IN THIS ISSUE...

• Time for a change? Carry back of losses

• 2012 Budget, see the Powers website

• Director Penalty Notices: It just gets worse

• ATTENTION EMPLOYERS! Avoid FWA penalties

• Xero Online - Your gateway to easier accounting

• National Business Names Register

• Money-making resolutions for the New Financial Year

• Manage your Super future • Can you earn something from the Carbon Tax?

Until the 2012 budget, agricultural enterprises and small businesses have not required a company structure to minimise tax. With changes introduced in this budget, however, there will be benefits from adopting a company structure, enabling farmers and business operators to spread fluctuations in annual income and losses over prior periods.

This tax break will result in a refund of tax from previous years, during a year when a company makes a loss.

To qualify for the carry back of losses, the taxpayer must be a company or an entity that is taxed like a company (e.g. public trading trust). Family trusts and

partnerships are not qualifying entities. So to participate, you will need to work with your accountant to set up a private company. The initiative will apply only to income tax losses (capital losses are excluded), and be limited to the company’s franking account balance to a maximum of $1 million.

In summary:• Only applies to companies with

turnover less than $2 million per annum.

• In 2012/13 the loss carry-back tax break only allows a reach back for one year to 2011/12. From the 2013/14 year, the carry back can apply for two years.

Time for a change?• The maximum amount that can be

claimed on the loss carry-back tax break, for tax paid in previous years is the company’s franking credit balance or a maximum of $300,000.

• As this scheme commences 1 July 2012, the cashflow benefit from any loss carry-back will not accrue until 2014.

• The strict “same business” and “continued ownership” tests that apply for losses carried forward will also apply to the loss carry-back tax break.

Contact your accountant at Powers now to adopt the most tax-effective structure on (07) 4995 6677 (Biloela) or (07) 3251 4444 (Brisbane).

Time for agricultural enterprises and small businesses to adopt a company structure.

CONNECTWith another financial year quickly coming to a close, Powers want to ensure that this tumultuous time of year is as painless as possible for you. This edition of our newsletter, focuses strongly on future success by planning now.

June 2012 ISSUE

Xero is an online accounting program, similar to banklink, that allows you to run your business and access your accounts from work, home or on the go. You can invite others to view your accounts and provide valuable real-time advice. It allows you to connect with Powers directly in real time, with no file corruptions, computer crashes or lost data and your account is accessible to you 24 hours a day. Backups are no longer required.

Xero makes it more convenient when

you have questions on your transactions or how to use the program and even preparing adjusting journals. Because Xero is in real time, when Powers accountants access your data online the changes made will show up immediately on your system, removing the need for file transfers and backups.

Even better, your data is completely secure if your computer is lost or stolen.

Xero systems are highly secure and have never been breached or lost any

Xero Online - Your gateway to easier accounting

customer data. Xero invests heavily to protect your sensitive financial information against unauthorised access and system failures, ensuring your data is guarded to the highest level at all times.

Access from $19/month with free-trials available also.

Contact David Butler at Powers for further information on (07) 3251 4444.

What would happen to your business in the wake of an unexpected serious event? In case of fire or flood could you support yourself and staff while your business is not operating? Could you meet payments, continuning expenses and debt? Why risk your net profit or worse, losing your business entirely?

Tony Bemrose Insurance Brokers can ensure your business’ health in the wake of a severe Business Interuption Event with a Business Interruption Policy.

Contact Steve Weil at Tony Bemrose Insurance Brokers on (07) 32525254 or email at steveweil@tbib.com.au

ATTENTION BUSINESS OWNERS

Do you have health insurance for your business?

TBIB are Powers preferred insurance brokers.

CONNECT

Wayne Swan has fulfilled his promise to get the Budget back into surplus. Whether this will be the best thing for the country only time will tell. To see how it will affect you, go online to www.powers.net.au/newsletters/blog.

2012 Budget is on our website

You might be very surprised at what the ATO can do to ensure the protection of Government revenue. The ATO is no longer an under-resourced, inflexible dinosaur.

The ATO has always had far-reaching powers to access vast amounts of external, third party data. However the value of this data was limited due to the inability to sort, categorise and match the data.

Over the last decade the ATO has invested millions of dollars developing sophisticated data-matching techniques.

These new ATO systems allow cross-checking with financial institutions, land title offices, share registries, Centrelink, State Revenue Offices, motor vehicle registries and the latest addition, marine registries.

After a discrepancy is discovered via the data matching, the ATO issue a letter which is sent to the taxpayer without an ATO officer even looking at it. Now the ATO can target more than just the traditional “high risk” clients. This means small businesses and wages and salary workers.

