Saturday, 21 July 2012
PAYG Instalment increases
The system uses GDP to increase the instalments from year to year. What this means is they expect that each business tax bill will go up by 6%. The ATO will put the instalment up automatically. Business should review their actual likely tax bill for the next tax year i.e. for the year 30June13. In conjunction with the tax agent check out just how much tax should be paid by instalment during the year, in advance. The Instalment method is NOT the tax rate method i.e. using T1 & T2 on the BAS. Using the instalment method you are allowed to vary the rate based on change in circumstances etc. You are permitted to vary the instalment along as you can justify it. If you vary either T2 or the instalment down and are wrong, in theory, you will be charged interest on the difference.