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.