Show download pdf controls
  • Correcting mistakes

    If you realise you've made a mistake or forgotten to withhold, you can request an amendment.

    Where you've already lodged some of your business activity statements and have not been withholding the correct amounts, you need to correct this mistake by lodging a revised activity statement. You can't correct the withholding understatement on a future activity statement. You need to write to us if you did not withhold any PAYG from PSI received, but you should have.

    You must use the legislative method to work out the amount to withhold when revising an activity statement. You can't use the simplified methods for a PAYG payment period that has ended. However, you can use one of these methods for future PAYG payment periods. If your business does not report and pay additional PAYG withholding amounts when required, penalties and the general interest charge (GIC) may apply. The penalty is equal to the additional amounts that should have been paid to us.

    However, we have the discretion to remit the penalty amount. When deciding on remission of penalty, we consider many factors including any PAYG instalments paid. The amount of penalty remitted is considered on a case-by-case basis.

    If you correctly use one of the simplified methods to calculate additional withholding, we will remit the penalty on any shortfall if, at the end of the income year, you work out that you withheld less tax than you should have as a result of using that method.

    Example: Incorrectly reporting PAYGW

    Betty started her business as a management consultant who contracts her personal services through her private company, Betty Pty Ltd, in August. As a small withholder, the company reports and pays PAYG withholding quarterly.

    The company didn't realise it had additional PAYG withholding obligations until early December. It had already lodged its September activity statement without reporting its additional PAYG withholding obligations.

    The company must lodge a revised activity statement for the September quarter to correct the withholding understatement. It cannot correct the mistake in a later activity statement during the following income year.

    End of example

    See also:

      Last modified: 30 Mar 2017QC 17515