The Australian Taxation Office (ATO) has issued an apology to businesses, after an error saw it calculate PAYG for base rate entities with an aggregated turnover of less than $50 million using the former company tax rate of 27.5 per cent instead of the correct 26 per cent.
The ATO admitted that the reduction in the company tax rate was not applied correctly from 1 July, but assured it has now corrected the mistake and issued these entities with a new PAYG instalment letter reflecting their updated instalment rate or amount.
“We apologise to you and your clients for any inconvenience caused,” the ATO said in a notice to tax agents.
The Tax Office said it has commenced refunding entities who have lodged their activity statements and paid an amount based on the incorrect instalment calculation.
For entities yet to lodge, the ATO explained that they can choose to lodge based on the current instalment calculation on the activity statement and receive a refund for the excess amount paid due to the error.
Entities are also able to vary their instalment rate or amount.
The ATO assured that “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,” it said.
“You can continue to vary your clients’ activity statements if their rate or amount does not reflect their current trading situation.”
