ABN 42 158 097 833

June 2017 Newsletter

Dear Client What a difference a week can make. Last week it was whatever happened to winter? With Perth on track to record its warmest start to winter since 1897 and the second driest June since records began. No need to go overseas, as the temperature was rivalling London's summer, although I bet it felt warmer in London! And now this week, brisk mornings of 4 degree! Needless to say, there goes the early morning walk in the park, and the “find 10000 steps!” So how do you keep healthy and fit? As much as it’s important to look after our physical health, it’s also important to have a financial health check up. This year when you make an appointment, please take the time to fill in our Financial Health Check Questionnaire at Reception and discuss with our accountants. GUILDFORD PARKING

We are very aware that parking in Guildford has

become very scarce, and now with the proposal of

a McDonalds Fast Food Outlet behind the

Guildford Hotel, parking is set to get even more

restricted.

REMEMBER Client parking is available at the rear of Our premises

TIP: keep a tax folder for your receipts and documents. It will save time keeping everything in the one place.

An Excel spreadsheet is another good way to record income and expenses for your businesses or rental property. Ask us for a template.

Or why not check out the apps now available to record your tax affairs.

For more information check out our website

pHaccts Pty Ltd ACN 158 097 833 Accountants & Business Advisors

Brockman House, 143 James Street, Guildford WA 6055

PO Box 267, Guildford, WA 6935 p: (08) 9379 1155 f: (08) 93792856

e:phaccts@phaccts.com.au w: www.phaccts.com.au

Continuity gives us roots. Change gives us branches,

letting us stretch, grow and reach new heights” Pauline R. Kezer

Tax time and your records

Accurate record keeping is important at this time of

year, and you can save money and time if you

present your records in an orderly system.

A system of all receipts going into a shoe box will just add to your bookkeeping costs. The ATO can impose penalties that go along with

failing to meet your tax requirements including not

keeping the required records, and most records

need to be kept for 5 years.

Use this opportunity for this time of year to contact

us to discuss how best to keep accurate records to

meet your taxation obligations.

Working out your Tax Return should be stress –free

Before you come in to see us at tax-time, please see our Tax Return

Checklist attached to ensure you bring everything we need to complete

your return quickly and easily for you!

Pauline Howatson and her team, Cherie Anglesey, Christy Ju, Kathy

Sparg, Sue Collins and Jody Newman look forward to assisting you

with your financial and taxation requirements. So when you are ready,

please contact our friendly administration team, Vicki & Michelle to

make an appointment.

Pauline Howatson

Principal

pHaccts accountants

STAFF GOSSIP Pauline has been escaping to the great outdoors on long weekends in the caravan. Cherie has been renovating her house, and has a brand new bathroom and kitchen. Christy is now back from maternity leave and is the proud Mum of another boy – Felix. Kathy and her husband Wade have a new business venture (Woodvale Chiropractic Clinic) as well as juggling 2 little boys plus work and home life. Most weekends sees Jody being Mrs Uber Mum for her 2 primary school age children’s sporting activities!

Tax pHaccts

Income Tax Rates 2017

No Changes to current personal income tax rates.

Taxable income $ Tax payable $

0–18,200 Nil

18,201–37,000 Nil + 19% of excess over

18,200

37,001–87,000 3,572 + 32.5% of excess

over 37,000

87,001–180,000 17,547 + 37% of excess

over 80,000

*180,001+ 54,547 + 47% of excess

over $180,000 *

It’s the Last year for

Temporary Budget Repair Levy of extra 2% Taxable income includes: -sell an asset and realise

capital gains, -take a superannuation lump sum benefit consisting of a taxable component between the age of 55 and 59.

Company Tax Cut –

In the 2016–2017 financial year, the reduced corporate tax rate of 27.5% will apply for businesses with an aggregated turnover of less than $10 million.

Tax Cut for Other Small Businesses – 5% tax discount will

be given to individuals with business income from an

unincorporated business (e.g. sole trader, trust or partnership

structure) that has an aggregated turnover of less than $2

million. It will be capped at $1 000 per individual, per year.

