Monthly Archives: July 2017

How much do you need to retire with?

How much do you need to retire with? It is a question that many think about without ever really doing anything about it.

So how much do you need?

The Association of Superannuation Funds of Australia (AFSA) releases quarterly moderate and comfortable living expenses for both singles and couples. In its latest release, it has measured that a single person requires $43,655 and a couple $59,971 to fund a comfortable retirement.

So much do you need to have invested to generate at least that level of income? For a couple earning an average of 6% (including franking credits & capital gains net of tax), they will need approximately $1,000,000.  However, if a couple invests only in term deposits earning 2.5%, then assuming an average tax rate of 15%, they will need more than $2,800,000.

It is becoming a more important question as the population ages and consecutive governments struggle with funding the age pension. I was born in the early 60’s when there was 7 people working for every age pensioner.  Today there are only 4.5 workers funding every age pensioner.  Even more alarming are the predictions that there will be only 2 & 1/3rd workers supporting every age pensioner.  Do you think the amount of the age pension and the levels at which one becomes entitled are going to rise or fall? 

And then there is longevity risk. We are living longer than our parents and grand parents – meaning our investment capital has to last longer.

So what are you going to do?  Speak to a financial planner.  A financial planer will take into account your needs, wants & resources and then advise you what is best for you in terms of the best tax structures, strategies and investments (notice that investments is listed last as it is my experience that strategy, structure and the way and timing as to how they are implemented usually delivers greater results and savings than the investment themselves). 

As accountants, we are prohibited from providing this service to you – but our separate financial planning firm can.  Why not call them today.

At MRS, we will spend today planning for your success tomorrow.


Reasonable travel allowances

Getting receipts whilst travelling can be hard and at times bordering on next to impossible. Getting your employees to do so can be even more difficult.  Fortunately, the ATO recognises this and provides relief through what are called reasonable travel allowances.

One can claim travel expenses in one of two ways:-

  • Have your Company or Trust keep all receipts and claim the deduction in the entity’s Tax Return.
  • Have your Company or Trust pay you an amount no greater than the ATO set travel allowance.  This allowance will be deductible to your Company or Trust.  It will be income within your personal Income Tax Return against which you can claim an amount of not greater than the allowance without being required to substantiate it.  Being an allowance, it is to be included on a PAYG Payment Summary.

Reasonable travel rates are set for:-

  • Domestic travel – amounts in respect of overnight stays for accommodation, food & drink and incidentals.  These amounts vary for each major centre and high cost remote areas. 
  • Overseas travel – amounts for food & drink and incidentals (receipts must be kept for all accommodation).  Allowance rates vary for each country and the employee’s salary level.

The ATO have recently released the rates for 2017/18 in TD 2017/19 which you can access at

Please don’t hesitate to call if you would like to discuss how you may be able to benefit from using this system.

Finally, please always remember that an overseas travel claim is not deductible unless it is supported by a travel diary or record.  The same applies in respect of a domestic trip which is for 6 or more nights.

At MRS, we will spend today planning for your success tomorrow.

June quarter deadlines

There are a number of upcoming June quarter deadlines.

For those of you who are employers, Friday 28th July is the end date for satisfying your SG super obligation for the June 2017 quarter.  Late payments will attract substantial interest and penalties which effectively doubles or triples the cost.  Even if your cash flow is tight, this commitment should be paid before anything else.

The final day for payments and reporting of Victorian Pay-roll Tax is Friday 21st July.

For those who lodge a quarterly BAS or IAS, your June quarter activity statement is due to be lodged by Friday 28th July (but 11th August for activity statements if you have registered your business as a user of the Taxpayer Portal and are not paying only fixed $ instalments).   

Please note that lodgement of an activity statement (even if it is nil statement) and payment are two separate requirements.  Late lodgement attracts a minimum non-deductible fine of $180 for every 28 days that a form is lodged late whereas as late payment results in an interest levy (which is often remitted).  A fine is not tax deductible, interest is.  Not that we encourage it, but should you not be able to pay an activity statement in full, do not defer lodgement as the possible fines are significant.  The ATO will of course in time identify that an activity statement liability has not been paid and follow it up; but by this time though the liability should be paid in full anyway and at worst, incur a deductible interest charge far less than any non-lodgement penalty.

Please be mindful that the ATO now reports unpaid business tax liabilities of more than $10,000 not subject to a payment arrangement directly to credit reporting agencies. Please refer to our blog from 12th June 2017 for further information.

I remind you that under the Director Penalty Regime which came into effect in July 2012, PAYG Withholding (WH) and SGC super which remains unreported and unpaid after 3 months now results in the unpaid amounts becoming a personal liability of any directors.  Placing a company into liquidation doesn’t avoid or extinguish this liability.  For further information, please refer to our September 2012 Tips and Traps newsletter.

Please contact us should you have any queries or require assistance.

For other key dates, please click on the Key Dates button on our firm app. If you haven’t done so already, you can download it from either Google Play or the Apple App stores.  Simply type in Maggs Reid Stewart at either site and we should come up first with our logo prominent.  You will also find a heap of useful tools and calculators in our app.

At MRS, we will spend today planning for your success tomorrow.