In this issue, we cover some important year end business considerations, upcoming lodgement dates and some general health practitioner updates. 

In this issue:

• Important lodgement and payment dates
• Business Activity Statements (BAS) - Lodgement Extension
• FREE Health Practitioner tax return checklist
• The new pharmacy location rules
• New hospital under way
• How to profit from a rising Aussie dollar
• Marketing Tips - The importance of a good logo

IMPORTANT LODGEMENT AND PAYMENT DATES

• Just a quick reminder that for most businesses, the following items will be due in the coming months: 21 October 2011 - Monthly Business Activity Statements. 
• 28 October 2011 - Superannuation for the September Quarter.  Must be paid by 28 October or your business will be denied a tax deduction, regardless of when paid.
• 28 October 2011 - Quarterly Business Activity Statements.  If you need an extension for business or cashflow reasons, see below.
• 31 October 2011 - Individual income tax returns due for lodgement if you don’t use a tax agent, lodged last years tax return after 30 June 2011, have multiple income tax returns outstanding or have been notified by the Australian Taxation Office that your due date is 31 October.

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BUSINESS ACTIVITY STATEMENTS (BAS) – LODGEMENT EXTENSION
If you lodge quarterly Business Activity Statements (BAS), the September 2011 quarter is normally due for lodgement and payment by 28 October 2011. 

Holmans can offer a four (4) week extension until 25 November 2011, which is available only to Tax Agents.  If your quarterly BAS is lodged through our Electronic Lodgement System, you will have until 25 November 2011 to lodge and pay.

We offer this service to our clients for a minimal charge of $110 (inc GST) per BAS.  Of course, our fee is tax deductible.  All we need is the completed and signed BAS by 9am, 25 November.

Key features of lodging through Holmans:

• This can be done on a quarter by quarter basis.  There is no obligation to use Holmans next quarter. 
• The ATO will continue to send BASs directly to you. 
• You have more time up your sleeve to prepare the BAS. 
• You must prepare the paper BAS form and provide us with a copy, signed and ready for lodgement by the 25 November.
• You should still attend to the payment of the BAS using your normal method (EFT, cheque or Post Office) – Holmans recommend you attend to payment at least 1 business day before the due date (i.e., 24 November) to allow the funds to clear the ATO accounts. 
• Monthly BASs are not eligible for the extension.  Monthly BASs must be lodged by the 21st of the following month.  No extensions are available.

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FREE HEALTH PRACTITIONER TAX RETURN CHECKLIST
Remember to visit our website to download your free Health Practitioner tax return checklist, which outline typical items we require to complete your tax returns.

The longer you wait, the busier we get and the closer it gets to Christmas. To ensure your tax returns are processed and refunds issued before the silly season, get your information in now.

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THE NEW PHARMACY LOCATION RULES
By Wayne Staal CA
Principal

New rules apply to the location of Pharmacies as at 18 October 2011.  In the words of the Department of Health and Ageing, the new rules “will remove the need to relocate an existing approved pharmacy [number] which could potentially leave a community without pharmacy services.”
 
In a nutshell, the Government have tried to reduce the barriers to entry in the Pharmacy industry by allowing new numbers in more circumstances than previously and phasing out some of the relocation rules.

I will let the Pharmacists read the new rules in detail.  They are complex and it will take a bit of time for the market to digest.  But here are my preliminary thoughts on the matter:

• If you are a Pharmacy group looking to expand, new opportunities may exist where previously they did not. Larger or cashed up groups will have the advantage here. Those who are quick to identify opportunities will benefit the most. You may be entitled to a free number, significantly reducing your setup costs.
• There may be an opportunity to set-up in  larger Medical Centres as these are have far less stringent distance rules. This fits in with the push by the Government for Super Clinics.
• Large Shopping Centre Pharmacies have probably decreased in value and certainly have questionable value where the lease term is due to expire. It would appear that the landlord could now simply negotiate with a competitor and that competitor could apply for a free number (reducing their setup costs).  There is no longer a need to move in a Pharmacy number. Accordingly, Shopping Centre Pharmacies as an investment proposition must show repayment periods shorter than the lease. I expect that landlords will innovate here and offer longer lease terms to Pharmacies to assist in eliminating this concern, particularly in new centres.
• The value in an existing approval has almost certainly decreased. Only time and specific circumstances will tell by how much. 
• Newly established sites and low turnover Pharmacies often use the value of the approved Pharmacy Number as equity against their loans. Where these Pharmacies are heavily geared, they will need to quickly prove their worth. As the banks may re-assess the value of the Pharmacy number and demand loans are brought back within their LVRs.
• If in the past you have been able to lock out competition from a certain area due to the old distance rules, you may need to re-assess what exclusion (if any) you currently have.
  The location of crucial services will now be a major indicator for Pharmacy opportunities (Doctors & Super Markets), rather than where Pharmacies are/or are not or the population of an area. Time to crack out the map and look at the location of these services.

As with all Government rules there will be unintended consequences to the rules. I’m sure in some cases these rules will actually decrease competition (For example, it would appear under the new rules that growing small suburbs such as those in Brisbane so-on may actually have better protection than previously). Only time will tell.

