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RISKS IN VARYING PAYG INSTALMENT RATE

Wednesday, 01 March 2017

The Australian Tax Office (ATO) has issued a warning that some taxpayers are incorrectly varying their pay as you go (PAYG) instalment rate or amount. It has warned this may result in a debt at the end of the financial year and attract a general interest charge (GIC) if the variation was significantly incorrect.

The ATO said “Some taxpayers are incorrectly varying their pay as you go (PAYG) instalment rate or amount. This may result in a debt at the end of the financial year and attract a general interest charge (GIC) if the variation was significantly incorrect.

“We may contact you to discuss your clients PAYG instalment variations and how to help them get it right.”

It recommended that BAS Agents and other advisers advise their clients they may have to pay GIC if they vary an instalment rate or amount to less than 85% of the:
• actual tax payable on their business and/or investment income for the income year
• instalment rate that should have applied for the income year

Clients should vary their rate up if they think they underestimated their rate or amount, the ATO said.

 

Click below to view source

ATO: Incorrect PAYG instalment variations and GIC

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