To help small businesses weather the global financial crisis, the Australian Government announced on the 12 December 2008 that it would reduce by 20% the quarterly pay as you go (PAYG) instalment due for the December 2008 quarter. For some small businesses this instalment was due 21 January 2009 while for the balance of small businesses this instalment was due on 28 February 2009.
The 20% reduction applies only to PAYG instalment. It does not apply to other tax liabilities – such as PAYG withholding, goods and services tax (GST), fuel tax or fringe benefits tax (FBT) – payable at the same time.
The 20% reduction applies to the instalment amount shown on the business activity statement (BAS) dispatched for the December 2008 quarter.
This means that eligible small businesses should pay only 80% of the PAYG instalment amount (shown at label T7) and 100% of the other liabilities (such as PAYG withholding, GST, fuel tax or FBT).
Please note that if you had your activity statement / instalment notice re-issued after 30 March 2009 your PAYG instalment amount will already include the reduction.
Eligibility
Letters were sent to eligible monthly lodgers in mid January and to eligible quarterly lodgers in early February 2009.
As a general rule, you are eligible if you:
You do not qualify for the 20% reduction if you are:
pay your PAYG instalments (PAYGI) quarterly using the Commissioner calculated instalment amount printed on your BAS
are carrying on a business and have an annual turnover of less than $2 million, or
are in receipt of income from a partnership or trust that is carrying on a business which has an annual turnover of less than $2 million.
a business with an annual turnover of $2 million or more
a business and work out your PAYG instalments on the basis of your instalment income (Option 2 on your BAS)
a business that has varied the Commissioner calculated PAYG instalment amount for the 2008–09 income year
a business and pay only two instalment amounts annually as notified by the Commissioner on your BAS, or
not in business (such as an individual with only investment income).
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