• PAYG withholding payment summary annual report

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    Lodgment due dates

    The due date for lodgment of the annual report is worked out by:

    • determining the class of payees the payer has included in the report, and
    • whether there is registered tax agent or BAS agent involvement in the preparation of the report.

    We allow BAS agents who are responsible for lodgment of the PAYG withholding payment summary annual report access to the lodgment due date of 30 September for relevant clients.

    Table: Lodgment dates for the PAYG withholding payment summary annual report

    Lodgment due date

    Reports for

    14 August 2016

    either:

    • large withholders (annual withholding more than $1 million)
    • payers who do not have registered agent involvement in preparing the report
     

    30 September 2016

    payers who have registered agent involvement in preparing the report and have either:

    • one or more arm’s length payees
    • only closely held payees but did not meet the compliance test
     

    Due date of payer’s tax return

    payers, including personal services income (PSI) entities, who have tax agent involvement in preparing the report and both the following apply – they:

    • have only closely held payees
    • meet the compliance test and notify us of any additional eligible clients by 27 September 2016
     

    Closely held lodgment concession

    If your client is eligible for the closely held lodgment concession we will email you – if you have eligible clients but we haven't contacted you, you can submit a request form.

    Eligibility

    Payers who have only closely held payees and who meet the compliance test will be eligible to access the closely held lodgment concession, allowing registered tax agents to lodge their report by the due date of the payer's tax return.

    To be eligible for the concession this year, your client must have:

    • only closely held employees
    • lodged their PAYG withholding payment summary annual report 2015 by 30 June 2016
    • lodged their 2015 tax return by 30 June 2016, and not received a failure to lodge on time (FLT) penalty for that return
    • registered for PAYG withholding.

    A closely held employee is one who is a non-arm’s length employee. This means they are directly related to the entity from which they receive payments, for example:

    • family members of a family business
    • directors of a company
    • shareholders or beneficiaries.

    The closely held lodgment concession does not extend to BAS agents. The latest date that a BAS agent can lodge the PAYG withholding summary annual report on behalf of their clients is 30 September.

    This concession also does not apply to large withholders. They must still lodge by 14 August 2016.

    Emails to agents about the closely held concession

    In late July, we email tax agents with clients who are eligible for the concession. The email outlines the lodgment concession process for the year, and include a list of:

    • your clients who have been granted the lodgment concession for 2016
    • those clients who received the concession last year but are not currently eligible this year and the reason why.

    If you have no other clients who are eligible for the concession, you do not need to take any action with the list.

    Reasons why clients are not eligible for the closely held concession

    You may have clients who received the concession last year but who are not currently eligible this year. If so, your email will contain a reason code that explains why they are currently not eligible.

    Table: Reason codes explaining why clients are not eligible

    Reason code

    Description

    3

    The client has other payees (not all closely held).

    4

    The client is a large withholder.

    7

    Our records show the client is deceased.

    8

    The client has not lodged their 2015 tax return.

    9

    The client received an FTL penalty for the late lodgment of their 2015 tax return.

    10

    The client has not lodged their 2015 payment summary annual report.

    11

    The request for the lodgment concession was made after 27 September 2016. The client will be assessed for eligibility for the 2017 concession.

    41

    Our records show the client is insolvent.

    50

    The client cancelled their PAYG withholding registration in a prior financial year.

    51

    The client is not registered for PAYG withholding.

    Closely held lodgment concession request form

    If you have clients who have not been granted the concession but you believe they are now eligible to receive it, you can request the concession for them by adding their name and Australian business number (ABN) to the closely held lodgment concession request form.

    You must submit the Closely held lodgment concession request form by 27 September 2016 (or the next business day). We will not process requests we receive after this date.

    We will review the eligibility of all the clients in your request and notify you of the outcome.

    If you do not notify us by this date and you lodge their annual report after 30 September 2016, we may apply an FTL penalty that can only be remitted if extenuating circumstances exist.

    You can also use the closely held lodgment concession request form to:

    • request a review of a decision to not grant the concession
    • advise us of clients who are no longer eligible for the concession and the reason why.

    Next steps:

    Key terms

    When we work out the due date for lodgment of this obligation, we use the following terms:

    • An arm’s length payee (or employee) is a payee who is not directly associated with the payer, director, shareholder or beneficiary – for example, an employee or contractor who has no other connection with the payer.
    • A closely held payee (or employee) is one who is a non-arm’s length payee (or employee); the term non-arm’s length payee refers to someone who is directly related to the entity that they receive payments from (the payer) – examples include a director of a company, the spouse or the children of the director, a shareholder or a beneficiary.
    • A personal services income entity is a company, partnership or trust in receipt of an individual’s PSI.
    • Registered agent involvement is when the tax agent or BAS agent has provided advice to help their client prepare the PAYG withholding payment summary annual report (including checking the report to ensure it is completed correctly) or prepares the report.
    Last modified: 01 Jul 2016QC 34543