Q.
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What are the changes for 2011/12 and beyond?
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A.
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Here’s a quick summary of the changes: |
| Change |
What it means |
| Flood Levy |
A new Temporary Flood and Cyclone Reconstruction Levy (Flood Levy) will assist with rebuilding infrastructure following the recent floods. The levy will apply from 1 July 2011 to 30 June 2012 and the rate paid per employee will depend on their taxable income. Check out the information available at www.ato.gov.au and chat with your accountant about this, as you need to ensure you’re aware of your obligations as an employer. |
| Paid Parental Leave |
The Paid Parental Leave requirement starts on 1 July 2011 (employers have actually been able to opt in since 1 January). From 1 July 2011, you need to provide Parental Leave Pay to eligible employees. Please read the information available at www.familyassist.gov.au and confirm your requirements with your accountant. |
| Low Income Tax offset |
The Government will increase the amount of the low income tax offset (LITO) that it delivers to low and middle income earners through their regular pay during the year from 50 per cent to 70 per cent of their total entitlements. The remaining 30 per cent of their LITO benefit will still be paid as a lump sum on assessment of income tax returns. Individuals’ total LITO entitlement in any one year remains unchanged. This measure will have effect from 1 July 2011. |
| HECS, HELP, SFSS and Medicare Levy |
Tax scales relating to HECS, HELP, SFSS and the medical exception scales have been updated with the new indexation. |
| Green Buildings |
There is a new tax break for green buildings and from 1 July 2012 businesses that invest in eligible assets or capital works to improve the energy efficiency of an existing building may be able to apply for a one-off bonus tax deduction. Information and eligibility criteria is available at www.climatechange.gov.au |
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Vehicle Tax Deduction and Low Assets Value Write Off
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Small business will obtain an instant write-off for the first $5,000 GST exclusive cost of any motor vehicle purchase. The balance of the purchase price can be allocated to the general small business depreciation pool and depreciated at the rate of 15% in the first year and 30% in subsequent years.
This concession for vehicle purchases mirrors the previously announced instant write-off for all assets costing less than $5,000 GST exclusive. Currently small businesses can claim an instant deduction for all assets costing less than $1,000 GST exclusive.
These measures will replace the entrepreneur’s tax offset and will come into effect 1 July 2012.
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Company Tax Rate
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The company tax rate for small businesses will decrease from 30% to 29%. This will come into effect 1 July 2012. |
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Trust Taxes
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The Government will remove the ability of minors (children under 18 years of age) to access the low income tax offset (LITO) to reduce tax payable on their unearned income, such as dividends, interest, rent, royalties and other income from property, with effect from 1 July 2011.
This measure will discourage income splitting between adults and children.
Income earned by minors from work will still be eligible for the full benefit of the LITO. Unearned income of minors who are orphans or disabled, as well as compensation payments and inheritances received by minors, will not be affected by this measure. |
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GDP uplift
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The Government will reduce the GDP adjustment factor for PAYG instalment taxpayers who use the GDP adjustment method, from 8 per cent (which is the rate that would apply for the 2011-12 income year under the current law) to 4 per cent for the 2011-12 income year. This measure is estimated to be revenue neutral over the forward estimates period.
The GDP adjustment factor for the PAYG instalment taxpayers increases the previous year’s adjusted taxable income by the previous year’s nominal GDP growth, to determine the tax instalments to be paid in the income year.
The GDP adjustment method is used by the overwhelming majority of taxpayers required to pay quarterly income tax instalments, mainly small businesses, but also some individual investors, certain trustees and small superannuation funds. This measure provides a significant cash flow benefit to such tax payers who are required to remit less income tax instalments in 2011-12. The measure also smooths the transition from the two per cent GDP adjustment that has applied for the last two years as the economy recovered from the GFC. |
Q.
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What new MYOB software versions will be released?
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A.
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MYOB AccountRight Plus v19.6
MYOB AccountEdge v9.6
MYOB AccountEdge Network Edition v9.6
MYOB AccountRight Premier v19.6
MYOB AccountRight Enterprise v19.6 |
Q.
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What do MYOB Cover members receive?
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A.
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MYOB Cover members receive software updates as a benefit of their membership. This means they are entitled to the compliance update, which includes the updated tax tables and a number of other enhancements. These enhancements are made in line with legislative changes as a result of the Federal Budget. |
Q.
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Why do I need to have a current MYOB Cover membership to receive the compliance update?
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A.
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MYOB invests considerable Product Development and Business resources to deliver this update to our clients each year. Having a current MYOB Cover membership ensures you receive the full product update. |
Q.
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How will the compliance update be available?
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A.
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For MYOB Cover members, the update is available for free via download. MYOB is committed to reducing our carbon footprint encouraging the success of our customers and continuing to prove that you can run a great business and look after the environment.
By downloading the release, you will be saving on the production of packaging materials such as compact discs and paper, and ultimately, the impact on landfill. |
Q.
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How do I download my update from the website?
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A.
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You are only eligible to do this if you have an active MYOB Cover membership.
If you are using an MYOB AccountRight product and are registered for auto updates, the compliance update will be automatically delivered to your software. If you are not registered for auto updates – find out how easy it is to register.
If you are using an MYOB AccountEdge product, instructions on how to download the release will be sent to MYOB Cover members soon. You will only need your serial number to access your update and will not need a password.
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What else?
Read Tim’s thoughts on this year’s budget and find out what other business think about the future via the MYOB Business Monitor
MYOB Cover – like to know more?
Visit myob.com.au/cover for a full list of benefits or to join today.
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