Section 4 Forms and Lodgment: Activity Statements

Australian Accounting and Bookkeeping
Section 4 Forms and Lodgment
Activity Statements
Lodgment and payment concession

The lodgment and payment concession is automatically applied when
the Australian Taxation Office receives the activity statement
electronically and it meets the eligibility criteria. If the person does not
lodge the activity statement electronically, the lodgment program
concessions will not apply.
Anyone who wants to confirm that the concessions were applied can check
the client's deferred due dates on the Tax Agent Portal after lodgment.
Learning Guide V1.0 © AAMC Training Group 62

Eligible activity statements

Form/activity Eligible for
Type statement registered agent
name concession
Business activity statement Form A Yes
Yes – exception is
quarterly PAYG
Instalment activity instalment activity
Form B
statement statement for head
companies of
consolidated groups
Business activity statement Form C Yes
Business activity statement Form D Yes
Business activity statement Form F Yes
No – exception is
Business activity statement Form G
December monthly
Instalment activity Yes – if quarterly role
Form I
statement No – if monthly role
Instalment activity
Form J Yes
statement
Annual instalment activity
Form N No
statement
Annual GST return Form P n/a
Quarterly PAYG instalment
Form R No
notice
Quarterly GST instalment
Form S No
notice
Quarterly GST and PAYG
Form T No
instalment notice
Business activity statement Form U Yes
Business activity statement Form V Yes
Business activity statement Form W Yes
Business activity statement Form X Yes
No – exception is
Business activity statement Form Y
December monthly
Business activity statement Form Z n/a

The form or activity statement name is visible in ELS, the practitioner

lodgment service (PLS) and the Tax Agent or BAS Agent Portals and
varies depending on the:
• client’s reporting cycle
• client’s elected reporting method
• details being reported.
Clients who operate on substituted accounting periods (SAP) are only

eligible if their quarters align with the standard quarters.
Channels for electronic lodgment

The preferred channels for lodgment of activity statements are:
• practitioner lodgment service (PLS)
• Tax Agent Portal
• BAS Agent Portal
• electronic lodgment service (ELS).
Types of Activity Statements

Annual GST returns
If a taxpayer is a GST instalment payer, they must lodge an annual GST
return. If a taxpayer elects the annual GST reporting method, that is, to
report GST annually and pay (or claim a refund of) GST annually, they
must lodge an annual GST return. The due date for lodgment (and
payment if required) of annual GST returns is either:
• the due date of the taxpayer’s tax return – if a taxpayer has a tax return
lodgment obligation
• 28 February 2018 – if a taxpayer does not have a tax return lodgment

obligation.
Quarterly activity statements

Quarterly activity statements are due on the 28th day of the month
following the reporting period, except for quarter two, which is due on 28
February 2018. Lodgment and payment concessions are only available for
electronic lodgment of eligible quarterly activity statements.
The concessional dates do not show on your client lists – the

concessions are automatically provided when the person lodges
electronically and the activity statements are received by the ATO. If the
person lodges a quarterly activity statement by paper, they will not
receive any lodgment and payment concessions.

Quarterly Lodgment and

lodgement Original due date payment
obligation concession date
Quarter 4, 2016–17 28 July 2017 25 August 2017
Quarter 1, 2017–18 28 October 2017 25 November 2017
Quarter 2, 2017–18 28 February 2018 n/a
Quarter 3, 2017–18 28 April 2018 26 May 2018
25 August 2018 To be
confirmed when the
Quarter 4, 2017–18 28 July 2018
Lodgment program
2018–19 is developed
Monthly activity statements

Monthly activity statements are due for lodgment and payment on the 21st of
the following month. The December business activity statement for business
clients with up to $10 million annual turnover, who report GST monthly and
lodge electronically is due for lodgment and payment by 21 February.
Clients who do not have a monthly GST obligation but are registered for
PAYG withholding monthly, and have at least one quarterly obligation
(for example, GST, PAYG instalment, or FBT instalments) will receive a:
• monthly activity statement for the first two months of the quarter (due
on the 21st of the following month)
• quarterly activity statement for the third month (due on the 28th of the
following month or 28 February for quarter two).
Quarterly PAYG instalment activity statement – head

companies of consolidated groups
Quarterly PAYG instalment activity statements are due on the 21st of
the month following the end of the reporting period. If you finalise PAYG
instalments for the 2016–17 year before lodging your client's 2017 tax
return, you will ensure they receive the correct instalment credit in their
tax assessments.
Instalment notices
Instalment notices (also called remittance advices) include:
• quarterly PAYG instalment notice (form R)
• quarterly GST instalment notice (form S)
• quarterly PAYG and GST instalment notice (form T)
• annual PAYG instalment notice (form N).

The person doesn’t need to lodge these forms with the ATO if they are
paying the amount advised. Forms R, S and T have the following
payment due dates:
• 28 July 2017
• 28 October 2017
• 28 February 2018
• 28 April 2018
• 28 July 2018.
Form N has a payment due date of 21 October 2017.
If the amount to be paid varies (or with form N, use the rate method to
calculate the instalment amount) a form must be completed and must
be lodged by the payment due date. The instalment notices can be
lodged electronically by ELS or PLS using the generic business activity
statement. These notices are not eligible for concessions.
Elections
When your clients receive an activity statement with an instalment
amount and an instalment rate option, they can elect either of these two
options. They should select the option and complete labels relating only
to the selected option. The activity statement must be received on or
before the due date for the election to take effect.
If your client received a form R or T in quarter 1 and would like to

change to the instalment rate option, call the ATO on 13 28 66 on or
before 28 October. They will arrange the change of option and send a
new instalment activity statement for lodgment.
Variations
Business and investment taxpayers in PAYG instalments could end up
paying more than their expected tax liability for the relevant income
year. If this is the case, they are entitled to vary their PAYG instalment
rate or amount to ensure that the correct amount of tax is paid.
A business or investment taxpayer may want to consider varying the

instalment rate or amount if there has been a substantial change in the
proportion of the business and investment income – for example, if they
expect to have much higher tax deductions for a similar level of
business and investment income.
A taxpayer is liable to pay the general interest charge (GIC) on the

shortfall when the varied instalment rate or amount is less than 85% of
the rate or amount calculated by the Commissioner. The ATO may grant
remission of the GIC in full or part when it is fair and reasonable to do so.

Generating, reviewing, and validating activity

statement reports
Revising activity statements

Use the correct DIN
Original and revised activity statements must have different document
identification numbers (DIN).
If the ATO has processed an activity statement, then receives lodgment

of another activity statement with the same DIN, it can lead to incorrect
refunds and account balances, as well as processing delays.
Note: if the person sends the client a copy of a lodged revised activity
statement, it has to be ensured that they do not lodge it again.
Revise online
Before lodging a revision, make sure that the client's original BAS was
lodged and processed.
One can complete a revised activity statement using the:
• Tax Agent Portal
• BAS Agent Portal
• electronic lodgment service (ELS)
• electronic commerce interface (ECI).
Using the portals

• Select the Processed activity statement from the History list.
• Select Request revision
• Enter the revised values.
Revisions should be completed online. When using the portal, if the

'Request revision' button does not display or if the user receives an error
message, the activity statement cannot be revised through the portal.
Using PLS or ELS

Use the DIN from the activity statement that needs to be amended.
Then enter a number between 1 and 9 in the Revision indicator field.
This refers to the revision number, with 1 being the first revision, 2 the
second revision and so on up to 9. This is the maximum number of
revisions that can be completed electronically.

