Need Advice: How to Get My $8000 ATO Credit Refunded (Stuck Because I Used Coles Mastercard Gift Cards)

Lmugpink on 06/02/2025 - 00:42
Last edited 06/02/2025 - 00:58 by 1 other user

Hi OzBargainers, I need urgent advice or insights from anyone who has dealt with a similar situation.

In 2024, I prepaid a few thousand dollars into my ATO account using Coles Mastercard gift cards from a previous deal. After lodging my tax return, my account now shows an $8000 credit balance. However, the ATO has refused to refund the amount to my bank account. Instead, they’ve given me two options:

  • Refund to the original gift cards (which I’ve already discarded).

  • Leave the credit in my account to offset future tax liabilities.

A tax accountant suggested I could take on a second job and ask the employer not to withhold tax, allowing me to use this balance against my tax obligations in the next financial year.

Has anyone been in this situation before? I found a previous post on this topic, but no clear solution was provided. Would really appreciate any advice on how to proceed!

Financial Gift Card InComm MasterCard Prepaid Card

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Comments

  • trapper on 06/02/2025 - 00:47

    How the hell did you manage to over pay by $8k, that is just wild.

    • mugpink on 06/02/2025 - 00:49

      I believe it's quite popular in Ozbargain forum or australianfrequentflyer - we got the points/ discount from the gift cards and used them to pay ATO

      • AustriaBargain on 06/02/2025 - 04:28

        Were those points worth all this stress and planning and thinking?

  • hasher22 on 06/02/2025 - 00:47

    This might work….. just a theory but may not be practical lol

    Don't take up a second job, tell your employer to change and select "no" when claiming the tax-free threshold. Do some math on your paycheck and when you hit 8k of tax which was supposed to be withheld but technically went to you, then tell your employer to change it back to "yes" when you hit 8k. If the theory and maths is right, when you do your tax, you technically owe ATO 8k which will cancel out your balance

    • mugpink on 06/02/2025 - 00:54

      thanks @hasher - that sounds like a good idea! I might need to talk to HR/ Finance representative to see if they can help with this! My tax accountant told me it would be complicated to persuade the company to do that!

    • DOGGYWOWWOW on 06/02/2025 - 01:04
      +3

      tell your employer to change and select "no" when claiming the tax-free threshold

      Won't doing this cause you to pay more PAYG tax and accumulate a higher credit balance with the ATO? OP needs to effectively increase tax debt. From my understanding the tax accountant is suggesting you take on a second job where you claim another tax-free threshold and hence owe the additional tax-free threshold come end of tax year.

      • mugpink on 06/02/2025 - 01:11

        I think what hasher means was to adjust this part instead: "Claim or vary your tax offset by reducing the amount withheld from payments made to you?" - that would result in a reduction of withholding amount ?.

        Another option I could find is this one: https://www.ato.gov.au/forms-and-instructions/payg-withholdi… - not sure if you have heard of it ?

        • DOGGYWOWWOW on 06/02/2025 - 01:25

          You will have a really hard time getting your employer to change withholding amount as they usually automate the withholding amount calculation and could see a variation as a risk for themselves.

          The form looks applicable to people with income outside of employment (e.g. rental income, investment income) which doesn't automatically incur withholding tax. If you aren't already on a PAYG plan directly with the ATO (not through employer) I don't think you can use that form.

          I am not an accountant and these are just my assumptions, your best bet is to ask ATO or an accountant.

        • hasher22 on 06/02/2025 - 01:57

          I've seen this form before, PAYG Withholding Variation (NAT 2036) is a form usually when employees will submit it when employees forecast they will incur a huge debt or a huge credit from the ATO, this form forecasts and tries to mitigate significant refunds/debt from/to the ATO.

          It's not a simple form to request ATO to tell your employer to reduce your tax.

          I would look into "downwards variations" (https://www.ato.gov.au/individuals-and-families/jobs-and-emp…) but in saying that, you still need to fill out NAT 2036.

          I would speak to your accountant or ATO if you're eligible for NAT 2036

      • hasher22 on 06/02/2025 - 01:27

        Actually, you're right, scrap that, I got the maths reversed with the tax-free threshold.

  • Benoffie on 06/02/2025 - 00:54

    Who on earth ever pays the ATO anything and expects it back? 🤔😂

  • JIMB0 on 06/02/2025 - 01:13
    +1

    If you do find a way to end up owing $8k there's a chance they'll put you on an installment plan in future and you'll need to pay up $2k quarterly and be stuck in the same situation next year.

    You could buy some overseas ETFs that have a high dividend yield which you'll owe tax on. Also
    if you've got private health insurance make sure to claim the full rebate.

    Another way is to take up higher education with a HELP loan. Then you can transfer the money over to the loan, you'll need to call up and they'll hate you because for each transaction they need to manually transfer it.

  • Sye on 06/02/2025 - 01:17

    @MS Paint does this count as ADAGCHS?

  • Sye on 06/02/2025 - 01:21
    -1

    I had this same problem. It was all solved when the ATO man called me and said he could refund me and I just had to let him remotely connect to my computer and then buy some iTunes gift cards.
    /$

    • mugpink on 06/02/2025 - 01:22

      is this supposed to be FUN ?

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