Happy New Financial Year – here’s what you need to know for 2011-12

It’s the start of a new financial year, and no doubt small businesses across the country will be getting their affairs in order.

It’s set to be a tough year. Retail conditions are poor, the property market is waning and consumers still want to save more money than they spend.

But SMEs should also be aware there is a wave of legislation about to come into effect this year that will affect them. Whether it’s distributing paid parental leave payments or getting OH&S regulations in place, businesses need to know what new regulations and laws they need to follow.

Here are the biggest changes that come into effect in the 2011-12 financial year.

Paid parental leave

While the first phase of the paid parental leave legislation was introduced earlier this year, the laws are now in full force and it is mandatory for businesses to distribute parental leave payments to their employees.

Over the past six months SMEs could have opted to have these payments distributed by the Family Assistance Office, but now businesses, whether they like it or not, will need to act as paymasters.

Businesses need to contact the Family Assistance Office to make sure they have all the necessary paperwork for an employee applying for parental leave. There needs to be some communication between your business and the government before this happens.

There are plenty of businesses that still aren’t aware of their obligations under the new laws. Contact the FAO and make sure you’re up to speed.

Minimum wage

As per Fair Work Australia’s ruling last month, the minimum wage has increased by $19.40 to $589.30 per week. This was more than business groups were hoping for – and less than the unions’ pleas – but the change is now in force and businesses must update their payroll.

Flood levy

Speaking of payrolls, businesses should also be aware everyone will have to adjust their tax rates due to the flood levy. While those earning under $50,000 are not subject to the temporary levy, businesses still need to make sure their payroll officers have new data so everyone is paid correctly.

For a comprehensive look at the flood levy and what it could mean for you, take a look at our latest article.

Director penalty notices

The government pumped the ATO with more cash in this year’s budget to help it crack down on tax avoidance. One of the ways it is doing that is by introducing new rules for directory penalty notices.

The legislation, which has not yet entered parliament but will come into effect from today, will make directors personally liable for any debts older than three months. The new laws will do away with the 21-day grace period, and extend the director penalty notice regime to super accounts as well.

“You need to be up to date with your tax returns and quarterly BAS forms. One thing is clear, and that is directors are going to be held personally liable,” liquidator Cliff Sanderson told SmartCompany this week.

Trusts

It’s been a long time coming but the government has finally introduced legislation covering the streaming of franked dividends to beneficiaries through trusts. While trust managers are now allowed to stream income, the legislation makes it clear trusts can only do this if beneficiaries are clearly named in the deed.

The new laws clear up a lot of confusion plaguing trusts over the past year. Industry experts are reminding managers they only have until August 31 to get their deeds up to scratch.

Occupational health & safety

Workplace safety laws are set to nationalise and come into effect on January 1, 2012. The new regulations have a number of changes, including:
• New codes of practice for a variety of industries
• Extensions to existing safety laws
• More paperwork for business owners
• Safety committees within businesses to be strengthened
• More regulations for hazard management
• New duties for building contractors earning over $200,000
• New penalties for businesses with an emphasis on risk management.

Businesses only have a few months before these new laws come into effect. They should review their OH&S practices to ensure compliance.

Executive pay

Shareholders now have more control over executive pay. The new legislation will ensure boards have “two strikes” in order to present a remuneration report that is accepted by shareholders before a vote can be called.

Exit fees

Mortgage exit fees will now be scrapped on new mortgages only, after months of debate and a multimillion-dollar marketing campaign from NAB.

Water and electricity

Water rates will be going up across the country, ranging from 5.3% in New South Wales, between 5% and 15% in Victoria, 8.5% in Western Australia, 18.8% in Queensland and 26.3% in South Australia.
Energy rates will be going up as well – on average by 17% in New South Wales, 5% in Western Australia, 6.6% in Queensland and 13% in South Australia.

Stamp duty

With the property sector struggling to pick up demand, state governments have made some changes to stamp duty in order to prod new buyers.

In New South Wales, stamp duty will be scrapped for those over 55 buying new homes, while Victoria will cut 20% off stamp duty prices for first home buyers. In Queensland, grants for new homes will reach $10,000 after August 1.

For further information on what these could mean for your individual situation, please give MJ Accountants a call on 02 6652 8788 or send us an email here.

Source: Smart Company 01 July 2011