If you are going to study when you have not done previous year’s tax returns then there is a trap for young players that could catch you out if you use HELP (Higher Education Loan Program) to pay for your course. Example In Jan 2020 Bart started studying medicine at uni and was not working, living on savings while studying. Instead of paying for his course himself, Bart decided to take advantage of the HELP scheme which is similar to borrowing from the government. The government will pay for Bart’s course fees with Bart making extra tax contributions in financial years where his income is over the threshold for repayment. On starting the course Bart had a HELP debt. As soon as he went over the census date But Bart hadn’t lodged his 2018 and 2019 tax returns. He was earning $100,000 taxable income during those years and was still owed money as he expected the ATO to refund some tax his employer had withheld because of his various deductions. In 2021 he lodged his previous tax returns and caught up with his tax reporting requirements. The ATO made Bart pay extra tax on his 2018 and 2019 years because of his HELP debt. This is in spite of him incurring the HELP debt in 2020 and onward tax years. This amounted to an extra $14,000 in tax which he didn’t expect. Not only didn’t he get a refund he had to pay extra tax which ate into his savings so he will now have to work while studying. Why is this so? He owed a debt at the time the tax return was assessed so because his taxable income was over the threshold for these tax yeas at the time, he was assessed Bart will have to pay extra tax that he was no expecting. Basically, Bart was liable for the debt at the time of the tax return so the extra tax applies. Section 154-1 of the Higher Education Support Act 2003 HIGHER EDUCATION SUPPORT ACT 2003 - SECT 154.1 Liability to repay amounts Had Bart done the other tax returns before he started studying he could have avoided having to pay HELP for many years to come.