We are working with the ATO in relation to member feedback about receiving very small amounts of interest from the ATO in their trust accounts as a result of their clients making their tax payments early (before the due date for payment). Feedback from members indicates amounts between $0.50 and $1.50 (in some cases, even less) being refunded to the taxpayer or their tax agent's trust account, electronically or with a physical cheques.
These amounts result from the ATO’s obligations to pay interest on early payments (IEP) under section 8A of the Taxation (Interest on Overpayments and Early Payments) Act 1983, which were automated from March 2022.
We have raised these concerns about the practical difficulties caused by these payments of these minor amounts and are actively working with the ATO over the coming weeks to assist our members understand and approach the administrative challenges, and identify a suitable way forward. We will keep our members updated on developments.