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au courant

July 2014

Happy New Year!

How time flies when you’re having fun!

It’s hard to believe that it has been nearly a year since our business commenced.  This time last year, we were putting the final touches on office painting and decoration, wrestling with phone, software and IT companies and dealing with 101 other things new business owners need to deal with when setting up a new business.

The past 11 months have been hard work, though most enjoyable and rewarding. Jade & I feel very privileged to have had so many new and wonderful clients join us. We look forward to long and prosperous relationships with all of our clients, for many years to come.

Thank you all so much for your support during our first year.

Onwards and upwards!

Andrew




 

Wollongong Accountants, Andrew Webb Family & Business Accounting
Tax and Superannuation changes from 1 July 2014
 
1 July each year is when the majority of adjustments and changes to our taxation and financial system take effect.  Here are some important changes that take affect from 1 July 2014:


Individual Tax Rates

Individual tax rates did not change between the 2012/13 and 2013/14 financial years. There are two changes however going into the 2014/15 financial year. The tax rate applied to the top income bracket i.e. over $180,000 per annum rises from 45% to 47%, and the Medicare levy rises from 1.5% to 2%.

 
  2013/14 2014/15
     
0 – $18,200 0.0% 0.0%
$18,201 – $37,000 19.0% 19.0%
$37,001 – $80,000 32.5% 32.5%
$80,001 – $180,000 37.0% 37.0%
$180,001 and over 45.0% 47.0%
     
Medicare Levy 1.50% 2.00%


Superannuation Guarantee

The rate at which employers are required to pay superannuation on behalf of their employees rises from 9.25% to 9.5% effective 1 July 2014.

Superannuation Concessional Contributions

A ‘concessional’ contribution, is a superannuation contribution that is made by you or for you, to a complying Superannuation Fund, and is taxable in the hands of the fund at a flat rate of 15%. The contributor i.e. either you or your employer, is normally entitled to a tax deduction for this contribution. There are limits on the amount of concessional contributions each person can make (or have made for them) before you pay extra tax.

The concessional superannuation contribution caps for the 2013/14 year, based on an individual’s age are:

 
Age 60 and over on 30 June 2014 $35,000 contribution cap
Age 59 and under on 30 June 2014 $25,000 contribution cap

The concessional superannuation caps for the 2014/15 year based on a person’s age have changed as follows:  
 
Age 49 and over on 30 June 2014 $35,000 contribution cap
Age 48 and under on 30 June 2014 $30,000 contribution cap

These caps include superannuation from all sources, including employer superannuation guarantee contributions and salary sacrifice contributions.

Fringe Benefits Tax

Fringe Benefits Tax (FBT) applies to employers who provide non-monetary benefits to their employees. It was designed to discourage employers from paying their employees in non-cash benefits rather than cash wages, and therefore circumventing the personal income tax system.
 
The rate of FBT is normally pegged to the top marginal tax rate including the Medicare Levy (previously 46.5%). Because FBT works on a 31 March year end (and is generally tedious and complicated), the recent tax rate changes will be processed as follows:

 
FBT Rate for the year ended 31 March 2014 46.5%
FBT Rate for the year ended 31 March 2015 47%
FBT Rate for the year ended 31 March 2016 49%


Two Good Reasons

With the new financial year upon us, it is time for most of us to prepare another tax return. Here are two good reasons you should come and see us:

1)            We will enter you in the draw to win a $500 Bunnings gift voucher.*
2)            We will donate $10 from our fee, for every tax return lodged between 1 July 2014 and 30 September 2014.*

Aspect is a beautiful little school, which provides supported schooling to children with Autism Spectrum Disorders at its Base School in Corrimal, and its various satellite classes across a number of local mainstream schools.

Autism Spectrum Australia, will direct 100% of funds raised, to Aspect South Coast School, to enable them to fund equipment and/or services as needed for their students across both Base School, and their satellite classes.

Click here for more information about why we have chosen to support Aspect South Coast School.
Please visit our website for Terms & Conditions for this exciting prize draw.

*NSW Permit No. LTPS/14/04532
**Aspect Authority to Fundraise No 2014EV112473
Wollongong Accountants; Andrew Webb Family & Business Accounting
Regulation of the Accounting Industry

Taxation advice is highly regulated in Australia and not just anyone can charge a fee to prepare your tax return, or give you tax advice.  Each year there are numerous people fined for providing unlicensed tax advice.

