Have you recently seen an unexpected deposit in your Company bank account from the Australian Taxation Office (ATO)? Perhaps you have received a letter from them stating “We are holding your refund”. Why has this happened?
ATO reduces some company rates for 2021 financial year
The Australian Taxation Office (ATO) has been amending Business Activity Statements (BAS) and Instalment Activity Statements (IAS) because the Company tax rate for a lot of Companies has reduced from 27.5% to 26% for the 2021 financial year. The ATO initially used the higher income tax rate when calculating your Company income tax instalment for September and they are now correcting that.
We are holding your refund letter
If you receive(d) a “We are holding your refund letter” you have two options. Firstly, to provide bank account details to the ATO for the refund to be paid or secondly, to allow the credit to remain on your account at the ATO and reduce the payment you make for your December BAS or IAS.
For RGM clients only: If you don’t have a MyGov Account to add your bank account details with the ATO, please contact us and we can attend to that for you via the ATO Tax Agent Portal. This will allow you to receive your refund rather than utilising the credit on your December BAS.
Clients of RGM who prepare their own Company BAS or IAS, and who choose to allow the credit to remain, are urged to contact us on 03 5120 1400 before payment for the December quarter is made to confirm the credit amount that can be used to reduce that payment.
As always, if you have any questions about this, or any other matter, we are here to help.