Gadallah is a firm of Chartered Accountants and Business Advisers established for over 30 years. The firm, located in Bankstown, New South Wales, provides services throughout Australia.

The team of professionals can provide the following consulting services:

• business development and management systems;
• business succession and estate planning;
• taxation, including income tax, capital gains tax, goods and services tax (GST), land tax, payroll tax, fringe benefits tax and withholding taxes;
• consulting and installation of accounting and information systems, including business software applications;
• superannuation, trust and company planning;
• financing and structuring;
• audit and compliance reviews;
• financial planning.

The team provides services to a wide variety of commercial interests, both large and small, including:

• retailers;
• manufacturers;
• primary producers;
• property developers and investors;
• health care providers;
• manufacturers;
• building and construction industry;
• professional service providers;
• hospitality industry.

Please contact us so we can help you.

Coalitions Election Tax Policies - Courtesy of CCH Tax Week

With the re-election of the Coaliton Government, we provide the following reminder of their election commitments in relation to tax. The Coalition has said that it will:

• extend the Simplified Tax System for small businesses to include businesses that account on an accrual basis from 1st of July 2005;
• introduce, with effect from 1st July 2005, a new 25% "Entrepreneurs" Tax Discount on the income tax liability of small businesses that are in the Simplified Tax System and have an annual turnover of $50,000 or less;
• reduce the amendment period in which the Tax Office can adjust the tax assessments of businesses within the Simplified Tax System from the current four years to two years;
• introduce a new tax rebate of 30% on parents' out-of-pocket childcare expenses;
• provide a $300 increase in the rate of Family Tax Benefit B to ensure complete fairness of treatment (with the new childcare rebate) for families where one parent makes the choice to stay at home full-time;
• increase, from April 2005, the private health insurance rebate from 30% to 35% for people aged from 65 to 69 years, and to 40% for people older than 70 years; and
• introduce, with effect from 1st of July 2004, a new mature aged worker tax offset for people aged 55 years or older.

Superannuation in Australia - Courtesy of the Adair Turner report

Today 95% of full-time employees in Australia have a company pension, compared with half in Britain. Approaching three-quarters of part-time workers have a pension, compared with less than 15% in the UK. And since the mid-1980s, Australia's nine million workers have seen the value of their pension assets soar from A$30bn (£12.2bn) to nearly A$600bn today.

At the heart of Australia's pension system are compulsory employer contributions, brought in by a Labor government in 1992 and backed by unions, but strongly opposed at the time by small business groups.

In 1992, every business in Australia was ordered to put aside 3% of each employee's salary into a superannuation scheme. The contribution rate was started at a low level then increased to hit its target of 9% in 2002, where it remains today. Employees were encouraged through tax incentives to pay into the schemes, known as "the super".

Employers have to pay the 9% contribution for anybody between 18 and 70 who earns above A$450 a month. The self-employed are outside the scheme but are offered a raft of tax concessions to encourage them to join. On average, workers have chipped in an extra 2-3% of salary, meaning that the typical employee now has 12% of their earnings going into a private pension pot, usually made up of a mix of shares, bonds and property.

GST: Employee Reimbursements

Can an employer who is registered for GST claim input tax credits when reimbursing employees for their expenses? If you are registered for GST you are entitled to claim an input tax credit for an expense you reimburse to your employee provided:-

• Your employee's expense is directly related to their activities as your employee or the reimbursement is an expense payment benefit for FBT purposes; the supply of the thing acquired by your employee is a taxable supply; and
• Your employee is not entitled to an input tax credit for the expense.

You make a reimbursement where you pay your employee for the price, or part of the price. Your employee must provide you with the tax invoice or receipt for the expense (if expense less than $55).

You also make a reimbursement where:

• You pay your employee an expense they have not paid, provided they are eligible for the expense;
• You pay your employee an advance for an expense, provided the employee has to repay any unspent amount;
• You pay an expense on behalf of an employee.

If you pay an employee for an estimated expense and they do not have to repay any amount not spent, you are paying an allowance and are not entitled to any input tax credit.

Furthermore, if you make a payment to an employee based on a notional (rather than actual) expense, you are not making a reimbursement.

Household Wealth

Key findings from HILDA, which is the Commonwealth Department of Family and Community Service's "Household, Income, and Labour Dynamics in Australia Survey" are:

1. The median superannuation account balance in 2002 was $35,000 for the 76% of housholds that held any assets in superannuation.
2. The median household had a net wealth of $218,500 (compared to an average net wealth of $404,300)
3. The household at the 80th percentage of wealth distribution was twenty times wealthier than the household at the 20th Percentile. (In the U.S., the equivalent is more than fifty times.
4. 68% of assets were non-financial.
5. The most valuable non-financial asset for most households was the family home with a median value of $250,000.
6. 50% of all home owners had a loan outstanding on their primary residence with a median value of $90,000.