Craig Fraser Retires

June 2011
Craig Fraser Retires
Craig Fraser Retirement
2011 Federal Budget
Summary
MYOB & Quickbooks
update
Employee Fraud
Staff News
2011 Federal Budget
Superannuation Changes
First Floor, 224 Victoria Street
Mackay Qld 4740
PO Box 6, Mackay Qld 4740
P: (07) 4968 3166
F: (07) 4968 3154
W: www.brownbird.com.au
E: brownbird@brownbird.com.au
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After 35 years at Brown and Bird and 44 years working I have decided that it’s time
to retire from the Brown and Bird business partnership. Brown and Bird started in
1966 when Alan Brown opened his own business in Shakespeare Street. John Bird
joined him a couple of years later from Western Australia. I joined the firm in 1976
and will be the firm’s longest serving member. These are my memories of my time
here.
Linda and I came to Mackay as bank officers in 1974. By 1976 I had decided that
my future lay elsewhere, and John Bird offered me a job. I had no qualifications
so I set about obtaining my Business Degree externally, whilst working. The
accountants in the office when I joined were Alan Brown, John Bird, Don Graham
and Bill Langdon. What a diverse and interesting bunch they were. The office was
in Victoria Street above Graham Brown’s Sports Store.
I remember there were no computers. We had two “typists” with wide carriage
typewriters to type “T style” financial statements; extra copies were made with
carbon paper. Mistakes were hard to hide and usually meant start again. We had
hard bound journal books for writing double-entry journals. We bought a “golf ball
typewriter”. What a wondrous machine. Then we obtained a computer, just one. It
must have been too much for Alan Brown who retired, to improve his lawn bowls.
The business expanded to new premises in Peel Street. I became a partner in 1985
and Bill Langdon left the partnership a couple of years later. More computers and
floppy discs. Derek Cockings became a partner, he managed the computers. John
Bird said we needed a fax machine, I couldn’t understand why we needed one.
The business grew, and we offered more services. We expanded our office, but
finally outgrew it and moved to Gordon Street. This period saw significant change
in the partnership. Derek Cockings left, and in 1999 John Bird hung up his abacus.
This coincided with the entry of two new partners Chris Wright and Ian Joblin. In
2000 we opened an office in Brisbane. In 2001 Don Graham retired. We offered
Michael Burgess a partnership in our Brisbane office. James Harris and Mike
Browne became partners in our Financial Planning business soon after.
The business relocated to the current premises in
Victoria Street in 2005. Andrew Duck became a partner,
more computers, more screens - we now have more
computers than people.
We run a professional services business. It requires good
staff to support it. They are our greatest asset, and they
help us deliver a client focused service. I’ve been here a
long time but I’ve met clients who’ve been here longer.
Some were with Alan Brown in his previous business and
came across to the new business with him. A long-term
relationship with satisfied clients is the goal we strive to
achieve.
I thank you all for your support and wish you every
success.
Craig Fraser
45 years Supporting Local Business
Page 1
2011 Federal Budget Summary
The Federal Budget was brought down in May this year. Soon after that we emailed our clients and provided
them with a detailed summary. This article provides a much briefer summary but focuses on the aspects which
we think will be more relevant to you.
Single rate for car fringe benefits
Date of effect: 10 May 2011
Changes were made to the way cars are treated under
fringe benefits tax; which will reduce the motivation to
drive unnecessarily to receive more attractive tax treatment.
Up to 10 May 2011, multiple statutory rates have been
used to determine the taxable value of car fringe benefits, which depend on distance travelled. These will be
replaced with a single rate of 20%. This measure is to apply to new contracts entered into after 7:30pm (AEST) on
10 May 2011 and will be phased in over four years, as
detailed in the table below.
Distance travelled
Current
rate
From
10/05/2011
From
From
From
01/04/2012 01/04/2013 01/04/2014
0 – 15,000 km
26%
20%
20%
20%
20%
15,000 – 25,000 km
20%
20%
20%
20%
20%
25,000 – 40,000 km
11%
14%
17%
20%
20%
> 40,000 km
7%
10%
13%
17%
20%
Comment
There will be an immediate benefit for employees
entering into salary sacrificed motor vehicle
arrangements where they travel less than 15,000 km
per year, as they’ll gain the benefit of the new rate
immediately. Employees on existing contracts who
travel more than 25,000 km per year will gradually lose
their current advantage over the next three years.
Removal of low income tax offset for
under 18s
Reduced HECS discounts
Date of effect: 1 July 2011
For payments made under the Higher Education
Contribution Scheme (HECS):
Those of you with children under the age of 18 may
have been aware of the ability for children to earn
trust or investment income of up to $3,333 without
paying any tax. This will no longer be tax effective
from 1 July 2011.
This measure won’t impact on income earned by
children from work, unearned income of orphaned
or disabled children and compensation payments
and inheritances received by children.
Date of effect: 1 January 2012
• The discount available to students electing to
pay their student contribution upfront will be reduced from 20% to 10%; and
• the bonus on voluntary payments of $500 or
more will be reduced from 10% to 5%.
Reporting of employer contributions
on payslips
Motor Vehicle depreciation
Date of effect: 1 July 2012
Small businesses will be eligible to write-off the
first $5,000 of any motor vehicle purchased after
1 July 2012.
The remainder of the purchase price can be transferred into the general small business depreciation
pool, which is depreciated at 15% in the first year
and 30% in later years.
Employers will be required to include the amount
of super contributions actually paid into employees’ super accounts on payslips. Super funds will
also be required to notify employees and employers on a quarterly basis if regular payments cease.
Date of effect: 1 July 2012
If you have any questions regarding the Federal Budget please call us at Brown & Bird.
