Much was expected of the Henry report, but of the 138 recommendations, only a few were taken up by the government, and of those, none are to have any impact until 2012/13 at the earliest.

The 2010 Federal budget is in many ways also a “non-event” as far as the “average person” is concerned.  Again, major taxation issues will not be effective until the 2010/11 and later years.

SO, WHAT NOW?

As for prior years, it is time to consider the fast approaching end of financial year 2009/10, and what one can and should do to save tax, and assist in your wealth creation strategies.

TAX SAVINGS TIPS

Below are a few examples of tax saving actions worthy of consideration:

• Defer recognition of income, by deferring invoicing until July.
• Bring forward deductible expenses – any purchases one is contemplating should be made before 30th June, and invoiced accordingly.  Similarly, any repairs needed on business premises, plant and equipment, business motor vehicles, etc, should be done before 30th June 2010.
• Superannuation payments must be made before 1st July to be deductible in 2009/10.  The maximum tax deductible contributions for employers, whilst reduced in last year’s budget, are still worthwhile making, if cashflow provides.  They are:

For employees 50 years old & over: $50,000, Under 50 years old: $25,000

Please note these maximum amounts are not additional to the standard 9% SGC required sum, so please ensure that you calculate the total sums already paid in the year, before “topping up” to these maximum sums.

• Bad debts – for businesses operating under the “accruals” basis (rather than the cash basis), any old outstanding debts, which cannot be collected, should be written off prior to 1st July.
• Stocktakes are required to be done (for trading entities that carry stock of raw materials, and/or finished goods), on or as close as possible to 30th June.  Often tax auditors will want to see stocktake lists.  The valuation of that stock can, however, be made in one of several ways, thus providing us (accountants) with some flexibility in establishing a viable stock value at 30th June.

TAX AUDITS

For some years now, we have been making a point of advising clients of the ever increasing incidence of taxation audits.  This is an area we can be confident will not reduce in activity, but, on the contrary, increase steadily and progressively over time.
All clients should prepare for a tax audit of some kind, now, rather than later.  Feel free to call us at Goldpats to discuss any concerns that you may have in this regard.

We would also like to remind clients, that for a reasonable sum, you can protect against the accounting costs associated with a tax audit – if you have not already taken up this audit protection service and would like further information, please call Jill at Goldpats.

GOLDPATS RISK INSURANCE

Goldpats, in association with Ray Powley, have now been advising clients about life insurance, income protection and crisis cover insurances, for over two years.  We urge clients who are not already covered, or who may wish to review their existing cover to call Ray to discuss their needs.  We are now seeing evidence that Banks are either requiring such cover, or treating applications for loans more favourably where applicants have such protection in place.

DIRECTORS/SHAREHOLDERS LOANS

Where company directors, shareholders or their family have taken loans from their companies, there is a need to ensure loan agreements are in place, and annual payments, including interest, are paid against those loans.  The ATO has increased its activity in this area, such that if loan arrangements are not in place, and repayments met, the entire loan is treated as an unfranked dividend, in the hands of the borrower, and as such, taxed accordingly.

If you are unsure of your obligations in this area, please call us at Goldpats to discuss.

OUR WEBSITE

For those of you who have not yet done so, we recommend that you check out our website:  www.goldpats.com

This site was established about two years ago, and we regularly add to it items which we consider of relevance for clients.  We would welcome any feedback clients may have.

Regards Goldpats

Ted Goldstein – (Partner)
Joe Farrell – (Partner)
Natasha Laptenko (Practice Manager)
And all Staff