Completion of the Revision indicator field indicates it is a revision – if not

completed, it will be treated as an original activity statement. Finally,
enter the new values of the labels to be revised and transmit.
Period of review
There is a four-year time limit to amend or revise the clients' activity
statement assessment. This is called the 'period of review'.
Correcting an activity statement

The current activity statement can be used to correct many GST and
fuel tax credit mistakes, to make claims for previous periods and to vary
a PAYG instalment.
If no corrections can be made on the current activity statement, it is

best to revise the original statement online or on paper, or write to the
Australian Taxation Office.
A four-year time limit applies to claiming credits and refunds. The

process for correcting mistakes and making claims for previous periods
depends on the specific tax or credit involved.
Mistakes can also be made when processing the activity statement – for
example, it may scan incorrectly the encoders may make a keying error.
If an error has been spotted, it would be wise to contact the ATO and
report the details of the mistake.
Correcting GST errors in the activity statement

If a mistake has been made (that fits the definition of a GST error) when
reporting GST on an activity statement, the error can be corrected on a
later activity statement if certain conditions are met.
The benefit of correcting a GST error on a later activity statement is that

the person will not be liable for any penalties or general interest charge
(GIC) for that error.
Generally, it is easier to correct a GST error on a later activity statement

than to revise an earlier activity statement. Revising an earlier activity
statement that contains an error can incur penalties or GIC.
Completing your activity statement to correct GST errors

To correct a GST error, include the correction amount at boxes 1A or 1B.
If the net result of the error(s) is paying too little GST, include the
amount at 1A, alternately if the net result is an overpaid GST include the
amount at 1B. The correction may also be reflected at boxes G1, G2,
G3, G10 or G11 as appropriate. Keep records and other relevant
information to explain the correction.

GST errors that cannot be corrected on a later activity

statement
A credit or debit error cannot be corrected on a later activity statement if:
• the GST error relates to a subject matter of a compliance activity or was

made in a reporting period that is subject to a compliance activity,
• The GST error was corrected in another reporting period
• The later activity statement had already been lodged and there is a need
to revise it to correct an error from an earlier reporting period.
If you are subject to compliance activity

A compliance activity is an examination of GST affairs undertaken by the
ATO and includes reviews, audits, verification checks, record-keeping
reviews/audits and similar activities.
Once the person receives advice (by phone or in writing) from the office
about their intention to conduct a compliance activity, one cannot
correct a GST error that is the subject matter of a compliance activity or
errors arising in a reporting period that is subject to the compliance
activity. It is best to voluntarily disclose them if these errors are found.
If the person tells the ATO about the GST error, it will be taken into
account when they consider the application of a penalty.
A compliance activity is completed when an assessment or notice of

amended assessment is received, or when the ATO tells that the
examination has been finalised.
If the GST error has been corrected in another reporting

period
A GST error cannot be corrected more than once. For example, if an
earlier activity statement has been revised in which the GST error was
made, or if the GST error has already been corrected in another reporting
period, then the error cannot be corrected on a later activity statement.
This includes the circumstance where a debit error is only partially

corrected because the relevant debit error value limit was exceeded. The
amount that exceeded the debit error value limit on a subsequent
activity statement cannot be corrected.
Revising a lodged activity statement

An activity statement that was already lodged to correct a GST error
from an earlier reporting period cannot be revised. Only the GST error of
an activity statement that hasn’t been lodged yet can be corrected.

For example, if an error was made on the October activity statement

and the February activity statement has already been lodged, the
February activity statement cannot be revised to include the correcting
information. The April activity statement must be lodged first to correct
the error (if it meets the conditions of correcting a GST error).
GST Classifications
Goods and services were divided into three groups as soon as the GST
system got introduced in 2000. Things did not get simple because some
goods and services were forced to be excluded from the 10 per cent tax
during the Howard government, instead of applying the GST to all goods
and services. Let’s study these three classifications.
GST-free
The following goods and services are free from GST:
• Childcare services
• Education courses and materials
• Medical and healthcare services, including medicine
• Basic foods
• Farmland and exports
Any company or business that provides goods and services labelled

GST-free are not charged with the 10 per cent GST. However, they are
able to get GST input tax credits which are a part of their costs.
Input Taxed
• Financial Services: These services, along with residential premises and
other input taxed goods and services providers do not apply 10 per cent
GST. In addition to that, they also cannot get their GST input tax as part
of their expenses in relation to input-taxed activities.
• Residential Premises: GST is not included when a used home is for sale,
or for the rent that needs to be paid. Recently, residential premises will be
subject to GST’s 10 per cent for used homes of more than five years.
GST taxable
Goods and services that are not classified as either GST-free or input
taxed are GST taxable. Providers of goods and services that are GST
taxable needs to put a charge of 10 per cent GST on everything they sell.
They may also get GST input tax credits from business-related expenses.

Business Activity Statement (BAS)

The business activity statement is a form submitted to the ATO by all
business to report their taxation obligations. If the person owns a
business registered for GST, they need to lodge a business activity
statement (BAS). Their BAS will help them report and pay their:
• goods and services tax (GST)
• pay as you go (PAYG) instalments
• PAYG withholding tax
• other taxes (for example fringe benefits tax, wine equalisation tax, and
luxury car tax)
When they register for an Australian business number (ABN) and GST,
the ATO will automatically send them a BAS when it is time to lodge. A
person’s BAS is broken up into sections, called 'labels', and they need to
fill out different labels depending on how they choose to report and pay.
Sample Activity Statement
Below is an example of a paper quarterly activity statement. The activity

statement will contain all of your reporting requirements and may not
look exactly like this example.

To make sure the ATO scans the activity statement correctly:

• print clearly using a black pen
• leave boxes blank if they don't apply, unless the ATO asks the person to
write '0' (do not use NIL)
• show whole dollars only (round cents down to the nearest whole dollar)
• don't report negative figures or use symbols such as +, -, /, $
• don't write any additional information on the activity statement – contact

the office if details have changed.
Lodging and paying BAS

BAS Agents ensure that clients receive the full lodgment program
concessions, so they lodge activity statements using:
• the BAS Agent Portal
• the electronic commerce interface (ECI).

To ensure that clients have received the lodgment program concessions,

follow these tips:
• Make sure that the registered agent number (RAN) is provided against
the activity statement role.
• When completing an activity statement on behalf of the client and lodge

using ELS, the RAN will be placed against the client's activity statement
role if they do not already have a RAN listed.
• Clients eligible for concessions will automatically receive the additional

time available under the lodgment concession for lodgment of their
eligible quarterly activity statements.
Forms R, S and T are linked to an election to pay quarterly instalments, and

lodgment is only required if the client is varying the instalment amount.
For BAS agents, the ECI can be used to lodge multiple activity
statements. The concessional dates do not show on the client lists – the
concessions are provided when a person lodges. The concessional dates
are only available when the activity statement is lodged through
electronic lodgment channels.
BAS can be lodged electronically, by mail, or for nil lodgments, on the

phone. It can be paid electronically, by mail, or in person at Australia
Post. Lodging and paying BAS on time is a good way to avoid penalties.
It is advisable to inform the ATO should the BAS cannot be lodged or
paid by the due date.
Online lodging
BAS can be lodged:
• Using the ATO’s online services for individuals and sole traders. For this
method, the person will need a myGov account that is also linked to the ATO.
• Through the ATO Business Portal.
• Directly from the lodger’s Standard Business Reporting (SBR) enable

software.
The method used to lodge the BAS will determine how it will be
delivered in future. For example, if the BAS was lodged electronically
through online services for individuals, the next statement will be
delivered through online services for individuals. ATO will send a
notification to advise when the activity statement is available.
Lodging as individuals and sole traders
Individuals and sole traders can manage their tax and super using the
ATO's online services. They just need a myGov account linked to the
ATO. A secure myGov account lets them link to a range of Australian
Government services with one username and password.