MYOB Update
QuickBooks Update
MYOB’s 2011/12 ATO compliant version of AccountRight
Plus is now available and includes the following updates that
you will need to be aware of:
QuickBooks Premier 2011/12 is now available and
incorporates the following updates:
• New Flood Levy schedules and exemptions
• Changes to HECS, HELP and SFSS and the Medicare
Levy
• Updates for low income Tax offset changes.
Page 2
45 years Supporting Local Business
• Advanced features to customise snapshots of
important information that impacts your business
• Reckon GovConnect software that assists with realtime BAS lodgements
• Tools to calculate payments to comply with the
Federal Government’s new Paid Parental Leave
Scheme.
Employee Fraud
Employee fraud is more common than most businesses think. It can have differing impacts on
the success of a business. In the most serious of cases, employee fraud can lead to business
failure and destroy careers.
Businesses designing strategies to reduce
the risk of fraud will have to balance
their desire to minimise such risks with
the business needs. In other words, a
business must avoid becoming so focused
on reducing the risk of fraud that it impairs
the ability of the business to meet its
commercial objectives.
Where a business is a victim of a fraud,
there is more at stake than just the direct
cost of the fraud. Other impacts to consider
are:
• Staff morale can be affected as they feel
a sense of betrayal that a colleague could
do such a thing and/or management
allowed the fraud to occur.
• Good employees do not want to work for
a business where fraud is widespread, not
investigated or not acted upon.
• The reputation of the business in the eyes
of the suppliers, customers, competitors,
possible employees and other business
partners (for example banks) can be
damaged.
• Businesses may become overly internally
focused in response to a fraud.
Examples of employee fraud
include:
• Creating “ghost” employees or not
deleting ex-employee records and having
the salary of these “ghost” employees
paid into the fraudster’s bank account
• Creating bogus suppliers, with payment
being made to the fraudster’s bank
account
• Creating bogus purchase
orders of a bona fide supplier
and substituting the supplier’s
bank account details with the
fraudster’s bank account details
• Obtaining kickbacks or bribes from
suppliers or contractors
• Associates of the staff providing services
to the business at inflated prices
• Personal use of business resources
• Inflated/bogus reimbursement claims
• Manipulation of financial data to receive
performance based bonuses
• Faking time sheets
• Private purchase through business
accounts or business credit cards
• Providing discounted (or free) goods or
services to friends and associates.
Strategies to minimise the risk of fraud & what to do once fraud is detected
The explanations on “minimising the risk of fraud” and “what to do once fraud is detected”
are too detailed to list in this space. For more information, follow the below link or email
D’Arne on darne@brownbird.com.au and she will forward the link to you in an electronic format:
http://www.cpaaustralia.com.au/cps/rde/xbcr/cpa-site/Employee-fraud-guide.pdf?Division=Queensland&Segment=The+Rest
This article was supplied to us by CPA Australia.
Staff News
Congratulations to Scott
and Penny McGuiness who
welcomed their beautiful
baby daughter Lily Grace on
16 June 2011. Penny is a
senior accountant in Chris
Wright’s team and Scott is
our IT Administrator.
45 years Supporting Local Business
Page 3
2011 Federal Budget Superannuation Changes –
Contributions Limits and Minimum Pension Payment
Requirements
10 May 2011
finance
Compared with previous years, the 2011 Federal Budget was relatively
mild; with few surprises or major changes. The Gillard Government,
handing down its first Budget, confirmed a range of previously announced
tax, super and social security policy changes. And while the Budget
has been received as relatively restrained, some new measures were
outlined which may impact how you manage your finances today as well
as plan for your retirement.
Minimum pension draw down relief phased out
Date of effect: 1 July 2011
The minimum pension withdrawal you are required to make has been halved in
recent years as a result of the Global Financial Crisis and its impact on super
balances. This draw down relief will be phased out, reducing to 25% for the
2011/12 financial year and returning to the normal rate from 1 July 2013 as per
the following table.
Age at start of
pension (and 1 July
each year)
In 2010/11
In 2011/12
In 2012/13
Under 65
2%
3%
4%
65 Ð 74
2.5%
3.75%
5%
75 Ð 79
3%
4.5%
6%
80 Ð 84
3.5%
5.25%
7%
85 Ð 89
4.5%
6.75%
9%
90 Ð 94
5.5%
8.25%
11%
95 +
7%
10.5%
14%
Higher pre-tax contribution caps at age 50
Date of effect: 1 July 2012
People aged 50 and over with less than $500,000 in super will be able to
contribute an extra $25,000 in pre-tax (concessional) contributions each year.
Eligibility requirements do apply, and the change is scheduled to apply from
1 July 2012. Those over 50 can make pre-tax contributions of up to $50,000
until 1 July 2012 under concessions previously announced, regardless of their
super balance.
The above information is of a general advice only and is not intended as a personal advice. It does not take into account the particular
investment objectives, financial situation and needs of a particular investor. Before making an investment decision you should assess
whether the advice is appropriate to your individual investment objectives, financial situation and particular needs. We recommend you
consult a professional financial advisor who will assist you.
Level 41, 120 Collins Street,
Melbourne Vic 3000
BBFP Pty Ltd
T/A Brown & Bird Financial Planning
is an Authorised Representative
of Lonsdale Financial Group Limited
ABN 76 006 637 225
Australian Financial Services
Licensee, No. 246934
Contact our financial
planners James Harris or
Mike Browne to discuss
your long-term investment
strategy
“Our experience counts”
Page 4
45 years Supporting Local Business
W:
www.brownbird.com.au
E:
james@brownbird.com.au
mike@brownbird.com.au