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au courant
April 2016

Welcome to the 13th edition of our Newsletter ‘au courant’.  For those new to our mailing list, this name is French, and means 'up to date'. Its literal translation is 'In the current'.
 
The main focus of this newsletter is a very exciting new Business Advisory Service we have just commenced offering our clients. This service takes historical accounting, adds a detailed and forward focused analysis and delivers outcomes and guidance to the client in a structured manner, in line with their existing reporting cycle.

Of course, we're also on the downhill slide to the end of the financial year, so have included some important information for your year-end tax planning. We also discuss some tax law changes regarding business re-structures which we expect will greatly benefit many small business owners.
 
We hope you enjoy. 

Regards

Andrew


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Wollongong Accountants, Business Advisory Service, Business Advice, Start ups
Business Advisory Service

I often joke with clients that accountants have traditionally spent their life ‘living in the past’, and that our main job has been to add up things that have already happened.

This ‘backward focused’ approach has been traditionally driven by the need to provide compliance based services including the preparation of financial statements and meeting taxation obligations.

Delivering compliance services will remain an important part of an accountant’s role for many years (despite the predictions of software salespeople). There is no question though, that with improved technology, compliance services are becoming much more automated and efficient to deliver.

There is a strong expectation for accountants nowadays to deliver a more forward focused advisory service, in addition to their traditional compliance role.

Good accountants have been providing forward focussed services for many years and are often seen by their clients as advisers, coaches and business mentors. Traditionally though, this advisory service has been delivered in a very unstructured and reactionary way.

After much planning, and refining, we are very pleased to have started offering our clients a formal business advisory package, on top of their traditional accounting. This service takes historical accounting, adds a detailed and forward focused analysis and delivers outcomes and guidance to the client in a structured manner, in line with their existing reporting cycle.

Please click here to read more about this exciting new offering.
Wollongong Accountants, Business Services, Business Structures, Business Advice
Time to review your business structure?
 
From 1 July 2016, new tax rules will apply to make shifting from one business structure to another much less costly for small business owners (less than $2 million turnover). Now is the perfect time, therefore, to review your business structure, in preparation for this 1 July 2016 change.

In a previous edition of this newsletter, we have looked at the different business structures available to business owners, which are summarised here.
 
Through business growth, or a change in personal circumstances, many business owners find that, although right for them in the beginning, their existing business structure is no longer an efficient operating model. Other people start out with the wrong structure simply through bad advice.


As a business grows, acquires more assets and becomes more profitable, it becomes more valuable. Tax law treats a restructure the same way as if the business were sold to a third party, and the owners can be liable for capital gains tax simply by moving their own assets from one structure to another (I have seen these capital gains tax bills run into hundreds of thousands of dollars).

Currently, there are a narrow set of ‘rollover’ provisions which essentially ignore this capital gain, though only when assets are being transferred to a company. The new rules will significantly broaden this rollover relief and can apply when assets are transferred to other entity types (I.e. to a sole trader, partnership or trust), if certain conditions can be met.

Regardless of whether you decide to restructure or not, there are several golden rules you should observe when it comes to business structures:

 
  1. No single option is perfect. Whichever option you choose, will have pros and cons. Your job (with great input and guidance from your accountant) is to choose the option which offers you the most pros and least cons.
  1. What’s right for someone else will not necessarily be right for you. Everyone has their own set of circumstances, and their own specific needs.
  1. Keep it simple, an elaborate and complicated structure may make you feel as though you are running a vast and expansive enterprise, though ultimately it’s only costing you money, and creating unnecessary risks.
  1. Make sure you understand your business structure. Ask questions, seek explanations and make sure you know what you are getting yourself into, warts and all.
  1. Don’t skimp on the setup if you know what you need. If you have done your homework, chosen the right option, and are happy with your choice, don’t alter this choice simply because a cheaper (though inferior) option exists. Do it right the first time.
Wollongong Accountants; Andrew Webb Family & Business Accounting; Budget 2016 Update
Budget pre-cursor
 
The Turnbull Government is due to hand down its first budget next month. There is currently a huge amount of conjecture as to what this budget will contain.

