August 2014 Newsletter
PAYG instalment threshold changes
The ATO has confirmed the Government’s recent announcement that the pay-as-you-go (PAYG) instalment thresholds will change with effect from 1 July 2014.
Following the Minister’s announcement, the ATO advised the following instalment threshold changes:
- the business or investment income threshold is increased from $2,000 to $4,000;
- the balance of assessment threshold is increased from $500 to $1,000;
- the notional tax threshold is increased from $250 to $500 and
- the requirement for entities registered for GST to remain in the system even if they have a zero instalment rate is removed.
As a result, many taxpayers will no longer have to pay PAYG instalments. According to the Minister of Small Business, around 32,500 small businesses that have no GST reporting requirements will no longer have to lodge a business activity statement (BAS) where to date lodgements have been made only to report PAYG instalments. In addition, around 340,000 small businesses with modest or negative income which are required to lodge a BAS, will no longer have to interact with the PAYG instalment system.
TIP: If taxpayers still wish to pay instalments towards their end-of-year tax liability, they may voluntarily re-enter PAYG instalments by contacting the ATO. Please contact our office for further information.