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 fund has taken reasonable care to estimate its end of year tax.
Taxpayers can vary their pay as you go (‘PAYG’) instalments throughout the year 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. This applies to excessive variations when the taxpayer has taken reasonable care to estimate 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.
Please contact our team on 03 9708 8801 or email firstname.lastname@example.org if you have any questions or need help with any PAYG issues.
Please Note: Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances. The information contained within this document is of a general nature only and neither represents nor is intended to be personal advice on any particular matter. Robinson Voss Partners (RV Partners) strongly suggests that no person should act specifically on the basis of the information in this document, but should obtain appropriate professional advice based on their own personal circumstances.
Robinson Voss Financial Pty Ltd T/A Robinson Voss Partners is a Corporate Authorised Representative (No 001263089) of GPS Wealth Ltd AFSL 254 544 Australian Credit Licence 254 544 ABN 17 005 482 726. www.gpswealth.com.au