Newsletter

November 2018 Newsletter

Focus on Your Cashflow in the Lead up to the Christmas & New Year Holiday
Brentnalls Affiliation National Conference 2018
My Learnings from China – What Makes a Success Business & Do You Measure Your Competitive Advantage?
Proposed Changes to Division 7A
Practical Advice on Agile Leadership
Brentnalls Affiliation in the Top 100 Accounting Firms for 2018
Every Bit Counts
Did You Know We’re on LinkedIn?

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crowdfunding

Crowdfunding: Tax & GST Implications

In this article we explore what exactly crowdfunding is and the implications of crowdfunding for both the entity receiving funding and the entities that contribute or pledge money.

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The habits of Effective

The Top Habits of Effective CEOs: Agile Leadership

In this blog, we continue to explore the topic of agile leadership, which we covered in a recent breakfast we facilitated with business owners and CEOs.

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Agile leadership strategy

Intro to Agile Leadership

The focus of our recent Business Growth Network (BGN) event was agile leadership and what exactly this means for individuals and businesses as a whole.

According to the simplest definition, the word “agile” means having the ability to move quickly and easily and being able to think and understand quickly.

Given the huge number of publications on the concept, it may seem like it is just another buzzword in today’s world of business. However, this is not the case when it comes to agile leadership. In its recent report, the World Economic Forum published a list of top skills required to be successful as leaders in 2020, many of them related to being more agile.

The Agile Business Consortium (the UK based not-for-profit body) released their first white paper on the topic in late 2017. To this day, this document remains to be an extremely relevant guide on how to be agile as a business leader. According to it, the keys to agile leadership lie in the concepts of Communication, Commitment and Collaboration. Much of our discussion during the BGN centred around these three words and in particular, the following nine principles:

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Targeted amendments to Division 7A – Treasury consultation paper

Today, Treasury has released a consultation paper relating to the proposed amendments to the Div 7A rules that are due to apply from 1 July 2019.

The release of this paper is significant as it is the first detail provided by the Government on how the new proposed rules are intended to apply.

Prior to today’s release, the Board of Taxation’s report outlining recommendations to Government (finalised in 2014) was all we had available as a guide on how the new rules may be applied. Treasury has made substantial changes from those original recommendations.

The notable points that may affect your group are:

  • New Div 7A loans will be straight line 10 year – principal and interest paid each year (previously 7 years)
  • Interest rate will increase from current ATO benchmark rates, and will be the “Small business; Variable; Other; Overdraft – Indicator Lending rate most recently published by the Reserve Bank of Australia prior to the start of each income year”. This will result in substantially higher interest and repayments over the term of the loan
  • Existing Div 7A loans will transition to new rules, however loan terms will not be extended
  • 25 year loans WILL NOT be grandfathered. Transitional rules will allow for 2 years to transfer the loan to a new 10 year loan. Failure to convert these loans will result in a deemed dividend
  • The concept of “distributable surplus” is being removed – this will result in previously exempt loans and payments being captured by the Div 7A rules and triggering tax that previously would not be payable
  • Self-correction mechanism will apply to rectify Div 7A breaches – make good catch up payments will be allowed
  • Amendment period relating to Div 7A loans, payments and forgiveness will extend to 14 years as an integrity measure (up from 5 year amendment period)
  • Post December 2009 Unpaid Present Entitlements (UPE’s) will be captured by the new Div 7A rules (this includes Sub Trust arrangements set up under the Practice Statement 2010/4)
  • IMPORTANTLY, IT IS STILL NOT YET CLEAR whether Pre December 2009 Unpaid Present Entitlements (UPE’s) will be included in the new rules. The consultation paper is specifically asking feedback asking “Should UPEs arising prior to 16 December 2009 be brought within Division 7A?”
    The proposed changes will affect a large number of taxpayers and in some instances will require proactive tax planning to ensure tax effective structures are maintained during the transition.

We will continue to keep you informed of the changes as further updates come to hand.

