS) bill you need to contribute to because you’re earning above $47,196 (in 2011/12 financial year)
• You made a trading loss from your side activities or business and it isn’t eligible to be offset against other income
• Your expenses have dramatically decreased ie you no longer have a mountain of eligible tax claims to offset your income

These are just some but not all reasons contributing to not getting as a big of a refund

Do you know of others? Feel free to share below

Firstly, you need to decipher which PAYG the ATO wishes you to pay; PAYG Instalments or PAYG Withholding.

PAYG Instalments

This is a system for paying instalments towards your expected income tax liability on your business and/or investment income for the current income year.

Your actual income tax liability is worked out when your annual income tax return is assessed.

Your PAYG instalments for the year are credited/offset against your tax assessment, for that year, to determine whether you owe more tax or are owed a refund.

The ATO is the only one who can enter and cancel you from the PAYG Instalment system.

PAYG Withholding

This is a system for withholding amounts from payments you make to employees and other businesses so they can meet their end-of-year tax liabilities.

You will have withholding obligations if you:
• are an employer, or
• operate a business that has other workers, such as contract workers and you enter into voluntary agreements to withhold amounts from payments you make to them, or
• make payments to other businesses that do not quote their Australian business number (ABN).

If you make payments subject to withholding, you must:
• register for PAYG withholding
• withhold amounts from wages and other payments
• lodge activity statements and make payments to the ATO
• provide payment summaries to workers
• provide ATO with a PAYG withholding payment summary annual report.

Hope that helps!

Scenario: Market rent for your investment property is $500 per week but you are a great friend or family member and renting out your property at $300 per week instead. Although it is very nice and welcome by the recipient – this does have tax consequences. Read on.

(Example copied from ATO’s Rental properties 2011 guide for rental property owners)

”
Mr and Mrs Hitchman were charging their previous Queensland tenants the normal commercial rate of rent ($180 per week). They allowed their son, Tim, to live in the property at a nominal rent of $40 per week. Tim lived in the property for four weeks. When he moved out, the Hitchmans advertised for tenants. Although Tim was paying rent to the Hitchmans, the arrangement was not based on normal commercial rates. As a result, the Hitchmans cannot claim a deduction for the total rental property expenses for the period Tim was living in the property. Generally, a deduction can be claimed for rental property expenses up to the amount of rental income received from this type of non-commercial arrangement.

Assuming that during the four weeks of Tim’s residence the Hitchmans incurred rental expenses of more than $160, these deductions would be limited to $160 in total ($40 multiplied by 4 weeks).

If Tim had been living in the house rent free, the Hitchmans would not have been able to claim any deductions for the time he was living in the property.
”

For any further information, please contact this office.

Do you work alone?

Never get a Christmas Party?

Do I have the solution for you! For the second year running this year in Mosman, Sydney we are running Jolly Solo – the Christmas Party designed for micro/solo business owners.

A chance to network in a relaxed environment, enjoy great food and fantastic entertainment!

We invite you to come and make your own Christmas Party with us!

Girls, get out your pretty frocks, boys shine up those black shoes!

WHY SHOULD I COME?

A chance to party, let your hair down & network

I WANT IN!

Buy your ticket to the Christmas Party: www.jollysolo.com.au

Have you ever seen or heard your competitors in the media? Has your business ever been in the media in a positive way?

Having positive media coverage of your business is a powerful way of getting people to know about your business and to think and feel about it in a certain way.

Media relations is not about selling your products or services – that is what other sales and marketing tools are for. For a small-to-medium sized business, it usually means identifying the media outlets that are watering holes where many of your ideal customers gather, and being included in those media outlets in a positive way that shows that you are helpful, knowledgeable and accessible.

Being on the front page of the Australian Financial Review is a pointless goal if it is not an influential ‘watering hole’ where your ideal customers congregate and turn to for influential information. However if your ideal client is in the food or hospitality industry, Food Service Australia magazine could be the optimal outlet to not only create awareness of your brand, but to also convey aspects of your business that you cannot always convey through other marketing tools. These include:
o   Credibility and trust
o   Personality and passion
o   Expertise
o   Confirmation of what you already market to your audience (for example, media coverage can confirm that you know what you are talking about, that you have an excellent track record or that you can translate IT speak into English).

Think about it: if your business is mentioned in a respected media outlet that is read by your ideal clients, it will have a much greater impact on your reputation than an advertisement would. This is because it is far more credible and interesting to have someone else say good things about your business than to hear it coming from you.

