Media Releases

New Partners Announcement

Thu, 01 Jul 2010 09:00:00 +1000

The Partners of Lawler Draper Dillon are pleased to announce the appointment of Glenn Franklin, Business Recovery and Insolvency and Shane Jacobson, Business Advisory team as partners from 1st July 2010.

Glenn has 16 years experience in accounting specialising in corporate insolvency. This experience has been gained through providing assistance and advice for all types of formal and informal insolvency appointments including corporate reconstructions and deeds of company arrangement, voluntary administrations, voluntary and court liquidations and bankruptcy matters.

Shane works closely with business owners and decision makers in providing tax and compliance services, management accounting, structure advice, audit services and has assisted several clients through business acquisition and disposal.

Budget 2010

Wed, 12 May 2010 09:00:00 +1000

Overview

The Federal Government issued a safe and no frills 2010/2011 budget on Tuesday 11 May 2010.

The budget outlook and the funding of many of the measures are based on the stronger performance of the Australian economy than was projected in the last budget - in particular the resources sector.

The budget confirms the previously announced Resource Super Profits Tax, Superannuation changes, Company tax rate reductions and small business depreciation measures that formed part of the Government's response to the Henry Review of the Australian Taxation system. It also set out a range of other tax measures aimed at small business and individual taxpayers.

The changes proposed have various commencement dates with some not due to be implemented for two or more years.

From an individual perspective, the key new announcements in this budget are the introduction of a standard personal tax return deduction and a 50% discount on the first $1,000 of eligible interest income.

For Australian business, a number of technical tax consolidation measures were announced along with several changes recommended by the Johnson Report aimed at building Australia's credentials as financial services centre.

The Economics

The budget forecasts a deficit of $40.8 billion, some $16.3 billion lower than forecast in the last budget. Further, the Government is projecting that the economy will grow at a rate of 3.25% to June 2011 and 4% in the 2012 financial year. Unemployment is also expected to drop from a current rate of 5.38% to 4.75% over the same period. Possibly, the boldest claim in the budget is the return to surplus in 3 years, 3 years ahead of the previously forecasted timeframe. This budget is fully funded in that all expense and revenue measures largely offset each other in dollar terms. As a result, should the revenue measures not pass through Parliament, the tax sweeteners will most likely not be implemented.

There are also spending measures in the key areas of health services ($2.2 billion), reductions in payments under the pharmaceutical benefits scheme ($1.78 billion), delayed implementation of an emissions trading scheme (saving $652 million which has been allocated to a renewable energy fund), border protection ($1.2 billion), skills training program ($661 million), rail freight ($1 billion), resource infrastructure ($5.6 billion) and an e-health program ($460 million).

Personal Taxation

A 50% interest income discount for individuals

From 1 July 2011, individuals will be entitled to a discount of 50% on the first $1,000 of interest income (including interest income earned indirectly via a trust or managed investment schemes). This announcement was in direct response to the Henry Review, which recommended a 40% discount on interest income.

A standard deduction for work-related expenses and the cost of managing tax affairs

From 1 July 2012, individual taxpayers will be entitled to an optional standard deduction of $500 for work-related expenses and the cost of managing tax affairs. This will rise to $1,000 from 1 July 2013 and gives rise to the concept of tick and flick tax returns for an estimated 4.6 million tax payers in 2011 and 6.4 million taxpayers in 2012 and onwards.

Taxpayers with relevant expenses in excess of the standard deduction will continue to be able to claim those expenses under the existing rules.

The medical expenses rebate threshold

From 1 July 2010, the threshold for out of pocket expenditure to qualify for the rebate will increase to $2,000 (up from $1,500)

Family Tax Benefit and Child Care Rebate

The Child Care Rebate will be capped from 1 July 2010 at $7,500, with indexation of the cap frozen for four years. Changes to the Family Tax Benefit ('FTB') system will assist FTB recipients that do not lodge income tax returns

No change to the previously announced personal tax rate reductions

The currently legislated personal income tax rates have not been altered, applicable rates and thresholds are set in the table below:

Current		From 1 July 2010
Taxable Income	Rate (%)	Taxable Income	Rate (%)
0 - 6,000	0	0 - 6,000	0
6,001 - 35,000	15	6,001 - 37,000	15
35,001 - 80,000	30	37,001 - 80,000	30
80,001 - 180,000	38	80,001 - 180,000	37
180,000+	45	180,000+	45

The Low income tax offset

The offset will rise from $1,350 to $1,500 meaning that the effective tax free unearned income threshold for minors will be $3,000 for the 2010 year and $3,333 for the 2011 year while for adult taxpayers earning less than $30,000 no tax will be payable on income up to $15,000 in 2010 and $16,000 in 2011.