Wildly excessive” tax deduction

claims The ATO is sending letters to taxpayers where they

consider work related expenses to be higher than the

statistical average for similar occupations. We remind

you of the ATO substantiation requirements for allowable

deductions.

AUDIT INSURANCE We have engaged Audit Shield an accountancy audit insurance provider to cover those clients wishing to take out insurance for professional fees charged in association with an ATO audit or review. Please contact us if you did not recently receive a letter regarding this, or if you wish to take this insurance

.

Medicare levy low income threshold increased.

For the 2016/2017 income year the income threshold

before you have to pay the Medicare levy has been

increased to

Singles $21665

Couples with no children $36541

Additional amount of threshold for

each dependent child or student $3356

Single seniors and pensioners $34244

Intending to move Overseas and have

a student debts: repayment thresholds

From 1 July 2017, anyone with a Higher Education

Loan Programme (HELP) or Trade Support Loans (TSL) debt who intends to move overseas for 183 days or longer in any 12 month period, needs to notify the ATO within seven days of leaving Australia. They will need to lodge a 2017 tax return declaring their worldwide income. If they earn income above the

repayment threshold they will need to make compulsory loan repayments. The HELP minimum repayment threshold for 2016–2017 is $54,869.

To find out more about overseas repayments and how

you can view your loan balance,

see Study and training support loans.

If you require more information about your loans,

rights and obligations, please visit the StudyAssist

website.

TIP: If you have a student loan debt and are planning to move overseas for longer than six months, you need to provide the ATO with your overseas contact details within seven days of leaving Australia. You should also factor in potentially having to make repayments from 1 July 2017.

Privacy Act – Release of Information to a Third Party

Does your bank require information? Or

Centrelink?

Don’t forget we need your authority to

release any information to third parties so

please give us a call/email if you are

considering applying for finance etc…

Rental Property pre and post 30 June Anyone with investment property or thinking about purchasing a property needs to know changes are afoot. Post 9th May 2017 ownership No more deductions for travelling to and from your investment property The days of writing-off the costs of travel to and from your residential investment property are about to end. From 1 July 2017, the Government intends to abolish deductions for travel expenses related to inspecting, maintaining, or collecting rent for a residential rental property. Depreciation changes Investors who purchase residential rental property from Budget night (9 May 2017, 7:30pm) will now have reduced depreciation deductions. Basically, if you are not the original purchaser of the item, you will not be able to claim depreciation. If you are an Investor who directly purchases plant and equipment – such as ovens, air conditioning units, Hot Water Systems, carpets etc – for your residential investment property after 9 May 2017 you will be able to claim depreciation deductions over the effective life of the asset. However, subsequent owners of a property will be unable to claim deductions for plant and equipment purchased by a previous owner of that property. Investors will still be able to claim capital works deductions including any additional capital works carried out by a previous owner. This is based on the original cost of the construction work rather than what a subsequent owner paid to purchase the property. pre 9 May investment property owners Quantity Surveyor Reports are a must for claiming depreciation deductions. If you do not already have one, please consider obtaining one. As a property gets older the building and items within it wear out. Property owners of income producing buildings are able to claim a deduction for this wear and tear. Depreciation schedules completed by quantity surveyors, itemise the depreciation deductions you can claim. Higher immediate deductions for co-owners It’s not uncommon to have multiple owners of an investment property. Co-ownership can, in some circumstances, quicken the rate depreciation deductions can be claimed for the same asset. This is because depreciation is claimed on each owner’s interest. If an owner’s interest in an asset is less than $300, they can claim an immediate deduction. The value of renovations It’s best to get a depreciation schedule completed before you start renovations so the scrap value of any items you remove can be recognised and written-off as a 100% tax deduction in the year of removal. This is available for both plant and equipment depreciation and capital works deductions.

When the renovation is completed the building component (ie a new roof, walls, or ceiling), can be depreciated at 2 ½% going forward. Further restrictions on foreign property investors Recent Federal Budget proposals, to restrict access to tax concessions, increase taxes, and penalise investors who leave property vacant. Measures include:

• Charge for leaving properties vacant – Foreign owners of residential Australian property will incur a charge if their property is not occupied or genuinely available on the rental market for at least 6 months each year. The charge, which is expected to be at least $5,000, does not appear to apply to existing investments but those made on or after Budget night, 7:30pm on 9 May 2017.