If you could read minds you might catch a reader thinking, “Someone who understands my interests (a respected media outlet) independently sought this person out for their advice, expertise or opinion. They could have chosen someone else in the field but they chose them. “

So how can YOU get in the media?

Most PR agencies will suggest that you use media releases or email out a media kit to countless journalists to generate positive coverage for your business. However, for many small-to-medium sized businesses, this is bad advice. While there are some instances where a media release or a media kit are appropriate, they are not an effective public relations tool for all businesses and all situations, and they should not be your only method of generating media coverage.

There are many other ways of getting in the media that are accessible to the budget of a small-to-medium sized business. These include:

• Bylined articles. Articles providing helpful advice, how-to tips, bold commentary and explanations. Published in targeted media publications such as magazines, they help to raise your profile as a sought-after expert. You are attributed as the author with your name attached. Often your company name, website, a short bio and a photo of you are also included in the author line.

• Opinion pieces. These are written to provide your passionate opinion on a topic relating to your industry. For example, busting myths, exposing money-wasting schemes or causing debate.

• Case studies. If you have some client case studies where a business has used your services resulting in a measurable ROI, you have the opportunity to offer media a case study of your business success story. If put together in the right format with the right information and materials, media love case good studies.

• Participating in scheduled features and interview opportunities. A PR agency with good relationships with key media can pitch you as a spokesperson for interviews, or as a case study to be involved in scheduled feature articles and news pieces.

Important disclaimer: Media relations requires that you give the media ‘newsworthy’ information. If your message is something that you would normally use an advertisement to say (for example, announcing that your business is having a stocktake sale or that you are better than your competitors), then this is not newsworthy. Media coverage is not free advertising.

Author’s Bio:

Phoebe Netto is the Managing Director of Good Business Consulting ( http://goodbusiness.net.au/), a small business advisory.

She has a background in public relations and marketing, and takes these skills that are often reserved for big businesses with big budgets, and uses them to help small businesses grow and meet their objectives. Phoebe is passionate about helping good small businesses grow through retaining their customers and attracting new ones.

You can read more of her advice regarding marketing, public relations and small business at her blog http://goodbusiness.net.au/blog/ or her newsletter http://goodbusiness.net.au/Newsletter.php

Please review the circumstances for the 2011 financial year below and note the change made by the recently handed down Budget.

Below is an extract from the ATO’s broadcast to Tax Agents:

Austudy and ABSTUDY recipients

In the same way we did for Youth allowance recipients who studied, we are writing to those of you who had previously lodged income tax returns for eligible Austudy and ABSTUDY clients. We are advising you that we will amend their tax assessments for the 2007, 2008, 2009 and 2010 income tax years to include a tax deduction of $550 for study expenses for each year they are eligible.

Deductions can be claimed for the 2011 year for study expenses incurred by Austudy, ABSTUDY and Youth allowance recipients.

Newstart allowance recipients and Youth allowance job seekers
If you have clients who are Newstart allowance recipients or Youth allowance job seekers, they may be entitled to a deduction for expenses they incur in actively seeking paid work.
Eligible taxpayers are those who:

• received Newstart allowance or Youth allowance to seek paid work during the year
• have included the allowance as income in their tax return
• incurred expenses during the year seeking paid work (this includes costs they incurred in meeting the requirements of an Employment Pathway Plan), and
• have written evidence to support their claim for the expenses.

Eligible taxpayers can claim deductions for the 2011 year when they lodge their tax return.

Eligible taxpayers can also request amendments for the 2007, 2008, 2009 and/or 2010 years.

The ATO will be monitoring the claims made throughout the 2011 year and may seek additional evidence as a result.

Budget Announcement
In the 2011 Budget, the Government announced its intention to change the law to prevent deductions being claimed against all government assistance payments from 1 July 2011. This includes claims for:

• study expenses by those who receive Youth allowance, Austudy and ABSTUDY
• job search expenses by Newstart allowance recipients and Youth allowance job seekers.

At this time, the legislation has not been introduced into Parliament. Something to keep in mind for you or your children receiving government assistance payments!

Can you describe what you do in 140 characters or less?

We help small businesses to get more out of their marketing and afford the new car that they started their business for in the first place.

What made you get into the marketing field?

Even as a kid I was interested in marketing. I was always curious how companies became so big and made so much money.

Your website states you use guerrilla marketing techniques – can you explain these sort of techniques?

Guerrilla Marketing is creative, unconventional and clever. It’s using your strengths as a small, nimble business to stand out & boost sales.

Do you find that most businesses don’t have a marketing plan?

I do. I would estimate that only about 10% of our clients previously had a marketing plan prior to working with us.

Why do you think that is?

