PAYG installments threshold increases from 1 July 2014
The ATO has announced changes to the pay as you go (PAYG) installments entry and exit thresholds.
From 1 July 2014, PAYG installment thresholds have increased, which means that some taxpayers no longer need to pay installments.
The entry and exit thresholds for:
- business or investment income will increase from $2,000 to $4,000;
- adjusted balance of assessment will increase from $500 to $1,000; and
- notional tax will increase from $250 to $500.
There will no longer be a requirement for entities registered for GST to remain in the PAYG installment system, if they have a zero installment rate.
The ATO says that if taxpayers no longer meet the entry rules, they will be automatically exited from the PAYG installments system. It will send a letter to notify tax agents of a client’s automatic withdrawal.
If they want to continue to pay installments towards their end of year tax liability, they can voluntarily re-enter the PAYG installment system.