In a recent update, the ATO explained that pay as you go (PAYG) instalments can help SMSF trustees to make regular prepayments on their investment income throughout the financial year.
“Paying the right PAYG instalments can help you manage a healthy cash flow and avoid a large tax bill when you lodge your SMSF annual return,” the Tax Office advised.
SMSF trustees who think their current PAYG instalments could result in paying too little or too much tax can vary their instalments, it explained.
“You must make variations on or before the day your instalment payment is due. Your varied amount will apply for all your remaining instalments unless you make another variation before the end of the financial year,” it said.
“Use the PAYG instalment calculator to help you work out your new instalment amount or rate.”
The ATO also stated that where SMSF trustees have been impacted by the recent floods, they may vary their PAYG instalments and claim a credit for previous instalments paid in the same financial year.
“You claim this credit at label 5B on your business activity statement,” it said.
Variations can be lodged through MyGov, Online Services for business or a registered tax or BAS agent, the ATO stated.
