Santa is bringing the most wonderful and awaited time of the year. Christmas is the ideal time to give and take love and joy. After Halloween, people have already started counting the days. And if you have still not decided where you willset up party for your employees or colleagues and how much you are going to spend this Christmas, then this article will certainly help you to plan better.

In recent years, there has been an increase in the number of hosting holiday parties. The way you celebrate Christmas at work reflects your working climate and culture. The cost of a Christmas party is tax deductible only to the extent that it is subject to FBT, according to ATO.It is therefore important to plan and organize the party to ensure that there won’t be any tax problems in future. Not all your costs are tax deductible, you must have a clear knowledge about the expenses which are deductible and which are not.

Christmas parties have no separate FBT category. All benefits that employers avail from the Christmas function varies depending upon where the function is provided, the cost of the function per attendee and the basis that the employer is using in working out the taxable value of such benefits. Food, beverages and other gifts provided at the Christmas party may either constitute –

  • An expense payment fringe benefit
  • A property fringe benefit
  • A residual fringe benefit

These benefits are the actual basis of valuation, however there are special valuations rules that an employer may elect to apply. In case an employer fails to make an election, the taxable value is determined according to the actual expenditure. The “meal entertainment” fringe benefits can be exempt from FBT if there is a “Minor benefit” or an exempt property benefit.

Minor benefits are the ones where it-

  • Does not come under reward for services
  • Provided on irregular basis
  • Has a notional taxable value of less than $300

Exempt Property Benefit

If the party is held on regular workplace, where food and beverages including alcohol is served then it is deemed to be an exempt property benefit, thus, FBT free. This is quite similar to the occasional Friday drinks at work. Such property benefits are exempted by the tax law. This exemption applies solely to the employees.

For all Christmas parties that are held off business premises, the associated costs will give rise to FBT unless these costs are under the minor benefit. To categorize these expenses under proper heads is vital that requires assistance from accountant.Also, if you wish to reward your staff with gifts, you must know whether your gifts come under the “Non entertainment gift” or not. Non entertainment gifts are exempted from FBT.

There is so much more that you need to know about your tax and party. Plan your party considering all tax rules and regulations. You should seek the advice of ATO and accountants if required.

When you are buying and selling an investment property it does not only involve annual rental income or loss, you also have to beware of the tax which you have to sell it. This tax is one of the biggest taxes and it is called Capital Gains Tax (CGT)

Despite the commonly used term and its widespread impact, most of the people don’t know what CGT is and what the effects of CGT are.

What is Capital Gains Tax?

CGT was introduced in Australia in 1985 and applies to asset you have acquired since that time. When you are buying most financial assets like shares or commodities aimed to earn some profit then in that scenario that profit is usually subject to CGT.

In the case of property, CGT is usually considered by the property investors as the tax only applies for investment purchase not for your owner occupied residence.

How do I work out my CGT?

CGT is calculated on the difference between selling price and the purchase price, which can include sum paid for the property plus all the legal fees, stamp duty and upfront costs as well as the value of any capital improvement completed by you. Capital Gain occurs when the sale price is greater than the Cost Price.

In regards to a property investment, the principal CGT exemptions include:

  • 50 % Discount for the investors: For properties purchased after October 1999, a discount of up to 50% may be available on the capital gain calculated for tax purposes

If an investment property is held for 12 months or more you are entitled to a 50% discount. In other words Capital gain is halved before tax is applied.

  • The 6 year rule: This is one of the handy rules. If you move out of the property and rented it out, you can claim an exemption for a period of up to six month.
  • The 6 month rule: This rule applies only if you upgrade or purchase another home. If you buy a new home before selling your present one, you will get the CGT exemption so long as you dispose of your older home with in the 6 months of purchasing the new home.

For your questions and queries, contact us to talk to our professionals at 1300 664 796.

 

A Business Tax Advisor is more than just a tax professional. It is a trained financial expert in tax laws. Every business welcomes tax season every year and whether this season makes you happier or makes you fall prey to unpleasant tax related experience, it all depends on how well your business tax advisor is prepared. ATO facilitates with self tax-lodgment services but still why business owners needs a professional business tax advisor! Well the answer is straight forward. By employing a business tax advisor you can save a lot on finances during taxation period and have up to date record maintenance so that there will be no last time record-pulling and doing it by yourself. Moreover, a professional tax advisor can help in seamless company’s auditing. Keeping updated tax regulations information and meeting all the standards are some qualities that make a tax professional a good business tax advisor.

