Blog

What’s the Fringe Benefits Tax (FBT) and How Does it Impact Me?

Date posted: Wednesday, February 19, 2014

As an employer, you are required to pay a tax on non-cash (or fringe) benefits provided to employees. These benefits include services and privileges allowed to employees as well as physical goods.

What is classified as a ‘fringe benefit’?

To put it simply, benefits provided to an employee because they are an employee are considered to be a ‘fringe benefit’. This includes giving employees:

• Company cars for personal use
• A cheap or discounted loan
• Private health insurance
• Entertainment in the form of meals or recreational activities

What is not classified as a ‘fringe benefit’?

Employers are not required to pay FBT on the following goods and services:

• Employee relocation expenses
• Superannuation
• Work related items such as protective clothing and tools

How does this impact me?

Whether you’re an employee or employer the Fringe Benefits Tax impacts you. While employers pay the FBT, fringe benefits must also be reported on an employee’s PAYG payment summary and tax return.

Still have questions? You can find out more by giving us a call, sending us an email or booking in for a visit. We specialise in servicing individuals and businesses in the South Eastern Suburbs within the Cardinia Shire.

What Happens If My BAS Is Late?

Date posted: Wednesday, February 5, 2014

Now that you’ve read our handy table on this financial year’s BAS deadline dates, we bet you’re asking yourself ‘what happens if I don’t get my BAS in on time?’

To put it simply, if a business doesn’t lodge their BAS before the specified dates, the ATO may issue a failure to lodge penalty.

While your next question may be ‘how much are the penalties for getting your BAS in late?’, fines differ based on the size of the business, the length of delay in lodging and the lodgement history of the business.

If your business is unable to pay their tax instalment on time, they are still required to lodge an activity statement by the specified deadline. For companies in this position, a deferral of payment or payment arrangement is possible.

Still have questions? You can find out more by giving us a call, sending us an email or booking in for a visit. We specialise in servicing individuals and businesses within the Cardinia Shire and
outer south-east suburbs including Pakenham, Berwick, Cranbourne, Officer, Beaconsfield, Garfield, and Drouin.

What Can I Claim on Tax?

Date posted: Thursday, January 2, 2014

Are you planning on claiming your new iPad as a tax deduction? Thinking you’ll claim your latest shoe splurge on your next tax return? Or are you just too confused to try and claim anything at all? We don’t blame you.

Tax return time can be overwhelming. Questions of what you can and cannot claim are endless. Here are just a few, we get asked daily…

• Can I claim my new dress as a deduction on tax if I bought it for a work event?
• Can I claim my work shoes on tax if they are work boots only?
• Can I claim tools and equipment I bought for work on tax?
• Can I claim my holiday on tax if I had to do some work while I was there?

…and the answers can sometimes seem even more confusing.

Save yourself the iPad/shoes/family getaway post-purchase regret and read Pakenham Taxation’s list of what you can and cannot claim on your tax.

What you CAN claim:

• Work travel expenses. This includes meals and accommodation while on a business trip, the cost of travelling between two workplaces and the cost of transportation of tools or equipment used for work.
• Occupation-specific clothing. The cost of uniforms, protective clothing and other items only worn for work purposes are all included. The costs associated with cleaning and maintaining ALL work clothes are also tax deductable.
• Tools, equipment, trade books or journals and other items required to fulfil a job or earn income. Calculators, Computers (this includes iPads!), filing cabinets and technical equipment are all included. Even better news; the costs of repairing or insuring these items can also be claimed!

What you CANNOT claim:

• Private travel. This includes costs associated with travelling to and from work as well as family holidays. This means if you’re planning on claiming your Hawaiian getaway as a tax deduction by slipping into a Waikiki conference for a few days, think again.
• Most clothing items. Unfortunately, if your employer requires you wear clothing of a certain brand, style or colour this is not tax deductable. The rule of thumb when it comes to claimable clothing is if your outfit makes your profession easily distinguishable (i.e. a chef’s uniform) then you can most likely claim it, otherwise it’s a no-go.

Still have questions? You can find out more by giving us a call, sending us an email or booking in for a visit. We specialise in servicing individuals and businesses within the Cardinia Shire and outer south-east suburbs including Pakenham, Berwick, Cranbourne, Officer, Beaconsfield, Garfield, and Drouin.

What to Bring to your Tax Appointment

Date posted: Sunday, August 4, 2013

We’ve talked about SBE (small business entity) and non-SBE taxpayers, now it’s time to actually claim your tax. Here are some things you’ll need to bring with you when you come to your next tax appointment with us.

• Stocktake details as at 30 June
• Debtors listing (including a list of bad debts written off) as at 30 June.
• Creditors listing as at 30 June

Let us help you simplify your tax and accounting today. Give the Pakenham Taxation + Accounting team a call on (03) 5940 1836 and let one of the experts help you claim all your tax.

 

Maximising Deductions for SBE Taxpayers: Prepayment Strategies

Date posted: Sunday, July 21, 2013

Continuing on from our last topic about maximising deductions for SBE (small business entity) taxpayers, we’ll now look at prepayment strategies.

So what does this mean for SBE taxpayers?
SBE taxpayers making prepayments before 1 July 2013 can choose to claim a full deduction in the year of payment where they cover a period of no more than 12 months (ending 1 July 2014). Otherwise, the prepayment rules are the same as for non-SBE taxpayers.

