The ATO has now taken the steps of sending warning letters to taxpayers about amending your PAYG Instalments variation making it an issue

This might be you as an individual, companies or even Self-Managed Superannuation Funds.


If in the 2020-21 income year, you varied and underestimated your PAYG instalments. This resulted in a tax liability at the end of the year a lot lower than your taxation liability. Furthermore ATO’s message is that they want to help you calculate your variation correctly. You do not have a significant debt at the end of the year.


To determine if you have underestimated your PAYG instalments, the ATO focus on this. They will compare the instalments you paid on your activity statements to your total tax payable at the end of the year.


Finally variation must be within 85% of your total tax payable on your instalment income to avoid any potential penalties. In addition ATO has advised that they will not apply penalties or interest on varied instalments if you have taken reasonable care and made a genuine attempt to estimate your instalment liabilities.

What steps have you taken?

What workpapers do you have in the case of ATO questions?

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