In December 2015, the productivity commission called for Sunday penalty rates to be reduced to the rates of Saturday payments. This approved reduction will gradually come into effect over the next few years. Workers in the retail, fast food, and pharmacy and hospitality industry are impacted by the penalty rate reduction.

Why there should be a reduction

Along with the productivity commission, small business wanted these changes because it improves their ability to operate and make profits on Sundays as well as their ability to hire more staff. They believe this will allow them to reduce prices on Sundays and create a better customer experience.

Why there shouldn’t be a reduction

However unions and the workers impacted by the penalty rate reduction argue that the reduction takes money directly from, money that they depend on for living expenses. This reduced income would also reduce spending in the economy. They believe that original Sunday rates were fair compensation for missing various social events including spending time with children at home. They also argue that there is no guarantee that these business will take advantage of the reduced rates to hire more staff and reduce their prices to create a better customer experience.

How retail workers are impacted

• In the retail industry the Sunday penalty rate for full and part-time employees will be reduced from 200% to 150%
• For casuals the rate will be reduced from 200% to 175%.

How fast food workers are impacted

• Full-time and part-time level 1 employees rates will be reduced from 150% to 125%
• Level 1 casual employee rates will be reduced from 175% to 150%
• No change for level 2 and 3 employees

How pharmacy workers are impacted

• Full-time and part-time employees working between 7:00am and 9:00pm will have their rates reduced from 200% to 150%
• Casual Sunday rates reduced from 200% to 175%

How hospitality workers are impacted

• Full and part-time penalty rates will be reduced from 175% to 150%
• Casual Sunday rates will stay at 175%

Source: ABC news

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This article is of a general nature and does not take into consideration anyone’s individual circumstances or objectives. Integrity One Planning Services Pty Ltd is a Corporate Authorised Representative No. 315000 of Integrity Financial Planners Pty Ltd ABN 71 069 537 855 (which is the holder of AFSL 225051). Integrity One Planning Services Pty Ltd and Integrity One Accounting and Business Advisory Services Pty Ltd are not liable for any financial loss resulting from decisions made based on this information. These articles are not owned by Integrity One Planning Services. We recommend that you seek personal advice from an advisor prior to implementing any of the information contained in this publication.

What is the $20,000 tax break?

Businesses with an annual turnover under $2 million can claim immediate tax deductions for as many less than $20,000 purchases they make before June 30, 2017, rather than having to claim those purchases as deductions spread over several years.

This is a huge increase from the current instant asset write-off threshold of $1,000.

The Federal Government has allocated $1.75 billion to fund the scheme, which will run for the next two years.

Who is eligible?

The $20,000 tax break applies to businesses that can demonstrate ongoing activity via quarterly Business Activity Statements, Small Business Minister Bruce Billson said.

The business must be actively trading to be eligible for the break.

What’s covered?

“If you run a cafe, it might be new kitchen equipment, or new tables and chairs,” Mr Hockey said in his budget night speech

“If you’re a tradie, it might be new tools or a computer for the home office.”

“Cars and vans, kitchens or machinery … anything under $20,000 is immediately 100 per cent tax deductible from tonight.”

In other words, any asset involved in running a business is covered by the scheme

What’s not?

Assets over $20,000 are not eligible for the instant tax write-off, but can be fully written off over a longer period.

Any assets over $20,000 can be added together and depreciated at the same rate. These assets are depreciated at 15 per cent in the first income year, and 30 per cent per year thereafter.

If the value of the pool is below $20,000 until the end of June 2017 it can be immediately deducted too.

There are a few items not deductible, including some horticultural plants and any software developed in-house by a business.

Software purchased for business use, for example, an account-keeping program, can be claimed.

Accountants have also warned they expect the ATO to closely monitor the number of Australian Business Number (ABN) applications, to keep an eye on any attempt to rort the scheme.

What else do you get?

In addition to the instant asset write-off, companies with annual turnover of less than $2 million will have their tax rate lowered, from 30 per cent to 28.5 per cent.

This is the lowest small business company tax rate in almost 50 years.

Unincorporated businesses, such as sole traders, partnerships and trusts, will also get a 5 per cent tax discount from July 1 up to $1,000 a year.

What does this mean for you?

If you currently run or you are thinking of starting a small business, now is the time to act, according to ABC’s AM program host Michael Brissenden.

“The small business package is extraordinarily generous. If you were ever thinking about opening a cafe, do it now,” Brissenden wrote last night.

“Buy as many espresso makers, fridges, photocopiers and lawn mowers as you like, and claim an immediate tax deduction until 2017.”

However Australia Institute executive director Richard Denniss has warned small business people to be cautious of taking advantage of the scheme before it passes Parliament — if it does at all.

“The scale and generosity of this proposal is unprecedented and, while the Treasurer has announced that it will begin [on budget night], history suggests he shouldn’t take the Senate for granted,” Mr Denniss said.

