Taxpayers could be on hook for ATO tax bill from bungled accounting

Key points

• Tasmanian state service employees who took voluntary redundancies over the past decade may face unexpected tax bills.
• The government incorrectly classified the payouts as tax-free genuine redundancies, but the ATO says voluntary redundancies should be taxed as employment termination payments.
• The government has told the ATO about the error and says it will cover any financial implications, so former employees will not be affected.