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THE TAX SYSTEM AND ECONOMY WORKS, EXPLAINED IN BEER 15th May 2019

Every day, ten men go out for beer and the bill for all ten comes to $100.

If they paid their bill the way we pay our taxes, it would go something like this…

The first four men (the poorest) would pay nothing

The fifth would pay $1

The sixth would pay $3

The seventh would pay $7

The eighth would pay $12

The ninth would pay $18

The tenth man (the richest) would pay $59

So, that’s what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve ball. “Since you areall such good customers,” he said, “I’m going to reduce the cost of your daily beer by $20”. Drinks for the ten men would now cost just $80.

The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still drink for free. But whatabout the other six men ? How could they divide the $20 windfall so that everyone would get his fair share?

They realized that $20 divided by six is $3.33. But if they subtracted that from everybody’s share, then the fifth man and the sixth man would eachend up being paid to drink his beer.

So, the bar owner suggested that it would be fair to reduce each man’s bill by a higher percentage the poorer he was, to follow the principle of thetax system they had been using, and he proceeded to work out the amounts he suggested that each should now pay.

And so the fifth man, like the first four, now paid nothing (100% saving).

The sixth now paid $2 instead of $3 (33% saving).

The seventh now paid $5 instead of $7 (28% saving).

The eighth now paid $9 instead of $12 (25% saving).

The ninth now paid $14 instead of $18 (22% saving).

The tenth now paid $49 instead of $59 (16% saving).

Each of the six was better off than before. And the first four continued to drink for free. But, once outside the bar, the men began to compare theirsavings.

“I only got a dollar out of the $20 saving,” declared the sixth man. He pointed to the tenth man, “but he got $10!”

“Yeah, that’s right,” exclaimed the fifth man. “I only saved a dollar too.

It’s unfair that he got ten times more benefit than me!”

“That’s true!” shouted the seventh man. “Why should he get $10 back, when I got only $2? The wealthy get all the breaks!”

“Wait a minute,” yelled the first four men in unison, “we didn’t get

anything at all. This new tax system exploits the poor!”

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn’t show up for drinks so the nine sat down and had their beers without him. But when it came time to pay the bill,they discovered something important. They didn’t have enough money between all of them for even half of the bill!

That my dear friends, is how our tax system works. The people who already pay the highest taxes will naturally get the most benefit from a tax reduction.Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier

JOIN OUR FOOTY TIPPING COMPETITION 1st March 2019

Henson Lloyd Accountants invites you to join our 2019 Footy Tipping Competition.

FIRST GAME: THURSDAY 21ST MARCH 2019

FREE ENTRY

1st, 2nd & 3rd Prizes up for grabs

End of season celebratory presentation for all participants.

Follow the link below for more info and to register:  https://www.footytips.com.au/comps/HensonLloyd

Password: moustache Or contact Danielle at the office – 08 8431 1644

Professional Series Part 2 1st March 2019

Henson Lloyd were thrilled to be a part of the ‘Professional Series Part 2’. Hosted by the Master Landscapers of SA. The session focused on finance & accounting in landscape design & construction.

Alongside other experts Lachlan & Wayne shared their finance, tax, cashflow and accounting advice for landscapers & designers.

Keep your eyes our for more info sessions in 2019.

Instant asset write-off threshold upped to $25k 8th February 2019

The government has increased the threshold for the instant asset write-off to $25,000 as it looks to entice the small business sector ahead of a federal election.

Announced yesterday, Prime Minister Scott Morrison has pledged to increase the small business instant asset write-off to $25,000 from $20,000.

The write-off will be available for small business with an annual turnover of less than $10 million and will apply until 30 June 2020.

The government will be seeking to legislate the change when Parliament resumes on 12 February.

This measure is estimated to have a cost to revenue of $750 million over the forward estimates period, with an estimated 3 million small businesses eligible to access the write-off.

