Varying Pay As You Go (PAYG) Instalments
The first instalment of 2021 income tax, due for quarterly taxpayers on 28th October may be varied down.
If your business or investment income has been affected by covid-19 (or any other factors) and has reduced, the instalment can be varied.
You must make a variation on or before the payment due date. An estimate of tax payable for the year, based on the current circumstances, will result in a reduced instalment.
You can vary instalment amounts multiple times throughout the year, reflecting current income and legislation announcements (e.g. new depreciation write offs, new incentives).
The varied amount will apply for the remaining instalments for the year, or until another variation is made.
Importantly, it should be done before the payment due date – and payment made of the recalculated amount.
An estimate of next years tax payable during this pandemic can be extra-ordinarily difficult, but the Australian Taxation Office have advised that no penalties will be imposed if a best attempt is made, although general interest charges may apply to outstanding PAYG.