Have you received an unexpected ATO bill?

It seems you’re not alone with the above. In most cases this relates to a PAYG instalment notice the ATO have issued.

So why did you receive this? You most likely reported untaxed income during the last tax return lodged which resulted in more than $1,000 in tax to pay. This could be for any of the below reasons:

  1. You owned a rental property that started turning a profit or became positive with cash flow (income was more than expenses)
  2. You are a sole trader and your business made a profit
  3. You had a great year with investments, eg received bank interest or dividends

The ATO decide if you’re liable to pay PAYG instalments. You’re able to voluntarily enter the system, however you can’t voluntarily exit the system.

Lately we’ve seen an increased number of clients receive overdue notices for PAYG instalments they didn’t know they had.

With the ATO’s continued approach to make their systems digital, they have been either issuing PAYG instalment notices via email direct to clients, or on a rare number of occasions, posting a paper copy of the form to either us or our clients. This new process has caught many clients unaware of a tax bill, only to be sent a paper (or a scanned digital copy from our office) copy of an overdue notice. To confirm, the ATO’s new process is:

  1. Send client an email advising a new PAYG instalment notice is about to be issued on their myGov account
  2. Issue PAYG instalment on myGov account
  3. If unpaid, issue a paper overdue notice

The crucial part in the above process is to ensure your email address with the ATO is correct and to check your myGov account. If either of these steps are incorrect, then you’ll miss the notification of a PAYG instalment being issued. Unfortunately it doesn’t come via us (they’ve cut us out of the loop). If you believe this needs updating, please contact our admin team to have this updated.

Of course, if you believe the PAYG instalment doesn’t reflect your current tax situation, we can vary this for you (for a fee) as long as it is done before the due date. Of course, you’re also able to contact the ATO yourself and have this done.

 

Author

Kim Jay