Welcome to the Capitis Accounting Solutions group news.

We are proud to bring you the Capitis Accounting Solutions newsletters that will keep you up to date with the latest news and information that affects you and your business.

In the newsletters you receive from us, we will keep you fully informed on our full range of products and services to enhance your company’s business operations and share some success stories and other amusing tales with you as well.

We will also give you tips on simple new ways you can get the most out of our brand-new interactive website. You can also register to receive valuable information quickly, easily, and securely and much, much more!

And of course, if you have any questions, please don't hesitate to e-mail us at info@capitis.com.au. We'd be happy to assist you!

The Team
Capitis Accounting Solutions
www.capitis.com.au

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• Cost of sales turnover
• Total expenses turnover
• Rent to turnover
• Labour to turnover
• Motor vehicle expenses to turnover

• Invoices, receipts, cash register rolls and/or point of sale print outs.
• Provide details of reconciliations between your sales records and the amount deposited into your business bank account or recorded in your cash book. The reconciliation should show any amounts not deposited to business accounts and any other amounts used for drawings, wages and other cash expenses.
• Provide copies of all bank statements.
• Provide an explanation, if your business is reporting outside the benchmarks for your industry as to why, including an explanation of how you work out your sales prices.

If you have any queries on the small business benchmarks and/or ATO record keeping requirements, please contact us. We also remind of our Audit Insurance Policies, which you are able to take out, which will in turn cover you for any costs associated in the event of an audit. If you are looking for peace of mind, this is a well worth the investment.

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With Christmas just around the corner now there is no better time to consider the Fringe Benefit Tax (FBT) and income tax implications of providing entertainment to staff and clients.

One major consideration is the “less than $300” minor benefit exemption and the fact that the Tax Office now accepts that different benefits provided at (or about) the same time are not added together when applying this threshold. Basically this means that a Christmas party and gift may be exempt from FBT, even if provided at the same time, as long as each costs less than $300.

Christmas Parties  - Electing to use the 50/50 Method

Food and drink provided (irrespective of where the party is held or who is attending) – only 50% of the total expenditure is subject to FBT and is tax deductable.

Under the 50/50 method:

• Where the function is held on the employer’s premises food and drink is not exempt from FBT.
• The Less than $300 (<$300) minor benefit exemption cannot apply.

Christmas Parties – Actual method

FBT is generally only payable on that portion of meal entertainment provided to employee’s and their associates (e.g., family members). Therefore FBT is not payable on entertainment provided to non-employee’s (eg., Clients).

Employers can calculate how much of their meal entertainment relates to employees and family members on the basis of either:

• the exact cost contributable to each person; or
• a ’per head’ apportionment, where an exact allocation cannot be easily made.

“Recreation expenditure” at a Christmas party

Where an employer hires a band, a DJ, a comedian or any other entertainer, for a Christmas party or similar function, this expenditure is generally considered “recreation expenditure” and is generally dealt with under the actual method.

To the extent that any recreation expenditure relates to clients, suppliers etc., there is no FBT and no tax deduction.

Exclusive use of premises or facilities

Where an employer hires or leases premises or other facilities (e.g., a recreation centre, a boat or even a cinema), for the exclusive use of their own staff, family members and clients, this expenditure may be dealt with under the 50/50 method (instead of the actual method).

Where this method is used 50% of the expenses are subject to FBT and 50% are tax deductable.

Christmas gifts

Gifts that ARE NOT considered to be entertainment

These generally include:

• A Christmas hamper, a bottle of whisky, wine etc.; and
• Gift vouchers, a bottle of perfume, flowers, a pen set, etc

The general FBT and income tax consequences for these gifts are as follows:

• Gifts to employees and family members – FBT is payable (except where the minor benefit exemption applies) and a tax deduction is allowed.

Gifts that ARE considered to be entertainment

These generally include:

• Tickets to attend a theatre, live play, sporting event or the like; and
• A holiday airline ticket or admission ticket to an amusement centre.

The general FBT and income tax consequences for these gifts are as follows:

• Gifts to employees and family members – FBT is payable (except where the minor benefit exemption applies) and a tax deduction is allowed.

The minor benefit exemption

Generally speaking, where the value of a drink Christmas related benefit (e.g., food and drink, and a gift) provided to an employee or family member is <$300, it may be exempt from FBT Surprisingly, for the purposes of the $300 minor benefit threshold, the following tips should be considered:

• The $300 threshold is applied separately to each benefit provided to an employee, and/or each benefit provided to a family member (e.g., spouse)
• All benefits provided to an employee or a family member in relation to a Christmas function are no longer grouped when applying the <$300 threshold (i.e., the <$300 threshold is applied separately to each benefit).