There are numerous types of qualifications in the profession, and it can be confusing to know what they all mean. This guide attempts to remove some of the confusion.


Registered Tax Agents

In order to prepare a tax return, lodge a tax return, assist in calculating various deductions or deal with the tax office on behalf of someone else, you must be a Registered Tax Agent.

The Tax Practitioners Board (TPB) is a national body responsible for the registration and regulation of Registered Tax Agents. They set out the qualifications needed to become a registered tax agent, review applications and maintain a register of current and former registered agents. They are also perhaps one of the more bureaucratic organisations I have ever dealt with, and certainly don’t let just anyone in.

The qualifications and requirements to become a Registered Tax Agent are a little intricate, and depend on your level of experience. A minimum of 12 months of full time experience is required with any application, together with completion of board approved courses in Australian taxation law, commercial law and basic accounting principles.

Only the person who signs the return needs to be a Registered Tax Agent. An accounting practice can operate with a single registered agent, and multiple employees.

Business Activity Statement (BAS) Agents

A BAS Agent cannot prepare your tax return, though can assist with the preparation and lodgement of a Business Activity Statement. A Certificate IV in Financial Services (Bookkeeping) or (Accounting) is a minimum requirement to register as a BAS Agent.

Certified Bookkeeper

Historically, bookkeepers have been largely unregulated and there are no formal qualifications required to call oneself a bookkeeper.

Bookkeepers who are not Tax agents or BAS Agents are not able to prepare tax returns or Activity Statements.

The Institute of Certified Bookkeepers is a professional body for bookkeepers. Membership requirements include at least 12 months practical experience and a Certificate IV Bookkeeping or Certificate IV Accounting, provided by TAFE & Other Registered Training Organisations.

Chartered Accountant (CA)

The Institute of Chartered Accountants (ICAA) is a professional body of accounting and business professionals (of which I am a member). Membership requires an accounting degree and completion of the CA Program. The primary component of the CA Program is completion of a Graduate Diploma of Chartered Accounting (GradDipCA) which is designed, marked and facilitated by the ICAA. This course is recognised internationally, and will often count as credit toward other post graduate degrees.

Candidates for the CA Program must work a minimum of 17.5 hours per week and have a current ICAA member appointed as their mentor during the program. I can say from experience, that this course is quite demanding and a great relief to complete! Each CA must undertake a minimum amount of training and education each year to maintain their registration.

Traditionally, the CA program was seen as the most appropriate pathway for accountants who operate within public practice. The ICAA recently merged with the New Zealand Institute of Chartered Accountants. The new body will have approximately 90,000 members.
 
ICAA Certificate of Public practice (CPP)

An accounting firm can employ people with various qualifications. To hold the firm itself out as being a Chartered Firm (as we do), the firm’s principals need to be members of the ICAA and obtain a CPP.

Those wishing to gain a CPP need to complete a short course run by the ICAA, obtain professional indemnity insurance…and pay extra on their annual membership subscriptions.

Certified Practicing Accountant (CPA)

CPA Australia is another professional body of accounting and business professionals. Why we need two separate bodies is based more in history, rather than practicality. Members of both organisations have voted five times on a merger and rejected the plan every time – the last time was in 1998.

The membership requirements to become a CPA are very similar to becoming a CA, and require an accounting degree, completion of a course of study and ongoing education. Members of each body argue over the merits and difficulty of each course. Practically, and from an employer’s perspective, the two qualifications usually carry equal weight.

Traditionally, CPA membership has been seen as the most appropriate career pathway for accountants in commercial accounting roles i.e. working internally for a single large company or organisation. CPA Australia has approximately 150,000 members.

In Memoriam
In Memoriam

It is with great sadness that we note the recent passing of a friend, and fellow accounting professional, Duncan Meadley.

Duncan was a Chartered Accountant who operated a local recovery and insolvency practice. I had the privilege of getting to know Duncan during the past several years, as we worked together for a number of clients.

Our lives shared a number of parallels, given that we had both decided to setup our own practices in recent years, and both of us have young families.

He was a consummate professional in dealing with clients and helped guide many people through some very difficult financial situations.

He was also as nice a bloke as you would ever hope to meet.

The calm, courageous and inclusive way in which he approached his illness this past year was truly amazing.

Duncan will be greatly missed.
Copyright © 2014 Andrew Webb Family & Business Accounting, All rights reserved.


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