News and views from PSZ

Read the latest from PSZ. Stories about our own PSZ team. Profiles of our inspiring clients and how we’ve helped them succeed. Updates from the ATO as well as financial reminders, checklists and tips. Please visit again soon.

Budget 2019 in brief

Budget coverage reached saturation point in the media recently. So what’s in it for you? PSZ’s summary gives you the highlights. Bear in mind that it all may be subject to change after election day.

Business instant asset write-off – act now to reduce your tax

For our SME business clients, this is the most important Budget initiative because you need to act quickly, well before 30 June, to take advantage of it.

The Government will increase the instant asset write-off threshold from $25,000 to $30,000 and expand the instant asset write-off to medium sized businesses with aggregated turnover of less than $50 million from 7.30pm on 2 April 2019 (Budget night).

So if you buy and install new plant or equipment worth up to $30,000, the full amount will be an instant tax deduction.That will reduce the tax your business pays this financial year. That will reduce the tax your business pays this financial year.

If you have any questions about how the instant asset write-off works or what sort of plant and equipment are eligible, please contact us now.

Superannuation

• From 1 July 2020, if you’re aged 65 or 66 then:
– You’ll be able to make voluntary super contributions without meeting the work test; and
– You can make three years’ worth of non-concessional contributions (currently capped at $100,000 a year) in just one year.

• From 1 July 2020, there will be an increase to the age limit for spouse contributions from 69 to 74.

Tax

• There will be increases to the Low and Middle Income Tax Offset for 2019, and the next three financial years.

• From 1 July 2024, there will be a reduction in the 32.5% marginal tax rate to 30%.

 Aged care

• A record $21.6bn has been allocated towards providing higher quality aged care.

 Other

• For 3.9 million Australians, there will be a one-off, income tax exempt payment of $75 (for singles) or $125 (for couples) to help with the next power bill.

If you have any questions about this, please contact us now.


Paul Caporn, Artist: Client Q&A

From mad merry-go-rounds to street art, from Sculpture by the Sea to nature playgrounds, Paul Caporn’s art defies pigeonholes.

When and how did you decide to become an artist?

At high school, it was either that or architecture, but in the end I studied painting and animation at Curtin.

What forms does your art take?

Many and various. Currently it’s large scale sculpture and installation. My “Roundabout” artwork involves flying merry-go-round horses made from paper and paint, and was four years in development. I’ve repurposed domestic and industrial items into sculptural and light works. I’ve created animations. I’ve done lots of public art. And I’ve designed and built a nature playground for a primary school.

Where would people have seen your work?

I’ve had a number of shows at Turner Galleries. I’ve exhibited at Sculpture by the Sea in Perth and Sydney. I’m in the collection at the Art Gallery of Western Australia. I’ve created ephemeral, street and public artworks for councils such as Perth, Fremantle and Vincent, and been involved in many festivals and group shows.

What inspires your work?

I often engage with themes that circulate notions of industry and science. I like to have a bit of fun, so my artworks often involve nostalgic play, dealing with technologies in a low-tech manner.

What’s been the highlight of your career so far?

Doing a six month residency in Basel through Artsource and the Christoph Merian Foundation in 2014.

What role has PSZ played in helping you become a successful artist?

It’s great having consistent staff who know me and my art as well as my business.

Any key pieces of advice PSZ has given you?

Moving to Xero was great. And we did some planning in the lead-up to tax time at PSZ’s suggestion that saved us a decent amount of money.

Earning a living as an artist can be a struggle. Any tips?

Keep experimenting. Take advantage of opportunities to travel or do residencies. Keep up conversations with your contemporaries. On a practical note, I was lucky to do an arts business course through the New Enterprise Incentive Scheme when I was starting out, and this gave me an understanding of the business side of my work.

Three words that describe you…

Diverse. Distinct. Honest.

A quirky fact about you…

I’m a twin.

paulcaporn.com


Tax, wealth, super and the 2019 federal election

If, as pollsters predict, Labor wins the federal election, there could be big changes ahead for tax and wealth planning in Australia.

We’ve had lots of questions from concerned clients about Labor’s proposed changes to tax laws, franking credits and other matters should Bill Shorten lead a federal election victory later this year.