With it, they can:
• lodge tax return using myTax
• check the progress of their tax return
• lodge claims for a refund of franking credits
• view, print or amend tax returns from 2015 onwards
• view notices of assessment
• find and manage their super
• lodge, view and revise activity statements
• manage PAYG instalments
• print lodged activity statements
• make a payment or create a payment plan
• view tax and activity statement account balance and transactions
• view their study and training support loan account balance and transactions
• view and update contact details
• view and update name and date of birth
• receive most of their personal ATO letters directly to the myGov Inbox,
rather than through the post.
The ATO will notify them through their myGov Inbox when the activity
statement or instalment notice is ready. They can also use any device –
computer, phone or tablet, by signing into their myGov account and
accessing ATO services.
Lodging the activity statement
The Activity statement option in the Business Portal menu is the starting
point for lodging or revising most types of activity statements online.
When lodging online, a receipt will be received to confirm that the
activity statement has been lodged. Previously lodged statements can
also be viewed and printed.
One can access all future activity statements through the portal when
lodging online. ATO will no longer post activity statements, and will
notify by email when activity statements are available to be accessed
and is completed online. Activity statement information is displayed as
either Not lodged or History.
Starting 1 July 2017, the ATO has introduced changes which will
transform the look of a number of screens. This will make it easier to
lodge activity statements via the Business Portal.

Streamlined lodgment process
From 1 July 2017, people intending to declare that the information

provided in their activity statement is true and correct will no longer
need to re-enter your AUSkey or myGov credentials. One will just need
to tick a declaration checkbox which will save time and effort.
Simpler BAS
From that same day, the Business Portal will also be tailored to reflect
the Simpler BAS changes for small businesses. Only fields that are
required to complete will be visible.
Improved save function
Still effective from 1 July 2017, users will be able to save a partially
prepared activity statement then resume it on any computer using the
improved save function.
Not lodged
Activity statements that have not yet been lodged are displayed as Not
lodged. Once it's past the due date, activity statements will display as
overdue. Improvements to the Business Portal from 1 July 2017 will
mean that a nil business activity statement (BAS) can be lodged at the
click of one button on the 'Prepare activity statement' screen.
History
All activity statements which have been lodged, processed, cancelled or

discontinued in the last two years are displayed under History. To see
activity statements for a different period, filter the date period on the
screen. To view an activity statement, click on it under Description. To
revise an activity statement, click the Revise button. Only activity
statements that are eligible for revision will display the Revise button.
Lodge by phone (for 'nil' business activity statements only)

Lodge a nil business activity statement if there is nothing to report. Nil BAS
can be lodged over the phone by calling 13 72 26. It's an automated
service that can be accessed anytime (24 hours a day, seven days a week).
Lodge by mail
Post the original, completed BAS, using the pre-addressed envelope provided
in the BAS package. If the envelope is misplaced, send the BAS to:
Australian Taxation Office

Locked Bag 1936
ALBURY NSW 2460
If the person has lost or haven't received their paper BAS, a copy can be
obtained by phoning the ATO on 13 28 66.

Due dates for lodging and paying your BAS

Lodging and paying BAS on time helps a person’s business run
smoothly. The due date for lodging and paying is displayed on the BAS.
If the due date is on a weekend or public holiday, the BAS can be lodged
and paid on the next business day.
Quarterly reporting
Due date for each quarter
Quarter Due Date

1 – July, August and September 28 October
2 – October, November and December 28 February
3 – January, February and March 28 April
4 – April, May and June 28 July
If the quarterly activity statements are lodged online, the person may be
eligible for a two week deferral. This offer is ongoing and is subject to
the following terms and conditions.
This offer applies to most activity statements for the standard quarters
ending 30 September, 31 March and 30 June which have an original due
date of the 28th of the month, following the end of the quarter – that is,
quarters 1, 3 and 4 (quarter 2 activity statement lodgers already have
eight weeks to lodge).
This offer does not apply to:
• monthly activity statements
• monthly GST payers with quarterly PAYG instalments (or other quarterly
roles) –this includes businesses that are required to or elect to report on
a monthly basis
• quarterly PAYG instalments for head companies of consolidated groups
• entities with substituted accounting periods that are classified as a large

business client (see note in the following page)
• any other clients who do not have an original due date of the 28th
• quarterly instalment notices, for example forms
− R (Quarterly PAYG instalment Notice)

− S (Quarterly GST instalment Notice)
− T (Quarterly GST & PAYG instalment Notice).

A large business client is defined as a client with:
• annual total income in excess of $10 million
• GST turnover of $20 million or more
• annual withholding payments in excess of $1 million, or an entity in a

group of companies where at least one member of that group has an
annual total income in excess of $10 million.
Monthly reporting
The due date for the monthly BAS is usually the 21st day of the month
following the end of the taxable period. Schools and associated bodies
are automatically granted a deferral of their December activity
statement. These will be issued with a deferred due date of 21 February.
Paying the BAS

The BAS can be paid using the following methods:
• BPAY
• Direct credit
• Direct debit
• Mail
• In person at Australia Post
Voluntary early payments can be made to offset future BAS liability

using any of the available payment methods. To do this, the payment
reference number (PRN) will be required.
Dealing with mistakes in the BAS
When completing a BAS one might discover a mistake, or notice that

something was left out of a previous BAS. Some mistakes made
previously in the current BAS can be corrected or there may be a need
to lodge a revised BAS to correct the mistake. You can do this:
• using the ATO’s online services for individuals (a myGov account linked to
the ATO will be necessary)
• on the Business Portal
• from the business software if it is enabled for Standard Business

Reporting (SBR)
• by phoning the ATO on 13 28 66 to obtain a revision form.
Correcting a mistake on the current BAS is different from making an

adjustment. For example, one makes an adjustment because the price
of a sale or purchase changes, but they make a correction because they
have transposed figures incorrectly or accidentally left amounts off their
earlier activity statement.

If the person can't lodge and pay on time
There may be a time when a person will be unable to lodge or pay by

the due date. ATO can help them by contacting the office as possible
before the due date so they can work to find a solution.
It is important to remember that it is the responsibility of the person to

meet their obligations, even if they use a tax agent. They can have an
authorised representative or their tax agent contact the ATO to discuss
the situation. A penalty may apply if there is a failure to lodge on time,
so even if the person can't pay, it is important to lodge on time to avoid
this extra cost.
Usually, if the person can't pay by the due date, they can enter into a
payment plan. They can use the ATO online payment plan estimator to
work out a payment plan which is affordable for them. The person can
also use it to find out how quickly they can pay off a tax debt and how
much interest they’ll be charged. A general interest charge (GIC) will
apply to any amount not paid by the due date.
Once they have worked out a suitable payment scenario based on their
circumstances, they can use it as a guide to set up a payment plan.
Pay As You Go Instalments (PAYGI)

Pay as you go (PAYG) instalments is a system for making regular
payments towards a person’s expected annual income tax liability. It
only applies to them if they earn business and/or investment income
over a certain amount. If they pay PAYG instalments, they still need to
lodge an annual tax return.
The ATO will notify the person if they need to start paying by
instalments under the PAYG instalment system. Before their PAYG
instalments are due, ATO will also send them an activity statement or
instalment notice, depending on the circumstances.
As an individual (including if the person in business as a sole trader),

they can view, lodge, pay, vary and manage all their PAYG instalment
obligations online if they have a myGov account linked to the ATO.
Who needs to pay PAYG instalments

The ATO works out whether a person needs to pay PAYG instalments
based on the information reported in their latest income tax return. If a
person is required to pay instalments, the office will notify them.

