Where to next?
This is what we’re asked by many people and the reason why our clients chose Hayes Knight.
Our clients know we are good at the fundamentals – accounting, tax compliance, and audit – but they come to us because not only are we good at the fundamentals, we have the expertise to help them identify, structure, and secure, their future … their next step.
If this tax change goes ahead, your decisions pre and post 1 January could mean $ thousands!
Normally we wouldn’t advise you of potential tax changes until we were absolutely certain that they were going to happen. But this potential tax change is a bit different because if the change goes ahead, your decisions pre and post 1 January could mean several thousand dollars.
Late last month the Government released draft legislation repealing the Minerals Resource Rent Tax – or mining tax as most of us know it. While the repeal of the mining tax is not likely to have a direct application to many small business and individual taxpayers, the Government also plans to abolish a number of other tax measures that will have a broader impact.
The changes are not certain until they are passed by Parliament but there appears to be limited opposition to the repeal of the mining tax and the other associated tax measures. Here’s what will change if and when the measures are repealed…
Salary Sacrifice Agreements – The hidden danger
If you haven’t reviewed your salary sacrifice arrangement for a while then two recent changes should have spurred you into action:
1. Increase to the super guarantee (SG) rate from 1 July 2013
While the increase from 9% to 9.25% doesn’t sound like a lot, it can have a big impact. The problem is the concessional contribution caps.
Take the example of 55 year old Wilbur who earns $160,000 per annum. Before 1 July, Wilbur’s employer paid the SG amount of 9% ($14,400) and Wilbur salary sacrificed $10,600 to use his full concessional cap. From 1 July, Wilbur will need to reduce the amount he sacrifices by $400 or breach his cap.
It’s such a minor amount but without this change the ATO will include the excess $400 contribution in Wilbur’s assessable income, which will then be taxed at Wilbur’s marginal tax rate with additional penalty interest charges applying.