It's Monday 21 January, we are all sitting at our desks ready to "attack" the week.
"With our passion and purpose you will profit."
As the card above suggests ... we love what we do!
BIGGER BEANS & BETTER RESULTS AWAIT
Everything we do is targeted at making your accounting easier by condensing bundles of information into simple strategies to get you ahead.
But getting ahead and reaching your financial ambitions can't be achieved by just doing your end accounts and tax returns, touching base with you frequently or getting together regularly will.
We will surprise you with what we know and what advice and ideas we can offer.
Have a listen to our team song ...
THE PACESETTER... 21 JANUARY 2019
For many of you last week would have been the first full week back at work. So well done on getting through that!
If you like following tennis, then no doubt you've been glued to watching the Australian Open. Those tennis players are supreme athletes.
Let's hope you've parked up some time to set some goals for the year ahead. Make sure most of them are realistic, but at the same time challenge yourself for a couple that might initially put you outside your comfort zone.
There has been lots of media coverage of late about Michael Cullen's Tax Reform Working Group report, which is about to be finalised and presented to the Government. So, the questions on all of our minds are…
1. Will it recommend a Capital Gains Tax?
2. Will the government act on this?
But perhaps the most media attention of late is left for the good old plastic bag and what we are going to use to replace their 101 uses.
QUESTION OF THE WEEK... 21 JANUARY 2019
Deductibility of child care expenditure
An employee travels out of town on a regular basis for business purposes. When the employee is out of town the employee needs to pay a person to care for her children.
If the employer pays the employee's childcare expenses will those payments be tax deductible and subject to FBT?
Where the employee incurs expenditure and the employer pays that expenditure or reimburses the employee for the expenditure, the payment is taxable income of the employee. The employer will need to gross up the payment and account for PAYE on it.
Where the employer incurs expenditure for the benefit of an employee, a fringe benefit will arise on which the employer may need to pay FBT.
Therefore, if the employer is reimbursing or paying the childcare expenses for the employee, it will be taxable income of the employee and the employer will need to account for PAYE. If the employer incurs the childcare expenses for the benefit of the employee an unclassified fringe benefit will arise. Whether the employer needs to account for FBT will depend on whether the employer breaches the de minimis threshold for unclassified benefits.
The childcare expenses will be tax deductible to the employer under the general permission on the grounds that they are the cost of providing a fringe benefit or part of the employee's remuneration.