Generally, for individuals and trusts there is a need to pay instalments if

a person reported $4,000 or more ($1 or more if they’re not residents)
of gross business and/or investment income in their latest tax return,
unless one of the following applies:
• the tax payable on their latest notice of assessment is less than $1,000
• their notional tax is less than $500, or
• they are entitled to the seniors and pensioners tax offset.
For companies or super funds, they generally need to pay instalments if:
• the instalment rate calculated is more than zero percent and the person’s
notional tax is $500 or more
• business and/or investment income (excluding capital gains) in their

most recent income tax assessment is $2 million or more, or
• they're the head of a consolidated group.
Notional tax is an estimate of the tax payable for the financial year,
excluding capital gains tax. Special rules apply to PAYG instalments for
partnerships, trusts, companies, primary producers and consolidated groups.
How to start paying PAYG Instalments

There are two ways to start paying instalments. One should automatically
enter the PAYG instalments system once they lodge their first tax return
that has business or investment income above the threshold.
Automatic entry
If a return with business or investment income is lodged above the
threshold and there is a need to start paying PAYG instalments, the ATO
will inform the person who processed the lodging and notify them about
the options available for calculating instalments and how often they
need to pay.
Voluntary entry
If the person thinks they can make a profit on their business or
investment income, they can choose voluntary entry into PAYG
instalments. This reduces the chances of having to pay a large amount
at the end of the year. This is recommended for new businesses.
To enter the PAYG instalments system voluntarily:
• estimate your annual income and the tax you wish to pay each quarter
• request to enter the PAYG instalments system
• make payments when you receive your activity statement or instalment

notice.

If the circumstances change, instalments can be varied (increased or

decreased) for a later quarter, so that any amount paid correctly reflects
the circumstances.
Estimating the amount of tax to pay

The amount of tax needed to be paid and the PAYG instalment amounts
can be worked out based on one’s estimated income. ATO has online
tools and calculators to estimate:
• how much to put aside each week
• the projected annual tax liability.
How much to put aside each week

Soon after starting a business, one must be able to work out their net
weekly earnings, using the following formula:
Taxable weekly earnings minus calculated tax = net weekly earnings
ATO’s Tax withheld calculator (or tax tables) estimates the tax payable
each week. For example, if you are turning over $1,442 per week (after
running costs) and you anticipate that you'll continue to earn similar
amounts each week, the tax payable each week is worked out as follows:
$1,442 (weekly earnings) minus $336 (tax) = $1,106 (net weekly earnings)
Based on this calculation, you'll need to put aside $336 each week to
cover your estimated tax liability for the year ($336 × 52 = $17,472).
To calculate the amount to pay per instalment quarter, divide the annual
amount by four ($17,472 ÷ 4 = $4,368).
Your projected annual tax liability – individuals

As an alternative, the tax liability can be worked out on the projected
annual income using the following formula:
Assessable income minus allowable deductions = taxable income
For example, you operate your business as a sole trader and you
estimate for the 2015–16 financial year that your turnover will be
$80,000 and your allowable deductions will total $5,000. Your taxable
income is $75,000, which is calculated as follows:
$80,000 (assessable income) minus $5,000 (allowable deductions) =

$75,000 (taxable income)
You can use the ATO’s PAYG instalments individuals calculator to work
out the tax payable on $75,000, per annum or per quarter. Based on
2015–16 tax rates, the annual tax payable (including the Medicare levy)
is $17,422 and the quarterly amount is $4,355.

Many taxpayers like to save regularly towards their tax obligation. To

determine a weekly amount, divide the estimated annual tax payable by
52 ($17,422 ÷ 52 = $335).
Your projected annual tax liability – companies

For business operations as a company, the tax liability can be worked
out on the projected annual income using the same formula.
Assessable income minus allowable deductions = taxable income
For example, you estimate for the 2016–17 financial year the company's
total income will be $150,000. This may include income from sales,
dividends and interest. You also estimate the running costs and
expenses to be $45,000 and this includes the cost of sales, motor
vehicles expenses and rent.
$150,000 (assessable income) minus $45,000 (allowable deductions) =

$105,000 (taxable income)
The ATO’s PAYG instalments calculator for companies can be used to

estimate the tax payable on $105,000 per annum or per quarter. Based
on the 2016–17 company tax rate for a small business entity, the
annual tax payable is $28,875 and the quarterly amount is $7,218.
The tax rate for companies that qualify as a small business entity is
27.5%. The tax rate that applies for all other corporate entities is 30%.
This liability will need to be considered when managing the company's
cash flow.
PAYG instalments correspondence

The ATO sends a letter with some general information and personal
options for those who have to pay PAYG instalments. They can also send
either an activity statement or instalment notice before the instalments
are due.
For individual taxpayers (including sole traders), PAYG instalments

correspondence will be delivered electronically if the person is registered
for myGov and the account is linked to the ATO. The office sends them an
email to let them know that the item is available in their myGov inbox.
The ATO uses the person’s ‘income tax’ address for PAYG instalments
when they send paper mail. The person can still have the choice to have a
different postal address for their activity statements/instalment notices.

Understanding your PAYG correspondence

PAYG correspondence may include some unfamiliar terms which are
explained below.
PAYG instalment rate
PAYG instalment rate is a percentage figure that is used to help make

sure the total instalments paid are as close as possible to the expected
tax payable on the business and/or investment income. ATO calculates
the person’s PAYG instalment rate from their latest tax return.
Notional tax
This is an estimate of the tax payable on the business and/or investment

income, excluding net capital gains, in the latest year for which the
income tax has been assessed. Notional tax is used to work out the
PAYG instalment rate.
Notional tax adjusted for GDP
The PAYG instalment amount should reflect the expected tax liability for
the current income year as accurately as possible. To account for
expected changes in the economy – as measured by the change in gross
domestic product (GDP) –a GDP adjustment to the person’s instalment
amount must be made.
Instalment amount
This is the amount required to pay each period if the person chooses to
pay the instalment amount calculated and they are eligible for this
option. This amount is based on their most recent tax return (and
includes an adjustment for GDP).
How to vary the amount to be paid

Whichever option chosen to calculate PAYG instalments, if the
circumstances change, then the amount paid for the current income
year can vary. The instalment amount can be varied if using the amount
or rate notified by the ATO will result in paying too much or too little tax
for the year. To do this, estimate the tax reliably on your business
and/or investment income.
If an instalment is varied, it's important to not underestimate the

amount or rate. If instalments are more than 15% under the actual tax
payable at the end of the year, it may be subject to the general interest
charge on the difference. The ATO may reduce or waive the interest by
writing to them about the circumstances that led to underestimate the
instalment rate or amount. Their PAYG instalment calculator will help
with working out instalments if the person decides to vary the amount.