August 2018 Newsletter

The latest edition of our Newsletter is on its way to your Inboxes! In it, you will find our Director’s reflection on the current financial market situation, Levi’s take on the importance of understanding the numbers, GrowthCon update & more.

Follow the link to access the Newsletter Download PDF of our August newsletter.

FBT exemption for minor private use of vehicles

The ATO has this week finalised the guideline relating to the “minor, infrequent and irregular” use of Fringe Benefit Tax (FBT) exempt motor vehicles, and there are some notable changes from the previously released draft guideline.

These updates can affect any business that provides utes, vans and similar exempt vehicles to their employees and Directors.

Employers can rely on the exemption from FBT provided under this guideline, if:

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Brentnalls WA appoints new Director

We are pleased to announce the promotion of Chris Smith to the position of Director.

Chris Smith has over 14 years of experience in tax, superannuation funds and business advisory to various companies in Western Australia. He holds a Bachelor of Commerce, Accounting & Finance degree from the University of Western Australia.

“We are delighted to welcome Chris as a new Director,” said Tony Monisse, Brentnalls WA Managing Director. “Chris has been with us for over 4 years and his expertise in taxation, asset protection and estate planning have been invaluable to our growth in recent years.”

Chris Smith added, “It’s a great privilege to be able to join Tony and Chris Mandzufas, the other Brentnalls WA director, in this exciting and challenging role. I look forward to further strengthening our position as a key advisor in the matters of tax planning and transaction advice to Western Australian businesses.”

Brentnalls WA to present at GrowthCon Perth

We are pleased to announce that our Director, Tony Monisse, will be co-presenting at GrowthCon Perth 2018.

We are pleased to announce that our Director, Tony Monisse, will be co-presenting at GrowthCon Perth 2018. The event will take place on Friday, July 27th from 8.30am to 12.30pm at Bendat Centre in Wembley, WA.

GrowthCon is a conference that will give entrepreneurs an opportunity to learn about growing a business from the top experts in finance, marketing, sales and technology.

The key topics the presenters will address are as follows:
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Tax Consolidating SME Groups

There is a common understanding that the tax consolidation regime is for the “big end of town” only.

Whilst tax consolidation does feature in the tax structuring of larger corporations, the tax consolidation regime is not only for the big end of town, but can be effectively used by Small to Medium Enterprise Groups (“SME”), the minimum requirement to form a tax consolidated group being a resident company with at least one wholly owned subsidiary company (or unit trust).

The tax consolidation regime treats the members of a consolidated group as a single entity for income tax purposes.  This means that intra-group transactions are ignored for income tax purposes and the group lodges only one income tax return for each income year.   Therefore, whilst tax consolidation is a choice, for many SME corporate groups it will be a practical necessity.

Some of the benefits that result from tax consolidating include the following:
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Strategy Process

Brentnalls WA Director Tony Monisse describes the strategy process to help improve your business’s success.

Pick where you’re going to play

One of the big challenges we see with clientsis they cannot take advantage of all the opportunities they identify.

There may be lots of opportunities, but they have limited;

  • Resources
  • Capabilities
  • Funds
  • Skills

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Growing Sales in Your Business

Hello, my name is Tony Monisse, I am a Director at Brentnalls WA, and I will be talking to you today about 3 actions which a business can take to grow sales, drawing on various experiences that we have had working with a number of private clients helping them grow their sales.

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Why establish an estate/business succession plan?

Despite the fundamental importance of succession planning, it is often neglected in current business/farming management practice.

Business owners/farmers should recognise that the need for a fully discussed succession plan is paramount in any business/farming situation. A natural progression from one generation to the next (or in case of unexpected or premature death) through the deceased’s Will. Poor succession planning is the cause of much “hurt in business/rural Australia.” Read more

What Is A Self-Managed Super Fund

A Self Managed Superannuation Fund (SMSF) is a type of super fund set up for those who wish to manage their own superannuation assets privately, rather than be a part of a larger fund where members pool their super funds and these are managed by professional fund managers. It gives the members much greater control over the investment decisions, but also require far greater input by the members of the fund. All super funds are required to comply with their relevant regulatory bodies and with SMSF‘s, trustees are required to oversee these compliance requirements. Read more

Traits of a Successful Business

We want to be the Accountant who will Challenge, Attack, Question, Confront, Dare, Provoke, Contest, Assault, Invade, Blast you on the way you operate your business.

