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Abacus 360 Financial Services March Newsletter

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March 2016 Newsletter

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From the CEO's Desk

Welcome to our brand new Abacus 360 Newsletter.

As our services have grown, I have recognised the need to keep both our business and individual clients informed and excited about constant changes that are occurring in the areas of business and taxation.

I am excited that each month we will be able to bring you some easy to read news and developments that affect your business as well as tips and tricks from our experienced staff, key dates to remember and some fun insights into our team!

March is always an interesting month. It marks the end of the 2016 Fringe Benefits Tax (FBT) year and is a great time to review the first few months of your 2016 financial performance.

In this months newsletter we bring you our TOP 4 tips for FBT, introduce you to our lead tax accountant, Jade and bring you a way to free up time with a handy Technology Tip.

Our Team hope you enjoy, if you have any questions about this months topic feel free to give us a call on 07 3379 1625.

Rachael Zhong

IMPORTANT DATES

21st March - Monthly IAS & BAS
31st March - FBT Year concludes

Topic of the Month

FBT 2016: The top 4 things every business needs to know

If your business uses salary packaging for team members, you’re a small business, or provide team members with a gym or space to do yoga, then there are a few things you need to know beyond the basic FBT changes when the new FBT year starts on 1 April 2016.

1. You will pay more FBT
The Fringe Benefits Tax (FBT) rate is currently 49%. The rate increased from 47% on 1 April 2015 in conjunction with the introduction of the 2% debt tax on high-income earners (Temporary Budget Repair Levy). The FBT year that is just ending is the first year at the higher tax rate - which means if you have an FBT liability, you will pay more tax.

The FBT rate will stay at 49% until 31 March 2017 when the impact of the debt tax is scheduled to be removed.

2. Salary sacrificing may not be worth it
By now you should have reviewed any salary sacrifice agreements to ensure that they are still viable at the higher 49% FBT rate. In some cases, salary sacrifice agreements may no longer achieve the intended goals and simply create an administrative burden for little to no benefit.

For high income earners (above $180k) however, the difference in timing between the FBT year and the income year means that there will be a planning opportunity between 1 April 2017 when the FBT rate reduces back to 47% and 30 June 2017 when the 2% debt tax is removed.

With any salary sacrifice agreement just be aware that certain rules must be followed. For example, the appropriate documentation............

...needs to be in place to ensure that the arrangement is ‘effective’. This means that the employee should agree in writing to forgo an amount of salary and wages before that entitlement has been earned. If it’s after, it’s not valid and the employee will simply be taxed on that amount. The business would also be liable for obligations such as PAYG withholding and superannuation guarantee amounts.

3. Two laptops are better than one for small business
If your business is a small business (turnover under $2m), from 1 April 2016 the FBT exemption on portable electronic devices will be extended. From this date, you can offer employees more than one work-related portable electronic device, such as a mobile phone, laptop and tablet and not have to pay FBT on it even if the device is the same or similar to other devices already provided in that same FBT year. All other businesses are limited to one device that is identical or similar to another.

4. Yoga or gym classes at the office?
Wondering what to do with that extra office space? Put in gym facilities for the team? Use a room for a yoga class or personal trainer perhaps? A recent ATO decision confirmed that the FBT implications of these two options are quite different. The reason is the definition of a “recreational facility.” A recreational facility is exactly that, a facility for recreation. Recreational facilities can be exempt from FBT if certain conditions can be met. However, a fitness class or a personal trainer is not a recreational facility and therefore, FBT would generally apply.

Meet the Team

Jade Thorne

With over 10 years in public practice and experience in a variety of fields, Jade heads our Taxation and Compliance team.

Jade specialises in Taxation Compliance, Tax Consolidation, Valuations, Due Diligence and supporting clients with ATO Audits, reviews and Correspondence.

When she is not working Jade loves to spend time with her young family and taking holidays overseas.

Technology Tip

Turn Your Phone Into
TIME

Do you come home after a long days work, only to spend hours sorting through receipts, orders and invoices?

Free up your evenings for 'YOU TIME' by TURNING YOUR PHONE into a FREE EMPLOYEE.

You can now take a photo with your phone and an app like receipt bank will read the details, create a transaction and after a quick review, send them to your cloud based accounting program to be reconciled with your bank statements.

Now that's a smart way to use your TIME and get more of it!

Abacus 360 Financial Solutions is a CPA accounting firm passionate about creating value for business, their owners and shareholders.

With a dynamic, flexible and focused team, Abacus 360 utilises leading cloud technology, technical expertise and focus to provide holistic solutions to businesses aiming to take their business to the next level.