There is no need for a person to vary instalments because if the amount

or rate the ATO calculates result in the person paying too much tax,
they will receive a refund of any overpayment when the office assesses
their tax return. If the amount or rate ATO calculates is insufficient to
meet the person’s tax liability for the year, they simply pay the balance
owing when their tax return is assessed.
Varying the instalment amount (option 1)

If the person is a quarterly payer who pays an instalment amount the ATO
calculates, they will see an amount printed in box T7 in option 1 on their
activity statement or instalment notice. To vary the instalment amount:
• estimate the tax on the business and/or investment income for the year
• work out the proportion of their estimated tax to pay in this instalment
• complete their activity statement or instalment notice.
If the person has varied their instalment amount in a previous quarter of

the income year, the amount in box T7 will be their varied instalment
amount. If they have registered for myGov and linked their account to
the ATO, they will be able to vary their instalment amount online.
Varying the instalment rate (option 2)

If they pay an amount that they work out by themselves (by multiplying
the instalment rate by their instalment income), they will find their
instalment rate printed in box T2 in option 2 on the activity statement or
instalment notice. To vary the instalment rate:
• estimate the business and/or investment income for the year
• estimate the tax on the business and/or investment income for the year
• work out the varied instalment rate
• multiply the instalment rate by the business and/or investment income

for the quarter to work out the amount to pay.
• work out any credit from previous instalments in the current income year
• complete the activity statement.
If the instalment rate is varied in a previous quarter of the income year,

the rate in box T2 will be the latest varied instalment rate. If the person
has registered for myGov and linked the account to the ATO they will be
able to vary their instalment amount online.
Frequency of lodging and paying

PAYG instalments are generally paid quarterly. There are options to pay
two instalments a year or an annual instalment. Some businesses must
make monthly PAYG instalments.

The ATO will inform the person how often to pay and the options
available when the office writes to say that they have to pay
instalments. Before lodging a tax return:
• pay all instalment amounts due, and
• lodge activity statements or instalment notices (if required).
Quarterly instalments
The ATO will send either an activity statement or an instalment notice at
the end of each quarter if the person is required or has chosen to pay
quarterly. They are required to pay the amount due, by the date shown
on the statement or notice. The amount will be 25% of the PAYG
instalment liability for the income year.
A person needs to complete and return an activity statement if they

receive one from the ATO. Should the person only receive an instalment
notice, they only need to return the notice if they are varying the amount.
Due dates for most taxpayers are set out below. Different dates apply to
businesses that pay GST monthly, and to taxpayers with a substituted
accounting period. If you pay GST monthly the due date will be printed
on your activity statement (and it's usually the 21st of the month).
Due dates for quarterly instalments – for most taxpayers
The following table shows the due dates for quarterly instalments that
apply to most taxpayers.
Quarter Period Due Date

1 July-September 28 October
2 October-December 28 February
3 January-March 28 April
4 April-June 28 July
Annual instalments
Annual pay as you go (PAYG) instalments are a single lump sum
payment made towards the expected tax liability on business and/or
investment income for the year. If the income year ends on 30 June, the
dates below relate to the person. If the person has been granted a
substituted accounting period, different due dates apply.

Eligibility for the annual instalments option
At the end of the first instalment quarter of the income year, the
following criteria must be met in order to become eligible to pay PAYG
instalments annually:
• their most recent notional tax assessment was less than $8,000
• they are registered for GST, and they report and pay GST annually
• they’re a partner in a partnership that is registered for GST and reports

and pays GST annually
• in the case of a company, they’re not part of an instalment group, a head

company of a consolidated group or a participant in a GST joint venture.
Note: An instalment group is a group of companies controlled by a head

company, unlike consolidated groups, which can include
trusts/partnerships as well as companies.
Choosing annual instalments
Self-preparers
Again, the ATO informs the person whether they are eligible to pay
PAYG instalments annually. If a person desires to pay their instalments
annually, they must first inform the office by the due date of their first
quarterly PAYG instalment of the year, as shown in their letter. Any
changes requested after this date will take effect the next year and they
will have to pay quarterly instalments until then.
Requests to choose annual instalments can be made through the

person’s myGov account linked to the ATO (for individuals including sole
traders). Alternatively the ATO can be contacted at 13 72 26 and the
caller can follow the prompts.
The office will notify the person of the outcome of their request. If the
request is successful, ATO will send an annual instalment notice, telling
how much to pay and when it's due.
Tax agents
Registered tax agents with clients who are eligible and wish to pay
annual PAYG instalments can use the ATO’s online form, Choosing to
pay an annual PAYG instalment. This allows transmission of details (for
up to 20 clients at a time) online, upon meeting the minimum system
requirements. Tax Agents with more than 20 clients will need to
transmit more than one form.

When to pay
Self-preparers
For those with a financial year ending 30 June who prepare their tax return
themselves, paying the annual instalment is not necessary. They just need
to complete their income tax return for the year prior to 31 October.
Tax agents
For those with a financial year ending 30 June, annual instalments are
due on 21 October. Those who have been granted a substituted
accounting period, will have different due dates to lodge and pay for
their instalments.
It is necessary to pay the annual instalment before lodging the tax

return. If the tax return has been lodged before paying, the person must
pay the amount the ATO calculates at T5 on the instalment notice by 21
October. People are discouraged from varying or calculating their
instalment amount, as this may result in the wrong amount being
credited towards their tax return.
If the person pays the amount calculated by the office at T5 on their

instalment notice, there is no need to lodge their notice. They simply
have to pay the amount by 21 October.
General interest charge (GIC) will apply to any amount not paid by the
due date. The person will receive credit for the PAYG instalment amount
which will appear on their notice of assessment. They will continue to
pay instalments annually in future years unless circumstances change or
they inform the office that they no longer want to do so.
Two instalments
Some primary producers and special professionals (such as sports
professionals and authors) can pay two instalments per year calculated
by the ATO. They will also be in charge of informing the person through
PAYG instalments letter if they are eligible to pay by two instalments.
The ATO sends an activity statement at the end of the first quarter of the
income year. If it has the words 'Nil this quarter' at label T7 and person
prefers to pay two instalments, they don’t need to lodge the statement
and they can just file it for their records. Once the due date for the first
quarterly statement has passed, the office will automatically update their
records to indicate that the person is a two-instalment payer.
The person is required to pay 75% of the annual PAYG liability by 28 April,
and the remainder by 28 July, if the person is a two-instalment payer.

Due dates for two-instalment payers – for most taxpayers
Instalment Proportion payable Due date

Instalment 1 75% 28 April
Instalment 2 25% 28 July
You will continue to pay two instalments in future years unless your
circumstances change or you tell us you no longer wish to do so.
If you want to change from two instalments to four instalments, you

must complete all labels shown on your first activity statement under
Option 2. In this case, you must lodge and pay your first activity
statement by the due date. If you prefer to pay four instalments per
year, you will need to work out your instalments yourself using the
‘instalment rate’ option.
If the person also has goods and services tax (GST) obligation, they
may be eligible to pay GST in two instalments.
Monthly instalments
If the person’s base assessment instalment income exceeds the relevant
year's threshold you will be required to start paying instalments monthly
and the ATO will notify you. You cannot elect to pay monthly instalments.
The change will be introduced progressively over a four-year period.

