s Fitting Your Pharmacy for the Future - Funding & Depreciating for Best Tax Effect | I2P: Information to Pharmacists - Archive
Publication Date 01/07/2014         Volume. 6 No. 6   
Information to Pharmacists

Editorial

From the desk of the editor

Welcome to the July 2014 homepage edition of i2P (Information to Pharmacists) E-Magazine.
At the commencement of 2014 i2P focused on the need for the entire profession of pharmacy and its associated industry supports to undergo a renewal and regeneration.
We are now half-way through this year and it is quite apparent that pharmacy leaders do not yet have a cohesive and clear sense of direction.
Maybe the new initiative by Woolworths to deliver clinical service through young pharmacists and nurses may sharpen their focus.
If not, community pharmacy can look forward to losing a substantial and profitable market share of the clinical services market.
Who would you blame when that happens?
But I have to admit there is some effort, even though the results are but meagre.
In this edition of i2P we focus on the need for research about community pharmacy, the lack of activity from practicing pharmacists and when some research is delivered, a disconnect appears in its interpretation and implementation.

read more
open full screen

Recent Comments

Click here to read...

News Flash

Newsflash Updates for July 2014

Newsflash Updates

Regular weekly updates that supplement the regular monthly homepage edition of i2P. 
Access and click on the title links that are illustrated

Comments: 1

read more
open full screen

Feature Contribution

Woolworths Pharmacy - Getting One Stage Closer

Neil Johnston

It started with “tablet” computers deployed on shelves inside the retailer Coles, specifically to provide information to consumers relating to pain management and the sale of strong analgesics.
This development was reported in i2P under the title Coles Pharmacy Expansion and the Arid PGA Landscape”
In that article we reported that qualified information was a missing link that had come out of Coles market research as the reason to why it had not succeeded in dominating the pain market.
Of course, Woolworths was working on the same problem at the same time and had come up with a better solution - real people with good information.

Comments: 5

read more
open full screen

Intensive Exposition without crossing over with a supermarket

Fiona Sartoretto Verna AIAPP

Editor's Note: The understanding of a pharmacy's presentation through the research that goes into the design of fixtures and fittings that highlight displays, is a never-ending component of pharmacy marketing.
Over the past decade, Australian pharmacy shop presentations have fallen behind in standards of excellence.
It does not take rocket science - you just have to open your eyes.
Recently, our two major supermarkets, Woolworths and Coles, have entered into the field of drug and condition information provision - right into the heartland of Australian Pharmacy.

read more
open full screen

The sure way to drive business away

Gerald Quigley

I attended the Pregnancy, Baby and Children’s Expo in Brisbane recently.
What an eye and ear opening event that was!
Young Mums, mature Mums, partners of all ages, grandparents and friends……...many asking about health issues and seeking reassurances that they were doing the right thing.

Comments: 1

read more
open full screen

‘Marketing Based Medicine’ – how bad is it?

Baz Bardoe

It should be the scandal of the century.
It potentially affects the health of almost everyone.
Healthcare providers and consumers alike should be up in arms. But apart from coverage in a few credible news sources the problem of ‘Marketing Based Medicine,’ as psychiatrist Dr Peter Parry terms it, hasn’t as yet generated the kind of universal outrage one might expect.

read more
open full screen

Community Pharmacy Research - Are You Involved?

Mark Coleman

Government funding is always scarce and restricted.
If you are ever going to be a recipient of government funds you will need to fortify any application with evidence.
From a government perspective, this minimises risk.
I must admit that while I see evidence of research projects being managed by the PGA, I rarely see community pharmacists individually and actively engaged in the type of research that would further their own aims and objectives (and survival).

read more
open full screen

Organisational Amnesia and the Lack of a Curator Inhibits Cultural Progress

Neil Johnston

Most of us leave a tremendous impact on pharmacies we work for (as proprietors, managers, contractors or employees)—in ways we’re not even aware of.
But organisational memories are often all too short, and without a central way to record that impact and capture the knowledge and individual contributions, they become lost to time.
It is ironic that technology has provided us with phenomenal tools for communication and connection, but much of it has also sped up our work lives and made knowledge and memory at work much more ephemeral.

read more
open full screen

Academics on the payroll: the advertising you don't see

Staff Writer

This article was first published in The Conversation and was written by Wendy Lipworth, University of Sydney and Ian Kerridge, University of Sydney
In the endless drive to get people’s attention, advertising is going ‘native’, creeping in to places formerly reserved for editorial content. In this Native Advertising series we find out what it looks like, if readers can tell the difference, and more importantly, whether they care.
i2P has republished the article as it supports our own independent and ongoing investigations on how drug companies are involved in marketing-based medicine rather than evidence-based medicine.

read more
open full screen

I’ve been thinking about admitting wrong.

