ATO’s PAYG withholding compliance test

From 1 July 2023, the ATO commenced an activity statement lodgement reminder program wherein 3,000 employers will be randomly selected for a compliance test. Even if they don’t lodge their activity statements in or on time, the PAYG withholding amounts reported through STP will be automatically added to their integrated client account balance when they become due and payable.

This program will be run by the ATO throughout the 2023–24 income year.If selected, the first activity statement the ATO will send a reminder for will be in:

  • July 2023 for monthly PAYG withholders
  • September 2023 for quarterly PAYG withholders.

What happens if you get randomly selected

If selected for the pilot, you will receive a reminder to lodge your activity statement if:

  • the activity statement remains outstanding for at least 7 days after the lodgement due date
  • PAYG withholding has been reported via STP for the period.

The ATO will also send, via correspondence, a summary of amounts that may be payable by you as at due date, including:

  • PAYG withholding amounts reported through STP
  • any pre-filled
    • PAYG instalment amounts
    • GST instalment amounts.

Confirm what’s on ATO’s records

You will be required to check that the PAYG withholding amounts pre-filled by the ATO are correct and complete. If you don’t lodge your activity statement by the date stated in your reminder letter:

  • The ATO will consider you have no corrections to report to amounts it has on record.
  • Amounts on record will be added to your integrated client account because they are due and payable.
  • The ATO may also finalise your activity statement and consider it lodged or it may remain outstanding. This will depend on whether you report any other amounts in your activity statement.

Other matters

If you need to report any additional obligations, your activity statement will remain outstanding and overdue; however, amounts that the ATO has on record will be added to your integrated client account balance and become payable on due date (general interest charges may also apply).If you identify any late corrections for the amounts reported through STP, you can remedy this by:

  • amending an already lodged activity statement, or
  • editing the PAYG withholding amounts in the activity statement, if not already lodged.

Next steps

If you get randomly selected for this lodgement reminder pilot, we, as your tax agent, will also be notified. We will reach out to you and guide you through any queries that you may have regarding this matter.

Please provide us all the necessary information promptly after 31 October 2023 so that we can prepare your activity statement well before the lodgement and payment due date (due date is 27 November 2023).

Should you have any other queries, please feel free to contact us.

t: +61 3177 4120

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