Reading ATO Notices of Assessment
A Notice of Assessment confirms the income a borrower declared in their tax return has been assessed by the ATO. Reading NOAs carefully protects the file from income misstatement and hidden ATO liabilities.
Confirming the NOA matches the tax return
Taxable income on the NOA must match the tax return exactly. If the figures differ, either the return supplied is not the lodged version or the ATO has amended the assessment. Either situation needs to be resolved before the file can proceed. Always collect the most recent NOA alongside each tax return requested.
Checking for outstanding ATO balances
The NOA shows whether the borrower received a refund or owes additional tax. An unpaid tax balance is an ATO liability and needs to be treated like any other debt. Lender treatment varies. Many lenders require ATO balances to be cleared before settlement. Others accept a documented ATO payment plan and treat the monthly instalment as an ongoing commitment. Either way, the balance needs to be raised with the lender rather than left to be discovered during credit assessment.
Validating the assessment date
Check the date the assessment was issued. Very recent assessments mean the return was lodged recently, which is normal. Assessments issued years after the tax year ended suggest late lodgement, which may or may not be an issue depending on lender policy. Some lenders require returns to have been lodged within a set period of the financial year ending.
Key takeaways
- ✓Match the NOA taxable income to the tax return exactly
- ✓Check for outstanding ATO balances and resolve them before lodging
- ✓Confirm the assessment date is consistent with on time lodgement
- ✓Collect the NOA for every tax year the lender requires
How QualifyMate helps
QualifyMate extracts taxable income from ATO notices of assessment and surfaces them alongside the matching tax return, so brokers can quickly confirm the figures line up before submitting a self employed file.
Key terms
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