Varying PAYG instalments throughout the year is now an option for taxpayers if they think they will pay too much, compared with their estimated tax for the year.
To assist taxpayers who continue to be affected by COVID-19, the ATO has stated that it will not apply penalties or interest on varied instalments for the 2021/22 income year for excessive variations when the taxpayer has taken reasonable care to estimate its end of year tax.
The ATO says this means making a reasonable and genuine attempt to determine the tax liability. When considering if a genuine attempt has been made, the ATO takes into account what a reasonable person would have done in the same circumstances.
Note that variations do not carry over into the new income year.
Therefore, if a taxpayer made variations in the 2020/21 income year, they may need to vary again in 2021/22. The varied amount or rate will apply for all of the remaining instalments for the income year, or until the taxpayer makes another variation.
The ATO encourages taxpayers to review their tax position regularly and vary their PAYG instalments as their situation changes.
If a taxpayer realises they have made a mistake working out their PAYG instalment, they can correct it by lodging a revised activity statement or varying a subsequent instalment.
If a taxpayer is unable to pay an instalment amount, they should still lodge their instalment notice and discuss a payment arrangement with the ATO to ensure they will not have a debt at the end of the year.
Contact Taxwise on (08) 9248 8124 if you need help with any PAYG (or any related) issues.
DO YOU NEED HELP WITH VARYING YOUR PAYG?
CALL (08) 9248 8124 NOW OR SIMPLY FILL IN THE FORM BELOW