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Hello and welcome to the July 2011 May Partners e-newsletter. You are receiving this as a client or friend of May Partners or our associated business 10X Bendigo.
Carbon Tax – What does it mean for you?
Whether you agree with it or not, it appears as though the carbon tax will be voted in by parliament.
But what does it mean for you?
From a business point of view, it is certainly going to be more costly to run our businesses. Increases in many input costs will reduce operating margins below current levels, again putting pressure on profitability.
At May Partners we are encouraging all small businesses to review their own position to determine the effect this will have on them. In particular, we believe it absolutely necessary that you develop a plan to encounter the additional costs that you will encounter.
The team at May Partners is currently reviewing the impact of the carbon tax on our small businesses and are ready to discuss any concerns you may have.
As far as individuals are concerned, certainly we are being told that the everyday cost of living will only increase minimally, only time will tell on that one.
What we can be certain of is that there are some significant tax cuts included in the reform.
From 1 July 2012, every taxpayer earning up to $80,000 a year will receive a tax cut, with most getting at least $300 annually. A second round of tax cuts will apply from 1 July 2015, increasing this annual saving for most taxpayers earning below $80,000 a year to at least $380.
The tax-free threshold will be more than trebled, increasing from $6,000 to $18,200 from 1 July 2012, and to $19,400 from 1 July 2015.
Regular wage earners with incomes below the new tax-free threshold will not have any tax withheld from their wages by employers, which will mean higher take-home pay.
The changes will particularly benefit part-time workers and workers on low incomes, ensuring that they pay less tax.
Every year, we are alerted to the fact that the winter months are traditionally the ‘cash flow crisis’ months. This year, depending on your industry, it could be even worse.
The winter cash squeeze will affect almost every business. Those with reasonable levels of liquidity and cash reserves will manage it without too much pressure; but these businesses represent no more than 20 percent of the small business population. For the rest, the impact of the squeeze will range from going through a period of cash distress and in the worst cases, liquidation.
All of this means that your debtors are picking and choosing who they are going to pay. Managing this cash crunch should be a three part strategy.
Planning
Have a look at your short term cash flow commitments. You need to complete a realistic assessment of what funds you expect to collect during the month. With this information you can calculate how close to the line you will be.
Collect your debtors as soon as possible
Businesses under cash flow pressure are more likely to pay the creditors who are chasing them than the ones who are silent. The first step in your debtor management is to have a documented credit policy.
Manage your expenditure
Don’t over commit for the month, manage your stock levels and only use working capital for larger capital expenditure items if you are certain that you can manage all of your working capital demands.
If cash flow is proving to an on-going battle for you, please contact May Partners for a free no obligation consultation to see how we can assist.
Did you know that the tax rates have changed as of July 1st 2011?
You can print off new Tax Tables from the ATO website. There are several different ones on the list so make sure that you print off the tables that are correct for your employees. If you are not sure, give May Partners a call and we will help you select the correct Tax Tables from the website. ATO Tax Tables link.
This year we have assembled a very competent and experienced team to receive your instructions and prepare your returns. To have a checklist of what you should bring to your appointment at May Partners, call the office today on 03 5452 1155.
If you made a superannuation contribution in the 2009 / 2010 tax year and have not yet received your government co-contribution, please advise us during your appointment as this is often overlooked.
APPOINTMENTS
To reserve your preferred appointment time, please advise our receptionist Bess that you require our ELS 2011 service.
Team members and available times are: -
Monday 9.00am to 4.30pm Sue Irvine
Tuesday 9.00am to 4.30pm Sue Irvine
Wednesday 9.00am to 4.30pm Daniel Higgs
Thursday 9.00am to 4.30pm Daniel Higgs
Friday 9.00am to 4.30pm Daniel Higgs / Sue Irvine
If these times do not suit you please contact us to arrange another suitable day & time.
The Introduction of the Flood Levy for the 2011/2012 Financial Year. What do you need to know?
Concerned about what you will have to deduct from your employees wages, how you will calculate the flood levy into your PAYG payments, are how much will be in your pay packet? The Australian Taxation Office has added a number of topics on their information website which cover all examples of who and how much people will pay towards the levy. We have included the links at the bottom of this article for clients to follow.
The levy starts for persons who have a taxable income of more than $50,000 for the 2011/2012 financial year. If you earn $50,001 to $100,000, you will pay half a cent for each dollar you earn over $50,000. If you earn over $100,000 , you will pay $250.00 plus 1 cent for every dollar you earn over $100,000. For an idea, follow this link to the ATO Flood Levy link for Individuals where you will be able to see an example of how much different income amounts will be estimated to pay. There is a lot of information on this link and it should answer all your questions.
For those that are responsible for doing the payroll or when you are working out your PAYG, again there is a complete information package on the website, follow the ATO Flood Levy Link for Employers link. Don't forget to make sure that any payroll software programs that you use are adjusted in time to make sure that the levy is coming out of employees wages from the 1st July 2011.
Don't forget if you need assistance with anything to do with the Flood Levy, May Partners is just a phone call away to answer any questions.
What does the Paid Parental Leave scheme mean for employers?
Your role is to provide Parental Leave Pay to your eligible long-term employees.
This role is being phased in for children born or adopted during the first six months of 2011. During this time, if you and your employee agree, you can provide Parental Leave Pay to your eligible employees.
From 1 July 2011, you must provide Parental Leave Pay to an eligible employee who:
- has a child born or adopted from 1 July 2011
- will have been your employee for 12 months or more prior to the expected date of birth or adoption
- will be your employee for their Paid Parental Leave period, and
- is an Australian-based employee, and
- is expected to receive eight weeks or more of Parental Leave Pay.
The Paid Parental Leave scheme does not provide eligible employees with a new entitlement to leave.
The existing minimum entitlement to 12 months unpaid parental leave for long-term employees, in the National Employment Standards under the Fair Work Act 2009, is unchanged.
Which employees are eligible?
You may be eligible for Parental Leave Pay if you:
- are the primary carer of a newborn child or recently adopted child
- are an Australian resident
- have met the Paid Parental Leave work test before the birth or adoption occurs,
- have received an individual adjusted taxable income of $150,000 or less in the financial year prior to the date of birth or date of claim, whichever is earlier, and
- are on leave or not working from the time you become the child’s primary carer.
Your child must have been born or adopted on or after 1 January 2011 to be eligible for Parental Leave Pay.
The birth mother or the initial primary carer of an adopted child must make the claim for Parental Leave Pay, unless there are exceptional circumstances.
To be eligible for the full 18 weeks of Parental Leave Pay, you should nominate a start date for your pay that is within 34 weeks of the birth or adoption of your child.
For more information, go to the Family Assistance Office
Important Dates To Remember
Applications for the Financial Assistance from Red Cross Australia have now been extended to close on the 1st August 2011.
