• Before the end of the year
• Director's Penalty Notices
• Benchmarks - what you need to know
• Central Coast Economic Update
• Deductions and Taxable Income
• Going forward with Banklink
• Recommendations
• Important Dates
• About DSR

Welcome Note

Welcome to What's Happening at DSR in May

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".

Before the end of year 

Now is an ideal time to talk with your accountant about exploring the legitimate tax advantages to your business before 30 JUNE
                                                           
It’s only May but if you haven’t already, now is the time to start thinking about the end of financial year. It may still seem some time away but those weeks will skip by and we’ll be there before you know it.

Last minute tax planning can be a recipe for poor decisions and you need to work through the cash flow implications on anything you decide to do. There is no point saving some tax if you create a cash flow crisis in the process. Tax planning these days’ falls into three baskets:

• Health & hygiene;
• Timing & efficiency; and
• Permanent savings.

To read on...


Tax Planning is a smart business decision.

Company Debts - Director's Penalty Notices

Directors can be liable for their company's tax debt the company fails to remit a tax instalment or other deductions and do not comply with a Director's Penalty Notice.  Directors may also become liable under the unfair preferences provision if the ATO has to refund money to a liquidator.

Directors are responsible for the payment of taxes as and when they fall due by:

• Paying the amount in full
• entering into a payment arrangement with the ATO
• appointing a voluntary administrator to the company; or
• winding up the company

Failure to act on any of the above before the tax is due, the director will become personally liable for a penalty in the amount of the unremitted tax. The penalty is referred to as a parallel liability, meaning it is a separate liability to that which is owed by the company. Therefore the company and each director(s) owes the full amount separately.  However, the ATO cannot collect penalties from Directors straight away.

Recovery can only occur after the Director has been given written notice of the penalty in the form of a Director's Penalty Notice (DPN). The DPN must be addressed within 21 days of issue. Adopting one of the three choices set out in the notice within this timeframe, the penalty due by the director will be deemed remitted in full. The company however will still be liable for the original debt.

If you would like further information about Director's Penalty Notices, speak with your accountant.

The ATO use industry benchmarks to assess business performance and will take a closer look at businesses that fall outside of these benchmarks.  But what happens if you have a niche business or have unusual trading conditions that mean you will almost never fall within these benchmarks?

This is the major problem with the current benchmarking approach. The ATO has a huge data base of information on business performance. When you lodge your business income tax return your accountant needs to include an industry code that is the closest match to your business.  It is through the matching of data against common industry codes that the ATO builds it benchmark information and is able to statistically establish ranges for what is normal.  With a lot of businesses however, there is no such thing as normal.

To find out more, click here

Talk us today about an appointment to review your business' benchmarks to ensure you stay on track with the ATO.

Central Coast Economic Update

On May 13, 2011, the Hunter Central Coast Innovation Festival event was held at Mingara Recreational Club hosted by Central Coast Research Foundation (CCRF).

The event provided an economic analysis of local, national and international economies, including current trends, plans to stimulate regional innovation and the outlook for the Central Coast.

The CCRF have published a publication "2011 Central Coast At a Glance". It provides a statistical snapshot of the Central Coast region including population, industry, employment, education, health, and law enforcement.  We trust you will find this an interesting read.

Deductions and Taxable Income

One of the most common questions we are asked is "I want more deductions to reduce my taxable income - should I purchase this new asset (or incur this expense) before the year end?

As a small business owner your primary concerns are usually expressed in terms of maximising your revenue and minimising your expenses. When it comes to taxes however, the goal is usually the opposite; to defer income or to maximise your expenses by making sure you claim every deduction you're entitled to.

Because of these conflicting goals, which require very different approaches, business owners sometimes fall into the trap of making important business decisions based mainly on the tax consequences. THIS IS WRONG!

Don't let the tail wag the dog. Make sure that you consider all the consequences of a transaction, from a tax, financial and strategic viewpoint, before finalising your decision. What sounds good from a tax perspective, does not always make sense in terms of your overall business objectives. 

Speak to your accountant today to help take the guess work out of whether to spend or not.

 Going Forward with Banklink

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

Since implementing Banklink in our practice 18 months ago, we have over 150 business clients successfully using the Banklink System with new users joining every week. They are discovering that the hours they spent preparing their accounts each month has now turned into just minutes. 

Your financial institution simply provides our office with a securely encyptyed electronic copy of your bank transactions. From here we can process your bookkeeping with minimal input from you.
 
No more spending hours on your computer doing monthly book work, Banklink frees up your time.

IT IS THAT SIMPLE.

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

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

15 May 2011 -  2010 Income Tax Returns and Annual GST Returns for those not eligible for tax agent concessions to 5 June 2011

23 May 2011 - Monthly Instalment Activity Statement for April 2011

26 May 2011 - Quarterly Business Activity Statement for Jan - Mar 2011

28 May 2011 - Superannuation guarantee charge (SGC) statement - Jan - Mar 2011

5 June 2011 - 2010 Income Tax Returns and Annual GST Returns eligible for tax agent concession to 5 June 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