Remember that the onus is on the taxpayer to prove their income, not for the ATO to disprove it.

The ATO are targeting the cash economy via industry bench-marking. If a taxpayers falls outside these industry averages then the risk of an audit is heightened. The ATO’s ability to find, analyse, and match data is increasing rapidly.

We recommend a few small steps to ensure you are not left with any nasty surprises.

What Can You Do?

• Make sure that you keep proper records particularly involving cash transactions.

• Keep details of large transactions that you might not think of as taxable (ie sale of the family home, bank transfers)

• Look at taking out audit insurance, which insures you against the cost of tax agent and legal fees associated with an ATO audit

• Talk with your Accountant about relevant industry averages that might apply to you.

To discuss your personal situation it is important that you make an appointment with your accountant.

Nowhere to hide from ATO data-matching

stated on the DPN. The Commissioner of Taxation can then commence court proceedings against the Director to recover the penalty.

What you need to doIf your company has failed to remit monies to the ATO or has unpaid superannuation guarantee obligations, you must take advice on how to get your

A DPN is a notice issued to a Director (or Directors) of a company requiring the Director to procure the payment of certain taxation liabilities, most notably PAYG deductions, within 21 days from the date of the DPN, or appoint a liquidator or administrator to the Company. If either is not done, the Director will become personally liable for a penalty equal to the unpaid tax

Director Penalty Notices affairs in order, prior to any enforcement action commenced by the ATO. You must, firstly, understand the severity of your problem, so that you can, secondly, create an informed strategyto deal with these issues.

For advice, call Powers Financial Group.

Directors have personal liability for unpaid PAYG with-held from wages

CONNECT

CONNECT

1. Review your investment strategyWith daily share market ups and downs, you need to regularly revisit your investment strategy and make sure it’s still suitable to generate returns you need. This is simple - pick up the phone and speak with the investment advisors at Powers.

2. Pay off your credit cardConsider consolidating credit card debts into one lower interest personal loan. Powers have a range of refinancing options which may suit your circumstances. We will assist you with all necessary paperwork to make it easy.

3. Review your insurancesHow would you or your family cope financially if you were unable to work due to illness, injury or even death? Cash reserves can deplete quickly. With

the right insurance solution, you can be assured that your family and income are protected at all times. Discuss your insurance needs with a risk advisor at Powers.

4. Consolidate your superannuationYour need to manage your superannuation funds to ensure your super remains in your hands. Maintaining control of multiple super accounts is confusing and time consuming and many people lose track and their superannuation ends up in the Australian Tax Office’s lost or unclaimed super register. Consolidating your super will make for a happier retirement. Powers superannuation advisors can make this easy for you.

5. Pay less taxYou may be paying more tax than you should, reducing your long-term

savings. You can boost your long-term wealth by more tax-effective streamlining of your investments.We can help you with personalised strategies which may include:

• Salary sacrificing: Involves contributing a percentage of your pre-tax salary into the concessional taxed superannuation environment to build your retirement savings;

• Debt recycling: Reducing non-deductible debt and utilising more tax-effective, deductible debt for investing in growth assets; and

• Gearing: Use borrowed funds to build on your investment portfolio and claim a tax deduction for interest payments.

For advice on any or all of these contact Marc or Dan at Powers on (07) 4995 6677.

Money-making resolutions for the New Financial Year

Over the past 12 months, Fair Work Australia have walked into 7000 businesses and audited their compliance, additionally auditing a total of 6779 businesses employment agreements and contracts. Throughout these roughly 15,000 random audits, over $4.7 million was recovered for some 7613 staff.

Non-compliance with any aspect of the Fair Work legislation can result in devastating costs. Infringement penalties start from $3,300 for the Managing Director and $33,000 for the business, per contravention. The impact on the affected companies and small businesses can be crushing, for both the business and the managers involved. However non-compliance and its results is an avoidable trauma.

Call Earl Stevens at Powers on (07) 3251 4444

ATTENTION EMPLOYERS!

A new national business names registration system was put in place on the 28th of May 2012. Prior to this, business names were registered in the state or territory in which the business is located, with each state or territory keeping its own register. The national register of business names has now replaced these state and territory registers, with a single national body. The Australian Securities and Investments Commission (ASIC) will administer the new register and all existing Queensland business names have been automatically transplanted to the national register prior to the 28th of May.

How will this affect you?

• The national system eliminates the need for businesses who trade across state borders to register their name in multiple jurisdictions.

• Businesses are now able to register and renew their national business name online.

• Queensland businesses will benefit from reduced registration fees.

For more information visit our blog at www.powers.net.au

An SMSF is like any other super fund - a secure way of investing for your own comfortable retirement.

