Reduction in the corporate tax rate could mean higher tax
The Abbott government is keeping its election promise in reducing the corporate tax rate to 28.5% from 1 July 2015. What the government didn’t explain though, is the impact this change has to the shareholders of these companies. This reduction in the corporate tax rate coupled with the 0.5% increase in the Medicare Levy and the introduction of the Temporary Budget Repair Levy (both to be imposed from 1 July 2014) means that the “Gap” or “Top-up” tax payable on franked dividends will increase. You should also be aware of the following implications:
- GST on incentives: Impacts GST, LCT and Stamp Duty
- Deal processing: What you need to do to avoid nasty surprises
- Demonstrator and used vehicle stock: You can recognise reduced value for a tax saving
- Review your fixed asset register: Good housekeeping can lead to savings
Download: Hot Topic-Corporate tax rate-June 2014
Don’t miss our latest Hot Topic discussing developments in FBT across the following areas:
- Car fringe benefits - cost price
- Car fringe benefits - statutory formula method
- Minor and infrequent benefits exemption
- 2015 increased FBT rates
- Fringe benefits provided by an arranger
- Eligible work related items
Download: Hot Topic-FBT-April 2014
FBT 2013: A year of increased administration and employer risk!
The past two years have seen the most significant developments to Fringe Benefits Tax (FBT) since the introduction of the GST in 2000! Compound this with the Australian Taxation Office (ATO) taking a more active role in FBT compliance enforcement and it is clear that accurate reporting of your FBT information will be of key importance!
Download: Hot Topic-FBT-April 2013
GST on incentives update …
As most of you are aware, the AP Group Ltd (AP) have had their claim for GST on Incentives heard in the Administrative Appeals Tribunal (AAT). The AAT is not part of the Courts system, rather a Tribunal set up for matters to be heard and deliberated upon between the taxpayer and the ATO. It should be noted that the decisions made in the Tribunal are not final and can be appealed through the Courts.
On Friday 14 September 2012, the AAT set aside its early objection decision and substituted a decision that the GST on Incentive objection by AP be allowed in part. Read more below …
FBT 2012: A whole new ball game!
2012 has brought the most significant changes to car fringe benefits in over 10 years and could fundamentally affect the valuation method that you adopt. With recent ATO statistics revealing that 70% of employers use the Statutory Formula Method for determining the FBT liability with respect to cars … there’s a strong likelihood these changes will affect you!
Download: Hot Topic-FBT-April 2012
Time to review your employment contracts …
Over the last month there have been two key changes to Work Place Agreements which are to apply from July 2011. These are as follows:
Paid Parental Leave
Change to Minimum Wage by Fair Work Australia
Read more below …
2011 Federal Budget - Impact on the automotive industry
As with most recent Federal Budgets, the 2011-12 Budget has significant implications for the retail automotive industry. The two matters of greatest significance are:
- Small Business Motor Vehicle Tax Write-Off
- FBT and vehicles
Read more on both of these matters below…
Download: Hot Topic-2011 Federal Budget-May 2011
FBT … What’s new in 2011?
With the due date of FBT returns creeping closer, it is important to highlight key amendments to legislation, as well as remind you of requirements for exemptions, which may dramatically reduce the FBT liability of dealers …
Download: Hot Topic-FBT-April 2011
Download: FBT Ready Reckoner 2011
Reportable Employer Super Contributions
The Australian Taxation Office has released a new reporting requirement on PAYG payment summaries which will affect all employers who pay additional super contributions to their employees, or who have employees under salary sacrifice arrangements …
Stamp duty … last chance for voluntary disclosure
A reminder that the State Revenue Office (SRO) in January issued a bulletin offering Licensed Motor Traders a reduced penalty tax rate (5%), if voluntary disclosure is made by 30 April 2010 (previously 15 March 2010), in respect of vehicles for which an exemption has been incorrectly claimed.
The SRO continues to focus heavily on the governance of stamp duty in relation to the motor industry. In our latest Hot Topic we outline the details of the SRO ruling in respect to vehicle stamp duty exemptions…
Download: Hot Topic-Stamp Duty-April 2010
Investment allowance and financing
With the fast approaching final deadline for the Federal Government’s 50% Small Business Tax Break - the “Investment Allowance” (including the 10% Tax Break for large businesses with over $2million turnover), dealers are being “swamped” with questions from customers regarding their eligibility to claim the tax break.