Medicare Levy Thresholds

Medicare Levy low-income thresholds will increase from 1 July 2010 as follows:

Singles	from $17,794 to $18,488
Families	from $30,025 to $31,196
Pensioners (below Age Pension age)	from $25,299 to $27,697

Business Taxation

CGT Treatment from earnout arrangements

From the date of assent of legislation to enact the new provisions, all payments under a qualifying earnout arrangement will be treated as relating to the underlying business asset (currently these rights are taxed as separate CGT assets).

40% Resource Super Profits Tax

As previously announced, a tax will be levied on profits from non-renewable resource projects from 1 July 2012, with a credit allowed for State Government royalties and a new resource exploration rebate will be introduced from 1 July 2011.

Reduction in company tax rate to 28% confirmed

From 1 July 2012 the company tax rate will drop to 28% for small business companies. For other companies the rate will drop to 29% from 1 July 2013 and to 28% from 1 July 2014

Small business asset write-off

From 1 July 2012, small business will be able to immediately write-off business assets costing less than $5,000 (up from $1,000). All other assets (other than buildings) will be written off in a single depreciation pool at a rate of 30%

Non-commercial loan rules refined

The changes to the non-commercial loan rules for the private use of company owned assets will not apply where the asset is used as a main residence of the shareholder or associate. This will apply from 1 July 2009 when the proposed new laws (which are not yet final) were to start.

Technical Consolidation Changes

A number of measures have been either confirmed or announced, addressing perceived inconsistencies in the way current consolidation provisions operate and designed primarily to ensure all consolidated groups are treated equitably. Many of the measures discussed in the budget are contained in legislation currently before Parliament.

Increased funding for ATO

The ATO will receive an additional $108 million over four years to expand data matching programs, aimed primarily at small business operators who operate in cash industries

Superannuation

Excess Contributions Tax

The Commissioner will be allowed to exercise discretion in relation to excess contributions tax, prior to issuing an assessment. Currently these requests must wait until after an assessment is issued.

Superannuation Guarantee Limit

The Super Guarantee age limit will be increased from 70 to 75 from 1 July 2013

Superannuation Contribution Cap

The $50,000 concession contributions cap will be kept in place from 1 July 2012 for those aged over 50 with super balances below $500,000 - the general reduction to $25,000 from 1 July 2012 will stay.

Superannuation Guarantee rate

From 1 July 2013, the Super Guarantee rate will be gradually increased to 12% (up from 9%) by 30 June 2020

Superannuation Co-contribution

The co-contribution will be set at a maximum of 100% and there will be no change to eligibility thresholds

Goods & Services Tax

GST and financial supplies

Changes to the financial supply rules that are designed to reduce compliance costs for small business, have been announced. Input tax credits on assets acquired under hire purchase agreements will be able to be claimed up front for taxpayers that account for GST on both a cash and non-cash basis so there will no longer be a need to use chattel mortgages. These changes will apply from 1 July 2012. The financial acquisitions threshold has also been increased from $50,000 to $150,000, effective 1 July 2012.

GST Margin Scheme

The margin scheme rules will be restructured to simplify the provisions and exceptions.

GST exemption for taxes, fees and charges

The current rules determining the GST status for various taxes, fees and charges will be amended to remove the specific list of exemptions and replace it with broad principles governing to determine those taxes, fees and charges that will be exempt.

ATO GST Compliance Funding

The ATO will receive an additional $338 million over four years to fund GST compliance activities targeting fraudulent GST refunds and incorrect reporting of GST liabilities, non-lodgment of GST returns and payment of outstanding GST debts. The increase in activity is projected to generate up to an additional $2.7 billion in revenue over the life of the program.

Hacketts Chartered Accountants Joins Lawler Alliance

Wed, 05 May 2010 09:00:00 +1000

Lawler Draper Dillon is pleased to announce the joining of Hacketts Chartered Accountants to the Lawler National Alliance.

Lawler Hacketts (as it will be known) is a trusted and respected accounting firm with offices in Brisbane and Rockhampton and joins other Lawler Alliance members, Lawler Partners and Lawler Draper Dillon, who have offices in Newcastle, Sydney and Melbourne.

The alliance is committed to providing innovative advice and assisting in value creation for organisations striving for success. The addition of Hacketts is an important milestone in the alliance's dedication to offer a superior value and service range to their clients and the middle market.

Hacketts Partner, Tom Hackett, said that the alliance impressed him with its energy and commitment to quality.

