“Our purpose is to assist aspiring business people to actively grow their business and increase their personal wealth.”

Important Dates

21/02/2011 -  Payment & Lodgement due date for Jan 2011 Activity Statements

28/02/2011- Payment and Lodgement due date for Quarterly Activity Statements

Welcome to the Whitehills newsletter for February 2011. Our thoughts go out to anyone who was affected by the floods. It has been a trying time for many and we send out our best wishes to those starting the long task of cleaning up and rebuilding.

This edition contains many interesting and helpful articles about Financial Relief for Flood Victims, Transitioning to Retirement, the Education Tax Refund and the Paid Parental Leave Scheme.

Happy reading, 
Whitehills Business Advisers 
Financial Relief For Flood Victims
By Nelson Ball - Accountant
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With recent flood devastation to South East Queensland, the ATO recognises that businesses in flood affected areas may need more time to meet their lodgement and payment obligations. Therefore, the lodgement and payment dates for December monthly activity statements, which were due on 21 January 2011 will be deferred until 21 February 2011. These deferrals will not need to be applied for, however if deferrals to later dates have already been approved, these will still apply.

Further help will be provided on application, as the ATO may allow for the fast tracking of refunds, extra time to pay tax debts without interest charges, and free help in reconstructing tax records where documents have been destroyed.

In addition, many of Australia’s  banks are also providing financial relief for flood victims. Affected customers with home loans may apply to defer repayments for up to three months, while those with existing business loans may request loan restructuring without establishment fees. Furthermore, credit card holders may request an increase in their limit or defer bill payments for three months. 

See the ATO website for further requirements or call 1800 806 218

Transition to Retirement
By Damian Jenkins - Financial Adviser

Image The Government’s ‘Transition to Retirement’ rule is designed to help Australians become more financially secure in the years leading up to their full retirement. The key to this rule is the access that pre-retirees aged 55 - 64 now have to tax-advantaged account based pensions. How can pre-retirees use the new rule?

There are two main ways pre-retirees can benefit from the ‘Transition to Retirement’ rule:

- Use super to top up your salary when moving to part-time employment

If you want to wind down your career by working part-time before you fully retire, the ‘Transition’ rule could enable you to top up your income using your super. Previously you had to ‘retire’ to access your super monies before 65 or age pension age. Now as long as you are over 55, you can start an account based pension from your super money.

You can use the ABP income (which has tax concessions) to replace your forgone salary – so your net income remains the same, but you are working less.

- Top up your super without forfeiting income

If you want to stay working full-time, but need to build up your super – or your spouse’s super – you can use the new rule to help you.

You can choose to sacrifice part of your salary so it is invested in your super fund (or your spouse’s super fund via the super splitting rules).

And, if you wish, you can start an Account Based Pensions (ABP) from age 55 to pay you income to make up part or all of the income you sacrificed… even though you are still working full-time.

The benefit here is that salary sacrificing and ABP income are much more tax effective than paying PAYG tax on your full salary.

In addition, you can accumulate money in super and withdraw it free of tax (as a lump sum in full or part, or as a pension) after age 60.

However, there are still limits on how much you can contribute to super on a tax deductible basis, and they are currently $50,000 p.a. for those aged 50+, but reducing to around $25,000 in 2012/13.

 

^Damian Jenkins is an Authorised Representative of Australian Unity Personal Financial Services Limited (AUPFS) ABN 26 098 725 145, AFSL 234459. This information has been prepared by AUPFS. The taxation position described is a general statement and should only be used as a guide. It does not constitute tax advice and is based on current laws and their interpretation. 

This information has been prepared without taking into account the investment objectives, financial situation or particular needs of any particular person. Because of this you should, before acting on it, consider its appropriateness, having regard to your objectives, financial situation and needs.  Past performance is not an indication of future performance.

Back To School
By Kylie Sinclair - Accountant

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It's that time of year again - book lists, uniforms, and kids going back to school. However as stressful as it might be, there is an upside... the Education Tax Refund.

The Education Tax Refund is a government initiative to help with the cost of a child's education - both primary and secondary students. Eligible parents, carers, legal guardians and independent students are able to get money back on education expenses. Items included as education expenses are things such as computers, educational software, textbooks, stationary and uniforms.

Generally, if you receive Family Tax Benefit Part A, you are eligible from the Education Tax Refund. There are other circumstances in which you may be eligible even if you can't receive the Family Tax Benefit so be sure to check these out. It is imperative that you retain your receipts. You cannot make a claim without these.

If eligible for the refund, you can claim 50% of eligible education expenses up to the maximum amounts. For the 2010-11 financial year, the maximum amounts are:
     
      - $794 for each primary school   
         child (being a refund of
          $397/child)
      - $1,588 for each secondary 
         school child (being a refund
         of $794/child)

As you can see this could mean a nice little bonus at tax time.

The following website has come great info - www.educationtaxrefund.gov.au

Paid Parental Leave Scheme - What do employers need to know?
By Philip Keir - Partner

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The Paid Parental Leave scheme has started! The scheme is a government-funded entitlement for working parents who are primary carers of children born or adopted from 1 January 2011. Parental Leave Pay is paid for a maximum of 18 weeks based on the National Minimum Wage, currently $570 a week before tax.

When do I need to start making payments from my payroll?

Employers will be responsible for making the payments to eligible employees through their payroll system. From 1 January 2011 until 30 June 2011 this will be voluntary. From 1 July 2011, it will be compulsory. Depending on how your payroll system is set up, it may be advisable to wait until your software has been updated and start from 1 July 2011. Eligible employees will be paid directly by the Family Assistance Office if you do not pay them from your payroll prior to 1 July.

Do I need to deduct PAYG withholding?

Employers must deduct PAYG withholding from the payments. The payments will be added to the employees’ annual payment summary.

Super, Payroll Tax and Workcover

You will not be required to make superannuation contributions for Parental Leave Pay. Parental Leave Pay will not be subject to payroll tax or workers compensation.

Payment notification

You will be required to provide written notification to your employees when each payment is made. This can be done electronically and form part of the employees usual pay slip.

Will my employee accrue additional leave entitlements for Parental Leave Pay?

Your employees will not accrue additional leave entitlements while they receive Parental Leave Pay.

How do I know if my employee is eligible?

You do not need to work out if your employee is eligible for Parental Leave Pay, this is determined by the Family Assistance Office. You will be notified directly if you are required to provide Parental Leave Pay to an eligible employee. You will need to provide bank account details to ensure that you receive the funds from the government prior to making payment to your employee.
Staff Happenings
By Craig Whitehill - Partner
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Kelly Horsfield
Congratulations to Kelly who passed her final Chartered Accountant's exam late last year without failing a subject during the two years of study. Kelly is now waiting for the Institute of Chartered Accountants to formally admit her as a full member. Kelly has been with us for 3 years working on a range of client businesses from individual tax returns to large SME businesses and superannuation funds.

Kylie Sinclair
Congratulations to Kylie who became engaged to Dean Sullivan early in January this year. Dean has been courting Kylie for a few years and decided that now he had finalized his Physiotherapy training it was time to pop the big question. Kylie is our senior accountant working with a broad range of our larger clients. She is developing a specialization in Superannuation and Business Taxation.
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Whitehills Business Advisers
Level 18, 300 Adelaide Street
Phone: (07) 3231 9100
Fax:     (07) 3231 9111
www.whba.com.au 
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