MEMBER 49 writes:
"I recently had a client who mixed up the payment slips for PAYG Withholding between two companies.
This resulted in one company underpaying PAYG withholding by some 10K and the other company overpaying by the same amount.
We received notification of the underpayment. But heard nothing about the overpayment.
I know businesses like to collect their debtors prior to issuing refunds to creditors, but the ATO is not a business and the amount involved was substantial.
I guess this raises the question does the ATO ever issue a credit notice with PAYG Witholding? Does it ever issue a credit notice with data matching (ie typing error overstating income compared with PAYG Statement in the personal tax return)? Does the efficient administration of tax require the ATO to issue refunds in this situation?
After twenty five years I know it used to happen but does it happen anymore?"