On Director Fees and Bad Advice
In the lead up to the end of the financial year, we often hear of wonderful schemes that are apparently available to reduce taxation liabilities.
One of our crew came across some advice on a blog that is just plain wrong. It concerns us deeply when advice given freely isn’t based on legislation. The blog in question related to the payment of Director Fees or Director Bonuses at the end of the financial year (or even after!). The advice provided by an accountant said that this was all fine and there are no super liabilities associated with such a payment.
Now, in certain limited circumstances this is true, however, based on our experience, it will not generally apply to the owners of smaller businesses.
As we discussed in the office, always go to the legislation and, in this case, we refer to section 11(b) of the Superannuation Guarantee Administration Act 1992.
We always work on the thinking that if it sounds too good to be true, it probably is!