The key areas of any Business that require ongoing maintenance to ensure the Health and Wealth of your business are: Read more

Strategic Planning – 10% Strategy 90% Execution

Where are you on the strategy and execution axis with your business?

It has often been said that an average strategy well executed will always outperform a superior business strategy which is poorly executed. In fact in terms of effort, the development of thebusiness strategy is 10% of the effort and the execution of the business strategy is 90% of the effort. Read more

Improving Value At All Stages Of Your Business

Improving the value of your business is not just about selling. It’s about running the most successful business you can.


The Theory

There are many ways to value a business, however the most commonly used valuation methodology for a profitable trading business is the Capitalisation of Profits Methodology.

This methodology is based on the average earnings of the business (before interest and tax – EBIT) multiplied by a capitalisation rate.

Therefore to increase the value of your business, a business owner should focus on: Read more

Funding Requirement Report

Is it time to visit the Bank?

Visiting your bank is often like visiting the dentist:

• You need to go yearly but you delay it for as long as you can
• Your past sins are obvious as soon as you open your mouth. They can be even worse when the dentist digs a little deeper and does an x-ray!
• The feeling of an unknown outcome – will you get the all clear?
• Feeling like you can’t get your point of view across even when they ask you questions
• The expensive bill at the end of the visit
• The ongoing maintenance and review so you don’t lose all of your teeth. Read more

Fringe Benefits Tax (FBT) and Salary Packaging

The 2011 Federal budget signaled significant changes to the way Fringe Benefits Tax will be calculated on the use of motor vehicles. Traditionally, motor vehicles have formed an essential part of many remuneration packages and it was initially feared that the changes to the legislation would make it prohibitive for employers to use this carrot to entice and retain employees. However, closer analysis suggests that there continues to be scope to tax effectively package motor vehicles into employee’s salary under the new regime.  Read more

What is a Bonus Plan?

Many exceptional companies have bonus plans to reward employees.

Why would you consider a bonus plan?

Advantages include:

  • Staff retention, attraction and motivation.
  • Added incentives to complete jobs on time and achieve agreed milestones.
  • Assists cash flow in the company by minimising annual salary increases.

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Contractors vs Employees: Under the ATO Spotlight

Why Consider the Contractor issue now?

The contractor issue is not at all new, nor has it been subject to any dramatic recent change.  However there are a number of diverse factors that have brought this issue back to the spotlight.

  1. Growth in the number of Contractors: The attractions of contractors are many: a substantial release from the growing obligations that employers face and the flexibility which comes with being able to gain or shed resources in line with needs and the business cycle, just to name a couple.
  2. Government / Treasury Attention: The new contractor reporting regime which will apply to the building and construction industry from 1 July 2012 is the most obvious example of measures to examine contractor arrangements.
  3. Tax Office Attention: The Tax Office’s compliance plan for 2012 is reason enough to note how important the contractor issue has become.
  4. Institutional attention:  It is reasonable to expect that union scrutiny of contractor arrangements will continue.

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The Budget Surplus – Illusion or Reality?

The Government released their Mid-Year Economic and Fiscal Outlook (“MYEFO”) report and announced the following key changes:

  • Corporate PAYG Tax Instalments

Companies with a turnover in excess of $20 million per annum will be required to make PAYG Income Tax instalments on a monthly basis.

  • In-House Fringe Benefits

Under the current legislation, the taxable value of an in-house fringe benefit under a salary sacrifice arrangement would be reduced to 75% of the lowest price at which an identical benefit would be sold to the public or under an arm’s length transaction. This taxable value would then be eligible for a further $1,000 reduction in determining the FBT payable. Read more