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PAYG instalments - where is the debt raised?

Newbie

Views 203

Replies 2

Hi guys,

I cannot find this information anywhere - not with the ATO or any accountancy firm websites.

 

If the ATO has determined that I must pay PAYG instalments (PAYGI) and I don't pay them, where is that debt raised? 

For example, if you pay too much PAYGI tax on your sole trader/business/investment income, that amount is a credit in your tax return.

But if you pay too little PAYGI, or none at all, is the resulting tax debt related to that underpayment included in your final tax bill (i.e. notice of assessment)? Or are they two separate debts?

If it's the latter, it seems exceedingly odd that PAYGI credit is applied to your tax return, but PAYGI debt based off total taxable income (which is declared and assessed in the tax return anyway) would incur a separate debt. i.e. you could essentially be due for two separate tax bills. 

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Most helpful response

Former Community Support

Replies 1

Hi @jamesrichards,

 

Yes, they are sperate tax bills. Your PAYG Instalment account is separate to your income tax account. You will receive quarterly activity statements for your PAYG Instalments with a payable amount or rate which could be varied. The PAYG Instalments amount or rate is calculated from the data we have hold from your pervious tax returns. If you don't pay your PAYG Instalments or too little, credits from your income tax return may be used to offset the amount payable for your PAYG Instalments. 

 

We have more information about PAYG Instalments on our website with great information. You can also contact us using business enquiries number for more information. 

 

 

 

 

 

2 REPLIES 2

Most helpful response

Former Community Support

Replies 1

Hi @jamesrichards,

 

Yes, they are sperate tax bills. Your PAYG Instalment account is separate to your income tax account. You will receive quarterly activity statements for your PAYG Instalments with a payable amount or rate which could be varied. The PAYG Instalments amount or rate is calculated from the data we have hold from your pervious tax returns. If you don't pay your PAYG Instalments or too little, credits from your income tax return may be used to offset the amount payable for your PAYG Instalments. 

 

We have more information about PAYG Instalments on our website with great information. You can also contact us using business enquiries number for more information. 

 

 

 

 

 

Newbie

Replies 0

Thank you for clarifying that. I think there is a gap however in how that is explained - I looked high and low for that explanation, and it's not explicitly stated anywhere. Anyway, I hope others can benefit from this information. Cheers.