However, note that, if the minor benefit exemption applies to the provision of entertainment benefits to an employee, no deduction can be claimed.

Example

An employer holds an external Christmas party for employees and their spouses. The cost of the food and drink per person is $250 and no other benefits are provided. Assuming the actual method is adopted: 

• For employees attending with their spouse no FBT is generally payable (i.e., the per head cost is <$300); and 
• For employees attending alone FBT is generally payable (i.e., the per head cost is <$300).

In either case no tax deductions will be allowed.

Assuming the 50/50 method is adopted:

• 50% of the total expenditure is subject to FBT and is tax deductable.

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From 1 January 2012, Family Tax Benefit and Youth Allowance are changing under the Supporting Families with Teenagers measure.

Changes to Family Tax Benefit:

From 1 January 2012, Family Tax Benefit Part A will increase for dependent 16 to 19 year olds who are undertaking full-time secondary study.  The maximum rate will increase to $214.06

These changes recognise the extra costs of raising teenagers, ensure that eligible families do not experience a drop in assistance and encourage young people to stay in school by providing more support for their family while they are studying. 

Family Tax Benefit Part A may include an annual supplement of up to $726.35 for each child, which is paid after the end of the financial year once tax returns have been lodged. 

Depending on income, the amount of Family Tax Benefit Part A will automatically be adjusted from 1 January 2012, if payment is being received for a dependent child who:

• is at least 16 years old, and
• has not turned 19 years old before 1 January 2012, and
• is in full-time secondary study

Also from 1 January 2012, Family Tax Benefit will cease when a young person turns 22.

Changes to Youth Allowance:

After 1 January 2012 young persons aged 16-17 years old, dependent, living at home and still in full-time secondary study will generally not be able to start to receive Youth Allowance.

Those currently receiving Youth Allowance on 31 December 2011 may continue to do so.  However, the increased rate of Family Tax Benefit Part A may be a better option for the family. 

To receive Family Tax Benefit Part A, the young person needs to stop their Youth Allowance and a claim for Family Tax Benefit must be lodged by their parent/s or guardian/s with the Family Assistance Office.

If Youth Allowance is stopped after 31 December 2011 and the family has claimed Family Tax Benefit, it is possible to go back to Youth Allowance if it’s decided that it is the better payment option.

From 1 January 2012 the Youth Allowance age of independence will reduce to 22 years.

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Why should you keep records?

• To provide written evidence of your income and expenses. 
• To help you or your tax agent prepare your tax return. 
• To ensure that you are able to claim all your entitlements.
• In case the ATO ask you to prove the information you provided in your tax return. 

Generally, you must keep your written evidence for five years from the date you lodge your tax return, or, if you: 

• have claimed a deduction for decline in value (formerly known as depreciation) - five years from the date of your last claim for decline in value 
• acquire or dispose of an asset - five years after it is certain that no capital gains tax (CGT) event can happen, so you know you don't need the records to work out a capital gain or loss
• are in dispute with the ATO, the later of five years from the date you lodge your tax return or when the dispute is finalised.  

• Record each individual transaction through the cash register. 
• Conduct a daily sales reconciliation between the 'Z' total and cash in the register, taking into account cash taken from the cash register for business expenses and personal use. 
• Transfer daily sales total into the cash receipts book regularly. 
• Perform bank reconciliations between bank statements and cash receipts book at least monthly. 
• Keep 'Z' totals and reconciliations for five years and the actual till rolls for one month after they have been reconciled with actual sales and banking. 
• If a daily sales reconciliation is not performed, keep the till rolls for five years. 
• Keep bank records and cash receipts book for five years. 
• Maintain a filing system to keep track of paid and unpaid accounts.

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Reckon have just released Cashbook Online, allowing you to record business transactions, including income, expense, perform bank reconciliations, & manage your cash flow in a simple & intuitive way.

Cashbook Online allows you to record payments & receipts per month for each bank account including recurring transactions saving you time & effort.

It allows you to create budgets for a given period & prepare a range of reports enabling you to better understand your business financials.  This includes financial reports such as a Profit & Loss, Trial Balance & Balance Sheet, as well as GST reporting to help you prepare for your BAS Lodgement.

Cashbook Online is an online application that requires no downloading of software, no installation & no updates or upgrades.  Cashbook Online works on both a Mac & PC.