“The $25,000 instant asset write-off will improve cash flow by bringing forward tax deductions, providing a boost to small business activity and encouraging more small businesses to reinvest in their operations and replace or upgrade their assets,

FINANCE AND ACCOUNTING IN LANDSCAPE DESIGN AND CONSTRUCTION 1st February 2019

Henson Lloyd are excited to be involved in ……

FINANCE AND ACCOUNTING IN LANDSCAPE DESIGN AND CONSTRUCTION

Three real-life design and construction scenarios are presented to our panel of experts for comment in front of a live audience.

Find out the answers to the most commonly asked questions about vehicle finance, tax and accounting for landscapers and designers.

The content of this workshop is invaluable to any landscape design or construction professional.

The experts on our panel are the best in the business:

✔️Wayne Henson, Director of Henson Lloyd.
✔️Lachlan Smyth, Director of Henson Lloyd.
✔️Matt Ford, Director of Finestream Capital.
✔️Frank Ross, MLSA President.

Our panel will be mediated by Liz Barter, Lending Manager at Finestream Capital

This workshop is FREE to MLSA members.

Thursday 21st of February at 5:30pm

To RSVP or enquire, please email ceo@landscapesa.com.au

Henson Lloyd Accountants Invite You To…. 4th October 2018

HENSON LLOYD INVITES YOU TO….. 

Breast Cancer : The Hidden Secret Awareness Breakfast

A new era for Breast Cancer Screening & Prevention. 

THURSDAY 18TH OF OCTOBER 

7:45am for 8:00am Start

ARKABA HOTEL 

Osmond Room 

150 GLEN OSMOND ROAD FULLARTON SA 5064

Guest Speaker – Dr. Stephen Birrell

Discussing how high mammography breast density lowers the sensitivity of breast cancer screening and increases breast cancer risk.

For more info, please visit www.wellendhealth.com

We hope you can join us for our Breast Cancer Awareness Breakfast. Please remember to RSVP at your earliest convenience.

The Buy a Bale Campaign 11th September 2018

At Henson Lloyd we have recently donated $2000.00 to the Buy a Bale campaign to support our Aussie Farmers in their time of need.

The Buy a Bale campaign is part of the charity Rural Aid, formed by Charles and Tracy to expand services and support to rural communities not only suffering through natural disasters but communities that need help remaining in existence, our rural communities are disappearing and need help.

For more information about the Buy a Bale campaign visit https://www.buyabale.com.au

ATO’s Focus On Work-Related Expenses 22nd March 2018

This year, the ATO is paying close attention to what people are claiming as ‘other’ work-related expense deductions, so it’s important when taxpayers claim these expenses that they have records to show:

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The Company Tax Rate Saga 19th September 2018

Wayne’s comment: Unfortunately, the recent Government delays in passing company tax rate legislation, has created much confusion in this area, and in certain cases, a review and possible amendments may be required for previously lodged tax returns.

In the last week of the August Parliamentary sittings, the controversial corporate tax cut plan for the big end of town (i.e., companies with an aggregated turnover of over $50 million) was defeated.

In addition, long-awaited legislation impacting the company tax and franking rates for small to medium companies (i.e., introducing a new ‘base rate entity passive income test’ from the 2018 income year to qualify for the lower 27.5% tax rate) was passed.

This legislation was particularly relevant for company rates applicable to passive investment and ‘bucket’ companies, which may now need to reconsider earlier lodged 2018 company tax returns, as well as the amount of franking credits attached to dividends paid from 1 July 2017.

Additionally, consideration may also need to be given to the company tax rates (and in certain circumstances, the franking rates) previously applied with respect to the 2016 and 2017 income years. 

This is in light of the recently issued ATO compliance and administrative approaches for the 2016, 2017 and 2018 income years.

Single Touch Payroll Reporting (STPR) – Does this affect you? 15th March 2018

The ATO have recently introduced a new initiative to receive real-time payroll information about your employees each pay run. This change is known as Singe Touch Payroll Reporting (STPR).

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