ARTICLE · 06 APRIL 2009

PAYG Instalment Reduction For Small Business

Moore Australia

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The Federal Government announced on 28 March 2009 further cashflow relief for small businesses, self funded retirees and small superannuation funds.

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The Federal Government announced on 28 March 2009 further cashflow relief for small businesses, self funded retirees and small superannuation funds.The relief will come by way of a reduction in PAYG instalments for the 2009-10 income year for taxpayers whose quarterly tax instalments are adjusted for previous years' Gross Domestic Product (GDP) growth.

This will mean a reduction in the upward adjustment of instalments from 9% to 2%. This is in line with the expected Consumer Price Index (CPI) growth for the 2009-10 income year.This reduction in PAYG instalments should ensure that PAYG instalments more closely approximate the taxpayers' actual liability for the year.

Taxpayers will still be able to vary their quarterly tax instalments if they expect income to be lower or higher than the amount determined by the Australian Taxation Office using the 2% adjustment factor.

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