ATO interest charges may no longer be deductible

The Australian Government has introduced legislation that, if passed, will remove the tax deductibility of General Interest Charges (GIC) and Shortfall Interest Charges (SIC) from 1 July 2025.

What does this mean for you?

Currently, businesses and individuals can claim deductions for ATO interest charges related to overdue tax debts or tax shortfalls. If this proposal becomes law:

✅ Late tax payments will become more expensive – as interest charges will no longer provide any tax benefit.
✅ Cash flow planning will be even more crucial – ensuring you have funds available to meet tax obligations on time will help avoid unnecessary costs.
✅ Outstanding ATO debts may be more costly to carry – now is a good time to review your tax position and consider early repayments or structured payment plans.

What should you do next?

While this law is not yet final, it’s a good idea to plan ahead. Here are some proactive steps to take:

📌 Review your cash flow: Ensure you have funds set aside for upcoming tax payments to avoid late fees.
📌 Check your ATO balances: If you have outstanding tax debts, consider discussing early repayment or a structured payment plan with the ATO.
📌 Stay informed: We will keep you updated on any developments regarding this proposal.

Stay ahead of the game and avoid unnecessary costs!