Superannuation Guarantee (SG) Rate Increases

Superannuation Guarantee (SG) Rate Increases

The Superannuation Guarantee (SG) rate, as currently legislated, will increase from 9.5% to 10%, with effect from 1 July 2021.

Further increases of 0.5% per year are to come from 1 July 2022 until it reaches 12% from 1 July 2025 onwards.

From 1 July 2021, employers will need to update their payroll settings to reflect the 0.5% increase in the SG rate. More importantly, both employers and employees will need to consider the potential increased SG costs of these changes going forward.

Our client guide (see link below) covers the financial impact on employers and employees and appropriate action required to be taken in response to the changes.

PA Client Alert June 2021 – Superannuation Guarantee (SG) Rate Increases

How can we help?

If you have any questions or would like further assistance regarding this update, talk to us today on 02 9415 1511 or send an email to your advisor at PrimeAdvisory.

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EOFY Resources 2021-22

EOFY Resources 2021-22

The end of the financial year will soon be upon us, with 30 June 2021 just around the corner. The months of May and June are the time to review & analyse ways to reduce your 2021 taxes based on your current income & expenses from July last year until now. We recommend all our clients consider tax planning for their business & personal tax. Download our tax planning guide & federal budget update for more information.

PrimeAdvisory – Minimise Your Business Tax 2021

PrimeAdvisory – Minimise Your Personal Tax 2021

PrimeAdvisory Federal Budget Update 2021-22

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Personal income tax cuts

Personal income tax cuts

As widely predicted, the Government has brought forward stage 2 of its planned income tax cuts by two years. Originally intended to apply from 1 July 2022, the tax cuts will come into effect from 1 July 2020 (subject to the passage of the legislation). The Treasurer the Hon Josh Frydenberg anticipates more than 11 million taxpayers will get a tax cut backdated to 1 July this year.

At a cost of $17.8 billion over the forward estimates, bringing forward the tax cuts is a controversial move. The Government argues that the measure will “boost GDP by around $3.5 billion in 2020-21 and $9 billion in 2021-22 and will create an additional 50,000 jobs by the end of 2021-22.” Others in Parliament believe the measure rewards higher income earners and the money could be better spent elsewhere. The Senate will decide whether the Government’s plan comes to fruition.

Stage 3 of the Personal Income Tax Plan that simplifies and flattens the personal income system remains scheduled for 2024-25.

  Tax thresholds
Tax rate Current From 1 July 2020 From 1 July 2024
0% $0 – $18,200 $0 – $18,200 $0 – $18,200
19% $18,201 – $37,000 $18,201 $45,000 $18,201 – $45,000
30%   $45,001 – $200,000
32.5% $37,001 – $90,000 $45,001$120,000
37% $90,001 – $180,000 $120,001 – $180,000
45% >$180,000 >$180,000 >$200,000
LITO Up to $445 Up to $700 Up to $700

Bringing forward the personal income tax plan will:

  • Increase the top threshold of the 19% tax bracket to $45,000 (from $37,000)
  • Increase the top threshold of the 32.5% tax bracket to $120,000 (from $90,000)
  • Increase the low income tax offset from $445 to $700

In addition, the LMITO (low and middle income tax offset), which provides a reduction in tax of up to $1,080 for individuals with a taxable income of up to $126,000, will be retained for 2020-21. This measure was to be removed at the commencement of stage 2 of the reforms from 2022-23.

If you need any assistance please contact your PrimeAccountant on 02 9415 1511 or email reception@primeadvisory.com.au.

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Preventing a tsunami of insolvencies.

Preventing a tsunami of insolvencies.

The Government has stepped in to prevent a wave of insolvencies when the COVID-19 support measures run their course in December 2020.

Temporary insolvency and bankruptcy protections are in place until 31 December 2020 to enable businesses to trade through the pandemic. The measures provide:

  • A temporary increase in the threshold at which creditors can issue a statutory demand on a company (from $2,000 to $20,000) and the time companies have to respond to statutory demands they receive (21 days to 6 months);
  • A temporary increase in the threshold for a creditor to initiate bankruptcy proceedings (from $5,000 to $20,000), an increase in the time period for debtors to respond to a bankruptcy notice (21 days to 6 months), and extending the period of protection a debtor receives after making a declaration of intention to present a debtor’s petition;
  • Temporary relief for directors from any personal liability for trading while insolvent; and
  • Flexibility in the Corporations Act 2001 to provide targeted relief for companies from provisions of the Act to deal with unforeseen events that arise as a result of the Coronavirus health crisis.

Between March and July 2020, there was a 46% decrease in the number of companies that have gone into external administration compared to the same period in 2019.

Anticipating a wave of insolvencies in early 2021, the Government has moved to streamline insolvency laws to enable small business to either restructure or efficiently wind up. There are two key elements to the reforms:

  • A new formal debt restructuring process for companies that will enable a business to keep trading under the control of its owners while a debt restructuring plan is developed and voted on by creditors.
  • A new, simplified liquidation pathway for small businesses to allow faster and lower-cost liquidation.

The measures will be available to businesses with liabilities of less than $1 million. You can find further information on the proposed insolvency reforms here.

In Australia, the insolvency laws currently do not differentiate between large and small businesses. Everyone goes through a similar process. For small business, the complexity and the cost of adhering to the current insolvency system often leaves little for creditors, makes it difficult to restructure, and places control of the business in the hands of an administrator. These reforms should help simplify the process.

For more information please contact your PrimeAccountant on 02 9415 1511 or email reception@primeadvisory.com.au.

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SCAM WARNING – Do not reply, delete immediately

SCAM WARNING – Do not reply, delete immediately

During a time such as COVID-19 many scammers see an opportunity to target people who may already be afraid or unsure. Here are a few examples that will give you a better understanding of the types of scams and how scammers are targeting people through both email and SMS.

Several emails are circulating with malicious attachments claiming that the recipient is eligible for a ‘working from home payment’, these are scam emails trying to get you to download malicious software. Other emails are asking for your personal information such as drivers licence and Medicare card. Many of these either try and impersonate the Government or a third party. Note you should never give personal information unless you are sure who you are dealing with.

There has been reports of different SMS scams circulating in Australia that are pretending to be from the Government and trying to get you to click malicious links and give out your personal and financial details.

Scammers have also started to target Australians financially impacted by the COVID-19 crisis, cold calling people claiming to be from organisations that can help you get early access to your superannuation. These scams are following from the Government’s announcement about early access superannuation. The ATO is coordinating the early release of super through myGov, there is no need to involve a third party or pay a fee to access this scheme.

If you receive a message from the ATO asking for your personal information, you can call them on 1800 008 540 to make sure it’s legitimate. If you think it’s fraudulent, report it by email to reportemailfraud@ato.gov.au.

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