• How do you vary your instalment amount?

    You should mark your variation on the appropriate label on your activity statement and indicate your reason for varying your instalment amount by choosing one of the reason codes from the table below.

    The reason codes cover a number of obligations reported on the activity statement including GST, pay as you go instalments and fringe benefits tax. If you are varying your GST instalment amount, you would use reason code 22, 23, 24, 25 or 26.

    Choose the reason code that best describes your reason for varying your GST instalment amount and write it at the appropriate label on your new activity statement.

    Variation reason codes

    Code

    Reason

    Reason description

    21

    Change in investments

    Your investment strategy or policy has changed and this will significantly affect your annual tax liability. For example, the sale or purchase of investments such as shares or residential property, or the use of investments for private purposes.

    22 *

    Current business structure not continuing

    Your current business has stopped trading or has changed its structure. For example, you have permanently closed or sold your business, it has stopped trading because of a merger or takeover, or it has gone into bankruptcy or liquidation or been placed in the hands of a receiver/manager.

    23 *

    Significant change in trading conditions

    Abnormal transactions relating to your business income or expenses will significantly affect your annual tax liability. For example, you have bought or sold a major piece of machinery or your trading conditions have been affected by local or global competition.

    24 *

    Internal business restructure

    You have restructured your business. For example, it has undergone an expansion or contraction, and this will significantly affect your annual tax liability.

    25 *

    Change in legislation or product mix

    A change in legislation, or in the product mix of your business, will significantly change your annual tax liability.

    26 *

    Financial market changes

    Your business has been affected by domestic or foreign financial market changes. This reason code is for businesses involved in financial market trading, including those whose income is affected by changes in financial products, for example, banks, finance and insurance businesses.

    27

    Use of income tax losses

    You will be using income tax losses, including capital losses transferred from another entity, that will significantly affect your annual tax liability.

    30

    Change in fringe benefits for employees

    You have changed your fringe benefits arrangements for employees. For example, you no longer provide fringe benefits, or you have reduced fringe benefits and increased salary.

    31

    Change in employees with fringe benefits

    You have changed the number of employees receiving fringe benefits or there is an increase in employee contributions.

    32

    Fringe benefits rebate now claimed

    You are now claiming the fringe benefits rebate.

    * Use one of these reason codes if you are varying your GST instalment amount.

    If you vary your advised instalment amount for a quarter, you will have a varied instalment amount for each of the remaining quarters of the financial year. This varied instalment amount is either of the following:

    • 25% of the estimated annual GST liability on which you based your varied instalment amount for the previous quarter if that estimate has not changed
    • a new varied instalment amount for the quarter if your estimated annual GST liability has changed.

    For each quarter you vary your instalment amount, you need to write your new estimated annual GST liability on your activity statement.

    Example 1

    Les is a plumber who is eligible to pay GST by instalments. He chooses to pay by instalments from the September 2012 quarter. Les pays the advised amount of $20,000 for the September quarter, but he decides to vary his December = quarter instalment amount. This is because by the time that instalment is due, Les estimates his GST liability for the year will be $70,000.

    Les works out his varied instalment amount for the December quarter as follows:

    Estimated annual GST liability

    $70,000

    Amount to be paid by December quarter ($70 000 x 50%)

    $35,000

    less GST instalment amount paid for September quarter

    $20,000

    Varied instalment amount for December quarter

    $15,000

    Les writes $15,000 as his varied instalment amount and $70,000 as his estimated annual GST liability on his December quarter activity statement, and also provides a reason code.

    Example 2

    For the March 2013 quarter, Les may either pay 25% of his annual estimate from the previous quarter if this is still what he estimates his annual GST liability to be, or he may choose to vary this amount. As Les has not changed his estimated annual GST liability of $70,000, his instalment amount for the March quarter is $17,500 (that is, 25% of $70,000).

    For the June 2013 quarter, Les estimates that his GST liability for the year will be $73,000. He works out his varied instalment amount for the June quarter as follows:

    Estimated annual GST liability

    $73,000

    Amount to be paid by June quarter ($73,000 × 100%)

    $73,000

    less GST instalment amounts paid for previous quarters
    ($20,000 + $15,000 + $17,500)

    $52,500

    Varied instalment amount for June quarter

    $20,500

    Les writes $20,500 as his varied instalment amount and $73,000 as his estimated annual GST liability on his June quarter activity statement, and also provides a reason code.

    End of example

    Find out more

    GST instalments provides information on using the GST instalment options for primary producers and special professionals.

    End of find out more
      Last modified: 20 May 2014QC 16431