Most Dealers are proficient at Finance, but very few achieve strong results with Insurance Commissions.
The Finance and Insurance commissions produced by dealers have unquestionably been under pressure over the last six to nine months. The impact of the GFC, coupled with the withdrawal of GMAC and GE as automotive inventory financiers, has led to most dealers experiencing unfavourable revisions in their retail plans. Accordingly, notwithstanding similar writing rates and finance volume, dealers are now generating declined finance commissions…
Don’t let stock shortages ruin the last of the stimulus package concessions in your business!
It is becoming apparent that the GFC has had a massive effect on the manufacturing of motor vehicles throughout the world. So much so that the motor vehicle “destocking” has led to inventories worldwide being below the demand “floor”. No doubt as we come out of this economic cycle manufacturers on both sides of the globe will be planning to gear up their manufacturing and close the gap on consumer demand…
Download: Hot Topic-Stock shortages-August 2009
Managing cashflow risk and providing peace of mind
The Australian Taxation Office (ATO) has publicly advised that their audit focus over the next few years will be small to medium sized enterprises. As such, we wish to bring to your attention the benefits of audit insurance. This may be particularly relevant to your business if you have undertaken any large transactions in the last few years. Read more below…
Download: Hot Topic-Audit insurance-August 2009
How much should dealers collect?
With the recent completion of Fringe Benefits Tax (FBT) returns for the 2009 year, it has come to our attention that many dealers are not collecting the appropriate contributions from their employees, resulting in excessive “vehicle benefits” FBT liabilities. Unfortunately, we identified many cases where contributions obtained from employees toward these benefits, are not enough to cover the FBT bill payable by the dealership.
Given that FBT returns have only recently been completed for 2009, now is the time to revisit (and if necessary, adjust) your employee contribution arrangements to ensure your exposure is covered by employee contributions. Read more below…
In these uncertain times, many businesses have retreated from their normal practices…
In some cases, businesses have prudently set up defensive barriers right across their entire business network. Whilst circumstances have changed, it is important to acknowledge that some practices should never be dropped - one of these is year end tax planning.
With only half of the month to go prior to 30 June, there is little time left to ensure you have maximised your tax strategies prior to year end. If you have thrown up the business barriers and are not looking to plan before year end, it may be time to have a quick rethink to gauge whether there are any opportunities that you might be missing out on. Read more below…
Download: Hot Topic-Tax Planning-June 2009
Demonstrators (demos) granted Royal Assent 25 May 2009
In our most recent Hot Topic we drew your attention to the latest ATO Explanatory Memorandum which outlined an example in respect to demo eligibility for the investment allowance. This prompted Fordham MDS to seek clarification of the eligibility criteria. We spoke to a Senior ATO Officer on Tuesday, who provided the following interpretations…
Investment Allowance: Do demonstrator vehicles qualify?
Following passage of the legislation through Parliament last week, we advise that there has been an important change in the way that the Investment Allowance applies in regard to demonstrator vehicles. Read more in our latest Hot Topic below.
Download: Hot Topic-Demonstrator vehicles-May 2009
Investment Allowance: 2009 Budget Update
Following the release of the 2009-10 Federal Budget, our latest Hot Topic details some key changes that have been made to the Small Business & General Business Tax Break (the “Investment Allowance”) that are currently before Parliament. The key change to the measure is an extension of the allowance to small businesses with a turnover of $2 million or less.
We can confirm now that all legislation (both the previously announced measures, and the extension announced in the Budget) have passed through both houses of Parliament and is now awaiting Royal Assent.
Read more in the latest Hot Topic below.
Download: Hot Topic-Investment Allowance-May 2009
Browse our archives
Download: Hot Topic-FBT-May 2009
Download: Hot Topic-Asset tax break-February 2009
Download: Hot Topic-Luxury car tax-November 2008
Download: Hot Topic-Luxury car tax-September 2008
Download: Hot Topic-GST on holdback-October 2007
Download: Hot Topic-GST on holdback-July 2007