Missing or Lost PAYG Payment Summaries
The ATO expects you to make all reasonable attempts to contact your employer to get a copy of your missing or lost PAYG payment summary. If you can’t get a payment summary, you can ask your employer to sign a letter stating the income and tax withheld throughout the income year.
If all attempts to get your payment summary are unsuccessful, then you can complete a statutory declaration and use this in place of the missing payment summary. To complete this declaration you may need to refer to your bank records or payslips to estimate your income and tax withheld.
Alternatively, when you use a registered tax agent you are not required to prepare a statutory declaration. Our ATO approved software generates an additional schedule as part of your electronic tax return. We still need details of employer, wages received and PAYG tax wihheld to complete the schedule. Pay slips are a good source of information if you need to rely on an estimate.
The ATO are also upgrading tax agents' access to this kind of information. Called "infilling", providing employers have supplied information to the ATO in a timely manner, tax agents can access the data online. <top>
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I don't understand my notice of assessment. Can someone explain it to me?
After the ATO has processed your tax return, you are issued with a "Notice of Assessment". This will tell you if you are entitled to a refund, or if you have a tax debt to pay.
To understand the items on your notice of assessment refer to the information in Reading your notice of assessment on the revese side of your notice. To understand how your refund or tax liability is calculated, follow these steps:
- work out if your taxable income is correct (the assessable income you earned minus deductions)
- add up the amount of tax payable on that amount of income (tax on taxable income, plus Medicare levy and Higher Education Loan Programme/Student Financial Supplement Scheme repayments)
- minus any offsets from your tax payable, then tax already paid (amounts withheld by your employer and paid on income activity statements)
- if there is an amount left over, this is refunded to you, and
- if there is an amount outstanding, this is your tax debt amount payable.
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How can I correct a mistake made on my tax return?
If you have made a mistake on your tax return as soon as possible. There are two ways to request an amendment:
1. submit a written request to the Tax Office
2. Tax agents normally lodge an "Amended" tax return for the relevant year. Lodged
electronically, It is processed much faster than written requests.
Note that you cannot submit amendments over the phone or by e-tax. <top>
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My Employer has been withholding extra amounts of tax from my pay - why hasn't the balance of my Higher Education Loan Programme (HELP) account been reduced?
Your employer will withhold additional amounts from your pay throughout the year to cover your anticipated tax liability and compulsory HELP repayment.
These amounts withheld are not directly credited to your HELP account during the income year but will be included in the PAYG Withholding Credits label on your notice of assessment.
Your final tax liability and compulsory HELP repayment are calculated at the end of the income year after you submit your income tax return. At that time, any amount your employer has deducted from your pay will be used to offset the liability that has been calculated.
Any extra amounts that you may have overpaid will be refunded to you at that time. Similarly, if you have not paid enough tax through employer deductions you may receive a bill. The compulsory repayment shown on your notice of assessment is credited to your HELP account on the date the notice of assessment is issued. <top>
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When do I have to lodge my tax return?
If you prepare and lodge your own tax return, the lodgment deadline is Wednesday 31 October 2007.
If you lodge through a registered tax agent, they have their own lodgment deadlines, with lodgment extensions up to May the following year.
However, if you are using a tax agent for the first time, or you are going to use a different tax agent this year, you must contact them by Wednesday 31 October 2007. <top>
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What penalties will be charged if I don't lodge my tax return on time?
Penalties are imposed on a case–by-case basis and depend on your lodgment history, amount of tax payable and when your tax return is lodged. You cannot be advised if a penalty will be applied, or the amount before you lodge your tax return.
However, our policy is not to apply a penalty if your tax return:
- is lodged voluntarily, and
- does not result in any tax payable.
General interest charge may be applied to money owing from the time it became due for payment. <top>
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What tax records should you keep?
You should keep records in these main categories:
- any payments you have received
- any expenses related to payments received
- when you have acwuired or disposed of an asset – such as shares or a rental property
- any tax deductible gifts or donations, and
- any medical expenses.