Roles and Responsibilities of a tax advisor

  1. Tax planning cannot be done overnight as it is year-long continuous process in any business. A business tax advisor advices the company on its tax planning and discusses various strategic points to control your taxes.
  2. A business tax advisor may work as your tax preparer and look after the tax lodgment process from scratch till end. It is recommended that if your business tax is taken care by your business tax advisor than your personal taxation should also be handled by the same professional so that overall tax savings can be coordinated.
  3. Lodging a tax file does not relieve your tax advisor from its responsibilities. Any business can be notified for getting audited at any time. This may land you in difficult financial situation if not prepared beforehand. Having a Business Tax Advisor beside you can help escape from any unexpected situation swiftly. The Business Tax Professional will represent your company in front of the ATO.

With BookSmart Accountants, you can enjoy hassle free business taxation process. Your business accounts are in safer hands of BookSmart Accountants. We provide after-office hours service (Saturdays inclusive) and can happily visit you to discuss your business tax requirements.

Contact us at 1300 200 106 to have a brief discussion on your taxes and book an appointment as per your convenience.

 

 

The Australian tax season is approaching and everyone will get busy in dumping useless data which constitute recently filed tax information as well. In this technological era, almost every accounting firm has migrated to paperless records but few of them still grapple with their tax record preservation. Accountants normally encounter their clients in a confuse state-of-mind while dealing with their tax records. They do not know what should be done with their past tax records and for how long they should be retained.

The Australian tax system allows tax-payers to self assess their income tax and are responsible for calculating amount to be declared and claimed on their tax return. This way ATO relies on the information provided by them. The tax-payers may be required to give written evidences to support their information. Hence, the ATO always encourages tax payers and their tax advisers to keep financial records.

But the question is still the same “How long to keep your records“

ATO advices that you must keep your written evidence for five years from the tax-return lodgment date. There are more reasons to retain your tax-

  1. If you are claiming for depreciation deduction, then five years from the date of last claim for depreciation should be held.
  2. If you have acquired or disposed an asset, then after five years of that you do not need to work out a capital gain or loss. Therefore it becomes certain that after five years there will be no CGT or Capital Gain Tax event.
  3. If you are having any dispute with ATO, then you need to keep the records from the date of tax-return lodgment until the dispute is dissolved.

For any tax related assistance, contact us 1300 300 106.

We are happy to serve after-office hours and on Saturdays at your premises as per your convenience.

 

 

Running a business is not an easy task. The experience of running a business is full of highs and lows and includes variety of experiences, challenges and requires lots of creativity, motivation and enthusiasm. In the enthusiasm and passion, a business owner encounters realities they might rather not. However, some experiences cannot be avoided while one must prepare for others.

  • Delegation and trust enhance healthy company growth: With the growth in company business one must learn the art of delegation and imbue company culture with shared trust and this can be done by hiring the best candidates and defining their roles and trusting each staff to perform their role.
  • Plan your things: You must work for today and plan for everything else. Regardless of the things whether you business operation are running smooth or not, you should spent some time on your contingency plan. Spend some time with your administrative staff and find solution to what if scenarios and documenting them for future reference.
  • Be careful with partnership: You need to be extra careful while choosing your partners as choosing a right partners can bring a lot of opportunities, resources and capital for your business and poor partnership can leads to a great difficulty.
  • Learn from the failure: Every business encounter less favourable results at some point. When you do, build on the experience. Critically analyse everything that happened, look for solutions to the failures which led to failures and implement them in future
  • Record Keeping: A good record save time and reduces stress if a discrepancy in a transaction arises, good records allow its easy correction
  • Client acquisition continues even after a client is signed: You not only need to continue to court your clients once they sign, you must maintain an ongoing funnel of potential clients. Spare some time for the client maintenance and client recruitment.

Contact HS Bookkeeping Services at 1300 664 796 for all your bookkeeping!

 

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