NEWS FROM ADAM HUNTER PTY LTD WHAT S HAPPENING IN OUR PRACTICE. Client Portal

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1 CONTACT US Hosken Street Bluff Point WA 5630 PH: (08) F: (08) Image Source: SnapAction NEWS FROM ADAM HUNTER PTY LTD WHAT S HAPPENING IN OUR PRACTICE Client Portal We are pleased to announce that we have launched a Client Portal that will make receiving and accessing correspondence quicker and easier. Clients will be able to access their own secure Client Portal via our website, all that is needed for access is an internet device such as an ipad, smart phone, tablet, computer or laptop. notification is delivered when new documents are uploaded to the Client Portal which gives clients the ability to immediately access documents such as tax returns, financial statements, activity statements and ATO assessment notices. If you would like further information about the Client Portal please contact our office. Audit Insurance 20 Years in Business Adam Hunter Pty Ltd provides an Audit Shield Service; an insurance to cover the professional fees incurred in preparing documentation and responses to the ATO, or other relevant Government Agencies conducting an audit, review or investigation. The ATO and other Government Agencies are getting tougher and often conduct audits on Business Activity Statements and Tax Returns. This small annual fee, which is 100% tax deductible, will cover any accounting fees incurred in what is normally a very costly process. To celebrate having been in business for 20 years the Adam Hunter team went to Bali over the long weekend in March Thank you to all of our clients who have supported our firm over the past 20 years, we look forward to the next 20. Should you have any queries in respect to this offer please contact Alicia France at our office. THANK YOU FOR YOUR BUSINESS

2 DO YOU HAVE A GESB WEST STATE SUPER FUND? YES? NOT SURE? THEN READ ON! West State Super is a super scheme that was available to WA public sector employees prior to April The fund is now closed to new members. Concessional contributions do not count towards your concessional contributions cap Most individuals can only contribute $30,000 (or $35,000 for those 50 years old or over) of concessional contributions per financial year into super and still be subject to concessional tax treatment. With a West State Super account you can contribute more because employer contributions (including salary sacrifice) and personal deductible contributions are not considered to be concessional contributions and do not count towards your concessional contributions cap, this is because West State Super is an untaxed scheme. Instead, West State Super members have an untaxed plan cap which means you can accumulate up to a maximum of $1.355 million in concessionally taxed benefits in your West State Super account. If you exceed this cap, tax on the excess is levied at 49%. So what does all of this mean to you? It means that you can concessionally contribute as much as you like within a single year without having to pay excess contributions tax (maximum of $1.355 million in total concessional contributions per fund) which could potentially save you thousands of dollars at tax time. Example Mrs Sue P Annuation is self employed and we estimate that her taxable income will be $180,000 with income tax payable of $58,147. If Mrs Annuation contributes $50,000 to her GESB West State Super Fund prior to 30 June 2015, her taxable income will be reduced to $130,000 with income tax payable of $38,647. This is an immediate tax saving of $19,500. When Mrs Annuation begins withdrawing funds from her West State Super Fund she will only have to pay tax at 15%, so after withdrawing the full $50,000 and paying $7,500 in tax (15% of $50,000) she would have saved a total of $12,000 in tax. If you have a West State Super Fund, we urge you to contact your accountant as soon as possible to discuss the advantages of making additional concessional contributions. CLICK HERE FOR FURTHER INFORMATION ABOUT WEST STATE

3 TIME IS RUNNING OUT! ARE YOU SUPERSTREAM READY? The goal of SuperStream is to improve the efficiency of the superannuation system, to improve the timeliness of processing of rollovers and contributions, and to reduce the number of lost accounts and unclaimed monies. How will SuperStream benefit employers? SuperStream will simplify how contributions are made which saves time and can reduce costs. The ability to use a single channel when dealing with super funds, regardless of how many funds your employees contribute to. Less time spent dealing with employee data issues and fund queries Greater automation and reduced cost of processing contributions and payments More timely flow of information and money which makes it easier for you to meet your super obligations Employers What you need to know Medium to large employers (20 employees or more) From 1 July 2014 employers were required to begin making contributions using SuperStream however the ATO have provided flexibility on this start date up until 30 June If you are a medium to large employer and you are not using SuperStream yet you should get in contact with your accountant immediately. Small employers (19 employees of fewer) From 1 July 2015 small employers will be required to begin making contributions using SuperStream, flexibility on this start date is provided up until 30 June 2015 however you should begin implementation as soon as possible. Self-Managed Super Funds What you need to know What do I need to do to meet my SuperStream obligations? If you receive Superannuation Guarantee Contributions from a third-party employer. your SMSF needs to be registered with an Electronic Service Provider. Our firm receives a discounted rate on SMSF registration through Australia Post. Please contact Alicia France at our office so your fund can be registered and start receiving SuperStream data. You will then need to provide your employer with the following information*: Super Fund Name Super Fund ABN Electronic Service Address (ESA): AUSPOSTSMSF The Super Fund's Bank BSB and Account Number *This is only required if you are receiving super guarantee contributions from a third-party employer.

