Collins Hume Blog

Tax planning

Company tax rate reduction from 1 July 2020

Despite the current economic environment, the company tax rate will reduce to 26% for small and medium businesses from 1 July 2020.

The 1 July change is part of a larger progressive plan to reduce the company tax rate to 25% from 1 July 2021 and applies to base rate entities (BRE) - companies, corporate unit trusts, and public trading trusts - with an aggregated turnover of less than $50 million where 80% or less of the entity's turnover for the year is classified as base rate entity passive income. 

Larger companies will continue to pay the 30% rate.

Read more…

Tax planning

Changes from 1 July 2020

• Company tax rate reduces to 26% for base rate entities
• $150k instant asset write-off scheduled to reduce back to $1,000 for small business entities and will no longer be available for entities with aggregated annual turnover of $10m or more, although accelerated depreciation rules apply to certain entities until 30 June 2021
• Cents per km rate for work-related car expenses increase to 72 cents
• Expected reforms to allow 66 and 67 years olds to make voluntary superannuation contributions without satisfying the work test. This reform is not yet law.
• Age limit for making superannuation contributions to your spouse increases from 69-74. This reform is not yet law.
• For those 67 and under, reforms will enable you to use the 'bring forward rule' to make up to three years of non-concessional contributions. That is, you can make non-concessional contributions of up to $300,000 from the 2020-21 financial year.

Our year end-checklists that cover all the year end issues and what you should be doing before 30 June are available at Factsheets now. 

If you need to get on top of your tax planning this year-end, call Collins Hume and we'll make sure you know your tax position as well as the various options available to your before 30 June.  Read more…

Super guarantee amnesty

Now is the time to get payroll right

A series of high-profile examples of businesses underpaying their employees has brought the need to get payroll right into sharp focus.

Complex award and enterprise agreements can complicate payroll obligations, in terms of both regular salary and wages and the ongoing need to pay employee superannuation. On top of that, from 1 March 2020, changes commence for annualised wage arrangements that will increase the compliance burden on some businesses.

The new rules impact on full time employees paid an annual wage under one of 16 Awards (see the full list here). Under the rules, an employee's annual wage can't be less than what they would've been paid over the year if they were paid all of their award entitlements for their work. If you pay your team above the award entitlements, then you can continue to pay an annualised salary without using the annual wage arrangements. If you have team members on a minimum wage however, there are additional obligations.

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Fringe Benefit Tax 2020

With the start of the Fringe Benefits Tax year looming on 1 April, businesses are being urged to review their Fringe Benefits Tax (FBT) position.

The ATO's top FBT problem areas

1. Motor vehicle fringe benefits - failing to report motor vehicle fringe benefits, incorrectly applying exemptions for vehicles or incorrectly claiming reductions for these benefits
2. FBT and income tax mismatch - mismatches between the amount reported as an employee contribution on an FBT return compared to the income amounts on an employer's tax return 
3. Entertainment claimed as a deduction but not recognised as FBT - claiming entertainment expenses as a deduction but not correctly reporting them as a fringe benefit, or incorrectly classifying entertainment expenses as sponsorship or advertising
4. Car parking fringe benefits - incorrectly calculating car parking fringe benefits due to:  Read more…

10M hectares, lives lost, wildlife on the brink, billions in lost revenue and clean-up costs

For many, returning life to normal is a long way off this summer. We summarise the help available to those impacted by the bushfires.

What we can do for you
If you are impacted by bushfires, we can help. Many will need to lodge economic loss claims to ensure that the true value of what they have lost is recognised.