This advice tells you what main types of records you should keep in each of these categories. You may also need to keep records in some other categories, or for other members of your family – for instance if you receive the family tax benefit.
Also, in some cases you may need to estimate items, such as how far you will travel during a financial year. At the end of the year, if you travel more than you estimated, you may need to have kept more records.
So if you’re not sure whether or not to keep a record, you should keep it. You can decide whether you need it at tax return time, and you’re better safe than sorry! <top>
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How long should you keep your records?
Generally, you must keep your written evidence for five years from the date the notice of assessment is sent to you, or:
- if you have claimed a deduction for decline in value (formerly known as depreciation), five years from the date of your last claim for decline in value
- if you acquire or dispose of an asset, five years after it is certain that no capital gains tax (CGT) event can happen for which those records will be needed to work out a capital gain or loss, and
- if you are in dispute with the Tax Office, the later of five years from the date you lodge your return or when the dispute is finalised. <top>
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What if you can not pay your tax debt on time?
If you cannot pay your tax debt on time, we recommend you contact the ATO at your earliest convenience to discuss your circumstances.
When you speak to an operator about payment of your outstanding tax debt or remission of general interest charge (GIC), the ATO is committed to:
- understanding your situation and individual circumstances
- being fair and equitable in the application of the law, processes and policy
- considering your case on its merits and assisting you to move on, and
- assisting you where possible if you are attempting to engage with the Tax Office and do the right thing.
In some circumstances, you may need to provide written details of your financial position, including a statement of your assets and liabilities, and details of your income and expenditure.
The ATO will also need to understand what steps you have taken to obtain funds to pay your tax debt, as well as what you have done to make sure you meet future tax debts on time.
They may give you extra time to pay, depending on your individual circumstances.
If you are given extra time to pay, you are required by law to pay the GIC. The GIC is tax deductible in the income year in which it is incurred. The law provides the Commissioner with the opportunity to remit all or part of the GIC in certain circumstances. Applications must be made in writing. <top>
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Living away from home (LAFH) Allowance for construction workers
Many construction workers are missing out on large deductions for Living Away From Home Allowance (LAFH).
In many cases, construction workers receive a LAFH allowance to cover the costs of accomodation, food are other costs while working away from home.
Where workers receive a LAFH allowance, some employers show the allowance seprately on the PAYG Payment Summary. Others don't. In either case, construction workers may be eligible to claim the cost of such travel in their tax return.
Some employers pay a fixed amount in cash. In this case, the LAFH allowance is not included on the PAYG Payment Summary and the allowable deduction is reduced by the amount received from the employer.
The ATO provides guidlines for "...what are the reasonable travel and meal allowance expense amounts..." that can be included in the tax return. For the 2007 tax return the "reasonable allowance" can be between $165 and $402 per day depending on circumstances and changes each year. For example, If a construction worker spent 70 days of the year in a country area the deduction to be included in the tax return could be $11715 (LAFH allowances received from the employer would reduce that amount).
If you are a construction worker than you may have missed out on this deduction in your 2007 return or prior years returns. Previous years tax returns can still be adjusted (amended) up to four years after the assessment was issued. So there may be additional tax dollars you are currently entitled to? <top>....................................................................................................................
Deductibility of Self-education expense
Self-education expenses are only deductible where they are relevant to income producing activities, or have the essential character of an outgoing incurred in gaining assessable income.
Although a course may be work related, a mere connection between the expense and the earning of income is not enough to make it deductible as the expense must be related to actually performing work as an employee.
in other words, the course must relate to current employment activities, not as a pre-requisite to changing a career path. <top>
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I have shares and received franked dividends and am not required to lodge a tax return. How can I get the franking credit refunded to me?
You can complete the Refund of Franking Credits for Individuals form which can be lodged by telephone or mailed to the ATO. Here is a link to the ATO for the form. <top>
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