Fuelling this conjecture is a long list of political issues which keep political journalists very busy and excited, though leave the rest of us a little bewildered and wondering what the hell is going on in Canberra!

Recent issues that have done the media swirl include the possibility of a double dissolution election, an increase in the GST rate, the states raising their own income tax, increases in tobacco tax, the abolition of negative gearing, a company tax rate cut, a loss of Australia’s AAA credit rating, and perhaps the most clichéd chestnut in Australian politics, a proposal to build a ‘very fast’ train.

 
Even the date of the budget has been a source of conjecture. Traditionally the budget is released on the second Tuesday of May (which would have been the 10th), though this year has been bought forward a week to the 3rd May 2016.

As in previous years, we plan to ignore all conjecture up until budget night, and report the facts of the budget actually handed down, via a special newsletter. My guess is that, given the state of modern politics, and after all the hype, the final product will end up being quite underwhelming. Let’s hope I’m wrong. 
Wollongong Accountants, Tax Planning, Business Planning, Tax Advice, Accountants Wollongong
Annual Tax Planning
 
We are now in the tenth month of the 2016 financial year, and now is the perfect time to do some year-end tax planning. For maximum effectiveness, tax planning measures should be considered and implemented before 30 June 2016.

Tax planning measures can be categorised into the following broad categories.
 
Timing differences – This is a process of essentially delaying the inevitable. We do not alter the amount of tax you pay, though we can delay payment to a future period, and allow you to do something more meaningful with the funds in the meantime.
 
Permanent differences – As the name suggests, these measures permanently reduce the amount of tax you pay. Often, permanent differences result from much longer term structural planning.

Risk Management – Tax planning is not all about minimising tax paid, it is also about minimising your risk and protecting yourself.

Good housekeeping – Not strictly tax planning measures, though important items to review at least annually.

High-risk schemes – these are highly technical, and heavily promoted schemes and ideas that claim to offer great benefits, and often look too good to be true. Unfortunately, that is usually the case. We will research these for you, and advise based on the cold hard facts presented, rather than the clever marketing they otherwise rely on.

For more detail regarding 2016 year-end tax planning, please refer to our guide here
Wollongong Accountants, Supporting local clubs, Business Advisory Services, Tax Time
Go the Shamrocks!

Autumn sees the commencement of another football season, a prospect which I’m sure excites some of you more than others.

During season 2016, we are a proud ‘jersey’ sponsor of the Woonona Shamrocks Rugby Club. We think our colourful logo looks very striking against the green background. Thank you to model and Club Captain, Chris Smith for the picture.

Jade grew up locally and has plenty of local ties, though when we moved to the Illawarra in 2009, I knew virtually no-one. I was keen therefore, to join a local rugby club and continue playing a sport I have enjoyed for many years.

We first moved to Woonona, only walking distance from the Shamrock’s home ground, Ocean Park, so a Shamrock I became. Since then, I have run out in the green jersey 96 times, made many new friends and very much enjoyed being part of a strong, family based club.

A bad knee injury this time last year saw me write off season 2015, though 2016 should finally let me hit the 100 games tally and become immortalised on the club house's ‘Centurions Board’.

Regardless of personal accomplishments, we are very pleased to be supporting such a high quality club, and look forward to a very successful season 2016 and beyond. 
Editor Special

I couldn't resist.

This little gem popped up on Facebook a couple of weeks back. Have a look at your friendly accountant (third from left) in 1993, heading off to the state finals for high school debating.

Always the third speaker, for good reason (trust me, I'm married to him!), unfortunately the team missed out on the win at this one. Though coming in in the final eight in NSW was a massive effort for this great little team from Oberon High.
Copyright © 2016 Andrew Webb Family & Business Accounting, All rights reserved.


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