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ABN PAYGO instalment amount question

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Newbie

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Hello,

I recently registered for an ABN for some freelance writing work that I was considering doing. I haven't done any freelance work yet and therefore haven't earned any income other than income from my part-time job where I am an employee of an Australian business. 

 

I received a PAYG quarterly instalment notice for the first time today and they are suggesting that I pay a couple thousand dollars, based off of my last tax return I assume. Since I have earned zero self-employed income using this ABN, do I fill out the variation form on mygov and put all the values as 0 (zero)? I.e. $0 estimated yearly tax, $0 Varied amount payable for period, $0 credit from variation?

 

And what should I put as my reason for variation? I am considering cancelling my ABN as I'm not certain I'll use it for quite some time (some personal circumstances have changed), so should I put my reason as "current business structure not continuing"?

 

Just asking because I've seen a lot of warnings about penalties for lowering your PAYG amount (even though I shouldn't have to pay anything). 

 

Thank you Smiley Happy

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Newbie

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They would have looked at the last tax return you lodged to come up with the amount on your PAYG installment notice. I just went through this recently myself.

 

@effy123 Installment income can includedifferent types of income like if you're earnign alot of interest on money in your bank (e.g. savign for a house or selling your house) look at this page if you havent already https://www.ato.gov.au/General/PAYG-instalments/#Termsweuse

 

If you are sure you don't need to pay then I would vary it liek you say. You can do this online, i think the reason current business structure not continuing is suitable. You would vary all to $0 so for the year $0, the quarter $0

 

I think the big thing to remeber with the ATO and penalties etc is that if you are trying to do the right thing to the best of your knowledge when you make these decision they are pretty understanding of that. 

1 REPLY 1
Highlighted

Best answer

Newbie

Replies 0

They would have looked at the last tax return you lodged to come up with the amount on your PAYG installment notice. I just went through this recently myself.

 

@effy123 Installment income can includedifferent types of income like if you're earnign alot of interest on money in your bank (e.g. savign for a house or selling your house) look at this page if you havent already https://www.ato.gov.au/General/PAYG-instalments/#Termsweuse

 

If you are sure you don't need to pay then I would vary it liek you say. You can do this online, i think the reason current business structure not continuing is suitable. You would vary all to $0 so for the year $0, the quarter $0

 

I think the big thing to remeber with the ATO and penalties etc is that if you are trying to do the right thing to the best of your knowledge when you make these decision they are pretty understanding of that.