AFS Bookkeeping

Election Wrap Up

Posted on Sep 13, 2013 in AFS Bookkeeping, Tax updates

Election Wrap Up

Spring Election Wrap Up from AFS Election Wash-up Edition The Coalition’s victory in the September 7 Federal Election will result in a number of tax changes. In this special edition of the Business Bulletin, we look at how the changes may impact your business. It’s worth noting however that these changes must first pass through Parliament, including the Senate. Without a majority in the Senate, there is a chance that some of the Government’s more contentious reforms may be blocked, watered down or their start date deferred. Pro-Business Measures In good news for business, the new Government has pledged to make the following changes: Company Tax Cut The new Government will cut the company tax rate by 1.5% which will reduce the rate from 30% to 28.5%. The start date for this measure is 1 July 2015. While this is certainly welcomed by the business sector, the effect of the reduction may be limited for two reasons. Firstly, it only applies to company structures. Therefore, the many businesses who are not incorporated (i.e. those who operate through partnership, sole trader or trust structures) will miss out on the tax cut altogether (including more than 70% of small businesses). Furthermore, for the many small business owners that strip the company profits relatively quickly, you will get next to no benefit from any corporate tax cut. This is because under the dividend imputation rules, the imputation credit (the credit that the dividend recipient gets for the tax paid on the dividend by the company) will also be reduced to 28.5%. So instead of getting a 30% credit when paying tax on the dividend as per the current rules, when you as the business owner repatriate the profits out of the company and pay tax at an individual level, the benefit of the 1.5% corporate tax reduction is lost. When company tax cuts are made without commensurate individual tax cuts, there is only a benefit when the profits remain in the company – which is not normally the case for many small business owners. However, when you are leaving the profits in the company (for example, you may be expanding and therefore pumping the profits back into the business) there is definitely a benefit from a company tax reduction. If you were to leave $300 000 of profits in your company for instance, the 1.5% tax cut will deliver a $4 500 benefit as compared to the current 30% rate. Carbon Tax Abolition One of the main promises made by the new Government was the abolition of the Carbon tax. Although the Carbon tax is only paid by Australia’s largest polluters (less than 500 businesses) these big businesses then pass on this tax impost through the economy which may result in price increases down the line (especially in relation to electricity). From a business standpoint, the abolition of the Carbon tax means that there will be far less flow-through pricing impact on small business. Indeed, in a survey of more than 1 700 small businesses conducted by the Australian Chamber of Commerce and Industry which was released on 9 May 2013, the abolition of the Carbon tax was nominated as one of the top three wishes of survey participants. Of course it remains to be seen whether these 500 big polluters pass on the savings that come about through the abolition of the tax. Business Tip—FBT Changes Aborted! Good News for Car Buyers The Labor Party’s defeat means that its controversial FBT change announced earlier in the year to abolish the statutory formula method for working out the FBT on car fringe benefits will not proceed. Employers can therefore continue to use the statutory formula method for...

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Why Choose AFS?

Posted on Sep 4, 2013 in AFS Bookkeeping

Why Choose AFS?

Hi,  I’m Carissa Bell from AFS, welcome to our new website. After many years of mulling over the fact we needed an updated website and logo, we finally got our act together and with the help of Localtag, have our new website and logo redesign up and running. We hope our website sets out what we at AFS can do to help you with your bookkeeping and payroll needs.  AFS are Gold Coast bookkeepers, providing bookkeeping and payroll services to a range of clients on the Gold Coast and the Logan/Brisbane area. At AFS your work is completed by us, the business owners. You are assured of always having the same person doing your work and easily contactable for one on one updates whenever you need more help or information about your accounts.  Shayne and I are both qualified accountants with many years experience in the accounting industry as well as over 10 years experience providing bookkeeping payroll and GST/BAS services to our clients. AFS is a registered BAS agent as well as a member of a number of bookkeeping and accounting industry bodies which assists us in staying up to date with all relevant compliance requirements.  We offer bookkeeping and payroll services using MYOB, Reckon Accounts (formerly Quickbooks) or Xero software and we are happy to discuss with you which software program will best meet your business needs as well as whether it should be a desktop or cloud solution.    Feel free to contact us if you are looking for Gold Coast bookkeepers or if you have any questions about how we can help you with your bookkeeping payroll and/or GST/Bas...

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