The Australian Taxation Office is offering some relief options to assist those impacted by the Coronavirus. One of these is that quarterly payers of PAYG Instalment Tax can vary their March quarter down (to NIL) and/or claim a refund of the instalments paid for September and December 2019 quarters.
This is PAYGI – this is not the same as the PAYGW (or wages tax) that is paid for employees.
The relief will not be automatically applied and you will need to take your own action or the IQ team can assist you.
To assist you in making a decision, here’s the important information that you need to know:
- The PAYG instalments are prepaid tax for your 2020 tax return. If you vary the March quarter down or to NIL and/or claim a refund of the September and December 2019 quarters, this will reduce the amount of tax you have paid during the year and when your tax return is lodged at the end of the year, there is a very high change you will have a tax debt to pay.
- The ATO are not offering you a “gift of funds.” This is simply a deferral of tax – giving you your money back now so you can pay it back to them at a later date.
- There are a variety of options to choose from:
- You can choose to vary the March quarter down OR to NIL and leave September and December 2019 quarters as paid.
- You can choose to vary the March quarter down OR to NIL and also refund September AND December 2019 quarters.
- You can choose to vary the March quarter down OR to NIL and only refund one of the September or December 2019 quarters.
How to take advantage of this opportunity:
This is time sensitive – please act now.
- The ATO provide you with a guide here which you can follow to vary your PAYG instalment yourself. The ATO have confirmed that they will not seek to penalise anyone who has a tax debt at the end of the year due to varying, so don’t be disheartened by the “interest and penalties” or;
- The IQ team can assist. We are offering a discounted COVID rate to assist clients in this process – please complete this form if you would like our office to take care of this matter for you. All information including costs are outlined on the form.
Finally, the ATO released some further information about JobKeeper late today. Unfortunately this did not contain detail for self employed but for employers the information is here.