Skip to main content
shopping_cart

Your shopping cart is empty

25 Jul 14 The ATO responds on incorrect PAYG instalment notices

In 2014 TAXVINE No 24 (11 July 2014), Member 80 wrote: 

"We really must commend the person in the ATO responsible for preparing the recent batch of Annual PAYG Instalment notices for 2014. It is a truly confusing document and is sure to keep us occupied for hours trying to explain it to our clients. The special features this year include: 

  • Basing the instalment on the 2012 assessment, even though the 2013 notice of assessment was issued in November 2013 of the previous year and was refundable with no instalments due for 2013-14.  I look forward to explaining to those clients why the ATO has issued a notice at all.
  • Printing beside the amount the instalment amount – 'Your PAYG instalment for the period 1 July 2013 to September 2013' or other random quarterly period in the 2014 year. This master stroke creates wonderful confusion for clients when they read this in conjunction with the printing of '1 July 2013 to 30 June 2014' under the heading 'Annual PAYG instalment notice'. Nothing like having two sets of periods to create confusion. Again, I look forward to explaining to my clients that it isn’t actually a quarterly instalment amount, and that there won’t be any more annual/quarterly instalment notices for the 2014 financial year (we hope).

Thanks again, ATO. Well done, it truly takes bureaucratic skill of world standard to make a single page document so confusing. Incidentally, where do we send the bill for the time we will waste thanks to your careless efforts?

I know it will be difficult for them to work out how to overcome these issues so, in the interests of saving time, perhaps I can suggest two apparently simple steps: 

1. Base the instalment on the most tax recent tax return lodged, particularly if it was lodged months before the notice is produced.

2. Don’t print anything besides the instalment amount or, if you must, print the dates covering the period 1 July to 30 June, not a quarterly period.

THE ATO NOW RESPONDS:

"We have recently issued 2014 instalment notices, which include annual instalment amounts and due dates, to all PAYG instalment taxpayers.

Some taxpayers who had elected to exit the PAYG instalment system during the 2013–14 year have incorrectly received an instalment notice. This is due to a system issue that has not recognised the taxpayer’s request to exit the instalment system. This issue has resulted in an incorrect reference to 2012 assessments on your clients’ instalment notices due to timing issues. As the system has not exited your annual clients from the start of their first quarter in the 2014 year, it has looked back to a period where it still showed that your clients were in PAYG instalments.

Your client does not need to lodge the instalment notice and we apologise for any confusion caused. Any income tax due will be advised on their Notice of Assessment once they lodge their 2014 income tax return."

In a similar vein, in the same issue of TAXVINE, Member 81 wrote: 

"I have now received my clients' annual PAYG Instalment notices and have noticed several clients have received such annual notice after previously receiving a letter stating that they would no longer receive instalment activity statements. When will the ATO get its act together? I wonder if any fellow members have experienced the same situation?

THE ATO NOW RESPONDS:

"We have recently issued 2014 instalment notices, which include annual instalment amounts and due dates, to all PAYG instalment taxpayers.

Some taxpayers who had elected to exit the PAYG instalment system during the 2013–14 year have incorrectly received an instalment notice. This is due to a system issue that has not recognised the taxpayer’s request to exit the instalment system. If your client is affected by this issue, they are not required to lodge their instalment notice. Any income tax due will be advised on their Notice of Assessment once they lodge their 2014 income tax return.

We apologise for any inconvenience caused and have resolved this issue for all future annual instalment notices."