It’s a shame but most businesses never knew where to start or never had the time to put one together.

Do you find that marketing is often not given the budget it deserves?

You know what? I think that the size of your marketing budget is irrelevant in 2011. Sure, money helps but creativity is far more valuable.

Your website also features a free monthly marketing report template download. This is a great template to stay on top of your marketing goals and successes. Have you had any feedback from clients or prospects who have used it?

To be honest I haven’t. Maybe we should be putting more work into our follow up communication.

What’s one of the more interest campaigns you’ve had a chance to work on?

We had a business come to us that was bleeding money and had 3 months left unless things improved. Being able to make such a huge different is very rewarding.

How about a challenge with any particular campaign?

Not a particular campaign but many of our projects are challenging due to the complex industries in which they operate. It’s all part of the fun and motivation that we have.

With email marketing and e-newsletters flooding our inboxes, is there still room for direct mail outs?

Definitely, but only if you make them exceptional. The bar is getting higher every month and average just won’t do it any more.

You also have a sister business – the Blog Designer. Has building a blog as part of a website become a given as opposed to simply being a variable?

At the end of the day you need to have a marketing strategy that makes you interesting enough for people to read your blog. If you don’t have that, a blog may not work for you.

And finally, what would you say to people who are sitting on the fence with respect to seeking marketing services?

Research marketing consultants that you are thinking of using. Get to know them, the clients they’ve worked with and see if they’re the real deal. We don’t bite

Contact Mike via:

Website – http://bit.ly/h39Fe9
Twitter – @MikeFromEngage & @EngageMrktingAU
Interviewed by Janna Fikh of Fletcher Tax Accountants

05/04/11

• Accountant and bookkeeper (biased to take #1 spot I know)
• Australian Taxation Office (ATO)
• Bank/s
• Lawyer
• Post Office
• Electoral Roll
• Gas
• Electricity
• Insurances
• Superannuation
• Loyalty and store cards
• Alumni and professional associations
• Anyone who you have direct debits with (ie Foxtel)
• NRMA
• Magazine subscriptions, Amazon or other web vendors you order from.
• Library
• School/s
• Doctor’s and specialists’ office
• Medicare and private health fund
• Vet
• Software providers
• And last but not least: children, family and friends

Have we missed anyone? Feel free to share your stories or additional tips for moving your business and/or personal residence.

THE FACTS

Are you eligible?
• are the primary carer of a newborn child or recently adopted child
• are an Australian resident (Australian citizen, holder of permanent visa, a New Zealand citizen who arrived to Australia on a New Zealand passport and some temporary visa applicants)
• have met the Paid Parental Leave scheme work test (see below) before the birth or adoption occurs,
• have received an individual adjusted taxable income of $150,000 or less in the previous financial year, and
• are on leave or not working from the time you become the child’s primary carer.

The Paid Parental Leave scheme work test
To meet the Paid Parental Leave scheme work test you must have:
• worked for at least 10 of the 13 months prior to the birth or adoption of your child, and
• worked for at least 330 hours in that 10 month period (just over one day a week), with no more than an eight week gap between two consecutive working days.

A working day is a day you have worked for at least one hour.
There are some exceptions to the work test if you cannot meet it due to pregnancy complications and/or premature birth.

You do not need to be working full-time to be eligible for Parental Leave Pay. You may meet the work test even if you:
• are a part-time, casual or seasonal worker
• are a contractor or self-employed
• work in a family business such as a farm
• have multiple employers, or
• have recently changed jobs.

Can you work while receiving Parental Leave Pay?
If you return to work, your Parental Leave Pay will stop.

What about your other employer entitlements?
The scheme does not change any of your existing leave entitlements.
If your employer currently provides paid maternity or parental leave through an industrial agreement, they cannot withdraw the entitlement for the life of that agreement.

What should you do before your child arrives?

If you think you are eligible for Parental Leave Pay there are a number of things you should do before your child arrives.
1. Plan your caring role and work leave arrangements.
o Consider what paid and unpaid leave you might take from work, when you would like your Parental Leave Pay to start, and when you might want to return to work.
2. Use the Paid Parental Leave Comparison Estimator
o Parental Leave Pay and the Baby Bonus cannot be paid for the same child. If you meet the eligibility criteria for both payments, you can choose which payment is the best financial decision for your family.
o Most eligible families will be better off receiving Parental Leave Pay rather than Baby Bonus. You should check the Paid Parental Leave Comparison Estimator to work out which payment is best for your family.
3. Talk to your employer.
o Organise your leave from work. You should try to do this at least 10 weeks before you intend to take leave.
o If you have worked for 12 months or more for the same employer you are entitled to up to 12 months unpaid parental leave.