Affected taxpayers will be required to start paying monthly PAYG
instalments from dates specified in the following table (or when their
current quarter finishes whichever is the latter), if they meet or exceed
the applicable threshold.
Starting dates for monthly instalments, by entity type
Base
Assessment
Entity Type Starting Date
Instalment
Income
BaCorporate tax entities $1 billion 1 January 2014
(companies, corporate limited $100 million 1 January 2015
partnerships, corporate unit
$20 million 1 January 2016
trusts or public trading trusts)
All other entities (including $1 billion 1 January 2016

superannuation funds, trusts $20 million 1 January 2017
and individuals)

Monthly instalments must be made electronically and are due on or

before the 21st day of the following month. If you are a deferred BAS
payer on the 21st day of the next instalment month, then the payment
is due on the 28th day of the following month.
PAYG instalment payments for corporate entities have been modified to

align with GST payments for most large companies.
Activity statement or instalment notice

The ATO will send an activity statement or an instalment notice,
depending on the taxes a person pays and the options they have
chosen. This will depend on the taxes paid and the options chosen.
If you're an individual or sole trader with a myGov account linked to the

ATO, you will receive your activity statements or instalment notices via
your myGov inbox. You will also be able to view your account, vary,
lodge and pay online.
Option 1 – instalment amount

An instalment notice will be sent to people who have chosen to pay
amounts that the ATO has calculated for them (option 1) and their only
obligation is PAYG instalments. If the person doesn't want to vary the
pre-printed instalment amount, they only need to pay the amount
shown by the due date – they do not need to lodge the notice.
Option 2 – instalment rate

An activity statement will be sent to people who have chosen to
calculate their PAYG instalments themselves, using the 'instalment rate'
(option 2). They must lodge and pay this by the due date shown on their
form, even if they have nothing to report.
Partnerships and trusts

An activity statement for PAYG instalments is also sent by the ATO for
people who are partners in a partnership. There are special rules to
work out the amount to include in their individual instalment income for
their activity statement.
If the person is a beneficiary of a trust, there are special rules to work

out the amount to include in their individual instalment income for their
activity statement.
Getting PAYG instalments right

It's important for people to get their PAYG instalments right. Calculating
and paying the right amount will help them keep a healthy cash flow
and avoid interest and penalties.

The ATO has identified some common errors made when reporting PAYG
instalments on activity statements. Let’s take a look at their findings and
the methods they suggest people to follow for proper procedures.
Reporting all your instalment income

If a person pays their instalments using 'Option 2 instalment rate', they
need to work out their instalment income and enter this on their activity
statement (at T1). If they don’t report all of your instalment income,
you may be liable for a penalty for making a false or misleading
statement. Mistakes in reporting the instalment income can be corrected
by revising the activity statement before lodging the tax return.
Include all your instalment income
ATO suggests the person to ensure that all instalment income should be
included on the activity statement. Instalment income includes:
• gross rent
• dividends paid or reinvested on the person’s behalf (do not include

imputation credits)
• royalties
• foreign pensions that are assessable in Australia
• the person’s proportion of any partnership or trust income
• foreign income
• interest received or credited to an account
• gross sales (excluding GST component)
• gross fees for services (excluding GST component)
• income earned from the sale of goods or services sold or supplied
• gross amount of income where tax has been withheld because the person
did not provide their tax file number (TFN) or Australian Business
Number (ABN)
• withdrawals from farm management deposits – if they make a farm

management deposit, the instalment income for that period is reduced
• fuel tax credits.
ATO advises not to include any of the following as instalment income:
• GST, wine equalisation tax (WET) or luxury car tax (LCT) you collected
• GST credits
• any income – such as salary, wages or income subject to a PAYG

voluntary agreement – where amounts have been withheld or should
have been withheld (other than income that an amount has been

withheld from because you did not provide your tax file number or
Australian business number)
• loans received
• owner's capital
• grants under the energy grants credits scheme, including the fuel sales
grant, the product stewardship (oil) benefit and the cleaner fuels grant
scheme
• capital gains
• amounts transferred between accounts
• imputation (franking) credits.
Reporting the gross instalment income
The instalment rate is calculated using gross income. The ATO would like
to ensure the people to include their gross instalment income (not the
net income, taxable income or income reduced by any deductions) on
their activity statement at T1 'PAYG instalment income'.
Report instalment income even when there is a nil instalment rate
A report on gross instalment income on the activity statement must still

be made, even if the instalment rate (at T2) is nil.
Monthly GST payers who report PAYG instalments quarterly
If a person pays their PAYG instalments quarterly and their GST

monthly, they have to make sure that they calculate their gross
instalment income for the full quarter and report this at T1 'PAYG
instalment income' on their activity statement.
Varying instalments
A person needs to vary their instalment rate or the amount on their
activity statement if their financial circumstances change. The most
recently issued activity statement can be varied. Previous activity
statements can not be varied. If their variation is too low, they may be
liable for a general interest charge (GIC).
Vary the instalment rate, not the instalment income
If the person pays their instalments by 'Option 2 – instalment rate', they

need to vary their instalment rate, not their instalment income.
Vary your instalment amount correctly
If they pay by 'Option 1 – instalment amount', they have to remember

that their quarterly instalment is an equal portion of their expected
annual tax liability, so they only have to vary their amount if their total
business or investment income for the year changes.

If they need to change their instalment amount regularly because their

business or investment income fluctuates throughout the year, they may
wish to choose to pay by 'Option 2 – instalment rate' on their first
activity statement in the next financial year.
Choosing payment and reporting options

If the person is eligible to choose a different payment or reporting
option, they must make a choice by the due date on their first quarterly
activity statement.
Once they have chosen an option, it can’t be changed until the first
quarter of the next income year. If an option had already been chosen,
there will be a pre-printed X in the box next to that option on the
activity statement or instalment notice.
If PAYG instalments were paid last year, the same option will be default
that was used last year. If this is the first year that PAYG instalments
will be paid, the default will be option 1 (paying an instalment amount)
if the person is eligible. It is not possible to elect to pay monthly
instalments. The ATO will call if they require the person to pay monthly.
It is important to manage cash flow, putting money aside from business

and investment income to cover PAYG instalments when they are due.
There is no need to pay interest if the instalment is paid on time.
If the person is eligible to choose a different payment or reporting

option and they have a myGov account linked to the ATO, they can do
this online – for example, they may be eligible to change from quarterly
to annual instalments or annual to quarterly instalments.
Exiting PAYG instalments

The ATO will automatically remove a person from the PAYG instalment
system if they no longer have to pay instalments. They will also remove
a person from the PAYG instalment system if any of the following occur:
• the person becomes entitled to and claim the senior and pensioners tax
offset in their latest tax return
• their latest tax return, for the most recent year of income, indicates
business and/or investment income of less than $4,000 for residents or
$1 for non-residents
• they had a tax debt of less than $1,000 (after adjustments for PAYG
instalments and any voluntary payments) in their most recent assessment
• the person is an individual payer who has a notional tax amount of less
than $500
• their latest tax return for the recent income year indicates Division 6AA
income less than the low marginal threshold

• the person lodges a final return
• their latest calculated instalment rate equals zero
• their accountant lodges a 'further return not necessary' or they lodge a

non-lodgment advice for the current year which is a year later than the
base assessment year
• the ATO has been advised that the person is deceased.
Alternatively, the person can contact the ATO to remove them from the
system if there were any circumstances that have changed. Eligible
individuals (including sole traders) with a myGov account linked to the
ATO can exit the PAYG instalments system online.
When you can't exit PAYG instalments

There are several circumstances where a person will not qualify for
removal from the PAYG instalments system, including if they have:
• become bankrupt and are in a debt agreement (Part IX of the Bankruptcy

Act 1966) or personal insolvency agreement (Part X of the act)
• a debt of less than $500 and it would have been more than $500 after
adding back PAYG instalments for the year
• received a refund which would have been a debt of more than $500 after
adding back PAYG instalments for that year.
Instalment Activity Statement (IAS)

The following information was gathered from
http://www.quinns.com.au/instalment-activity-statement-ias/ to explain
about instalment activity statements.
An Instalment Activity Statement, or IAS, is a form used by taxpayers

who are not registered for the GST. The IAS is also the form required to
be lodged by entities that prepare a quarterly BAS but are required to
remit their PAYG withholding tax on a monthly basis because they are a
medium withholder. The IAS is a pre-printed document issued by the
ATO monthly which summarises the amounts of PAYG instalments, PAYG
withholding and ABN withholding.
If somebody owns a business, or is an individual that deals with PAYG

Instalments, PAYG withholding, and/or FBT Instalments, and they aren’t
registered for the GST they will need to lodge IAS’s. It is also possible, if
they are a trustee for example, that they will have to fill out a
combination of both business activity statements (BAS) and IAS forms.