"As a professional services firm our focus is on helping our clients achieve their goals and objectives. The Lawler Alliance provides Hacketts with the unique combination of remaining an independently-owned and managed partnership whilst providing access to an expanded network of specialist technical services and professionals who share the same values and commitment to personalised client service. " Mr Hackett said.

Lawler is very proud of the strong network, excellent business frameworks and established systems that have been developed. We will continue to take a leadership position in shaping the mid-tier accounting market without losing sight of the values, culture and commitment to the local communities in which we have a presence.

Audit Alliance News

Mon, 01 Mar 2010 13:02:00 +1100

With our Alliance colleagues from Lawler Partners the Audit Team recently hosted the firms' inaugural Audit Conference. In addition to our respective audit staff, visitors from Adelaide and Hunter Valley firms boosted the numbers to 36 participants in all.

The agenda was written and delivered by the Audit Partners of the Alliance firms - Michael Cain, Lawler's new hire and a regular conference facilitator for the Institute of Chartered Accountants and others and co-facilitators Steven Bradby (Lawler Draper Dillon) and Clayton Hickey (Lawler Partners).

Not all Audit Conferences are the same. For example, we had a viewing of what seemed to be a 1960's vintage training video: "The Auditor in Court". Whilst current demands on auditors are higher, the case study showed that the principles then remain current today and diligent application of our policies and methodology will spare us from being the subject of an updated video!

In addition, we toured through the revised Audit Standards, current issues of Regulator focus, new accounting pronouncements, fraud awareness, and auditor independence. We are momentarily up to date, for our environment continues to move and present challenges. Professional development is an important aspect of our service delivery; by keeping ourselves up-to-date we are best equipped to deliver our audit and assurance service to our clients. We have plans to develop a professional development initiative for clients, with a technical accounting focus - more details will follow, though inquiries and expressions of interest can be directed to Steven Bradby.

Lawler National Alliance

Mon, 01 Mar 2010 13:02:00 +1100

It is now eight months since Draper Dillon announced a National Alliance with Lawler Partners. Currently the National Alliance has a combined force of 22 Partners and 220 staff.

At the time of writing this article we can announce that we have successfully completed negotiations with a Brisbane firm that will add a further 5 Partners and 35 staff to the Alliance.

As an Alliance we have concentrated on three key areas during our initial year:

Audit
Business Recovery & Insolvency (BRI)
Franchising

In Audit and BRI we believe we now offer a very real alternative to the large National firms.

Our first Chair of the Lawler National Alliance Executive is Terry Lawler. Terry established Lawler Partners in 1977 and is one of the Hunter Region's most respected business leaders. Terry was named by the Hunter Business Chamber as "Business Person of the Year" in November 2002 in recognition of his contribution to business in Newcastle, the Hunter and to the wider community. Terry's expertise is widely recognised and he has served on local, national and state boards along with a number of business and community organisations providing business, internal audit, operational and strategic advice.

2010 Changes Ahead

Mon, 01 Mar 2010 09:00:00 +1100

2010 looks certain to be a year of significant taxation and business changes affecting both individuals and businesses.

With the release of the Henry report there will be plenty of opportunity for the Government to once again tinker with both the taxation system and the superannuation rules, especially in an election year.

We have set out below a number of issues which we believe require consideration.

Shareholders' and Directors' Loans

Shortly before Christmas the Austalian Taxation Office ("ATO") released a draft ruling which outlined the circumstances in which an unpaid present entitlement to a corporate beneficiary would convert to a loan.

The consequences of the potential change are that corporate beneficiaries which have previously accumulated unappropriated profits might now be compelled to commence a dividend policy to satisfy the Division 7A requirements.

What was previously seen as a long term and perhaps generational deferment might not be available.

In some cases, the consequences of these changes might require the realisation of assets, which have been accumulated out of the unappropriated profits, just to meet the "top up" tax on the dividend.

We will be watching this with great interest and keeping you informed so that appropriate strategies to meet your circumstance can be considered and implemented.

ATO Matching Initiatives

Over the past three years the ATO have vastly improved their cross-referencing systems in order to capture employment and passive investment income details for individuals.

The ATO have also increased benchmarking across industry and employment type to identify taxpayers that declare information considered to fall outside the range which is normal or expected. This allows the ATO to target those taxpayers which might be considered a revenue risk.

In an ominous sign of increased surveillance the ATO shut down their Tax Agent Portal during January to extensively upgrade their software capabilities. We are expecting that the matching process will now be enhanced so that trust distributions, partnership distributions, property transactions, etc. will be cross checked to ensure income is ultimately declared.

Fair Work Australia

The changes introduced by the Fair Work Act 2009 will impact on all businesses in Australia.

