When you may have to pay the general interest charge
You may be liable to pay the general interest charge (GIC) if you vary your PAYG instalment rate or instalment amount downwards and the following conditions apply:
- your varied instalment amount is based on an estimate that is less than 85% of the actual tax payable on your business and/or investment income for the income year
- your varied instalment rate is less than 85% of the instalment rate that you should have applied for the income year.
Remission of GIC
Generally, if we charge you a GIC amount, you can ask us to reduce or waive it. You must ask us in writing and outline the circumstances that led you to underestimate your instalment rate or amount. We will consider both:
- your extenuating and unforeseen circumstances
- the steps you have taken to relieve the effects of those circumstances.
You can see the grounds for the remission of GIC in PS LA 2011/12 Remission of General Interest Charge.
Varying to nil amounts
If you pay instalments on the basis of GDP adjusted notional tax, and you think the assessed tax you will pay on your investment and/or business income this year will be nil, on your activity statement:
- write '0' at T8 and T9
- record a reason code at label T4.
If you calculate your instalments based on your instalment income and have no investment and/or business income for the period, report a nil amount at label T1 on your activity statement. If you have nil amounts at all labels (including instalment income) on your activity statement, you can lodge it over the phone on 13 72 26.