As an individual you could be affected by:

  • Losing franking credit refunds to your self-managed super fund or yourself
  • Paying higher capital gains tax
  • Losing tax benefits from negative gearing into investment property

As a business you could be affected by:

  • Changes to the laws for loans from companies (known as Div 7A)
  • Discretionary trusts (also known as family trusts) being taxed at 30% of their income

We’re not going to recommend who you vote for, but it’s important that you have an understanding of how these tax and other changes will affect you.

For the moment, we’re recommending to our clients a “wait and see” approach before taking any specific action on any of these proposals. An election needs to be won and then legislation needs to be passed before new laws take effect.

But there may be some opportunities that open up soon to restructure your tax and wealth affairs to give you some significant tax benefits.

Over the next few months, we plan to keep you informed.

If you have any questions about this, please contact us now.


All systems go for Single Touch Payroll

Single Touch Payroll is a government initiative that will change the way you report on your payroll to the ATO – and you need to ensure your software is ready now.

Are you a small business with fewer than 20 employees? Single Touch Payroll (STP) is here – and you need to be ready.

STP is a government initiative that will change the way you report on your payroll to the ATO.

Under STP, your business will report on salary or wages, pay as you go (PAYG) withholding and superannuation directly to the ATO electronically at the same time as you pay your employees.

It’s this direct electronic connection to the ATO with every pay run that’s new and it may require your payroll systems to be upgraded. If you’re using Xero (as most of our clients are) you’re halfway there because Xero is STP compliant.

STP was introduced for businesses with 20 or more employees last year. Now STP is set to be rolled out in stages to smaller businesses with 19 or fewer employees as at 1 July 2019.

Here are three key pointers to ensure you’re STP ready:

  • Does your payroll software support STP reporting? If you’re unsure, contact us immediately and we can help you review your business accounting and payroll systems.
  • If you don’t use payroll software, you can choose an STP ready solution or request that PSZ reports through an STP ready payroll solution on your behalf.
  • If you have 1–4 employees, you can choose a low-cost STP solution. We can advise you.

If you need help in reviewing your software and payroll processes to get ready for STP, or any clarification about what’s required, we urge you to contact us now.

You can also download a more detailed STP employer guide and checklist here.


Carole Herriman, Retired Management Consultant: Client Q&A

Long-term PSZ client Carole Herriman has retired from her management consultancy but is more engaged with the community than ever.

What did you do during your working life?
I was an early recruit to computer programming and worked in Australia, Canada and the US, mostly in universities. On returning to Australia, I moved into senior roles in IT. This was followed by years in my own company undertaking strategic management consulting where most assignments had an IT component.

How did you know it was time to retire?
When I moved to the east coast more than 10 years ago, I decided the time had come. Having worked all my adult life, I was in an acceptable financial position.

As a career high achiever, has retirement had its challenges?
One tends to define oneself in terms of career, so retirement does have its challenges. After moving to Sydney, the settling in and renovating processes took about a year. Subsequently, some of the need to achieve was sublimated into coaching for executive women in information and communication technology.

You’ve moved from Perth to Sydney, yet you’re still with PSZ. Please explain.
Internet, telephone and Australia Post mean that, aside from the time difference, it makes no difference where you live.

What services has PSZ provided for you apart from the obvious tax returns?
Through PSZ I have set up an SMSF and a family trust. In addition, a business of which I am a co-director uses PSZ as our registered office and for all our accounting needs. The financial planning arm of PSZ Partners has also very efficiently reorganised my super fund shareholdings.

How do you spend your days?
My family is spread widely and I spend quite a bit of time visiting nationally and internationally. I am a member of two Sydney art galleries and often attend courses at the Art Gallery of New South Wales as well as philosophy and Spanish language courses. From time to time, I copy-edit academic papers and theses.

How have you become part of your local community?
I am a member of the Glebe Society and have undertaken a number of different roles such as organising their community talks. Locally we have a wonderful bookshop, Gleebooks, which has interesting talks and book launches.

Favourite travel destination?
For family reasons, our most frequent destination is Edinburgh. My partner and I have also taken some educational tours to Europe. Sicily won our hearts, and London and Paris are wonderful cities for a visitor.

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