Issues such as managing dismissals, agreement making, rights and responsibilities, need to be considered.

Lawler Draper Dillon cannot advise in this area, but would be happy to facilitate an introduction to an appropriate legal advisor if you do not already have an existing relationship.

Non-Commercial Losses

Commencing in the 2009/2010 tax year, the Government intend to disallow non-commercial losses to higher income earners.

In normal circumstances, non-commercial losses can only be claimed by an individual in a financial year if one of the following tests is met:

1. Income exceeds $20,000

2. Must have produced a profit in three of the last five years

3. Real property used in business exceeds value of $500,000

4. Other assets used in business exceed $100,000

Losses are quarantined and carried forward until offset by income from the same source.

Notwithstanding that one of these tests is met, the ATO will deny a deduction to individual taxpayers that have an adjusted taxable income in excess of $250,000.

Adjusted taxable income includes:

w Individual taxable income

w Reportable fringe benefit

w Reportable superannuation benefits

w Total net investment losses

If an individual is affected by this change they can apply to the ATO for discretion to be applied to allow the deduction. The discretion will take into account the particular circumstances of the enterprise including viability, stage of development, exceptional circumstances.

Superannuation Contributions

Although not changed from the 2008/2009 year, it is timely to remind our clients that the capped deductible contributions for the next four years are:

	Under 50 Years	50 Years +
2010	$25,000	$50,000
2011	$25,000	$50,000
2012	$25,000	$50,000
2013	$25,000	$25,000

For those clients who had relied upon the previous $100,000 limit for "over 50's" to fund their retirement, the changes are particularly harsh. These clients have not enjoyed employer superannuation throughout their working lives and the higher contribution provided the opportunity for them to catch-up in their final years of work.

We consider that 2010 should be the year for planning some alternative tax strategies to try and replace the considerable benefit that has been removed.

Our New National Alliance

Mon, 01 Jun 2009 13:02:00 +1000

We're proud to announce our new national alliance.

Lawler Partners and Draper Dillon are proud to announce a national alliance of like minded independent chartered accounting firms focused on superior quality client service. Through this shared vision and depth of resources, we can offer greater benefits to our clients and greater opportunities for our people.

Federal Budget 2009

Wed, 13 May 2009 13:34:00 +1000

The Treasurer handed down his second budget on 12th May 2009 "Nation Building for the Recovery". A budget focussed on "investing in infrastructure, supporting jobs and productivity and positioning for the recovery".

Although no significant tax changes were announced, there are a number of taxation and superannuation changes which may impact many of our clients.

Superannuation Concessions

Reduction in Concessional Contributions Cap

There was much speculation prior to the budget that the Government would initiate the first roll back of the Simpler Superannuation regime. The Government announced the concessional contributions cap will be reduced from $50,000 to $25,000 effective 1st July 2009. For those aged 50 years or over, the transitional contributions cap will be reduced from $100,000 to $50,000. The transitional contributions cap will continue to apply for the 2009/10, 2010/11 and 2011/12 years after which it will reduce to $25,000.

There is no proposed change to the non-concessional contributions cap i.e. $150,000 per year or $450,000 under the "bring forward" provisions.

Superannuation Co Contribution Decreased

The Government currently contributes $1.50 (150%) for every $1.00 invested into superannuation as an "after tax" contribution for taxpayers earning less than $30,342 per year, with eligibility shading out for incomes between $30,342 to $60,342. The maximum which could be received as a co contribution is $1,500.

The Government announced the co-contribution would be reduced to 100% of eligible contributions for the 2009/10, 2010/11 and 2011/12 income years with a maximum contribution of $1,000. The rate will increase to 125% of contributions for 2012/13 and 2013/14 income years after which it will increase to 150%. Shading out provisions will apply.

Business Taxation

Small Business and General Business Tax Break

Changes which will expand the tax break available to small business were announced in the Federal Budget.

Small businesses with a turnover of less than $2 million can claim an additional 50% tax deduction for eligible assets costing $1,000 or more, acquired between 13th December 2008 and 31st December 2009 which are installed and ready for use by 31st December 2010.

The previously announced General Business Tax Break remains unchanged. Other businesses can claim an additional 30% tax deduction for eligible assets costing $10,000 or more acquired between 13th December 2008 and 30th June 2009, which are installed and ready for use by 30th June 2010. This tax break is reduced to 10% for assets acquired between 1st July and 31st December 2009 which are installed and ready for use by 31st December 2010.

Other Business Taxation Measures

The existing Research & Development Taxation Concession will be replaced with a simplified R&D Tax Credit system effective 1st July 2010. The Division 7A rules will be tightened effective 1st July 2009. The new rules will limit the scope for private companies to allow shareholders or their associates to use assets owned by the company for free or at less than an arms length value. This will include assets such as real estate and cars.