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NEW HOSPITAL UNDER WAY
By Julie Jacobson
Manager

Great news for the Sunshine Coast during the last quarter with the much anticipated Sunshine Coast University Hospital under way. The hospital will be built in two phases. First a 200 bed Ramsay Health Private Hospital which is due to open in late 2013. This will be followed by a 450 (growing to 738 beds by 2021) bed Public Hospital on the same site.

The development is expected to significantly improve the services and treatment available to Sunshine Coast patients. It will also boost the local economy through employment, particularly in the construction industry.

Hopefully this will go a little way to meeting the ever increasing demand for medical services on the Sunshine Coast.

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HOW TO PROFIT FROM A RISING AUSSIE DOLLAR
By NABHealth



No matter which area of the health industry you're in, a higher or lower Australian dollar will impact on your profit margins when purchasing medical equipment or products from overseas or when recruiting staff from abroad.
In the current situation, with the Australian dollar trading strongly, some GPs are buying equipment from online overseas medical suppliers at a fraction of the price it'd cost to buy the same products in Australia.

Despite the obvious attractions that these cheaper buying opportunities present, health businesses need to be wary of cash flow when using foreign currency, according to Ronny Jensen, Associate Director, Foreign Exchange, at NAB Wholesale Banking.
"One of the biggest financial risks facing any business is the uncertainty of its cash flows," he explains. "This uncertainty intensifies when some of these cash flows are denominated in currencies other than the Australian dollar.
"Any currency movement will cause fluctuations in the cost of goods and services imported from overseas and in revenue attributable to sales in foreign currencies."

Currency Tools
Available through a foreign exchange specialist at a financial institution, the following two tools can help act as a buffer against the unpredictability of currency movements. They're relevant when you're buying overseas assets or recruiting from overseas for your health business and the invoice payments are quoted in foreign currencies.

• Exchange contracts

 A forward exchange contract gives a business protection from future fluctuations in the value of the currency. These contracts are agreements to exchange two designated currencies at a specific rate and for an agreed amount in the future. The contract is settled on a maturity date determined at the start of the contract.

• Options

An option allows the business to buy the right, but not the obligation, to transact a specific amount of currency at an agreed rate for a designated maturity date. For an importer, they could buy the right to purchase US dollars at a future point in time. They'd exercise the option if the prevailing currency rate was lower than the agreed option rate on the maturity date. But, if the prevailing currency rate was higher than the agreed option rate on the maturity date, the business would let the option expire and use the prevailing currency rate.

So, is there such a thing as a good time to be buying foreign exchange? Unfortunately, says Jensen, you can never know for certain the best time to hedge a currency exposure.

"It's only with hindsight that we know such information," he adds. "In the face of this uncertainty, we can look to an array of economic data, market sentiment and historical observations to take a view on the likely future direction of a currency.

"When a currency is trading at a historical high, it's reasonable for an importer to consider that it's an optimum time to hedge. Equally, if the prevailing forward currency rate enables a business to lock in a satisfactory profit margin that may be eroded by currency movements if they remain unhedged, then the decision on whether to hedge or not should be relatively straightforward.

"Removing this component of risk from a business is positive and will enable the company to remain focused on core business rather than on its potential exposure to currency fluctuations."

Trade Avenues
A rising Australian dollar may open up opportunities for importers and for service providers outsourcing parts of their business offshore, Jensen notes, but businesses must do their homework.

"Such a business strategy is predicated on the prevailing exchange rate," he says. "It's vital to undertake an appropriate currency hedging program to ensure that the identified profits are realised through the P&L and not eroded through adverse movements in the currency."

To assess the viability of using options or exchange contracts in your health business, contact your NAB Health Relationship Manager or your Foreign Exchange Specialist. They can tailor a currency strategy to your business and transactional requirements and take into account your risk profile. A well-planned currency strategy can give your health practice flexibility in cash flow and allow for a known protection rate and varying degrees of participation in favourable market movements

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MARKETING TIPS – THE IMPORTANCE OF A GOOD LOGO 
By Jacki Hull


A logo is the window to the soul of your business and should reflect that in its design. A lot of small businesses ‘knock something up’ themselves on Publisher or Word with a fancy font and a bit of clipart, which can make a first impression of…well…cheap and nasty! Is this how you want your business to be perceived by your clients? If you are taking short cuts with the identity of your business, it will make your customers think, what other shortcuts are they taking? Would you go to a hairdresser who had bad hair? Just remember, it’s all about perception.

If you would like to freshen up your business image contact me on 0407 544 428.

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OUR FIRM

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If you think a colleague would like to be added to the email list, please have them email Wayne Staal (Principal) on wstaal@holmans.com.au

Your Experts

The taxation of health practitioners and their practices is a complex area, made up of numerous pieces of tax legislation, case law and other generally accepted industry practices (some of which are incorrect).

Accordingly, it is vital that you have a well qualified accountant with suitable experience to ensure you correctly meet your income tax and GST obligations, grow your wealth and legally reduce your income tax payable.

Holmans have a team of highly trained professionals, with over 35 years of combined experience in the health and medical sector, who know how to assist their clients, reduce tax and grow their wealth.  The privacy of our clients records and information is as vital as the privacy of your patients, so you can be sure your information is kept in the strictest confidence.