• Excluded from main residence exemption – Foreign and temporary residents will be excluded from the main residence exemption. The main residence exemption excludes private homes from capital gains tax (CGT). Existing properties held prior to 9 May will be grandfathered until 30 June 2019. However, it remains to be seen whether partial relief will be available to those who have been residents of Australia for part of the period they owned the property and whether this change will apply to Australian residents who were classified as a foreign resident for part of the ownership period.

• Increase in CGT withholding tax – When someone buys Australian real property (ie land and buildings) they are currently required to remit 10% (increasing by 2.5% to 12.5%) of the purchase price directly to the ATO as part of the settlement process, unless the vendor provides a certificate from the ATO indicating that they are an Australian resident.

• To prove that you are an Australian resident, every vendor must complete an application.

• From 1 July 2017, the CGT withholding threshold for foreign tax residents will reduce from $2 million to $750,000.

• Rules tighten for property purchased through companies or trusts – Australian property held through companies or trusts by non-residents or temporary residents is also being targeted by expanding the principal assets test to include associates. The move is to prevent foreign residents avoiding Australian CGT liability by splitting indirect interests in Australian real property.

• Level of foreign investment in developments capped – a 50% cap is being placed on foreign ownership in new developments.

Businesses

Business software - Need help?

We can assist you with Xero, MYOB and Reckon and

Cashflow Manager.

Assistance for Start-Ups – An immediate deduction is available for professional

expenses associated with starting a new business (such as

legal or accounting advice in establishing your business

structure.

GST Registration

You must register for GST if:

o your business or enterprise has a GST turnover (gross

income minus GST) of $75 000 or more

o your non-profit organisation has a GST turnover of

$150 000 per year or more

o you provide taxi, uber or limousine travel for

passengers in exchange for a fare as part of your

business,

o regardless of your GST turnover – this applies to both

owner drivers and if you lease or rent a taxi

o you want to claim fuel tax credits for your business or

enterprise.

If your business or enterprise doesn’t fit into one of the

above categories, registering for GST is optional.

However, if you choose to register, you generally must stay

registered for at least 12 months.

If your turnover exceeds the relevant threshold, you must

register within 21 days of reaching it.

If you don't register for GST and are required to do so, you

may have to pay GST on the sales you have made since the

date you became required to register. This could happen

even if you did not include GST in the price of those sales.

You may also have to pay penalties and interest.

Increased Turnover Threshold for SBEs

The Small Business Entity (SBE) turnover threshold is

now $10 million, up from $2 million to $10 million.

Accelerated Depreciation The Government have extended the current instant asset write-off ($20,000 threshold) for small business entities (SBEs) by 12 months to 30 June 2018.

The threshold amount was due to return to $1,000 on 1 July 2017. SBEs will be able to immediately deduct purchases of eligible depreciating assets costing less than $20,000 that are acquired between 1 July 2017 and 30 June 2018 and first used or installed ready for use by 30 June 2018.

Payment Summary Annual Reporting

obligations With the end of the financial year looming employers will need to prepare the following documents

❖ provide payment summaries to your employees by 14 July

❖ send the ATO your payment summary annual report

❖ use the new tax rates for withholding from 1 July. You can check for updates to tax rates on the ATO website If you use accounting software, you should contact your software provider for payroll updates.

If you require our assistance to help you meet your obligations please contact us to discuss. As always these tools and products may assist.

The ATO app can be downloaded through Google play™, Apple App Store and Windows Phone Store

Sage Point&Claim app Never lose a receipt again. Check out the free expense management app. simply take a photo of your receipt and enter in app. Keep track of your Warranty details. www.pointandclaim.com

Are you intending to claim a deduction for your motor vehicle? Do you need to keep a motor vehicle log book? Or does your employer provide you with a vehicle and you need a log book for FBT?

Download this app at www.vehiclelog.com.au

• multiple vehicles.

• multiple logbook periods.

• calculates & reports your % business use.

• editing of existing trip records.

• publishes both CSV files and PDF copies your logbook.

• creates an audit report in both CSV and PDF format every time you publish.