The kinds of expenses that may be prepaid include:

• Rent on business premises or equipment
•  Lease payments on business items such as cars and office equipment
• Interest
• Business trips
• Training courses
• Business subscriptions
• Cleaning

Let the team at Pakenham Taxation + Accounting make life a little easier by helping you with all your end of financial year needs. Call the team on (03) 5940 1836 and make a booking today.

Maximising Deductions for SBE Taxpayers: Accelerating Expenditure

Date posted: Sunday, July 7, 2013

Over the last couple of weeks we’ve looked at non-SBE (non-small business entity) taxpayers and how they can maximise deductions. Now let’s take a look at how SBE taxpayers can do the same thing.

There are two ways in which SBE taxpayers can maximise deductions, one is by accelerating expenditure and the other is by prepaying deductible business expenses. This week we’re going to focus on accelerated expenditure.

So what is accelerating expenditure?

It’s where SBE taxpayers can choose to write-off depreciable assets that cost less than $6,500 in the year of purchase. Also assets costing $6,500 or more can be depreciated at 15% (which is half the full rate of 30%) in their first year.

If your business chooses to use the SBE depreciation rule it is effectively ‘locked in’ to using this rule for all depreciable assets.

Accelerating expenditure can be a little confusing and tricky. If you have any questions call us on (03) 5940 1836 and make a booking with one of the Pakenham Taxation + Accounting experts who can help you with all your tax, finance and accounting needs.

 

Maximising Deductions for Non-SBE Taxpayers: Accrued Expenditure

Date posted: Sunday, June 23, 2013

Our last topic for non-SBE (non-small business entity) taxpayers is accrued expenditure.

So what is accrued expenditure?
Accrued expenditure is expenses incurred during the current financial year. Non-SBE taxpayers (and some SBE taxpayers) are entitled to a deduction of expenses incurred during the current financial year, even if they have not yet been paid.

So what are some expenses that may be accrued?

• Salary/wages and bonuses – the accrued expenses for the days that employees have worked but not been paid as of June 30
• Interest – any accrued interest outstanding on a business loan that has not been paid as of June 30
• Commercial bills – the discount applicable to the period up to June 30, where the term of the bill extends past June 30
• Fringe benefits tax – if any FBT instalments is due in the June quarter, but is not payable until July, it can be accrued and claimed as a tax deduction in the 2013 income year
• Director’s fees – a non-SBE taxpayer can claim a tax deduction where the company has a definitive commitment to pay a director’s fee during the current financial year.

To find out exactly what your business can claim  contact Pakenham Taxation + Accounting on (03) 5940 1836 and make a booking with one of our experts today.

Maximising Deductions for Non-SBE Taxpayers: Accelerating Expenditure

Date posted: Sunday, June 23, 2013

So what is accelerated expenditure?

Accelearting expenditure is where a business taxpayer brings forward the expenditure on regular, on-going deductible items. Business taxpayers are generally entitled to deductions on an incurred basis. Because of this there is generally no requirment for the expense to be paid by June 30. As long as the expnse has genuinely been incurred, it will generally be deductible.

Below is a list of items, which are possible for accelerated expenditure:

• Depreciating assets costing $100 or less can be written off in the year of purchase.
• Depreciating assets costing less than $1,000. These can be allocated to a low value  pool and depreciate at 18.75% (which is half of the full rate)
• Repairs to office premises, equipment, cars or other business items
• Consumables and spare parts
• Client gifts
• Donations
• Advertising
• Fringe benefits
• Superannuation

Again we completely understand this may still be a little confusing. So if you have any question give Pakenham Taxation + Accounting a call on (03) 5940 1836 and make a book with one of our experts today.

 

 

End of Financial Year: Prepayment Strategies For Non-SBE

Date posted: Sunday, June 9, 2013

We’re now in the month of June, which can only mean one thing… the end of the financial year. For many businesses and individuals this can be a very confusing time with questions like; what can I claim on tax. And, how can my business maximise deductions? At Pakenham Taxation + Accounting we like to help reduce these stresses, so over the next few weeks we’re going to post some tips, tricks and information all relating to the end of the financial year.

To kick things off we’re going to look at how non-SBE (non-small business entities) taxpayers can maximise deductions, firstly through prepayment strategies.

So what does a prepayment strategy include?
A prepayment strategy includes any part of an expense prepayment relating to the period up to the 30th June and is generally deductible in full.

In addition, non-SBE taxpayers may generally claim the following prepayments in full:

• Expenditure under $1,000
• Salary and wages
• Expenditure required to be incurred under law.

But just wait, before you go jumping the gun you should know that prepayments can be a little confusing, so before you commit to making a payment please feel free to call the Pakenham Taxation + Accounting team to help you out with all your queries. There’s no silly questions when it comes to tax.

 

How to Avoid Tax Crime

Date posted: Thursday, May 9, 2013

We’re often impressed by people’s creativity when it comes to attempting to reduce their tax fees. The ATO however, is not always entertained and some individuals and businesses who take a DIY tax reduction approach can find themselves in trouble with the law. A DIY approach to tax reduction can be disastrous and costly. There is no substitute for professional advice. No matter how good you are at making investment decisions, a superior level of taxation management expertise is recommended, as the consequences without can be costly. There are perfectly legal ways to reduce your tax and keep yourself and your business out of the tax-crime-woods. As Pakenham’s leading taxation management hub, we’re able to provide solutions in these basic tax strategy areas:

• Earn tax-free income
• Tax advantage of tax credits
• Defer taxes
• Maximise your tax deductions
• Reduce your tax rate
• Shift Income to others
• Take advantage of your tax exemptions

Be sure to give us a call to make an appointment, for more information on tax saving strategies.