We are under a week until Christmas and we can hear you asking where has the year gone? Our Christmas closure period is from 5pm 21 December and we will re-open in the new year on 3 January.
Please also join us in welcoming Belmin and Andres to the team. They join us as undergrads from Western Sydney University and we look forward to seeing their growth while putting their knowledge towards practical experience.
Congratulations to Yulia who said YES to her partner Eric when he proposed on a holiday in Canada. We look forward to hearing about the wedding plans as they progress.
2016 brought another year of fantastic fundraising by the team and supporting those in need. We walked the streets knocking on doors for the Salvation Army Red Shield Door Knock appeal and raised funds for the RSPCA, the Royal Institute for Deaf and Blind Children, Parkinson Australia, and Cerebal Palsy Australia. We are finishing the year with donating food items to the Salvation Army so that Christmas hampers can be made.
We wish everyone a Merry Christmas and Happy New Year!
Coleman Greig Challenge
10 of us braved the early morning of Friday 21 October to participate in the Coleman Greig Challenge at Parramatta Park. Whether it was walking, running, riding or helping behind the scenes we helped raise $150,000 for St Gabriel's School, the Royal Institute for Deaf and Blind Children and My Westmead. Thanks to those that made the event possible and to those that donated to these great causes.
2016 - The Year That Was
2016 is nearly over. What were the highlights?
- There was no recession; however there was higher unemployment and significant business failures in some areas of Australia.
- Youth unemployment is still far too high in most parts of Australia.
- The Liberal/National Party government was returned with a significantly lower majority.
- The government has had to negotiate with cross-bench senators to get legislation passed by the Senate.
- The Australian currency moved up and down during the year and finished at approximately 74.5 cents US -v- Australian dollars as compared to 73 cents US in December 2015.
- There appears to be far more money available for investment in technology companies than what has been available in recent years.
- The Reserve Bank of Australia's interest rate is at the lowest ever level at 1.5%.
- The Australian Small Business & Family Business Ombudsman has indicated that debtors in Australia are at a world high rate of 26.4 days over the normal 30 day payment terms - a total of 56.4 days. The Ombudsman indicated that $26 billion was owing to Australian small/medium enterprises by their debtors.
- The Small Business Restructure Rollover Relief legislation commenced from the 1st July 2016.
- Capital gains tax withholding for foreign residents for sales of real Australian property with a market value greater than $2 million, excluding GST, was introduced from the 1st July 2016, which impacts all vendors.
- Unfortunately many SMEs had ongoing employment issues relating to Fair Work Australia.
- There is a claim made with Fair Work Australia every 3.84 minutes of a working day.
The start of a new calendar year is a great time to review budgets and cashflow forecasts and business plans incorporating your strategies for the next twelve month period. Why not have a planning day to review all of the activities within your business. Many businesses have found that one of the best ways to do this is to engage an independent facilitator to chair this process.
Directors' Personal Responsibilities
Directors, by their appointment, accept a number of clear legal responsibilities under the Corporations Act, Workplace Health & Safety Act, Fair Work Australia, Income Tax Act and other legislation. Directors also have a personal responsibility relating to their own performance as a director. These items include:
- keeping yourself informed about what is happening within the company and the company's industry
- reading reports before the board of directors' meeting
- attending the board of directors' meeting with a list of questions relating to the reports that have been submitted for discussion
- ask questions at the meeting, especially if you don't understand the matters being discussed
- if you are having difficulties in understanding a matter being discussed, request legal or expert opinion to assist you in understanding a particular issue
- declare any personal interests in matters being discussed by the board
- respect confidentiality of board reports and discussions within the board meeting
- read minutes of the board of directors' meeting carefully and, if you disagree with any item, contact the chair and then raise that disagreement at the next board of directors' meeting
- keep your own records of matters discussed at a board of directors' meeting so you have your notes and briefing material available in the unfortunate event of subsequent litigation against you relative to the performance of your duties as a director
If you find that you are unable to conscientiously fulfill your director's role as a director then you need to consider resigning.
Directors need to be aware of the very significant financial risks relating to being appointed a director of a company, if you are not fully briefed and understand what is happening within the company.