4 TOP TAX TIME TIPS Are you wondering what you can do to increase your refund and reduce the amount of tax you pay? Yes? Then read on for some quick tax saving tips! 1) Keep Good Records The ATO gets enough of your money so don t miss out on your eligible deductions because you don t have the necessary evidence! You can make your record keeping quick, easy and effective by keeping all of your receipts in a single file; if you aren t sure if an expense is tax deductible, put it in your file and check with you accountant at tax time. If you didn t get a tax invoice, you misplaced it or you accidently threw it out, don t panic as you may still be able to claim the deduction! If you used an electronic payment method the ATO will accept alternative documentation such as bank statements, credit card statements, BPAY receipts/transaction numbers or an copy of the invoice. So dig them out and give them to your accountant. 2) Protect your Income Many of us insure our homes, our vehicles and our health, but how many of us insure our incomes? The answer is very few. Income protection is a form of insurance that provides you with a percentage of your usual income should illness or injury prevent you from working for a long period of time, and as an added bonus income protection is tax deductible! Premiums can also be paid out of your superannuation. Contact our office if you need further advice on this matter. 3) Claim Everything Vehicle & travel expenses: You can claim vehicle and other travel expenses directly connected with your work. Clothing, laundry & dry-cleaning: You can claim a deduction for the cost of buying and cleaning occupation specific, protective and distinctive clothing. Gifts & donations: Gifts and donations made to charities are tax deductible. Self-education expenses: You may be able to claim a deduction for self-education expenses if your study is work-related or if you receive a taxable bonded scholarship. Tools, equipment & other assets: If you buy tools, equipment or other assets to help earn your income, you can claim a deduction for some or all of the cost. These are just some of the many deductions you may be able to claim, for a full list visit: 4) Don t Disregard the Small Things Whether a deduction has cost you $2 or $200, it all adds up over the course of a year, so claim everything you can and maximise your tax return.

5 MAKING CENTS OF THE FEDERAL BUDGET In general, the 2015/16 Federal Budget is aimed at supporting small business and growing jobs, supporting families, ensuring fairness of tax and benefits, national security and progressing budget repair in a measured way. WHAT WILL CHANGE ON 1 JULY 2015 Business: Small business tax cut - 1.5% for companies and 5% tax discount for unincorporated small businesses under $2m (capped at $1,000)* Employee share scheme rule changes to make the schemes more attractive particularly to start-ups* 'Fly in fly out' and 'drive in drive out' (FIFO) workers will be excluded from the Zone Tax Offset (ZTO) where their normal residence is not within a 'zone'* New businesses will be able to immediately deduct a range of professional expenses required to start up a business such as professional, legal and accounting advice.* The way work related deductions for car expenses are calculated will change. The '12% of original value method' and the 'one third of actual expenses method' will be removed. The 'cents per kilometre method' will be modernised, replacing the three current engine size rates with one rate set at 66 cents per kilometre to apply for all cars. Superannuation: The terminally ill will be able to access super earlier* Employers with 20 employees or more must use SuperStream for employee contributions. Individuals: Changes to family tax benefits income test changes, add on child payment removed, and changes to large family supplement. * announced change not yet law. $20,000 IMMEDIATE TAX DEDUCTION WHAT YOU NEED TO KNOW So, your business has a turnover under $2 million and you want to know how to use the $20,000 immediate tax deduction that s been all over the news? Before you start spending, there are a few things you need to know, and it s important not to rely on the advice of the person you are purchasing from. There is a lot of misinformation out there in the market right now and it s important to know how the concessions apply to you.

6 What has changed? In general, a deduction is available for purchases your business makes. What has changed for small businesses with turnover under $2m is the speed at which they can claim a deduction. Before the Budget announcement, small businesses could only immediately deduct business assets costing less than $1,000. On Budget night, the Treasurer announced that the threshold for the immediate deduction will increase to $20,000 at 7.30pm, 12 May 2015 for small businesses with an aggregated turnover less than $2 million. The increased threshold is intended to apply until 30 June Is your business eligible? To use the instant asset write-off, your business needs to be eligible. The first test is that you have to be a business not just holding assets for investment purposes. The second is the aggregated turnover of your business needs to be below $2m. Aggregated turnover is the annual turnover of the business plus the annual turnover of any affiliates or connected entities. The aggregation rules are there to prevent businesses splitting their activities to access the concessions. Another entity is connected with you if: You control or are controlled by that entity; or Both you and that entity are controlled by the same third entity. Does your business make a profit? Deductions are only useful to offset against tax. If your business makes a loss then a tax deduction is of limited benefit because you re not paying any tax. Losses can often be carried forward into future years but you lose the benefit of the immediate deduction. Small businesses with a turnover of $2m or less make up 97.5% of all Australian businesses. The latest Australian Taxation Office (ATO) statistics show that well under half of these businesses paid net tax. That means that the $20,000 instant asset write-off is useful to less than half of the Australian small businesses targeted. So, if your business makes a loss and you start spending to take advantage of the immediate deduction, all you are likely to do is to increase the size of your losses with no corresponding offset. Think about your cashflow first Cashflow is more important than an immediate deduction. The most important consideration is your cashflow. If there is equipment that your business needs that will immediately benefit the business, and your cashflow supports the purchase, then go ahead and spend the money. The $20,000 immediate deduction applies as many times as you like so you can use it for multiple individual purchases. Assets must be ready to use If you use the $20,000 immediate deduction, you have to start using the asset in the financial year you purchased it (or have it installed ready for use). This prevents business operators from stockpiling purchases and claiming tax deductions for goods they have no intention of using in the short term. What is not included There are a number of assets that don t qualify for the instant asset write off as they have their own set of rules. These include horticultural plants, capital works (building construction costs etc.), assets leased to another party on a depreciating asset lease, etc. Also, you need to be sure that there is a relationship between the asset purchased by the business and how the business generates income. For example, four big screen televisions are unlikely to be deductible for a plumbing business. Second hand goods are ok It does not matter if the asset you are buying for your business is new or second hand. So, you could still claim the deduction on say, second hand machinery you have bought. The material and contents in this article are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be sought.