GIC Tax Deduction Is Ending – Time to Rethink Your ATO Debt Strategy
Liz Gibbs • May 14, 2025

GIC Tax Deduction Is Ending – Time to Rethink Your ATO Debt Strategy

From 1 July 2025, the General Interest Charge (GIC) on unpaid ATO debts will no longer be tax-deductible. That means holding onto tax debt could cost you more than you think, especially if you’re counting on the deduction to ease the burden.


So what can you do? Here’s a breakdown of smart moves depending on your situation:


If You’re a Business

Carrying tax debt past 1 July 2025? It’s time to review your options. Instead of letting GIC pile up, consider business loan solutions to pay out your ATO debt now.

Why?

• Interest on business loans is generally still tax-deductible

• You’ll likely pay a lower interest rate than GIC

• Consolidating debt can simplify your cash flow and budgeting

Speak with your advisor or lender to explore low-rate financing options before the deductibility window closes.


If You’re an Individual

Got a personal ATO debt? You’re not off the hook either. From July next year, the interest on that debt won’t help at tax time.

What to consider:

• Refinancing the debt into a personal loan with a lower interest rate

• Setting up a repayment plan now to avoid GIC from growing

• Reviewing your budget and seeking financial advice early

The sooner you act, the better the outcome.


Don’t Wait Until It’s Too Late

With the GIC deduction ending, it’s crucial to take action before 30 June 2025. Talk to your financial advisor or lender to explore your options, reduce your tax impact, and keep your finances on track.


Need help assessing your situation? We’re here to help.


Need Help with your Business, Bookkeeping, Tax or SMSF requirements?

If you would like a little help, please get in touch with us for assistance. We can help with your business, bookkeeping, tax and SMSF requirements.


Please also note that many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances. Should you have any further questions, please get in touch with us for assistance with your SMSF, business, bookkeeping and tax requirements. All rights reserved. Brought to you by RGA Business and Tax Accountants. Liability Limited by a scheme approved under Professional Standards Legislation. 


Truck Drivers meal expenses

Truck driver entitled to claim meal expenses

By Liz Gibbs • May 13, 2025
In a recent decision, the Administrative Review Tribunal ('ART') upheld a truck driver's claim for meal expenses, notwithstanding that those expenses had not been fully substantiated.
work from home

Increase to rate for working from home running expenses from 1 July 2024

By Liz Gibbs • May 12, 2025
The ATO has updated its guidelines for claiming work-from-home expenses, making things a bit simpler for many people.
Clearance Certificates

How to Avoid Common CGT Mistakes

By Liz Gibbs • May 11, 2025
Just because you have a clearance certificate, it doesn’t mean you’re off the hook for other CGT (Capital Gains Tax) obligations.
minimum pension

Friendly Reminder: Minimum Pension Drawdown

By Liz Gibbs • May 9, 2025
If you’re receiving an account-based pension from your SMSF, there’s a minimum amount you need to withdraw each year. This amount is worked out using a percentage based on your age and your pension account balance as at 1 July 2024-or on a pro-rata basis if you started your pension partway through the 2025 financial year.
Micro habits big improvements

Tiny Habits, Big Wins: How Small Changes Can Make a Huge Difference

By Liz Gibbs • May 8, 2025
Let’s chat about micro habits—those small, super-manageable actions that can actually lead to some pretty big improvements in how we manage our time and priorities. If you’ve ever left a workshop full of great ideas only to forget them a week later, you’re not alone. That’s where micro habits come in. They’re easy to stick with and surprisingly powerful.
Stay on top of your finances

Managing Your Day-to-Day Business Transactions

By Liz Gibbs • May 8, 2025
Running a small business can get hectic, but staying on top of your finances doesn’t have to be overwhelming. The ATO has a few helpful tips that can make managing your tax obligations a lot smoother:
CGT small business concessions

ART rejects taxpayer's claim for CGT small business relief

By Liz Gibbs • May 2, 2025
In a recent decision, the Administrative Review Tribunal ('ART') held that a taxpayer was not entitled to the CGT small business concessions on the disposal of his interests in some farm land.

Taxable payments annual report lodgment reminder

By Liz Gibbs • May 2, 2025
Businesses that pay contractors for 'Taxable payments reporting system services' may need to lodge a 'Taxable payments annual report' ('TPAR') by 28 August each year.
Retirement

Threshold for tax-free retirement super increases

By Liz Gibbs • May 2, 2025
The amount of money that can be transferred to a tax-free retirement account will increase to $2m on 1 July 2025.
Key tax policies

2025 Federal Election: Key Tax Policies Snapshot

By Liz Gibbs • May 2, 2025
With the 2025 Federal Election approaching, tax policy is a central topic of debate. Here’s a concise comparison of some the major parties’ key tax proposals to help you stay informed when Australia goes to the polls on 3 May 2025:
More Posts