



For the first time since the election on July 2, Parliament has sat and they have made a number of tax changes.
Commencing today, October 1, there are new tax withholding tables as the threshold for the 32% marginal rate has been increased from $80,000 to $87,000.
There is no catch up for the amounts withheld during the first three months of this financial year, so individuals affected will have to wait until they lodge their 2017 tax return to receive the full benefit.
If you pay staff wages and have to withhold tax, ensure that you are using the newest tax tables so that your employees can receive the benefit in their next pay run.
Updated Changes to Superannuation Announced
The Federal Government has announced its adjusted changes to superannuation, after wider consultation following the Budget announcements in May 2016.
The original announcements were widely panned for their retrospectivity, and as a result all changes will now commence 1 July 2017.
This allows an opportunity to 30 June 2017 to make additional contributions to super, and to increase superannuation balances while higher contributions caps apply.
Broadly, the changes are:
- A reduced non-concessional contributions cap of $100,000 per year applies from 1 July 2017
- Individuals under age 65 can continue to bring forward three years’ worth of non-concessional contributions
- Individuals with a superannuation balance of more than $1.6 million will not be eligible to make non-concessional contributions from 1 July 2017
- Concessional contributions cap reduced to $25,000 from 1 July 2017
- Individuals aged 65 to 74 will still have to satisfy the work test to make additional contributions to superannuation
- The commencement date of the proposed catch-up concessional contributions will be deferred to 1 July 2018
As these changes will now not apply until 1 July 2017, there are some opportunities until 30 June 2017 under the pre-existing rules to make further contributions without additional tax consequences.
If you feel that any of the changes will affect you, please contact us to discuss your options!
Small Business Company Tax Rate Cut
This tax cut provides a number of benefits over and above the reduced amount of tax required to be paid:
- Additional funds will be available for working capital in the business
- Higher retained earnings provide more equity for investment back into the business
- Less tax equals more retained earnings, which makes the banks happier when going for finance to fund equipment or expansion
- Tax deferred equals tax saved – having the money in the company longer, rather than paying tax provides a greater rate of return
There are a number of opportunities for Capital Gains Tax Rollovers which can reduce or remove the tax burden from a restructure, so combined with a lower corporate rate of tax, this might be the time to consider the move to a company. This will be particularly relevant for fast growing businesses who have much of their cash flow tied up in the business, and require even more cash flow for growth.
If you think this might be relevant to you, contact us at Value Beyond to discuss your situation.
Cashing Out Annual Leave
From 29 July 2016, employees might be able to cash out their annual leave.
There are a number of conditions before an employee can cash out their annual leave:
- Annual leave can only be cashed out when an award or registered agreement allows it
- an employee needs to have at least 4 weeks annual leave left over
- a written agreement needs to be made each time annual leave is cashed out
- an employer can’t force or pressure an employee to cash out annual leave
- the payment for cashed out annual leave has to be the same as what the employee would have been paid if they took the leave
Other changes made to some awards include:
- Taking annual leave in advance – most awards now allow employees to take annual leave before they have accrued it if their employer agrees in writing. The agreement needs to be signed by both the employer and the employee, say how much leave is being taken in advance, and say the day the leave will start
- Managing excessive annual leave balances – where an employee has accumulated at least 8 weeks of leave, the employer can direct the employee to take annual leave by giving at least 8 weeks notice (and not more than 12 months) of when the leave will start. The notice must be given in writing, the leave has to be at least 1 week long and can’t result in the employee having less than 6 weeks accrued leave.
- Payment for annual leave – Some awards say that annual leave has to be paid before the employee starts their leave. A new clause has been added to these awards so that now if an employee is paid by electronic funds transfer (EFT), they can continue to be paid using their usual pay cycle during periods of leave.
For more information, you can check your awards at the Fair Work website.
Ban On Excessive Credit/Debit Card Surcharges
From 1 September 2016, there’s a new law limiting the amount a large business can charge customers for use of most credit and debit cards. Large businesses can now only pass on to customers what it costs them to process a payment, for example bank fees and terminal costs.
A large business is one that meets at least two of the following criteria:
- gross revenue of $25 million or more
- gross assets worth $12.5 million or more
- 50 or more employees.
The Reserve Bank of Australia has indicated, as a guide, that the costs to businesses of accepting payments by debit cards is 0.5%, by credit card is 1-1.5%, and for American Express cards issued by Australian banks it is 2-3%. Some businesses’ costs might be higher than these indicative figures.
Small Businesses
While the ban currently only applies to large businesses, it will apply to all businesses from 1 September 2017. So now is a good time to start reviewing your payment charging methods to ensure they’ll be in line with the new law.
The ACCC’s website and the RBA’s website provide detailed information for businesses about the law, including how businesses can identify and quantify those costs that can be passed on as a surcharge.
Are You Sending Spam – And Don’t Even Know It?
Spam is the common term for electronic ‘junk mail’ – unwanted messages sent to your email account or mobile phone.
The Spam Act 2003 regulates the sending of commercial electronic messages and prohibits the sending of these messages except in certain limited circumstances.
If you are part of a business or organisation planning to send email, SMS (text message), MMS (image-based text message) or instant messages to current or prospective customers, you must understand and meet the following three key requirements of the Spam Act 2003:
Consent
The message must be sent with the recipient’s consent. The recipient may give express consent, or under certain circumstances, consent may be inferred from their conduct, or an existing business or other relationships.
Identify
The message must contain accurate information about the person or organisation that authorised the sending of the message and how to contact them.
Unsubscribe
The message must contain a functional ‘unsubscribe’ facility to allow the recipient to opt out from receiving messages from that source in the future. Unsubscribe requests must be honoured within five working days.
Spam Address Harvesting and Cold-Calling Prohibition
The supply or use of address harvesting software or harvested email addresses for the purpose of sending spam is prohibited. Under Australian law, a message does not necessarily have to be sent out in bulk to be considered spam.
You cannot email prospective customers unless express or implied consent already exists.
The Spam Act prohibits the sending of unsolicited commercial electronic messages. This includes messages that aim to ‘test the water’, or gauge the recipient’s interest in receiving future commercial messages.
You need to gain consent through other means, such as a letter, a phone call or a face-to-face conversation.
You can find more information on the ACMA website.
Upcoming Dates
21 October 2016 Lodgement and payment of monthly September 2016 activity statements
28 October 2016 Deadline for making superannuation guarantee payments on behalf of employees for September 2016 quarter
31 October 2016 Final date to appoint a tax agent to be eligible for the tax agent’s lodgement program
31 October 2016 Lodgement due date for tax returns if tax agent not appointed
31 October 2016 Lodgement due date for entities with one or more prior tax returns outstanding
21 November 2016 Lodgement and payment of monthly October 2016 activity statements
25 November 2016 Lodgement and payment of quarterly September 2016 activity statements where lodged electronically by tax agent




