Could you be paying too much in PAYG instalments?
In the current economic climate there has been a downward trend in earnings. The Tax Office is encouraging businesses to review their tax position to see if the PAYG instalments reflect your current financial position.
Some business and investment taxpayers that use the instalment rate method for PAYG instalments could end up paying more than the expected tax liability for the income year. If this is the case you are entitled to vary your PAYG instalment rate to ensure that the correct amount of tax is paid.
A business or investment taxpayer may wish to consider varying the instalment rate where there has been a substantial change in the proportion of the business and investment income that will be paid as tax. For example, if you expect to have much higher tax deductions for a similar level of business and investment income. Any overpaid instalments from previous quarters can then be applied to meet the current PAYG instalment.
However do your sums correctly as you may be liable to pay an incorrect variation general interest charge where the varied instalment rate is less than 85% of what should have been used. The ATO has said though that it will look favourably on a situation where the rate variation is considered to have been reasonable at the time it was made.