How will you be paid?
Parental Leave Pay will be provided to you by either your employer in your usual pay cycle or by the Family Assistance Office in fortnightly payments.,
From 1 January 2011, you and your employer can agree that your employer will provide your Parental Leave Pay. Your employer will be funded by the Australian Government to do this if you are eligible. If either you or your employer do not agree, you will receive your Parental Leave Pay from the Family Assistance Office.

From 1 July 2011, your employer must provide your Parental Leave Pay if you have worked with them for at least 12 months prior to the expected date of birth or adoption of your child and you will be receiving at least eight weeks of Parental Leave Pay. If this does not apply to your situation, you and your employer can still agree that your employer will provide your Parental Leave Pay after 1 July 2011, provided you are eligible.

How much will you be paid?
Eligible working parents will receive Parental Leave Pay at $570 a week for a maximum period of 18 weeks. This pay is taxable.

If your employer is providing your Parental Leave Pay:
• You will be able to access other paid leave such as maternity leave, however this may mean you will be taxed at a higher rate.
• They can deduct child support from your Parental Leave Pay if they are required to do so.
• You may arrange for other deductions to be made from your Parental Leave Pay.
• You may salary sacrifice some or all of your Parental Leave Pay. For example, you may make voluntary contributions to superannuation. You must agree these arrangements with your employer as you do with wages.
• Your employer will not be required to make superannuation contributions on your Parental Leave Pay.
If we provide your Parental Leave Pay:
• We will withhold PAYG at the rate of 15 per cent unless you request another rate.
• You will not be able to salary sacrifice Parental Leave Pay that is provided directly by us.
• You can voluntarily request a Family Assistance and/or Centrelink debt to be deducted.

What else do you need to know about this entitlement? (which is often not conveyed during media coverage)

Parental Leave Pay and the Baby Bonus cannot be paid for the same child. If you meet the eligibility criteria for both payments, you can choose which payment is the best financial decision for your family.

If you have a multiple birth (for example, twins or triplets), you can receive Parental Leave Pay for the first child and, if you are eligible, the Baby Bonus for a second or additional child in a multiple birth.

Parental Leave Pay will count as taxable income for Family Tax Benefit and child support purposes.

You and your partner cannot receive Family Tax Benefit Part B, the dependant spouse, child housekeeper and housekeeper tax offsets during the Paid Parental Leave period. These may be paid after the end of the Paid Parental Leave peiod.

Are you an employer with a staff member who has given birth or about to, post 1 January 2011?
The Paid Parental Leave scheme starts on 1 January 2011. Your role in providing Parental Leave Pay will be voluntary until 30 June 2011. This means you have time to make any necessary adjustments to your payroll system. This also means you will not have to make changes to your payroll system part-way through a financial year.

From 1 July 2011, you will be responsible for providing Parental Leave Pay to your eligible employees who have or adopt a child from 1 July 2011, and have worked in your business for 12 months or more and are expecting to receive more than eight weeks Parental Leave Pay.However, you will have the choice to pay your employee if they have worked for your business for less than 12 months, or are accessing less than eight weeks Parental Leave Pay. If you choose not to provide your employee their Parental Leave Pay in these situations, we will pay your employee.

Your employee will need to contact the Family Assistance Office and lodge a claim for Parental Leave Pay.

On a practical level:

Paid Parental Leave funds will be transferred into the business bank account you nominate, before your employee’s usual pay cycle cut off date. You will receive these funds fortnightly over 18weeks, or you can receive them in three six-weekly instalments.

You will be required to withhold tax from the Parental Leave Pay under the usual PAYG withholding arrangements. You must also include any Parental Leave Pay in the total amounts on the employee’s annual or part-year payment summary.

Other Links of Interest:

For a checklist of things you need to do and/or keep track of as an employer, please see > http://www.familyassist.gov.au/payments/family-assistance-payments/paid-parental-leave-scheme/employers–what-will-i-need-to-do.php

Examples of how the Paid Parental Leave applies > http://www.familyassist.gov.au/payments/family-assistance-payments/paid-parental-leave-scheme/working-parents—more-information.php

Questions & Answers for working parents > http://www.familyassist.gov.au/payments/family-assistance-payments/paid-parental-leave-scheme/parents—frequently-asked-questions/

Once again, for more detailed information about this entitlement, please see the Family Assistance Office website > http://www.familyassist.gov.au/payments/family-assistance-payments/paid-parental-leave-scheme/ or contact them directly for further rights and responsibilities.