The ATO will be paying interest on early payment entitlements (IEP) automatically from March 2022. The ATO are automatically identifying, calculating and paying IEP entitlements directly into nominated bank account. This process applies to eligible early payments made from 1 July 2022.
For eligible payments made:
– after 13 March 2022, we are paying IEP entitlements generally within 2 weeks of the due date of the liability
– between 1 July 2021 and 13 March 2022, we are paying IEP entitlements from 14 March 2022.
If you have an existing tax debt, your IEP entitlement will be offset against the debt and any excess IEP amount will be paid to your nominated bank account.
You will receive a Statement of Account notifying you of your IEP entitlement when it is paid to you or offset against an existing debt.
The automation of IEP means that you or your tax professional will no longer need to contact us to request payment of your future IEP entitlements.
Interest on early payments is assessable income and needs to be included in your tax return in either the:
– income year you receive the interest
– income year it is offset against your tax debt