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Newsletter December 2004

In 2005 we can look forward to the Coalition Government following through with their election tax commitments being:

• Introduce a new tax rebate of 30% on parents' out-of-pocket childcare expenses;
• Provide $300 increase in the rate of Family Tax Benefit B;
• Increase from April 2005, the private health insurance rebate from 30% to 35% for people aged from 64 to 69 years, and to 40% for people older than 70 years;
• Introduce, with effect from 1 July 2004, a new mature age worker tax offset for people aged 55 years or older;
• Extend the Simplified Tax System for small businesses to include businesses that account on an accruals basis from 1 July 2005;
• Reduce the amendment period in which the Tax Office can adjust the tax assessments of businesses within Simplified Tax System from the current four years to two years;
• Introduce, with effect from 1 July 2005, a new 25% "Entrepreneurs" Tax Discount on the income tax liability of small businesses that are in the Simplified Tax System and have an annual turnover of $50,000 or  less;

In accordance with the Hanel v O'Neill (2004) Supreme Court decision, directors of corporate trustees may be personally liable for debts of an insolvent trust without the benefit of the insolvent trading defences applicable to directors of non-trustee companies.

There is a four year limit on making a GST refund claim.  As the GST is now in its fifth year, the limit stands to affect all businesses that lodged business activity statements from the beginning of the New Tax System.

If you upgrade to the latest version of MYOB you will find that you will be asked to confirm registration details on a frequent basis.

This is a new security feature that MYOB have added to the latest upgrades to ensure that only registered users can use their software.  If you have already upgraded, you will find that this feature may interfere with your ability to re-enter data at different dates.

MYOB have issued a support note on what to do in this instance. The address for this is Confirmation of MYOB Company File  

The process to back date simple entries is quite involved, compared to what you would currently have to do.  It is not necessary to upgrade your MYOB software until such time as the PAYG withholding instalment rates change or you wish to use a new feature of their recent software.

Should the tax scale change, it is our understanding that the PAYG withholding formulas can be changed manually.  There is no need to upgrade your MYOB software if you are happy with the version you are using as the version (being version 10 upwards) that was in existence when Goods and Services Tax was introduced, was quite capable of attending to the accounting requirements of a normal business.

If you are unsure as to whether you should upgrade, you should consult your Wearne & Co Partner, as an upgrade will not allow you to return to your earlier versions of MYOB.