However, with an SMSF you make your own investment decisions.

Most people put their contributions into a superannuation fund where it is pooled with other members’ super and professionally managed by the trustees of the fund. Over recent years these have not performed well.

• Benefits associated with being the manager of your super fund:

• Your SMSF can acquire your business premises as a contribution, helping to build your SMSF savings.

• Your SMSF can own your life insurance policies and claim a tax deduction for the premium.

• Your SMSF can borrow money to acquire property using your

contributions and rent to service the loan.

• Your SMSF can lend money to your business under certain circumstances to boost your cashflow.

If you establish an SMSF, you are the boss.

Managing your own superannuation is a big responsibility. There are strict rules that govern what you can do with your SMSF, how you can invest the fund’s money and when you can access it.

But for many people the benefits far outweigh the responsibility. Powers Superannuation Specialist Advisers can take the hassle away.

For more information contact, Charles Page, Director of Superannuation on (07) 3251 4444.

Manage your Super future

National Business Names Register

A Self Managed Super Fund (SMSF) returns control of your future security to you, as Charles Page explains.

CONNECT

2012 Highlights at years end for tax

Investment, Salaries & Wages at Tax Time

To see how it will affect you, go online to www.powers.net.au/newsletters/blog.2012 Budget is on our website

Are Powers doing enough for you?

The importance of good adviceAdvice has the power to bring great change and whether it comes from an Olympic coach or a financial adviser, it is all about helping you to make the most of what you have. Personalised advice is at the heart of what we offer you, because when all is said and done, it’s all about you.

Tax, investment, superannuation, business and insurance are all complex machines that require precision at every turn and can be perilous with a wrong step. We have been working with our clients since our beginning with a mission of ensuring that your life need not be interrupted by unnecessary worries, but if there are we

For Individuals

MEDICAL EXPENSES TAX OFFSET

• Consider incurring medical expenses before 1 July 2012 to obtain the benefit of the current lower threshold and higher offset rate. There will be a means test for the medical expenses tax offset from 1 July 2012 for individuals with an adjusted taxable income above the Medicare levy surcharge threshold ($84,000 for singles and $168,000 for couples and families).

EMPLOYMENT TERMINATIONPAYMENT OFFSET

• Employees about to cease employment and who have a total annual taxable income of over $180,000, should consider ceasing employment before 1 July 2012. The Government will limit the ability of high income earners to use the Employment Termination Payment offset on payments such as golden handshakes.

For Superannuation

Higher Concessional Contributions Cap• If you will be over 50 years of age

as at 30 June 2012 you may want to

will take care of them. This time of year represents the best time to take inventory and ask yourself whether your livelihood could be more secure, better managed and result in you enjoying your own time.

We value our relationships with our clients, but they could always be stronger. We can always be doing more for you, and you may not even know that. We’ve included a few pointers for you to get the full scope of how we at Powers can help.

• Expert Tax adviceThis is where we began, and we take pride in our ability to both understand tax and

consider a concessional superannuation contribution of up to $50,000 before 1 July 2012. The $50,000 concessional contribution cap will not apply for the 2012/13 and 2013/14 years.

HIGHER CONTRIBUTIONS TAX FOR HIGH INCOME EARNERS• Higher income earners could consider

making superannuation contributions before July 2012. From 1 July 2012, the Government will increase the super contributions tax from 15% to 30% for contributions for individuals with income greater than $300,000.

For Trusts

TRUST DISTRIBUTIONS AND RESOLUTIONS• This year the ATO is looking to ensure

the trustee income distribution determinations and resolutions are correctly made and recorded by the required times. Generally, this must be done by 30 June. It is essential that trustees make these determinations prior to 30 June. The ATO will be reviewing a number of trusts to ensure the income distribution

deliver the best result to you.

• Specialist Superannuation AdviceYour super is your future security, pick up the phone and talk to us about where your future lies.

• Investment & Financial AdviceRetirement, planning, mortgages, general finance & insurance. These are all important, and all things that our expert team can assist with.

Call Powers to discuss what we can do together on (07) 4995 6677 (Biloela) or (07) 3251 4444 (Brisbane).

determination has been made by the trustee. They will also be asking for evidence of when that determination had been made. We suggest that written evidence of the 2011/12 trustee’s determination of income of the trust be prepared by 30 June 2012, preferably in the form of a trustee resolution.

Ongoing year-end issues

HOME OFFICE EXPENSES• Portion of interest, rent and insurance are

not deductible unless you are carrying on business from home and the area is separate and distinguished from private living areas.

• Converting the spare room is not sufficient.