Mark Neuenschwander

Editor's Note: This is an early article by Mark Neuenschwander we have republished after the soul-searching surrounding a recent Australian dispensing error involving methotrexate.
Hmm. There’s more than one way you could take that, huh? Like Someday when I get around to it (I’m not sure) I may admit that I was wrong about something. Actually, I’ve been thinking about the concept of admitting wrong. So don’t get your hopes up. No juicy confessions this month except that I wish it were easier for me to admit when I have been wrong or made a mistake.
Brian Goldman, an ER physician from Toronto, is host of the award-winning White Coat, Black Art on CBC Radio and slated to deliver the keynote at The unSUMMIT for Bedside Barcoding in Anaheim this May. His TED lecture, entitled, “Doctors make mistakes. Can we talk about it?” had already been viewed by 386,072 others before I watched it last week.

read more
open full screen

Dispensing errors – a ripple effect of damage

Kay Dunkley - BPharm, Grad Dip Hosp Pharm, Grad Dip Health Admin, MPS, MSHPA

Most readers will be aware of recent publicity relating to dispensing errors and in particular to deaths caused by methotrexate being incorrectly packed in dose administration aids.
The Pharmacy Board of Australia (PBA), in its Communique of 13 June 2014, described a methotrexate packing error leading to the death of a patient and noted “extra vigilance is required to be exercised by pharmacists with these drugs”.
This same case was reported by A Current Affair (ACA) in its program on Friday 20 June
http://aca.ninemsn.com.au/article/8863098/prescription-drug-warning

read more
open full screen

Take a vacation from your vocation

Harvey Mackay

Have you ever had one of those days when all you could think was, “Gosh, do I need a vacation.”
Of course you have – because all work and no play aren’t good for anyone.
A vacation doesn’t have to be two weeks on a tropical island, or even a long weekend at the beach. 
A vacation just means taking a break from your everyday activities. 
A change of pace. 
It doesn’t matter where.
Everyone needs a vacation to rejuvenate mentally and physically. 
But did you also know that you can help boost our economy by taking some days off? 
Call it your personal stimulus package.

read more
open full screen

Explainer: what is peer review?

Staff Writer

This article was first published in the Conversation. It caught our eye because "peer review" it is one of the standards for evidence-based medicines that has also been corrupted by global pharma.
The article is republished by i2P as part of its ongoing investigation into scientific fraud and was writtenby Andre Spicer, City University London and Thomas Roulet, University of Oxford
We’ve all heard the phrase “peer review” as giving credence to research and scholarly papers, but what does it actually mean?
How does it work?
Peer review is one of the gold standards of science. It’s a process where scientists (“peers”) evaluate the quality of other scientists' work. By doing this, they aim to ensure the work is rigorous, coherent, uses past research and adds to what we already knew.
Most scientific journals, conferences and grant applications have some sort of peer review system. In most cases it is “double blind” peer review. This means evaluators do not know the author(s), and the author(s) do not know the identity of the evaluators.
The intention behind this system is to ensure evaluation is not biased.
The more prestigious the journal, conference, or grant, the more demanding will be the review process, and the more likely the rejection. This prestige is why these papers tend to be more read and more cited.

read more
open full screen

Dentists from the dark side?

Loretta Marron OAM BSc

While dining out with an elderly friend, I noticed that he kept his false tooth plate in his shirt pocket. He had recently had seven amalgam-filled teeth removed, because he believed that their toxins were making him sick; but his new plate was uncomfortable. He had been treated by an 'holistic dentist'. Claiming to offer a "safe and healthier alternative" to conventional dentistry, are they committed to our overall health and wellbeing or are they promoting unjustified fear, unnecessarily extracting teeth and wasting our money?

