PAYG instalments: Take care when varying payments
The ATO has reminded taxpayers to take care when varying PAYG instalments, particularly where the amount is being reduced.
PAYG instalments require taxpayers to make regular payments on their business and investment income during the year to ensure they meet their expected tax obligations throughout the year. If your circumstances change and your instalments are likely to be higher or lower than your expected tax liability, you can vary the amount you pay.
However, if your instalments are varied down too far, a general interest charge (GIC) may apply.
When the ATO receives an income tax return, it compares the taxpayer’s actual instalments to the total tax payable on their instalment income for the income year.
“If your varied instalments are less than 85 per cent of your total tax payable, you may have to pay a general interest charge (GIC) on the difference, in addition to paying the shortfall. Depending on the circumstances, there may also be penalties.”
If you’re unsure whether your PAYG instalments should be varied, it’s worth checking before making a change. The ATO says “If you’re not sure, it is best not to vary your instalments. Any overpaid instalments will be refunded to you after you lodge your tax return.”
Further, “If you’re unable to pay your instalment amount, you should still lodge your instalment notice and discuss a payment arrangement with us,” the ATO said.
If you’re thinking about varying your PAYG instalment, talk to us first so we can help you assess the appropriate amount.
ATO data matching: Motor vehicle purchases
The ATO is expanding its motor vehicle data-matching program, using information from state and territory motor vehicle registries to help identify potential discrepancies in tax reporting.
For the 202526 to 2029/30 financial years, the ATO will receive information about vehicles that are newly registered or transferred where the purchase price or market value is $10,000 or more.
This information can be compared with existing ATO records to identify transactions that may not align with a taxpayer’s reported financial position or tax obligations. The data may be used to:
- identify taxpayers that have purchased vehicles with values that don’t match their reported financial position
- identify taxpayers who may not have met their obligations across relevant taxes, including GST, FBT, luxury car tax, fuel tax credits and income tax
Information collected may include details about the vehicle and transaction, such as the sale price or market value, registration details and intended use, along with identifying information about the individual or business.
For most taxpayers, this is simply another example of the ATO using data matching as part of its compliance activities. The important thing is to make sure vehicle purchases, business use and any associated tax claims are correctly recorded and consistent with your tax reporting.
If you’ve recently purchased or transferred a vehicle and are unsure about the tax implications, please speak to us.
Could you have lost or unclaimed super?
The ATO is encouraging Australians to check whether they have any lost or unclaimed super, with more than $21 billion currently waiting to be claimed.
Super can become “lost” for a number of reasons, including when an account has been inactive or a super fund no longer has your current contact details. In some cases, lost or unclaimed super may eventually be transferred to the ATO.
A quick super health check through ATO online services via myGov can help you:
- search for lost or unclaimed super
- check your super balances and contact details
- see whether you have multiple super accounts.
The ATO says more than $1.1 billion in unclaimed super was returned last year, either through consolidation into super accounts or direct payments to eligible individuals.
If you discover multiple accounts, it may be worth considering whether consolidation is appropriate for you. Before making changes, consider any fees, insurance cover and other benefits attached to your existing accounts.
It only takes a few minutes to check, and you may find super you’d forgotten about.
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