spacer
spacer
spacer
spacer



CPA LOGO
spacer
Latest News
Hot Issues
How crypto assets can trigger CGT tripwires
ATO targets dodgy deductions for holiday homes
Tips for small business owners
About the working from home safety and wellbeing checklist
Countries with the highest GDP per capita between 1800-2040
Downsizer age reduction now in force
Raids stop $33m in tax avoidance, ATO claims
100A ruling leaves trust decisions haunted by ‘uncertainty’
A 2022 Advent Calendar for our clients
Difference Between Leasing vs Hire Purchase
How Have Australians Reacted to Interest Rate Hikes?
FBT – Christmas Parties and Taxi Fare/Rideshare
Employee Christmas Parties and Gifts – Any FBT?
Big-end-of-town tax: miners, banks pay up, but for one-third it’s zip
Cash flow forecasting template
Buyback law closes loophole ‘but franking credits here to stay’
Budget October 2022-23-Comprehensive summary
Federal budget 2022 -- Winners and Loser
Federal Budget 2022/23 - Documents and Facts Sheets
Budget: all the key points you need to know
Sole traders cut back super, work longer hours
Small business debt and tax gap at top of ATO hit list
Christmas ‘crunch time for economy, inflation outlook’
Articles archive
Quarter 4 October - December 2022
Quarter 3 July - September 2022
Quarter 2 April - June 2022
Quarter 1 January - March 2022
Quarter 4 October - December 2021
Quarter 3 July - September 2021
Quarter 2 April - June 2021
Quarter 1 January - March 2021
Quarter 4 October - December 2020
Quarter 3 July - September 2020
Quarter 2 April - June 2020
Quarter 1 January - March 2020
Quarter 4 October - December 2019
Quarter 3 July - September 2019
Quarter 2 April - June 2019
Quarter 1 January - March 2019
Quarter 4 October - December 2018
Quarter 3 July - September 2018
Quarter 2 April - June 2018
Quarter 1 January - March 2018
Quarter 4 October - December 2017
Quarter 3 July - September 2017
Quarter 2 April - June 2017
Quarter 1 January - March 2017
Quarter 4 October - December 2016
Quarter 3 July - September 2016
Quarter 2 April - June 2016
Quarter 1 January - March 2016
Quarter 4 October - December 2015
Quarter 3 July - September 2015
Quarter 2 April - June 2015
Quarter 1 January - March 2015
Quarter 4 October - December 2014
ATO’s interest charges hit highest level in seven years

The ATO has raised both its general interest charge (GIC) rate and shortfall interest charge (SIC) rate for the next quarter, increasing both by more than 1 per cent. 



 


The GIC rate rises from 8 per cent in the July to September quarter to 9.31 per cent for October-December, while the SIC increases to 5.31 per cent, up from 4.00 per cent. 


The ATO’s interest rate increases this year have outpaced the RBA’s cash rate rises.


The cash rate has increased from 0.35 per cent in May to 2.35 per cent in September, whereas the ATO’s GIC rate has risen from 7.07 per cent in the April to June quarter to 9.31 per cent in the October-December. 


Meanwhile, the ATO’s SIC rate has grown from 3.07 per cent in the April to June quarter to 5.31 per cent for the October-December.  


Both ATO charges are now at their highest levels since the second quarter of 2015, when the GIC rate was 9.36 per cent and the SIC rate was 5.36 per cent. 


Both ATO rates are determined by a formula in the Taxation Administration Act 1953 that relies on the 90-day bank bill rate, rather than the RBA cash rate. 


The GIC rate is calculated by adding seven percentage points to the average bank bill base rate for a month, specified by the act, in the preceding quarter. 


For example, to determine the rise from 1 October, the ATO would have used the 90-day bank accepted bills for the preceding August. 


The formula for calculating SIC is also in the act and uses the base interest rate, the 90-day bank accepted bill rate, and an uplift factor of 3 per cent. 


The GIC rate applies to late or unpaid tax liabilities or excessive shortfalls in incorrectly varied or estimated income tax instalments. 


However, the SIC rate applies when a tax return is amended and the tax liability increases resulting in a tax shortfall. 


The ATO typically applies the SIC rather than the GIC when taxpayers would be unaware of the shortfall amount until they receive an amended assessment. 


However, GIC applies to the original assessment of any tax shortfalls and associated SIC from their due date if the tax is unpaid. 


This due date is 21 days after the ATO issues the notice of the amended assessment. 


 


 


Josh Needs
20 September 2022
accountantsdaily.com.au




18th-October-2022
spacer
Privacy Policy | Disclaimer