read more
open full screen

Planning for Profit in 2015 – Your key to Business Success

Chris Foster

We are now entering a new financial year and it’s a great time to reflect on last year and highlight those things that went well and those that may have impacted negatively in the pursuit of your goals.
It's also a great to spend some time re-evaluating your personal and business short, medium and long term goals in the light of events over the last year.
The achievement of your goals will in many cases be dependent on setting and aspiring to specific financial targets. It's important that recognise that many of your personal goals will require you to generate sufficient business profits to fund those aspirations

read more
open full screen

ReWalk™ Personal Exoskeleton System Cleared by FDA for Home Use

Staff Writer

Exoskeleton leader ReWalk Robotics announced today that the U.S. Food and Drug Administration has cleared the company’s ReWalk Personal System for use at home and in the community.
ReWalk is a wearable robotic exoskeleton that provides powered hip and knee motion to enable individuals with Spinal Cord Injury (SCI) to stand upright and walk.
ReWalk, the only exoskeleton with FDA clearance via clinical studies and extensive performance testing for personal use, is now available throughout the United States.

read more
open full screen

Attracting and Retaining Great People

Barry Urquhart

Welcome to the new financial year in Australia.
For many in business the past year has been described as a challenging period.
Adjectives are a key feature of the English language.  In the business lexicon their use can be, and often is evocative and stimulate creative images.  But they can also contribute to inexact, emotional perceptions.
Throughout the financial pages of newspapers and business magazines adjectives abound.
References to “hot” money draw attention and comment.  The recent wave of funds from Chinese investors, keen to remove their wealth from the jurisdiction and control of government regulations is creating a potential property bubble in Australia.

read more
open full screen

Updating Your Values - Extending Your Culture

Neil Johnston

Pharmacy culture is dormant.
Being comprised of values, unless each value is continually addressed, updated or deleted, entire organisations can stagnate (or entire professions such as the pharmacy profession).
Good values offer a strong sense of security, knowing that if you operate within the boundaries of your values, you will succeed in your endeavours.

read more
open full screen

Evidence-based medicine is broken. Why we need data and technology to fix it

Staff Writer

The following article is reprinted from The Conversation and forms up part of our library collection on evidence-based medicines.
At i2P we also believe that the current model of evidence is so fractured it will never be able to be repaired.
All that can happen is that health professionals should independently test and verify through their own investigations what evidence exists to prescribe a medicine of any potency.
Health professionals that have patients (such as pharmacists) are ideally placed to observe and record the efficacy for medicines.
All else should confine their criticisms to their evidence of the actual evidence published.
If there are holes in it then share that evidence with the rest of the world.
Otherwise, do not be in such a hurry to criticise professions that have good experience and judgement to make a good choice on behalf of their patients, simply because good evidence has not caught up with reality.

read more
open full screen

Laropiprant is the Bad One; Niacin is/was/will always be the Good One

Staff Writer

Orthomolecular Medicine News Service, July 25, 2014
Laropiprant is the Bad One; Niacin is/was/will always be the Good One
by W. Todd Penberthy, PhD

(OMNS July 25, 2014) Niacin has been used for over 60 years in tens of thousands of patients with tremendously favorable therapeutic benefit (Carlson 2005).
In the first-person NY Times best seller, "8 Weeks to a Cure for Cholesterol," the author describes his journey from being a walking heart attack time bomb to a becoming a healthy individual.
He hails high-dose niacin as the one treatment that did more to correct his poor lipid profile than any other (Kowalski 2001).

read more
open full screen

Culture Drive & Pharmacy Renewal

Neil Johnston

Deep within all of us we have a core set of values and beliefs that create the standards of behaviour that we align with when we set a particular direction in life.
Directions may change many times over a lifetime, but with life experiences and maturity values may increase in number or gain greater depth.
All of this is embraced under one word – “culture”.
When a business is born it will only develop if it has a sound culture, and the values that comprise that culture are initially inherent in the business founder.
A sound business culture equates to a successful business and that success is often expressed in the term “goodwill” which can be eventually translated to a dollar value.

read more
open full screen

ReWalk™ Personal Exoskeleton System Cleared by FDA for Home Use

Staff Writer

Exoskeleton leader ReWalk Robotics announced today that the U.S. Food and Drug Administration has cleared the company’s ReWalk Personal System for use at home and in the community.
ReWalk is a wearable robotic exoskeleton that provides powered hip and knee motion to enable individuals with Spinal Cord Injury (SCI) to stand upright and walk.
ReWalk, the only exoskeleton with FDA clearance via clinical studies and extensive performance testing for personal use, is now available throughout the United States.

