• Tax Planning: where are the real benefits
• Can your SMSF buy artwork
• ATO Benchmarks - contractor payments
• Getting too close to your business
• Preparing your tax documents
• BankLink - make the change
• Flood Levy
• Recommendations
• Important Dates
• About DSR

Welcome Note

Welcome to What's Happening at DSR in June

All of us at Davis Stewart Rowland are looking forward to helping you achieve your business and personal goals and work towards building a successful retirement plan.

We aim to bring you interesting and tax effective ideas for saving you money, explore new developments in taxation and the way we do business, and keep you up to date with issues that may affect you and your business.

Remember...

'whatever your financial and accounting needs we can work with you to find a solution".

• health and hygiene decisions that every business should review each year;
• timing benefits; and
• permanent savings

Read on...

We can outline all of the opportunities in your business for tax timing benefits. Once you have this information, you can make the decisions on what you want to do.

Can your SMSF buy artwork?

Why stop at art? What about collectors items - some fine wine perhaps? Or, a few antiques?

The answer is yes you can (as long as the asset is genuinely for retirement income purposes, not for your personal use now, and not acquired from a related party) but the Government is looking closely at what SMSF’s acquire and how those assets are managed.

Last month, the Government released draft regulations that will guide what and how SMSFs buy, sell, and manage collectibles. The regulations seek to ensure that trustees do not gain a benefit from those assets now. For example, you cannot hang artwork purchased by your SMSF on your wall at home or wear jewellery acquired by the fund. This is because the Superannuation Industry Supervision Act (SIS) requires that all assets acquired by a SMSF are used for retirement purposes only. If you are using the assets now, you breach SIS as the asset is not exclusively for retirement purposes.

Storage of collectibles owned by your SMSF will be a major issue as it will be important to show that you are not benefiting from the asset now – so no storing the asset at home or in the home of a related party. Nor can you arrange to lend the asset to a related party, even if the asset is being rented.

The regulations cover collectable and personal use assets include artwork; jewellery; antiques; artifacts; coins or medallions; postage stamps or first day covers; rare folios, manuscripts or books; memorabilia; wine; cars; recreational boats; and memberships of sporting or social clubs. 

Talk to your accountant if you have questions about assets in your SMSF.

Compulsory reporting of contractor payments in building industry

The Government is researching a proposed reporting regime for payments made to contractors in the building and construction industry which requires businesses to annually report payments made to contractors in this industry.

The Government has found  that contractors in the building and construction industry are the least compliant out of six major industry groups. Across the compliance review, 10% of all tax invoices could not be matched to a payee due to non quotation or invalid quotation of an ABN. Of the approximately 11,500 matched entities in the initial analysis, 34% were contractors in the building and construction industry. 31% of those contractors matched to ATO records had not lodged a tax return, with a further 20% having lodged but omitting all or part of their income.

The proposed regime will see any businesses using contractors, reporting contractor payments made together with their ABN on an annual basis to the ATO. As this industry is quiet broad the Government will clarify in due course the definition of what falls within the building and construction industry.

The building and construction industry is first of several industries considered by the Government with the commercial cleaning industry next in line.

If you have concerns about tax compliance, talk to us today.

Getting too close to your business - when personal & business funding blend

Most small business owners are pretty close to their business. For many, it is a major part of their life and the distinction between personal and business is easily blurred. This can also cross over to their financial affairs with business and personal finances being interrelated.

Some recent tax cases are a reminder of the risks you run if you don’t keep a sufficient separation between personal and business. Get it wrong and you can lose some valuable tax deductions. The main area of risk is for those that operate their business through another entity such as a company or trust. Maintaining this structural separation is quite common and often makes a lot of sense for asset protection purposes. But problems often occur when you personally incur an expense on behalf of your business and then seek to claim tax deductions for the expense.

The most common example of this is interest costs on borrowing. 

Read on...

 BankLink - Make the Change

The Banklink System is an excellent alternative to bookkeeping and MYOB.

"I was a bit concerned at first about losing control of my accounts, but BankLink can provide reports on my income and expenses at any time. Now instead of spending 10 hours on bookkeeping each quarter, I spend about an hour. BankLink is definitely a product that has made my bookkeeping a lot simpler and less time consuming."

Warwick Dowton
Coast Interior Linings Pty Ltd

IT REALLY IS THAT SIMPLE.

So do yourself a favour and talk to us today about using Banklink for your business.

Flood Levy

 Individual taxpayers, both residents and non-residents, who have a taxable income over $50,000 in the 2011-12 financial year only will have to pay the flood levy.  Some exemptions however do apply. 

For those on salary and wages the flood levy will automatically be included in the tax taken out by your employer.

For more information, click here.

Recommendations    
        
As you well know, the lifeline of any business comes from the recommendations from existing clients.

We know that you have been pleased with our service levels so far, and believe that you may know of other businesses like yours that we could help in the same way. Do you know of anyone who would require our services? We are happy to sit down and discuss their accounting.

And to show our appreciation, each time one of your new business referrals becomes a client, we will send you a bottle of Cloudy Bay Sauvignon Blanc 2009 as a thank you.

Important Dates

 21 June - Monthly Instalment Activity Statement for May 2011

About Davis Stewart Rowland

Davis Stewart Rowland is a three partner firm located at The Entrance on the NSW Central Coast. With over 50 years experience we have an in-depth knowledge of what the business owner and investor needs to embark and stay on the path of growth and wealth creation.

We have a unique appreciation of the issues business owners and investors face, which makes us an integral part of our client's advisory team. Our comprehensive approach includes:

• Benchmarks
• Tax minimisation plans
• Cash flow forecasting
• Business information processing
• Management & strategic advice

Whatever your needs we can help find a solution.

Contact us today