Yahoo Finance ATO warning after tiny HECS error leaves Aussie with $1,515 bill: 'Be careful'
Despite making a voluntary payment to her student loan, she still has to pay money to the Australian Taxation Office.
A young Aussie worker has been hit with a huge bill from the Australian Taxation Office (ATO) because of a tiny HECS issue. Aussies across the country have been submitting their tax returns to see if they're in the running for a small cash boost.
But Cassidy, who works in recruitment, was shocked to see she owed the ATO a little more than $1,515 and realised she hadn't told her workplace she had an outstanding student loan debt. Finance expert Ben Nash told Yahoo Finance you can get yourself into a sticky situation if you owe the ATO money.
"If you do get a bill, then the ATO is within its rights to apply penalty interest to the bill, and so you can then end up paying more with that," he said.
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"If you're doing it on purpose, and particularly if there's a pattern of behaviour over a number of tax years, it's very likely that they would apply the penalty interest. And you can run the risk of getting further penalties on top."
Nash told Yahoo Finance that some Aussies don't tick the box that lets their employer know they have a HECS debt when they're starting a new job.
Have you been hit with an ATO bill? Email stew.perrie@yahooinc.com
If this happens, the workplace won't allocate a portion of the employee's salary to pay off that debt if they're earning over $54,435.
"Be careful when doing the forms," Nash said.
"Understand what the rules are and how they work, because there are a lot of myths out there. And put yourself in the driver's seat as opposed to having stuff catch you out of the blue and cause you stress."
Am I at risk of paying an ATO bill?
The error does not appear to be uncommon, with several people noting they had similar issues.
"I apparently owe $4,000 because of this," one Aussie said.
"Love this because I’m in the same position lol $1.8k owed," wrote another.
"I got a $1.4K bill for this exact reason, my fault though, I didn’t check the box in my forms," added a third.
"Bro, this but it was $6.5k," commented a fourth.
Cassidy revealed she still owed money to the ATO despite putting in a voluntary HECS payment of $2,000 during the last financial year.
"Tax time used to be fun for me but not this year," she said.
What happens if I owe the ATO money in my tax return?
There are many reasons why you might owe money to the Australian Taxation Office following the end of the 2023-24 financial year.
Aussies have found themselves with tax bills of up to $7,000, which you can read about here.
Some common causes for a tax bill include:
Working multiple jobs
Receiving bank interest
The Medicare levy surcharge
What should I do if I get a tax bill?
If you get a tax bill, you will need to pay it by the due date on your Notice of Assessment. If you lodged your tax return yourself, this will be November 21.
If you don’t pay your bill on time, the ATO will start charging you interest on your debt.
Nash told Yahoo Finance you might be able to set up a payment plan if you don't have the ability to pay it in one big lump sum.
"The ATO will push you to repay it over the shortest timeframe that they think that they can get you to do," he said. "They are within their rights to ask you to substantiate your claims.
"If you say you can't pay it, they'll say, 'Tell me your income, Tell me your living expenses'. They will want to see that you actually can't pay them to let you have a longer time period to repay it."
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