• Optional use of GPS to automatically calculate the end odometer value, record start & end locations & route information.

• Quick & easy selection of purpose of journey via favourites.

• iPhone calendar & contact entries can be selected as the purpose of the journey (e.g. Sales Meeting: ACME Incorporated).

ATO app Small businesses can use the ATO app to access tax and superannuation tools and calculators.

Do you have a myGov account?

Haven’t set one up yet? myGov is a secure way to access government services online with one login and one password.

▪ Medicare ▪ Australian Taxation Office ▪ Centrelink ▪ Australian JobSearch ▪ My Health Record ▪ My Aged Care ▪ Child Support ▪ Department of Veterans' Affairs ▪ National Disability Insurance Scheme ▪ If you have an ABN, you can connect it

to your myGov account. For those wishing to prepare their own income tax returns check out myTax.

• myTax is accessed through myGov For more information go to https://my.gov.au

Centrelink Changes Changes to FTB Part A payments Is your Child immunised? From 1 July 2017, Family Tax Benefit Part A supplement payments will be reduced by $28 per fortnight for each child who does not meet the Government immunisation requirements. Changes to dollar income test taper The Government will implement a consistent 30 cents in the dollar income test taper for Family Tax Benefit Part A families with a household income in excess of the Higher Income Free Area (currently $94,316) from 1 July 2018. This will ensure that higher income families are subject to the same income test taper rates.

Changes to Age Pension eligibility From 1 July 2017, the age to be eligible for the Age Pension is changing. Clients who were born on or after 1 July 1952 will need to be aged 65 years and six months before being eligible, and the Age Pension age will then go up by six months every two years until 1 July 2023, when the Age Pension eligibility age will be 67. Thinking of applying? You can submit a claim up to 13 weeks before reaching Age Pension age.

Commonwealth Seniors Health Card

This card gives older Australians cheaper health care and some concessions.

Eligibility basics You can get a card if you:

• have reached pension age • do not qualify for a payment from us or the

Department of Veterans' Affairs, and • meet an income test • are an Australian resident currently living in

Australia

You must meet an income test to get the Commonwealth Seniors Health Card, reviewed on 20 September each year in line with the Consumer Price Index.

The income test will look at your:

• adjusted taxable income • a deemed amount from account based income

streams

To pass the income test, you must earn no more than:

• $52,796 a year if you’re single • $84,472 a year for couples • $105,592 a year for couples separated by illness,

respite care or prison

Add $639.60 to these amounts for each child in your care.

There is no assets test.

Account based income streams

If you receive an account based income stream or annuity, it is now included as part of the income test. The balance of an account based income stream is subject to deeming. Deeming assumes that financial investments are earning a certain rate of income.

Deeming rules will only apply if:

• you bought or changed it on or after 1 January 2015

• you own it and your Commonwealth Seniors Health Card was granted after 31 December 2014

• your partner owns it and they are 60 years old or more

Remember

We are just a phone call

away

Superannuation

Changes to how much you can contribute into

Superannuation

How much can I put into Superannuation before 30/06/2017?

For the 2016/17 year the concessional contributions cap is $35,000 for people aged 49 or over on 30 June 2017. For everybody else the cap is $30000.

How much can I put into Superannuation after 30/06/2017?

For the 2017/18 year the cap has been reset at $25,000 for all taxpayers If you currently are an employee and have salary sacrificing arrangements with your employer you will need to review your contribution limits. If you are self employed you may be entitled to deductions for personal contributions. Please ensure you complete and provide to your Superannuation Fund, a Notice of Intention to Claim for Personal Contributions.

Government co-contributions

The Government co-contribution “lower income

threshold” is set to increase to $36,813 for 2017-18,

while the “higher income threshold” is $51,813.

Employers

Super guarantee While the super guarantee is frozen at 9.5% until 1

July 2021, the “maximum contribution base” will rise

to $52,760 per quarter from 2017-18 (up from

$51,620 for 2016-17).

An employer is not required to provide the minimum

super guarantee support for that part of an

employee’s ordinary time earnings (OTE) above the

quarterly maximum contribution base (ie $52,760 for

2017-18). This quarterly maximum represents a per

annum equivalent of $211,040 for 2017-18.

