Taxation Administration Act 1953 - PAYG Withholding Variation: Under 18 years of age and no ABN (20/06/2001)

Overview

The Pay As You Go (PAYG) Withholding Notice of Variation of Amount Required to be Withheld is a legislative instrument issued under the authority of the Taxation Administration Act 1953 (TAA 1953). Enacted by the Australian Parliament, this instrument aims to address a specific gap in the tax withholding requirements for payments made to minors under the age of 18. The policy objective behind this variation is to alleviate the administrative burden on payers by exempting small payments to minors from PAYG withholding obligations when certain conditions are met, namely when the payments do not exceed $120 per week and the payer does not quote an Australian Business Number (ABN) to the supplier. This measure was introduced to simplify compliance for small payments and to provide relief to businesses and individuals making such payments.

Scope and Application

The legislative instrument F2006B00230, which pertains to the variation of the amount required to be withheld under the Pay As You Go (PAYG) Withholding system, applies specifically to payments made to individuals under the age of 18 years. The legislation operates within the framework of the Taxation Administration Act 1953 (TAA 1953), extending its reach across the Commonwealth of Australia. This legislative instrument was issued by Murray Boyd Crowe, the Assistant Commissioner of Taxation, and it varies the withholding amount to nil for certain specified payments, effective for payments made on or after 1 July 2001. The variation applies to payments that do not exceed $120 per week and where the supplier does not quote an Australian Business Number (ABN) to the payer. This measure is tailored to meet the special circumstances of the designated class of cases, thereby streamlining the withholding process for particular payments made to minors.

Key Provisions

The legislative instrument F2006B00230 (PAYG Withholding Notice of Variation of Amount Required to be Withheld) specifies the variation of the amount required to be withheld under section 15-15 of Schedule 1 to the Taxation Administration Act 1953 (TAA 1953). This variation reduces the PAYG withholding to nil for certain payments made to individuals under 18 years old, provided they do not exceed $120 per week and the supplier does not quote an Australian Business Number (ABN) to the payer. These provisions are effective for payments made on or after 1 July 2001. Under the Act, specific obligations and requirements are imposed on parties involved. The payer is required to withhold PAYG payments according to the notice, and this is particularly relevant when the payment criteria mentioned in the notice are met. The supplier, who is the entity making the payment, must ensure that they do not quote an ABN to the payer if they wish to benefit from the nil withholding requirement. This ensures that the correct withholding rates apply based on the specific circumstances outlined in the legislation. In terms of compliance and consequences, there are no explicit offences, penalties, or civil/criminal consequences detailed within the notice itself for failure to comply with the withholding variation. However, general compliance with the TAA 1953 is mandatory, and non-compliance with PAYG withholding obligations can lead to penalties such as fines, interest on unpaid tax, and potentially criminal charges if the non-compliance is deemed to be deliberate or negligent. The specific penalties would be determined under the general provisions of the TAA 1953 and related taxation laws. It is therefore essential for both payers and suppliers to adhere to the requirements specified to avoid potential repercussions.