The ATO will send out all of a person's IAS documents ahead of time –
allowing them plenty of time to complete it and have it lodged before
the due date. Also note that some parts of the form will have been pre-
filled with some personal information; this is done to save time.
The ATO is authorised by the Taxation Administration Act 1953 and the
Fringe Benefits Tax Assessment Act 1986 to collect the information
requested in this form. The office needs this information to help
administer taxation laws including fringe benefits tax law. They may
require completing a new form for ones that are incomplete, incorrect,
or needs checking as it may cause delays in processing.
Where authorised by law, the ATO may give this information to other
government departments and agencies, including:
• Department of Education
• Department of Employment
• Department of Social Services
• Department of Human Services
• State and Federal Police
• Australian Customs and Border Protection Service
• Director of Public Prosecutions
• Australian Bureau of Statistics.
The Australian Taxation Office also provides taxpayer information to

treaty partners overseas under international tax agreements.
Their privacy policy contains important information about the people’s

privacy, including information about how they can access and seek
correction of information held about them, how to make a complaint if
they think the office has breached the Australian Privacy Principles and
how ATO will deal with any privacy complaints.
Electronic Lodgement Service (ELS)

The practitioner lodgement service (PLS) is replacing the electronic lodgement
service (ELS). To ensure tax professionals have access to a reliable electronic
lodgement service, the ELS will remain available as a safety net.
Together with software developers, the ATO is committed to ensuring the new
SBR-enabled PLS is the primary lodgement channel for tax practitioners.
ELS is an electronic online system that enables registered tax agents to lodge
income tax returns and other forms, as well as create reports to assist with
managing workloads.

Benefits of registering and using the ELS include:
• reduction in paper use
• accuracy – through edit checks within your software
• choice of software providers
• faster turnaround time on electronically-lodged forms
• privacy
• 24-hour access
• acknowledgment of lodgement
The ELS supports a variety of different form types and schedules. The
type of information a person can transmit is only limited by the form
types in their software package.
Practitioner Lodgement Service (PLS)

The practitioner lodgement service (PLS) is the main electronic
lodgement channel for tax practitioners and is gradually replacing the
electronic lodgement service (ELS).
Not only will the PLS lay the foundation for future enhanced services in
the person’s software, it will also improve how they currently prepare
and lodge returns, activity statements and schedules with the office.

People can now lodge 2017 fringe benefits tax (FBT) returns only
through the PLS. Those who access it will lodge other tax return forms
through the PLS only from:
• 1 October 2017 for partnership tax returns
• 11 November 2017 for
– self-managed superannuation fund annual returns

– trust tax returns
– fund income tax returns
• 1 February 2018 for company tax returns
• 1 April 2018 for individual tax returns
All other forms, services and reports will be progressively removed from
the ELS based on discussions with software providers. These include
activity statements, client lists and client updates.
The transition to the PLS is about making the person’s software

Standard Business Reporting (SBR) enabled. SBR is built into business
and accounting software, and incorporates standard terms used in
government legislation and reporting.
ATO has been working in partnership with software providers to ensure

access to the ELS is available to be incorporated into the software as a
safety net, as the person transitions to the PLS. Software providers will
determine whether, or how, they plan to provide access to the safety
net in their software.
If the person hasn't already started using the PLS, their software
provider will let them know when to expect this software and what they
need to do to make the transition.
Electronic Commerce Interface (ECI)

The Australian Taxation Office's Electronic Commerce Interface (ECI)
Client software is an application that allows businesses with an Australian
Business Number (ABN) to communicate with the ATO electronically.
Some examples of the functions that can be performed are:
• collecting documents/files from the ATO electronically
• sending documents/files to the ATO electronically
• checking documents/files for errors before sending
• sending secure messages to the ATO via the Internet (Superannuation only)
To use the ECI application, an AUSkey is needed. AUSkey is a single key

that identifies a person, or their nominated representatives of a business
when engaging online to government agencies.

The following reports should now be lodged through the portal file
transfer function:
• tax file number (TFN) declaration reports
• pay as you go (PAYG) withholding annual reports, including
– PAYG withholding payment summary annual report

– PAYG withholding where ABN not quoted annual report
– PAYG withholding annual report - payments to foreign residents
– Departing Australia superannuation payments (DASP) annual report
• employee share scheme (ESS) annual reports
• Australian Investment Income Report
• Quarterly TFN reports
• Member contributions statement
Some of the services in ECI will gradually close as clients transition to

lodging through the portals and through their SBR-enabled software.
However, as some of the services within ECI are not yet supported by
the portals or SBR the office will not remove the ECI services until there
are suitable electronic alternatives available.
ECI enables the following functions to be completed online:
• lodge super reports, including
– Assessment variation advice

– Lost members statement
– Member exit statement
– Payment variation advice
– Reasonable benefit limits
– SuperMatch request
– Unclaimed superannuation money statement
• collect super reports, including
– reasonable benefit limits

– remittance advice and recovery notice
– SuperMatch response
– surcharge provider assessment details
• lodge claims for the product stewardship for oil program
• lodge first home saver accounts reports, including
– First home saver account activity report

– First home saver account payment variation advice

• collect first home saver account reports, including
– Remittance advice and recovery notice

– Outcome of lodgement report
• lodge multiple activity statements on behalf of others (you cannot use
ECI to lodge forms R, S and T).
Functions are grouped into smaller applications that are located within
the ECI. There are five applications available.
Business
Allows general businesses access to the most commonly used functions
• Activity Statements (the sub menu link to the In Tray, Out Tray and Sent
Items used for the download and lodgement of activity statements
Super Funds
Allows access to the functions listed above and allows the person to send
and receive Superannuation Surcharge and other general superannuation
files to the ATO and to receive certain superannuation files from the ATO.
They are also able to lodge Unclaimed Superannuation Money reports.
Investment Bodies
Allows access to the functions listed above plus validation and

lodgement of First Home Savers Account (FHSA) activity report and
FHSA Payment Variation Advice (PVA) statement.
Excise
Links to the In Tray, Out Tray and Sent Items which can be used for the
creation of Excise documents or the download and lodgement of activity
statements.
BAS Service Provider
Allows access to the activity statement functions plus the BAS Service
Provider Client List and Document list.
The ECI provides digitally signed and encrypted exchange of documents

and messages between the ATO and clients. Once validated, documents
may be transmitted online through the ECI to the ATO. Only documents
free of error will be transmitted online.
Tax Returns and Lodgment Dates
Lodging tax returns

Tax returns cover the financial year from 1 July to 30 June, and if a
person lodges their own, they are due by the 31 October deadline.

