Businesses have been able to elect to use TFE to write off the cost of new assets, reducing their taxable income and bringing forward depreciation deductions that would have otherwise been required to be taken over the useful life of an asset.
From 1 July 2023 onwards:
Businesses with a turnover below $10m, this reduces to $1,000 per asset
Businesses with a turnover above $10m, this reduces to $100 per asset
In order to still utilise the TFE rules, assets must be purchased and installed ready for use prior to 30 June 2023.
Toyota spent decades studying and eliminating wastes from all aspects of their businesses. The result of their focus was the identification of seven wastes which are the most prevalent types of waste that exist in any business or process.
By understanding these wastes and investigating their existence in your business you are able to then identify those high priority wastes that are causing unnecessary costs.
At Harris Black, we have noticed a growing trend with clients taking an ever increasing interest in their personal wealth position, including how they will retire, and what will happen when they have passed away.
In the last dozen years there have been 2 major events, being the GFC and more recently the Covid19 pandemic. These have made people look past their business affairs, and more inwardly at their own personal future retirement and estate planning situation.
Nearly all our clients focus a large amount of their time and energy on their plans for business growth and business success and this often overshadows their consideration and management of personal affairs – eg reducing debt, accumulating and protecting their wealth, and planning for retirement and (sadly) their eventual death.
When completing clients’ personal work or during tax planning, we discuss what estate planning has been documented in the past. Often this is just a simple Will (or worse, no Will). Ultimately, many things may have occurred since the making of an initial or simple Will which can render it relatively ineffective, such as:
marriage
minor children,
adult children,
family trusts,
life insurance policies,
superannuation and the possibility of reducing the tax burden upon your death,
corporate beneficiaries (bucket company’s),
large beneficiary loans,
debts between entities,
debts with bans,
unequal loans or gifts to family members,
inheritances already received, or potentially receivable that will change your wealth position dramatically, and
concerns about your children’s current and future marriages (bloodline)
We have been able to assist clients in their initial selection of a suitable family planner lawyer (we have several we can recommend), and are generally involved in the initial discussions around their current structure, supply of key documents and often are part of discussions and raising questions on behalf of our clients. We effectively help project manage the estate planning process, as we want to ensure it suits our clients’ needs and that new (more effective) Wills actually get signed.
Other important aspects often get raised as part of this process, including:
Gifting to adult children (ie providing some assistance along the way, not just when you pass away)
Letter of wishes – this accompanies your Will, and whilst not legally binding it can provide guidance on how you would like things to be managed in the future
The use of a Testamentary Trust
Who is suitable Executor and/or Trustee of your Testamentary Trust – both now and in the future (eg when children become older)
Please give these points some thought, and we would be happy to have an initial chat around any concerns you may have.
We’re coming up to the end of the 2023 Fringe Benefits Tax (FBT) year which runs from 1 April 2022 to 31 March 2023.
If you are getting assistance from Harris Black (your tax agent) with your 2023 FBT return, the due date for lodgement is 26 June 2023.
What is FBT?
FBT is a tax on non-cash benefits provided to employees or their associates. This also includes non-salary directors/trustees. The tax is paid by the employer and is separate from income tax. Below are some common examples of non-cash benefits provided to employees where FBT may apply:
Allowing a vehicle owned by the employer to be used by an employee for private purposes.
Payment of expenses on behalf of an employee.
Providing entertainment to employees such as Christmas parties, meals, drinks, or recreational activities.
Providing loans to employees or forgiving debts owed by the employee to the employer.
Payments to an employee to compensate for living expenses incurred due to having to live away from their normal place of residence for work purposes.
What to do next
In preparation for the 2023 FBT year ended 31 March 2023, please be sure to:
Consider if you have provided non-cash benefits to employees that may be relevant for FBT.
Consider keeping a logbook for a period of 12 weeks detailing the business/private use of any vehicles used by employees. This allows for calculation of the FBT using the operating cost method which can often yield a more favourable result.
Make note of the closing odometer reading at 31 March 2023 for any vehicles used by employees.
Provide explanations for transactions in your online accounting software for any transactions coded to ‘Entertainment expenses’ or ‘Staff amenities’ to allow your Harris Black team member to differentiate between FBT-applicable and FBT-exempt transactions.
Harris Black will be sending a FBT checklist to clients in the coming weeks to assist with identifying FBT reportable benefits. If you do not receive a checklist but believe you may have provided applicable non-cash benefits, please let your Harris Black team member know.
If you have any questions, or would like to discuss your specific situation, please do not hesitate to contact us.
2023 Leadership And Business High Performance Trends: Discover What Will Be Critical To Your Success In The Year Ahead
In our recent Harris Black Business Leader Forum, we looked at ‘2023 leadership and business high performance trends: Discover what will be critical to your success in the year ahead’.
We covered off the major themes of: What critical business and leadership trends do you need to embrace for higher performance in 2023? What strategies will you implement to successfully navigate continued market turbulence?
In addition to those themes we did a deeper dive into the following areas: what’s working and what’s not for leaders around key areas of growth/profit, attraction/retention, staying agile, managing a hybrid workforce, implementing strategy, resilience, and personal productivity.
Overall, it was a terrific workshop with the attending business leaders and also provided opportunities to problem solve key challenges and opportunities for 2023 with experienced peers.
If you are interested in joining our practical and high-value learning sessions, we would like top invite you to join us at our next Business Leaders forum coming in May 2023. Please refer to our Harris Black Team Member for details.
Whilst the RBA and banks have been making headlines with 10 interest rate rises in a row the ATO have quietly been increasing their General Interest & Shortfall Charges.
From 1 April the ATO have increased rates on outstanding debts to:
General Interest Charge (GIC) 10.46% – applied to late or unpaid tax liabilities including Income Tax, excess shortfalls in Income Tax Instalments varied or estimated incorrectly, GST & PAYG.
Shortfall Interest Charge (SIC) 6.46% – late lodgement interest incurred from the due date for a return to actual date lodged, and then GIC applies.
Both the SIC and GIC rates are determined by a formula in the Taxation Administration Act 1953 which relies on the 90-day bank bill rate rather than the high-profile RBA cash rate. To calculate the GIC rate, 7 percentage points are added to the average bank bill base rate for a month, which is specified by the act, in the preceding quarter, whilst 3 per cent is added for SIC.
Our experience over the last few months is that GIC which was being remitted by the ATO has now stopped and interest is being automatically added to any outstanding balance.
Whilst the ATO are still happy to enter repayment plans for amounts outstanding, they are generally not inclined to remit interest.
Hence applications for remittance now involve a more formal review of your current financial circumstances.
Throughout COVID the ATO paused its firmer and stronger actions regarding unpaid tax bills but this is no longer the case.
Do not hesitate to contact your Harris Black team member should you require any assistance or further clarification.
How can we help you?
Today’s financial environment demands a regular review of strategy and a focus on execution.