9 Points on the Superannuation Reforms 2016
The changes superannuation are being hailed as the most significant super reforms in a decade since the Simplified Superannuation reforms of 2007. It's important that you understand the impact of these changes and plan your finances in the best possible way moving forward.
Some of the changes to consider are as follows:
1.Non Concessional Contribution Cap and 'Bring Forward' rule - Currently, the cap is $180,000 a year with an option to make 3 years of contributions in one year ($540,000) if you are under 65 years of age. This cap is not impacted by your super balance. From 1 July 2017, the cap will be $100,000 a year with an option to make 3 years of contributions in one year ($300,000) if you are under 65 years of age. There will be transitional arrangements available and the cap will be adjusted based on when you triggered the "Bring Forward" rule. This cap will further be impacted by your super balance and anyone with more than $1.6M in super will not be able to make any contributions.
2. Tax Offset for Spouse Contributions - Prior to 30 June 2017 there is a tax offset available where the recipient spouse has an assessable income less than $13,800. Age and work tests apply. In the new financial year, The tax offset is available where the recipient spouse has an assessable income less than $37,000. Age and work tests will continue to apply. Further, no tax offset will be available if the recipient spouse has exceeded their non-concessional contribution cap or their balance is $1.6M or more.
3. Contribution Cap - At present, the cap is $30,000 if you are under the age of 49 and $35,000 if you are over age 49 on 30 June 2016. Post 1 July, it will be $25,000 for everyone irrespective of age.
4. Options to Catch-up on Concessional contributions - Under the present super rules you can only contribute up to your annual cap mentioned above each year. If you do not use the cap, you do not have any catch-up option available. There is not a change for the next financial year (2017-2018). However, if your super balance is less than $500,000 on 30 June 2018, you can make catch-up super contributions on a rolling 5-year basis from 1 July 2018.
5. Tax Deduction for Personal Contributions - Currently an income tax deduction for personal superannuation contributions is only available to people who earn less than 10% of their income from salary or wages. From 1 July 2017, anyone under 75 who makes a personal super contribution will be able to claim an income tax deduction (subject to the work test for those aged 65 or more).
6. Division 293 Threshold - At present, anyone with an adjusted taxable income of more than $300,000 pays 30% tax on their concessional super contributions. This threshold is being reduced from 1 July 2017 to $250,000.
7. Account Based Pension - From 1 July there will be a cap of $1.6M on the amount of superannuation that can be transferred into a tax-free retirement account. This cap is applicable irrespective on when you started the pension account. Any amount more than this amount can be retained in an accumulation super account or withdrawn from super. Fluctuation in retirement accounts due to earnings growth or pension payments will not count towards the cap. The transfer cap will be indexed in line with CPI and will increase in $100K increments. You may have capacity to add funds to the pension account based on the percentage of the cap you still have available. This $1.6M transfer cap is impacted by any Defined Benefit pension you receive as well. The CGT cost base of the assets above $1.6M that are then subject to tax in the fund may be reset to current market value to reduce the tax on gains you accrue in the future.
8. Transition to retirement (TTR) Pension - Post 1 July there will be no limit on how much you can transfer into the TTR pension phase. You need to withdraw between 4%-10% as a pension payment. Both of these points have not changed, however, the income generated by the assets supporting the Pension account will now attract a 15% tax (same tax rate as applicable in the accumulation phase). Further, you will not be able to treat certain super income stream payments as lump sums for tax purposes. Capital Gains Tax will also be payable on the sale of these assets. You may be able to reset the cost base of the assets supporting the TTR to current market value to reduce the tax on gains you accrue in the future (subject to LCG 2016/D8).
9. Defined Benefit Schemes - From 1 July 2017, a defined benefit pension of $100,000 per annum will use up the recipient's transfer balance cap of $1.6M. If they have any funds invested with another industry fund or SMSF which are in pension phase, they will have to move these funds back into accumulation or withdraw them from super. Further, 50% of the pension over $100,000 per annum paid to a person aged 60 and over from a funded defined benefit will be included in the recipient's assessable income. Pensions from an unfunded scheme over $100,000 per annum will be taxed at full marginal rates with no offsets available.