Owing the ATO Is About to Cost You Much More

What accountants and business owners need to act on before 1 July 2025

For years plenty of small and mid-sized businesses have treated an ATO payment plan like a handy line of credit. It kept the doors open when cash was tight and felt cheaper than a bank loan. That comfort blanket is about to vanish.

The rule that flips the maths

From 1 July 2025 you will no longer be able to claim a tax deduction on General Interest Charge (GIC) or Shortfall Interest Charge (SIC). In plain language, every dollar of ATO interest will come straight out of your after-tax profit.

Current GIC rate: 11.17 % p.a. and it compounds monthly.
Formula: 13-week Treasury Note rate + 8 % – higher than most commercial loans.
Example: A $10 000 tax debt racks up $1 100+ in interest each year.
On a 30 % tax rate you would need $1 300 in pre-tax profit just to cover that interest.

The ATO has also warned that waiving GIC will be rare. Hope is not a strategy.

What you, as an accountant, can do right now

You see your clients’ cash-flow worries before anyone else. Use that vantage point.

Check their ATO balance today. Most owners ignore the MyGov inbox until it hurts.
Explain the true cost. Show them how non-deductible interest erodes profit.
Explore refinance options. A business loan or cash-flow facility taken out before 30 June could turn that interest back into a deductible expense.

How we help at PPM Finance

We specialise in untangling ATO debt. Working side-by-side with you, we:

Review each client’s financial position and cash-flow timing.
Source finance that keeps interest deductible and affordable.
Align the funding structure with broader business goals.
Stay involved so the plan doesn’t unravel six months down the track.

The goal is simple: cut unnecessary interest, protect profit, and give owners one less thing to lose sleep over.

Time is short

Refinancing before 30 June 2025 could save thousands. Let’s talk now, run the numbers, and keep your clients on the front foot.

Ready to get started? Contact PPM Finance and we’ll map out the best option.

Disclaimer: This information is general in nature and does not constitute financial, tax, or legal advice. Always consider your circumstances and seek professional guidance before acting.