PAYG installment thresholds will change from 1 July
The ATO has confirmed the Government’s recent announcement that the 2014pay-as-you-go (PAYG) installment thresholds will change with effect from 1July. Following the Minister’s announcement, the ATO advised the following installment threshold changes:
- the business or investment income threshold is increased from $2,000 to $4,000;
- the balance of assessment threshold is increased from $500 to $1,000;
- the notional tax threshold is increased from $250 to $500; and
- the requirement for entities registered for GST to remain in the system even if they have a zero installment rate is removed.
As a result, many taxpayers will no longer have to pay PAYG installments. According to the Minister of Small Business, around 32,500 small businesses that have no GST reporting requirements will no longer have to lodge a business activity statement (BAS) where to date lodgements have been made only to report PAYG installments. In addition, around 340,000 small businesses with modest or negative income which are required to lodge a BAS, will no longer have to interact with the PAYG installment system.
TIP: If taxpayers still wish to pay installments towards their end-of-year tax liability, they may voluntarily re-enter PAYG installments by contacting the ATO.
Please contact our office for further information.