06 Feb 15
On reactivating withholding status - the ATO responds
In 2015 TAXVINE No 1 (23 January 2015), Member 1 responded to an earlier ATO response about a client whose withholding status was reactivated with their previous remitter status (medium), notwithstanding that changed circumstances meant that they should have had a different remitter status (small). Member 1 was also advised by ATO letter that the status could be changed with a telephone call, but the ATO response acknowledged this was an error on its part. Member 1 also recounted the difficulties that they had lodging the BAS online by the due date.
THE ATO NOW RESPONDS
"We apologise to Member 1 for the unsatisfactory series of events which have occurred in relation to this registration.
Firstly, the client was correctly reregistered as a monthly payer. This requirement follows from s.16-100 of Schedule 1 to the Taxation Administration Act, 1953. The section states that an entity will be a medium withholder, with a monthly payment cycle if:
'The amounts withheld by the entity in a financial year ending before the current month exceeded $25,000.'
That is, if the threshold was exceeded at any time in the past, a monthly cycle applies.
In the circumstances a written request to downgrade the cycle to quarterly should have been granted but it appears that the relevant correspondence was not acted upon in accordance with our service standards.
We will be reviewing the letter which caused Member 1 to call us in circumstances where written communication was required.
The portal outage which compounded the problem was unplanned. A significant and unexpected failure occurred and we remedied the situation as soon as possible. Agents were advised of the problem through our SMS service."