Varying your PAYG instalments due to COVID-19

With pay as you go (PAYG) instalments, you make regular tax payments throughout the year. This helps you avoid a large tax bill when you lodge your tax return.

You can vary your PAYG instalments if you think you will pay too much compared with your estimated tax for the year.

We recognise that many businesses continue to be affected by COVID-19. We will not apply penalties or interest for any excessive variations for the 2021-22 income year.

This applies when you have taken reasonable care to estimate your end of year tax. When considering if a genuine attempt has been made, we take into account what a reasonable person would have done in your circumstances.

Variations do not carry over into the new income year. If you made variations in the 2020–21 income year, you may need to vary again in 2021–22.

You can vary your instalments multiple times throughout the year. Your varied amount or rate will apply for all your remaining instalments for the income year, or until you make another variation.

If you realise you have made a mistake working out your PAYG instalment, you can correct it by lodging a revised activity statement or varying a subsequent instalment.

Remember, registered tax agents and BAS agents can help you with your tax.

Source: ATO

 

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About the Author: David McKeller

David McKellar is a Chartered Accountant and Director of Allied Business Accountants, an accounting firm specialising in providing strategic advice and taxation services to business owners, investors and Self Managed Superannuation Funds.

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