read more
open full screen

Pharmacy 2014 - Pharmacy Management Conference

Neil Johnston

The brave new world of health and wellness is not the enemy of Pharmacy, it is its champion.
Australian futurist, Morris Miselowski, one of the world's leading business visionaries, will present the Opening Keynote address on Pharmacy's Future in the new Health and Wellness Landscape at 2.00pm on Wednesday July 30.
Morris believes the key to better health care could already be in your pocket, with doctors soon set to prescribe iPhone apps, instead of pills.
Technology will revolutionise the health industry - a paradigm shift from healthcare to personal wellness.
Health and wellness applications on smartphones are already big news, and are dramatically changing the way we manage our personal health and everyday wellness.

read more
open full screen

Generation and Application of Community Pharmacy Research

Neil Johnston

Editor’s Note: We have had a number of articles in this issue relating to pharmacy research.
The PGA has conducted a number of research initiatives over the years, including one recently reported in Pharmacy News that resulted from an analysis of the QCPP Patient Questionnaire.
Pharmacy Guild president, George Tambassis, appears to have authored the article following, and there also appears to be a disconnect between the survey report and its target audience illustrated by one of the respondent comments published.
I have asked Mark Coleman to follow through, elaborate and comment:

read more
open full screen

Fitting Your Pharmacy for the Future - Funding & Depreciating for Best Tax Effect

Chris Foster

articles by this author...

Chris Foster is a Chartered Accountant and partner in Green Taylor Partners, with over 33 years experience in working with small/medium business clients. Chris's interest in pharmacy goes back to his mother, who as a registered pharmacist, managed a pharmacy for over 26 years. Chris has worked with pharmacy clients for over 26 years and has an in-depth knowledge of those factors that make a business profitable and successful. Chris is a true believer in practicing what he preaches thus is a successful business owner and investor in his own right. Green Taylor Partners was also ranked in the top 8 firms in Australia by business performance in the 2011 Australia wide survey "The Good, the Bad & The Ugly" as conducted by Business Fitness. Chris can be contacted for an obligation free discussion about your business performance on 03 53824761 or email: chris.foster@greentaylor.com.au

Editor's Note:
I2P will be developing a series on pharmacy designs - ideas and concepts in respect of clinical services spaces.
In designing such spaces it was realised very early in the exercise, that to be properly integrated in an Australian pharmacy setting it could not be just an “add-on” but a whole of pharmacy redesign.
Similarly with the introduction of automated dispensing machines (original packs and dose administration aids) it is important to design workflows properly to capture efficiencies, and this also entails a “whole of pharmacy” redesign.
2013 may be the year of decision in terms of the type of pharmacy design to house your market offering. To survive you need to be different and there is not a lot to differentiate one pharmacy from the other, even if you belong to a marketing group.

Will you be a utilitarian design with a deep discount offering or will you begin to develop a clinical offering, realising that the workflow design will have to be separated from the dispensary?
Also, European designs will be looked at for adaptation to Australian settings because they have been at the forefront of clinical pharmacies for many years.

Pharmacy fit-outs are expensive but are needed to fully express your market offering.


Left: one design concept for a clinical space


Chris Foster is contributing some accounting perspectives to the series because it has to start with money and the taxation strategies that can help maximise your investment.

Depreciation Allowances for Pharmacy Owners

Expenditure by you on the purchase of “assets” as distinct from “repairs” has different taxation consequences.
In many cases, what you would consider to be repairs might in fact be the purchase of an asset under ATO interpretation.
Simply put, restoring an asset to its original condition will normally be a repair on the assumption that the deterioration has been due to wear and tear whilst you have owned the asset and you have not altered its construction or physical appearance.

This distinction between being treated as an asset (or capital) rather than repairs has a significant difference in their tax treatment. Simply put:

1)                 A repair is immediately tax deductible

2)                 An asset is tax deductible over a number of years

The temptation is to treat as much expenditure as possible as repairs, particularly those considered to be “grey”.
However, this must be carefully executed as the ATO monitor repair expenditure and case law is littered with both successful and unsuccessful attempts to claim what really is capital expenditure as repairs.

Let’s now examine the tax treatment of capital expenditure.

The tax treatment of such expenditure is markedly different, depending on whether you are considered to be a Small Business Entity or other entity.

Small Business Entity

You are considered to be a Small Business Entity (SBE) if your turnover is under $2m in any of the following circumstances:

1)         Estimated in the current year (looking forward)

2)         Actual in the current year (looking back)

3)         Actual in the prior year (looking back) 

There are grouping provisions in place that will ensure that where you “control” another entity, the turnover of all the entities that you control must be added together to determine whether you pass the $2m turnover test.

