Oct 14, 2020 Matthew Hung
COVID-19 PAYG instalment variations
Taxpayers who are concerned about reducing their September 2020 tax instalments will be pleased with the lenient approach that the ATO will take, as it is hard to be accurate in projecting future income so early in the financial year.
The ATO has indicated that it will not be applying penalties or interest for the 2021 income year for excessive variations of PAYG instalments when taxpayers make their “best attempt” to estimate their end of year tax.
Normally, the ATO can apply penalties where the value of the varied instalments is less than 85% of the total tax payable, but due to the impact of COVID-19, the ATO will not be pursuing this in 2021. However, the way the ATO’s guidance has been worded does indicate that this is not a complete guarantee that penalties will not be payable in all circumstances.
You can find more information here.