Lodging with myTax

MyTax is the quick, easy, safe and secure way to lodge tax returns online.
It's web-based, so it is not necessary to download anything. Lodging can
be done on a range of devices – computer, smartphone or tablet – one
just needs to make sure to lodge by the 31 October deadline.
To lodge online, a myGov account linked to the ATO is necessary. MyTax

replaces e-tax and can do everything e-tax could do, plus extra things it
couldn't. From 2016, myTax is available to all individuals completing
their own return (including sole traders).
Lodge a paper tax return

You can use the paper Tax return for individuals and the Individual tax
return instructions to lodge paper tax return by mail. Most refunds are
issued within 50 business days of lodgment.
How to lodge a paper tax return
To lodge a paper tax return the following are necessary:
• the Individual tax return instructions
• a copy of the paper Tax return for individuals.
A pack can be ordered which includes the instructions and two copies of
the tax return form:
• online through our publication ordering service
• by calling 1300 720 092.
The Tax return for individuals must also be lodged (supplementary

section) if the person has:
• distributions from a partnership or trust
• capital gains
• foreign source income
• rental income.
The Individual tax return instructions (supplement) is only available

online. The supplementary section return form can be ordered at the
same time as the person orders the tax return form.
There will be a need to lodge the Business and professional items

schedule for individuals if the person has:
• personal services income
• a net income or loss from a business
• deferred non-commercial business losses.

The people may contact the ATO to request a copy of the Business and
professional items schedule for individuals, along with other tax return forms.
The Business and professional items instructions is only available online.
Where to send your tax return
Completed tax returns can be sent to:

GPO Box 9845
IN YOUR CAPITAL CITY
Note: The person should not replace the words IN YOUR CAPITAL CITY
with their capital city and postcode.
If they are sending their paper tax return from overseas, they have to
change the address on the pre-addressed envelope by crossing out 'IN
YOUR CAPITAL CITY' and replacing it with:
SYDNEY NSW 2001, AUSTRALIA
It will help the office if the person also cross out the barcode above the
address. If they are using their own envelope, they can mail it to:

GPO Box 9845
SYDNEY NSW 2001, AUSTRALIA
Due dates for tax returns

These dates apply to entities that balance on 30 June, (at the end of the
Australian financial year). They do not apply to entities that use a
substituted accounting period.
31 October
Individual, partnership and trust income tax returns due:
• Income tax returns for trusts that were either taxable or non-taxable
medium to large taxpayers in the last year they lodged and have one or
more prior year returns overdue as at 30 June in the previous financial year.
• Income tax returns for Trusts where the previous financial year income
tax return was not lodged by the due date.
• Exception – new registrant trusts from the previous financial year can
lodge by 28 February unless required earlier.
Income tax return lodgment due date for all June balancing companies where:
• the previous financial year income tax return was not lodged on time, or
• one or more prior-year returns were overdue as at 30 June of the

previous financial year.

1 December
Income tax lodgment date for non full assessment company entities.
• Payment date is as per the notice of assessment.
Income tax payment due date for companies that were:
• taxable medium to large taxpayers in the immediate prior year
• required to lodge by 31 October.
15 January
Lodgment due date for income tax returns for companies, and trusts
that were taxable medium to large business clients in the prior year and
are not required to lodge earlier. If the person doesn't lodge their return
for the previous financial year on time, their income tax return for the
current financial year is due by 31 October.
28 February
Income tax return lodgment due date for:
• medium to large trusts that were non-taxable in the latest year lodged
unless required earlier
• new registrant trusts unless required earlier
• self-preparing taxpayers that were not due at an earlier date.
If they fail to lodge their return for the previous financial year on time,
their income tax return for the current financial year will be due by 31
October.
Due dates for lodging and paying

Due date falling on a weekend or public holiday
When a due date falls on a Saturday, Sunday or public holiday, people
can lodge or pay on the first business day after without incurring a
penalty or general interest charge.
Substituted accounting periods

The income tax due dates are for entities that balance on 30 June – that
is, at the end of the Australian financial year. They don't apply to
entities that use a substituted accounting period.

Other ASIC lodgment requirements

Generally, companies need to lodge financial reports when:
• there are large sums of money involved
• the public has invested in the company, or
• the company exists for charitable purposes only and is not intended to
make a profit.
Types of organisations that need to lodge financial

reports
The Corporations Act 2001 (Section 292) outlines which entities need to
lodge financial reports. In some cases, 'small' companies don't need to
lodge. The following entities need to lodge financial reports:
• all disclosing entities
• all public companies
• companies limited by guarantee (except small companies limited by

guarantee)
• all large proprietary companies
• all registered schemes
• small proprietary companies that are foreign-controlled
• small proprietary companies or small companies limited by guarantee

that we direct to prepare financial reports
• small proprietary companies subject to shareholder direction under s293

of the Corporations Act
• small companies limited by guarantee subject to member direction under

s294A of the Corporations Act
• registered foreign companies may also need to lodge balance sheets,

profit and loss statements, cash flow statements and other documents
with ASIC.
AFS licensees must also lodge financial statements under section 989B
of Corporations Act. Seek professional advice if you're unsure about
your financial reporting obligations.

Section 4 Forms and Lodgment: Activity Statements

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Section 4 Forms and Lodgment: Activity Statements

Uploaded by

Copyright:

Available Formats

Australian Accounting and Bookkeeping

Section 4 Forms and Lodgment

Lodgment and payment concession

Learning Guide V1.0 © AAMC Training Group 62

Eligible activity statements

Learning Guide V1.0 © AAMC Training Group 63

The form or activity statement name is visible in ELS, the practitioner

• client’s reporting cycle

• client’s elected reporting method

• details being reported.

Clients who operate on substituted accounting periods (SAP) are only

Channels for electronic lodgment

• practitioner lodgment service (PLS)

• Tax Agent Portal

• BAS Agent Portal

• electronic lodgment service (ELS).

Types of Activity Statements

• 28 February 2018 – if a taxpayer does not have a tax return lodgment

Quarterly activity statements

The concessional dates do not show on your client lists – the

Learning Guide V1.0 © AAMC Training Group 64

Quarterly Lodgment and

Monthly activity statements

Quarterly PAYG instalment activity statement – head

• quarterly PAYG instalment notice (form R)

• quarterly GST instalment notice (form S)

• quarterly PAYG and GST instalment notice (form T)

• annual PAYG instalment notice (form N).

Learning Guide V1.0 © AAMC Training Group 65

Form N has a payment due date of 21 October 2017.

If your client received a form R or T in quarter 1 and would like to

A business or investment taxpayer may want to consider varying the

A taxpayer is liable to pay the general interest charge (GIC) on the

Learning Guide V1.0 © AAMC Training Group 66

Generating, reviewing, and validating activity

Revising activity statements

If the ATO has processed an activity statement, then receives lodgment

One can complete a revised activity statement using the:

• Tax Agent Portal

• BAS Agent Portal

• practitioner lodgment service (PLS)

• electronic lodgment service (ELS)

• electronic commerce interface (ECI).

Using the portals

• Select Request revision

• Enter the revised values.

Revisions should be completed online. When using the portal, if the

Using PLS or ELS

Learning Guide V1.0 © AAMC Training Group 67

Completion of the Revision indicator field indicates it is a revision – if not

Correcting an activity statement

If no corrections can be made on the current activity statement, it is

A four-year time limit applies to claiming credits and refunds. The

Correcting GST errors in the activity statement

The benefit of correcting a GST error on a later activity statement is that

Generally, it is easier to correct a GST error on a later activity statement

Completing your activity statement to correct GST errors

Learning Guide V1.0 © AAMC Training Group 68

GST errors that cannot be corrected on a later activity

• the GST error relates to a subject matter of a compliance activity or was

• The GST error was corrected in another reporting period

If you are subject to compliance activity

A compliance activity is completed when an assessment or notice of