Yahoo Finance Tax warning as fuming Aussies slapped with bills in ATO crackdown: 'You owe me'
It's worth being aware of what you're paying for because these bills because you could avoid them next year.
Aussies have been warned to make changes if they've been stung by a high tax bill this year as the Australian Taxation Office (ATO) serves a harsh reminder of its powers. Many have been getting their tax returns back since July 1 and some have been shocked to see that, despite paying thousands of dollars in tax for the year, they still owe the government money.
Tax Invest Accounting director and registered tax agent Belinda Raso explained to Yahoo Finance that there are plenty of reasons why you might have a bill to pay with the ATO and chances are it will happen again if you don't do anything. Tyrone Northrop took to social media to complain after seeing his outstanding bill.
"Someone, please tell me how the f**k I still owe the ATO," he said. "I paid 60 grand in tax and I don't even get six f**king dollars back, not even six cents, and they still reckon I owe them...you owe me a f**king apology.
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Raso responded to the young Aussie worker and said she's been dealing with "hundreds" of these complaints since the 2023-24 financial year ended.
"Firstly, work out what caused your tax debt last year. In most cases, it's going to have been the same thing that caused it this year and will continue to cause it," she said.
If you don't pay your ATO bill, the tax office can charge you penalties worth hundreds of dollars each.
Reasons why you owe the ATO money after lodging your tax return
The tax accountant said there are several factors that can cause you to have an ATO bill after July 1 and it's important to work out if it's avoidable:
You worked multiple jobs: you can only claim the tax-free threshold for one occupation and any others will get taxed much higher than your primary one. Raso told Yahoo Finance that unfortunately Australia's payroll system means a side hustle or second job can result in you underpaying your tax.
You received bank interest: Aussies have to pay tax on any interest that's earned from a savings account, which can sometimes be as high as 34.5 per cent.
You have to pay the Medicare levy surcharge: if you earn over $93,000 a year, you have to have private health insurance, otherwise, you'll be hit with a tax bill.
The ATO's soft spot for struggling businesses is waning
While the cost of living crisis is gripping Aussies and small business owners, the ATO has reminded everyone that you better pay up if you have a debt.
Businesses can enter payment plans with the tax office if they're going through tough times, however, there are limits to that generosity, especially now that we are out of the COVID pandemic.
A spokesperson for the ATO told the Australian Financial Review that it has returned to a "business as usual" approach to recovering outstanding debt.
“Whilst the growth of collectable debt is slowing down, addressing growing collectable debt remains an area of focus for the ATO," they explained.
"It’s the ATO’s responsibility to ensure a level playing field, protecting other creditors, and supporting those who are doing the right thing and paying on time.”
This new approach has been partly blamed on the Black Brewing Co. falling into voluntary administration recently. The brewer had been relying on the ATO to get by in recent years, but the office drew a line in the sand and demanded the company to cough up the $1.2 million they were owed, according to the AFR.
After falling into administration, Avior Consulting was called in to assess Black Brewing Co's books. It recently declared that the company's assets now need to be liquidated.
The ATO spokesperson explained this circumstance should serve as a reminder that it reserves the right to take “strong and deliberate action to deal with those who ignore their obligations and refuse to engage with us to pay their outstanding amounts”.
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