Simply put, if you have an interest in a partnership of 40% or more, you are considered to control the partnership and you must include that turnover in assessing whether you pass the $2m turnover test.

For example, lets assume your business interests were as follows:

                                                                        Turnover

Sole Proprietor                                                        $950000

50% Partner in Partnership                                     $2000000     

Your turnover for assessing eligibility as a SBE will be $2.95m, not $1.95m –therefore you would not be eligible to be a SBE.

So what are the benefits of being a SBE in respect of asset purchases? They are significant – they include:

* The ability to claim an immediate tax deduction for most depreciating assets costing less than $6500
* The ability to claim the first $5000 as an immediate tax deduction for the purchase of a motor vehicle used for business purposes
* Any other plant, fixtures and fittings costing more than $6500 are allocated to a pool and depreciated at 15% in the year of purchase and 30% for each subsequent year

Non Small Business Entity

Those businesses that do not satisfy the definition of SBE are subject to the capital allowance write offs that are much less generous that under the SBE regime.

In general these are:

* Assets costing less than $100 can be written off
* Assets costing over $100 and less than $1000 are allocated to a Low Value Pool and written of at 18.75% in the first year and 37.5% in each subsequent year
* Assets costing over $1000 must be written off over their effective useful life. The effective life of an asset can be determined by reference to Tax Ruling TR2012/2 (refer link http://law.ato.gov.au/atolaw/view.htm?docid="TXR/TR20122/NAT/ATO/00001"
* Depreciation on assets purchased during the year can only be claimed pro rata in the year of purchase eg if purchased on 30th April, depreciation can only be claimed for 61/365 in the first year
* Depreciation can be claimed on a Prime Cost (Straight Line) or Diminishing Value basis.
* The  Diminishing Value rate of depreciation is twice that of the Prime Cost method. For example, if an asset was purchased that had an effective life per the effective life tables of 10 years, the depreciation rates would be as follows:

    * 10% Prime Cost
    * 20% Diminishing Value

Depreciation using the Prime Cost method is calculated on the original cost each year whilst for the Diminishing Value method, it is calculated on the depreciated value each year
Diminishing value gives you a greater write off in the earlier years and reduces gradually each year. Prime Cost gives a lower depreciation claim in the earlier years and a greater write off in the later years. As such, most choose diminishing value as their preferred method.
Any assets that cease to be used and are considered obsolete can have the remaining depreciated value written off (unless they are sold)

Property Improvements

There is no difference between the tax treatment of structural improvements to property under the two tax regimes. A 2.5% capital allowance (write) applies to property improvements that form part of the structure of a property.

Financing Equipment Purchases

Significant equipment purchases are generally financed. The two most popular methods are: 

1)                 Lease

2)                 Chattel Mortgage or Equipment Loan 

Lease payments are generally tax deductible and the GST in each payment claimable in your monthly BAS.
The only circumstances where the lease payments will not be totally or partially tax deductible will be where the asset is not 100% for business use or the residual is not realistic.
In the 1980’s it was common practice to have the residual value (the final payout should you wish to own the asset at the end) set at $1 such that the full value of the asset was written off over a relatively short time.
The ATO have tightened this up and the residual must now be reflective of market value for the lease to be considered a general lease. 

Under a chattel mortgage or equipment loan, you claim the GST in the purchase in the BAS for the period in which the asset was purchased (assuming 100% business use).
No further GST is claimable in respect of the payments.
For tax purposes, rather than claiming the total amount of the payments, you claim depreciation on the asset as if you own it and the interest in each payment.

Which finance method is best will depend on your individual circumstances and I suggest you discuss this with your accountant in order to achieve the optimum result for you.

Return to home

Post new comment

The content of this field is kept private and will not be shown publicly.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Allowed HTML tags: <a> <em> <strong> <cite> <code> <ul> <ol> <li> <dl> <dt> <dd>
  • Lines and paragraphs break automatically.

More information about formatting options

health news headlines provided courtesy of Medical News Today.

Click here to read more...

If any difficulty is found in subscribing, please use the "Contact Us" panel found in the navigation bar with the message "subscribe" and your email address.

Subscribe to our mailing list

Email Format
 

 

  • Copyright (C) 2000-2020 Computachem Services, All Rights Reserved.

Website by Ablecode