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28 Nov 14 On give us all your money - and then some! - the ATO responds

In 2014 TAXVINE No 43 (21 November 2014), Member 186 wrote about a client with a 114.66% PAYG instalment rate. 


"Unusually high instalment rates can occur as a result of the way in which PAYG instalments are calculated. The situation occurs when the taxpayer’s total income has exceeded their notional tax. Several circumstances can lead to this result, the most common being if the taxpayer has been involved in an employee share scheme.

At any time, if the instalment rate is too high, or if the subsequent tax return does not include employee shares scheme income, taxpayers can vary the rate to one that better reflects their actual financial situation. Taxpayers are notified by letter of their PAYG instalment rate and with their first quarterly activity statement, should receive a flyer providing an example of why they have received a high rate.

Other examples of where a high rate can occur are where there is a HECS/HELP debt in a taxpayer’s last income tax return or where income has been included at the wrong label in the income tax return. The ATO has raised this calculation outcome with Government to seek a legislative change."