SuperStream All businesses should now be

SuperStream compliant

Superannuation Contributions Make sure contributions have been received by the fund by

30 June if they are intended to be counted for the members

in the 2016/2017 financial year;

30th June 2017 is a FRIDAY

Payments of superannuation must be received by the relevant fund by 30 June to obtain a tax deduction for the current financial year.

Note that if you "EFT" the payment, the ATO maintainsthe date of payment is the day it is received by the fund, not the day it left your bank account! So, do not leave your EFT and BPay payments until the last few days in June. Note also that payments from "clearing houses" also need to reach the super funds by 30 June – they have advised a cut off date of 23 June to be certain of this.

When can I access my super? Increase to Preservation Age

Please check your preservation age

Birthday Age at which you can access your super

Before 1 July 1960 55

July 1, 1960 -- June30, 1961

56

July 1, 1961 – June30, 1962

57

July 1, 1962 – June 30, 1963

58

July 1, 1963 – June 30, 1964

59

After June 30, 1964 60

Self Managed Superannuation Funds Do you have your own SMSF and draw a

pension? Pension minimums reminder • Please ensure that you have taken the minimum pension payment before 30th June. The implications of not paying the minimum can mean your Fund does not qualify for its tax free status. • In the case of a transition to retirement income stream, if you exceed your pension limit, any ‘pension’ withdrawals may constitute unauthorised lump sum payments.

Who’s in the ATO Firing line this year?

The Black Economy Taskforce is ramping

up, and the Government plans to claw

back almost $600 million through a

fresh crackdown — with couriers and

cleaners next in the firing line.

➢ Work related travel claims, eg carrying work equipment and bulky/heavy items

➢ Overnight Travel Allowance and Expenses - Expenses must have been incurred &

Travel diary necessary ➢ Self Education Expenses ➢ Home Office; Mobile phones & Internet ➢ Rental Property Expense claims, especially

Holiday Homes and Airbnb ➢ Travel claims for Rental Properties ➢ Online Sales such as E-Bay ➢ Uber drivers ➢ Development/selling “apps” ➢ High Income Earners ➢ Income from Overseas ➢ Taxpayers with large asset base ➢ Taxpayers who lodge their returns late.

Penalties will be incurred, especially Self Managed Superannuation Funds.

➢ Family Trust Distributions

➢ Small Business If your business falls outside the ATO industry benchmarks be sure to have an explanation as to why this is so. Failure to be able to explain why your business is different to others in the same industry, may lead to an ATO audit.

Below are 10 common ways that businesses trigger an ATO audit: 1 Have financial performance that is out of kilter with your industry. 2. Don’t pay the right amount of superannuation to your employees. 3. Variances between tax returns and business activity statements 4. Have a poor record of lodging returns on time. 5. Consistently show operating losses. The ATO regards 3 loss years out of 5 as indicative of problems. 6. Own motor vehicles, but don’t lodge an FBT return 7. Get disclosure items wrong in your tax return. 8. Show big fluctuations between years. 9. Have international transactions 10. Be in the news. A major transaction or dispute that is reported in the media will undoubtedly be seen by the ATO.

Paying our fees

We have received a number of enquiries about paying

our fees in recent weeks.

We accept payments via direct credit through your

financial institution’s internet banking service. Our

bank details are located on the bottom payment slip of

your invoice. Please call our office if you need a copy

of your invoice with these details.

Note: Please ensure that you quote your Invoice

number or your name in the description field when

paying by direct credit.

For those clients who do not have access to an internet

banking service, payment may be made by sending

your cheque through to us at PO Box 267, Guildford

WA 6935.

If you have not quoted your particulars in your internet

payment or made a payment directly, please ensure

that you email our Practice Manager at

vickio@phaccts.com.au so that she can allocate your

payment correctly. This includes payment being made

for our Audit Shield services.

Our Practice Manager is available Monday – Thursday

between the hours of 8.30am – 5.00pm for any billing

queries

If you have any questions, please contact our office.

The material and contents provided in this publication

are informative in nature only. It is not intended to be

advice and you should not act specifically on the basis

of this information alone. If expert assistance is

required, professional advice should be obtained