For more information log onto www.reckononline.com.au or contact our Reckon Accredited Professional Partner Calinda Hurley at calinda.hurley@capitis.com.au

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Every year thousands of Australians fall victim to scams. To avoid being hurt financially and emotionally, here is some information and tips on how to avoid two of the latest scams. 

Carbon pricing compensation scam

With the recent discussions around carbon pricing, it has been reported that scammers have been contacting members of the public offering compensation payments.

What is the scam?

The scammer reportedly:

• Make contact out of the blue and claims to be a representative from the Australian Government or a government department
• Offers a compensation payment as part of the Australian Government’s carbon pricing initiative, and 
• Asks for your bank account details to transfer the money. 

Do not provide your bank details, as they could potentially gain access to your money and any personal details linked to your bank account. 

The Australian Government will never call you to ask for your bank account details or offer you carbon pricing assistance.  

The clean energy advance and supplement will be paid automatically into the bank account Centrelink uses for existing payments. 

For more information about the carbon pricing payment scam call the Australian Securities and Investments Commission Infoline on 1300 300 630 or visit www.moneysmart.gov.au

CCleaner is the number-one tool for cleaning your Windows PC. It protects your privacy online and makes your computer faster and more secure. It removes unused files from your system - allowing Windows to run faster and freeing up valuable hard disk space. It also cleans traces of your online activities such as your Internet history. Additionally it contains a fully featured registry cleaner.  Easy to use and a small, fast download.

Cleans all areas of your Computer

Internet Explorer
Temporary files, history, cookies, Autocomplete form history, index.dat.

Firefox
Temporary files, history, cookies, download history, form history.

Google Chrome
Temporary files, history, cookies, download history, form history.

Opera
Temporary files, history, cookies.

Safari
Temporary files, history, cookies, form history.

Windows
Recycle Bin, Recent Documents, Temporary files and Log files.

Registry Cleaner
Advanced features to remove unused and old registry entries 

Go to http://www.piriform.com/ccleaner to download this free program.

MYOB have commenced the release of their next generation software, AccountRight 2011.
Versions that are now available include;

• AccountRight Basics (was MYOB BusinessBasics)
• AccountRight Standard (was MYOB Accounting)
• AccountRight Plus (was MYOB Accounting Plus)

The network version of AccountRight (Premier) will be released in mid 2012.

Whilst the new versions have many exciting new features, there has been widespread concerns about the overall speed performance and bugs within the software, and as such, we strongly recommend not to upgrade to the new product until further patches and updates are available. New updates are scheduled to come through in January and February of next year, and we will then re-evaluate the performance of the software and provide recommendations at this time. 

If you have any queries, feel free to contact our MYOB Certified Consultant, Paul Drendel, in our Horsham office or email paul.drendel@capitis.com.au

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Warren Stewart

On December 13, Warren celebrated his 60th birthday. Congratulations Warren!!

Capitis Accounting Solutions boasts a proud history dating back to May 1979, thanks to Warren, which is when he commenced as a sole practitioner.

Having completed his education at the Dimboola Primary and Secondary Schools, Ballarat College and the Australian National University in Canberra, Warren gained employment at the Federal Treasury in Canberra. He then moved back to Melbourne to a position with Peat Marwick Mitchell (now KPMG).

During this time, Warren completed his studies to become a Chartered Accountant.

These employment positions were rewarding but failed to provide the one-to-one personal contact he felt important in a working life. When an opportunity in public practice became available in Horsham, Warren made the move back to the Wimmera.

Even though Warren was offered a partnership position at this firm, his dream of being a public accountant in Dimboola remained a major objective. Consequently, with the understanding and consent of his wife Pamela, Warren opened an office as a sole practitioner in Lloyd Street, Dimboola in May 1979.

The trials and tribulations of establishing a public practice in a small town with a zero client base were numerous. Without Pamela’s unwavering support to a “naïve” husband (she was also his secretary), the business would have floundered. However, they worked hard and the client base continued to grow.

Warren opened an office in Warracknabeal at the same time. The Warracknabeal office was open three days a week and Dimboola two days a week.

Capitis Accounting Solutions continues to operate with offices in Horsham, Dimboola and Warracknabeal. From its humble beginnings, the business has grown into a leading professional services firm in the Wimmera region, employing 12 professional (including partners) and four administration staff.

The Capitis team would like to wish you all the very best for the Christmas and New Year period, and look forward to working with you in 2012.

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** Don't forget our range of online training courses on such things as MYOB, PAM, Excel & Calxa 

If you are interested in what upcoming training courses we have coming up, please visit our webpage here....