• Power, heating and depreciation can be claimed at a flat rate established by the ATO even if the room is not exclusively set aside for a home office.

Call Powers to discuss your tax status on (07) 4995 6677 (Biloela) or (07) 3251 4444 (Brisbane).

CONNECT

With the end of financial year at your doorstep, it’s time to take on board some considerations for your tax. Here are some of the more important tax highlights to steer you in the the right direction for the coming financial year.

Starting from 1 January 2013, this new payment will be given to 1.3 million Australian families and is aimed at helping families with the costs of education. Eligible families will be paid the bonus automatically in January and July.

How Much• $410 for each child in primary school

(two instalments of $205) and• $820 for each child in high school (two

instalments of $410).• Children who start primary school in

2013 will be eligible for a Schoolkids Bonus instalment of $205 in January 2013.

Are you elgible?The Schoolkids Bonus will be available to

• Families receiving Family Tax Benefit Part

• Young people in school receiving Youth Allowance

• Some other income support and veterans’ payments.

• Your child must be in primary or secondary education.

Because the payment is automatic and upfront, it means:

• Families don’t need to keep receipts for months – it is a guaranteed payment

The schoolkids bonus & you

paid straight into your bank account.

• Families will receive their entitlement every time, so they won’t miss out if they lose receipts. No paperwork is required.

If eligible, you must let Centrelink know when your child starts school. If you do not receive a one-off payment in June, you can contact Centrelink to check whether you may be entitled to a payment for the 2011-12 financial year.

For more information about the Schoolkids Bonus go to www.fahcsia.gov.au

The Australian Government announced in the 2012 Budget that the Education Tax Refund (ETR) would be replaced by a new payment called the Schoolkids Bonus.

The ATO will be contacting new rental property and share investors

This month, the ATO will be sending letters directly to you if you reported rental property or dividend income for the first time in 2010-11.

These letters aim to assist you in understanding your tax obligations. Remember that Powers are there for you when you need us.

The Government recalls its 50% tax discount for interest earned.

This measure was announced in the 2010-11 Budget to encourage Australians to save more, however given the significant increase in savings since then, they have decided not to proceed with this measure.

This measure was scheduled to commence on 1 July 2013, so the decision not to proceed with this will not impact on the current taxation arrangements of any person.

Beware the taxman

No more 50% tax discount

Standard deduction for work-related expenses

The Government has decided not to proceed with the standard deduction for work-related expenses.

This measure was scheduled to commence on 1 July 2013, so the decision not to proceed with this measure will not impact on the current taxation arrangements of any person. Taxpayers with genuine work-related expenses will still be able to claim tax deductions.

Work expensesdeduction cut

CONNECT

The Carbon Farming Initiative (CFI) allows farmers and land managers to earn carbon credits by storing carbon or reducing greenhouse gas emissions on their land.

These credits can then be sold to people and businesses wishing to offset their emissions. This initiative encourages sustainable farming while providing a source of funding for landscape restoration projects.

Powers business consulting has investigated this area thoroughly and there are a number of strategies available to reduce costs and guarantee the future viability of your enterprise.

For more detailed information talk to Earl Stevens on (07) 3251 4444.

Contact us

For further information on any of the articles in this issue contact your local office:

BILOELAGladstone Road(PO Box 98)Biloela Queensland 4715P 07 4995 6677F 07 4992 17878.30am — 5.00pm

BRISBANEL7, 269 Wickham Street (PO Box 310)Brisbane Queensland 4006P 07 3251 4444F 07 3251 44228.30am — 5.00pm

MONTO3 Newton Street(PO Box 69)Monto Queensland 4630P 07 4166 1366F 07 4166 13439.00am — 3.00pm

mail@powers.net.au

www.powers.net.au

Can you earn something from the Carbon Tax?

The information in this document is of a general nature and is provided for information purposes only. It does not take into account your particular objectives, financial situation or needs and should not be used as a substitute for independent advice from a qualified professional.Liability limited by a scheme approved under Professional Standards Legislation, except where financial services are provided by Authorised Representatives of Profes-sional Investment Services Pty Ltd (PIS) AFSL 234951 ABN 11 074 608 558.

New role for CarolCarol Hampson has taken on the Office Manager role in our Brisbane Office.

The end of an eraAfter 38 years of service to the firm, Dianne Johnson is leaving Powers. Dianne commenced work with Powers in 1974 when she left school and has been working hard ever since. After all those years of building relationships with our clients, Dianne will be missed greatly.

David Butler completes the CADavid has successfully completed the Graduate Diploma of Chartered Accounting and will soon be admitted as a chartered accountant.

BirthdaysGeoff Arnold 40th

In-House Announcements

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Paul Chalmers 60th