Print Newsletter

Newsletter June 2008

The NSW government will be increasing the payroll tax threshold and reducing the payroll tax rates over the coming year as follows;

• From 1 July 2008 to 31 December 2008 the rate of payroll tax remains 6%,
• From 1 January 2009 to 30 June 2009 the rate of payroll tax will be 5.75%,
• From 1 July 2008 to 30 June 2009 the threshold is $623,000.

Employers or a group of related businesses whose Australian wages exceed the current NSW monthly threshold, are required to pay NSW payroll tax.

The annual reconciliation and payment or ‘nil’ remittance is due by 21 July 2008.

The Australian Taxation Office has determined that the CGT improvement threshold for the 2008/2009 year is $119,594 (up from $116,337 for 2007/2008).

The improvement threshold is used when capital improvements are made to a pre-CGT asset. If the improvements are less than the threshold, then the ‘exempt from CGT’ status of the asset remains unchanged.

From the 2008/2009 year onwards, there will be an increase in the Medicare levy surcharge threshold for individuals from $50,000 to $100,000. There will also be an increase in the Medicare levy threshold for families from $100,000 to $150,000.

The Medicare levy imposes a 1% increase in the Medicare levy liability on individuals who do not have private patient hospital insurance and their taxable income is above the thresholds.

The R&D tax concession is an ongoing scheme designed to increase the level of R&D being conducted by Australian companies. It is broad-based, not industry specific, and market-driven with the applicant entity deciding upon the scope and timing of the R&D.

It enables companies to deduct up to 125% of eligible expenditure incurred on R&D activities from assessable income when lodging their income tax returns. For expenditure that qualifies for the 125% concession (excluding plant related expenditure), an additional 50% deduction called the ‘175% premium R&D tax concession’ may be available.

It is available to those companies that increase their level of this type of R&D expenditure relative to their average of such R&D expenditures over the previous three years. Grouping and other rules apply.

An ‘R&D tax offset’ (equivalent to the value of the R&D tax concession) is available to companies with an annual turnover of less than $5 million and whose aggregate R&D amount is more than $20,000 and less than $1 million per year. These threshold tests are also subject to grouping rules. Eligible companies can elect to receive the offset of 30 cents for each dollar that would otherwise have been claimable as a deduction.

The Export Market Development Grants (EMDG) scheme is a key Australian Government financial assistance program for aspiring and current exporters. Administered by Austrade, the scheme supports a wide range of industry sectors and products, including inbound tourism and the export of intellectual property and know-how outside Australia.

The EMDG scheme:

• encourages small and medium sized Australian businesses to develop export markets,
• reimburses up to 50 per cent of expenses incurred on eligible export promotion activities, above a $15,000 threshold,
• provides up to seven grants to each eligible applicant.

 Any Australian individual, partnership, company, association, co-operative, statutory corporation or trust that has carried on export promotion activities during the year can apply for an export grant.

To be eligible, the business must have:

• income of not more than $30 million in the grant year,
• incurred at least $15,000 of eligible export expenses under the scheme (first-time applicants can combine two years expenses),
• principal status for the export business (some exceptions apply, e.g. event promoters).

 The business also must have promoted one of the following:

• the export of goods and services,
• the delivery of services outside Australia,
• certain services in Australia to non-residents,
•  inbound tourism,
• the export of intellectual property and know-how conferences and events held in Australia

The Wearne & Co Partnership will become an incorporated entity from 1 July 2008. The ABN for the new entity will be 35 002 401 907.