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  • PAYG instalments and company tax rates

    We have recently become aware that the reduction in the company tax rate was not applied correctly from 1 July 2020 for companies that are base rate entities with an aggregated turnover of less than $50 million. This resulted in pay as you go (PAYG) instalments being calculated using the former rate of 27.5% and not the correct 26%.

    We have now corrected this error and will issue your clients with a new PAYG instalment letter reflecting their updated instalment rate or amount. We apologise to you and your clients for any inconvenience caused.

    Corrective action we are taking

    For clients who have lodged and paid

    For clients who have lodged their activity statements and paid an amount based on the incorrect instalment calculation, we will refund the overpaid amount shortly. There is no further action required from you or your clients. We expect these refunds to start appearing in bank accounts in the week commencing 9 November.

    If you or your clients have varied their instalment amount or rate, you will not be impacted by these changes.

    For clients yet to lodge

    When clients lodge:

    • if they choose to lodge based on the current instalment calculation on the activity statement, we will apply the correct rate and refund an excess amount due to this error; or
    • if they had intended to vary their instalment rate or amount, they can still vary, and we will not adjust the varied amounts.

    If your client has an amount payable, we have a range of options available to support you and your client including the ability to enter into a payment plan.

    Further information on support available is found at help with paying.

    Future activity statements

    All future activity statements will have the correct rate applied.

    If you or your clients have varied their instalment rate or amount, the variation will continue until the start of their next income year. You can continue to vary your clients' activity statements if their rate or amount does not reflect their current trading situation.

    To vary PAYG instalments in Online services for agents:

    • select a client
    • select Lodgments then Activity statements
    • select Prepare next to the relevant activity statement
    • at PAYG instalment income select Edit and complete the mandatory fields, then select Save and continue
    • select the declaration then Lodge.

    See also:

    Last modified: 06 Nov 2020QC 64105