Personal Taxation

Tax Rates

The reductions in personal income tax rates as announced in the previous budget remain unchanged. The income tax rates for resident individuals for the financial year 2009/10 are:

Taxable Income	Rate
$0 - $6000	nil
$6,001 - $35,000	15¢ for each $1 over $6,000
$35,001 - $80,000	$4,350 plus 30¢ for each $1 over $35,000
$80,001 - $180,000	$17,850 plus 38¢ for each $1 over $80,000
$180,001 and above	$55,850 plus 45¢ for each $1 over $180,000

Private Health Insurance Rebate and Medicare Levy Surcharge

The Government announced reforms to the current 30% rebate for Private Health Insurance. Effective 1st July 2010, the 30% rebate will be means tested for singles earning $75,000 or more and families earning $150,000 or more. The rebate will be reduced to nil for singles earning $120,000 or more and families earning $240,000 or more.

The Medicare levy surcharge, currently an additional 1% for those exceeding the thresholds without private health insurance will also increase effective 1st July 2010. This will directly impact singles earning $90,000 or more and families earning $180,000 or more without Private Health Insurance.

Non Commercial Losses

The proposed changes to the non commercial loss rules will directly impact high wealth individuals. The current rules allow individuals to offset losses from non commercial business activities against other income provided one of the four non commercial loss rule tests is satisfied. Under the proposed changes individuals with an adjusted taxable income of $250,000 or more will no longer be able to apply these losses against other income. The rules remain unchanged for individuals with an adjusted taxable income of $250,000 or less. This measure is intended to apply from the 2009/10 income year.

There were additional reforms announced in the federal budget which fall outside the scope of this article. If you wish to discuss how these measures may impact you or your business please contact your Lawler Draper Dillon Consultant. The proposed changes still need to be passed by Parliament.

Adding to Our Audit Focus

Sun, 01 Mar 2009 13:02:00 +1100

We welcome Steven Bradby to Lawler Draper Dillon. He has joined the firm as an Audit Partner, enabling us to give broader focus to the delivery of Audit and Assurance services.

Steven has built his experience from over 25 years in the Assurance and Advisory Business Services Division of Ernst & Young, where as an Executive Director he provided assurance services and business advice to a range of small proprietary through larger publicly listed and multinational clients, and government business entities. Those clients operated across various industry and service sectors.

In his role as client service executive Steven is responsible for the coordinated delivery of assurance and related services, for ownership of the audit strategy, and execution of the plan in accordance with our methodology.

Steven's expertise adds to our audit and assurance service offering. We enable clients of varying legal structure, type, focus, and size to meet a range of requirements, whether in accordance with legislation or to independently respond to stakeholder needs. We maintain our clients' awareness of changing reporting frameworks and compliance requirements, acting not merely as auditors, but also as advisors. Our services extend to the provision of assurance on specific scope assignments such as due diligence, reviews of financial information, and internal control or process efficiency reviews.

Further insight into our audit and assurance services may be obtained by contacting Steven on 03 9679 2270, or by email: mailto:sbradby@lawlerdraperdillon.com.au.

Appointment Of General Manager

Sun, 30 Nov 2008 13:02:00 +1100

Jacqueline Tan was appointed as Lawler Draper Dillon's General Manager in November 2008 and comes to us with over 16 years of experience in accounting practices.

Jacqueline began her career at Wise Lord & Ferguson in Hobart, a Business Services graduate working on a range of clients with compliance requirements. During this time she was also involved with developing special valuation assignments for new business projects in conjunction with the Tasmanian Development Authority.

Moving to Melbourne to pursue a different client experience in 1996, Jacqueline joined PKF's Business Services Division. In addition to compliance clients, Jacqueline developed training and reporting programs unique to the division's requirements.

In late 2000 Jacqueline was appointed as Admin. & Finance Manager at PKF, supporting the General Manager and the Partners of the practice with finance reporting, statutory requirements and development of responsive information catering to the unique needs of each division.

Over the following eight years her experiences included optimised utilisation of the practice management system, development of a more streamlined finance reporting system, more productive interaction between the Admin team and the rest of the practice, development of environmental and human resource policies including flexible working practices and culminated in a successful office move in 2007.

At Lawler Draper Dillon, Jacqueline will be responsible for the overall operations of the business enabling the partners and professional staff to concentrate on servicing and growing the client base.

Jacqueline is an avid Hawthorn supporter, enjoys a good glass of wine from time to time, and is looking forward to an exciting new work experience with Lawler Draper Dillon.