Author
Tegan Taylor – ABC News, August 2016

This article is of a general nature and does not take into consideration anyone’s individual circumstances or objectives. Integrity One Planning Services Pty Ltd is a Corporate Authorised Representative No. 315000 of  Integrity Financial Planners Pty Ltd ABN 71 069 537 855 (which is the holder of AFSL 225051). Integrity One Planning Services Pty Ltd and Integrity One Accounting and Business Advisory Services Pty Ltd are not liable for any financial loss resulting from decisions made based on this information. These articles are not owned by Integrity One Planning Services. We recommend that you seek personal advice from an advisor prior to implementing any of the information contained in this publication.

Retirement is a time of life when you should be relaxing and enjoying the fruits of your labour, rather than stressing about how to make ends meet.

Planning for retirement is crucial, and if you want to be financially secure, you should think about all avenues to adequately fund your retirement, including superannuation and the Age Pension.

For that reason, it’s a good idea to seek professional financial advice in order to achieve your goals.

Determining the Size of your Nest Egg

How long you live and the type of lifestyle you desire will determine how much you’ll need to retire.

If you are an above-average income earner, generally you will require two-thirds of your pre-retirement income to maintain the same standard of living.

The Association of Superannuation Funds of Australia (ASFA) estimates how much money people over the age of 65 need to support a modest or comfortable retirement.

A modest retirement means being able to afford basic activities, while a comfortable retirement would give you perks such as a range of recreational pursuits, private health insurance, international holidays, a mid-range car and electronic equipment.

Assuming an average life expectancy of about 85 and that you own your own home, couples wanting a comfortable retirement would have annual living costs of $59,619, or $1,143 per week. ASFA estimates singles wanting a comfortable retirement would have annual living costs of $43,372, or $832 a week.

For a modest retirement, couples would have annual living costs of $34,560, or $663 a week, while for single individuals the estimate is $23,996, or $460 a week.

Far from the $1 million figure that’s often bandied about, a comfortable nest egg for a couple would start at $640,000, or $545,000 for an individual, depending on your income needs and assuming you receive a partial Age Pension to assist with ongoing funding of your retirement.

At present, the costs associated with a modest retirement are mostly met by the Age Pension, so ASFA estimates a couple would need $35,000 in savings at retirement, while singles would need $50,000 in savings at retirement.

It’s important to note that the Age Pension should not be relied upon as a retirement plan, especially given recent changes.

For further estimates, see the Australian Securities and Investments Commission’s retirement calculator.

Author
LDB Group – January 2017

This article is of a general nature and does not take into consideration anyone’s individual circumstances or objectives. Integrity One Planning Services Pty Ltd is a Corporate Authorised Representative No. 315000 of  Integrity Financial Planners Pty Ltd ABN 71 069 537 855 (which is the holder of AFSL 225051). Integrity One Planning Services Pty Ltd and Integrity One Accounting and Business Advisory Services Pty Ltd are not liable for any financial loss resulting from decisions made based on this information. These articles are not owned by Integrity One Planning Services. We recommend that you seek personal advice from an advisor prior to implementing any of the information contained in this publication.

All sole traders must be aware of exactly what you can claim as it will help you ward off a large tax bill when tax time looms.

In this article, we provide an overview of what you can claim as a sole trader, including unusual claims you might not be aware of and industry-specific tax deductions.

Allowable Deductions for Sole Traders

If your expenses relate directly to running your business and earning assessable income, you can claim them in your personal tax return.
According to the Australian Taxation Office, you can generally claim the following operating expenses in the year you incur them:

• Advertising
• Bad Debts
• Home Office Expenses
• Bank Charges
• Business Motor Vehicle Expenses
• Business Travel
• Education and Training
• Professional Memberships
• Insurance
• Interest
• Telephone Bills
• Repairs/Maintenance
• Tax Preparation Costs

Typically, depreciation on capital expenses, which are expenses that have a longer life, is claimed over several years. Examples include:

• Computers
• Electrical Tools
• Furniture
• Motor Vehicles
• Plants and Equipment

If an expense is for both business and private use, you can only claim the business portion. As a sole trader, you cannot claim deductions for private or domestic expenses, entertainment, fines, nor expenses relating to income that is not taxable, such as money earned from a hobby.

Additional and Unusual Claims for Sole Traders

Did you know you can prepay your expenses, for a period of less than a year, and attract a tax deduction? As a sole trader, you can prepay subscriptions, certain business travel expenses, training events and business asset repairs, for example.

Industry-specific tax deductions

The industry you work in affects your tax deductions.

For example, mechanics can claim the cost of using their car to travel between home and work if they’re transporting bulky tools and there is no secure storage on site.

Travel agents may claim expenses associated with attending conferences and industry promotions, including passport fees and travel insurance.

Author
LDB Group – January 2017

This article is of a general nature and does not take into consideration anyone’s individual circumstances or objectives. Integrity One Planning Services Pty Ltd is a Corporate Authorised Representative No. 315000 of  Integrity Financial Planners Pty Ltd ABN 71 069 537 855 (which is the holder of AFSL 225051). Integrity One Planning Services Pty Ltd and Integrity One Accounting and Business Advisory Services Pty Ltd are not liable for any financial loss resulting from decisions made based on this information. These articles are not owned by Integrity One Planning Services. We recommend that you seek personal advice from an advisor prior to implementing any of the information contained in this publication.