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Deductions denied for ATO interest charges from July

General and Shortfall Interest Charges no longer tax deductible from July

IMPORTANT Parliament has recently passed legislation to deny tax deductions for General Interest Charges (GIC) and Shortfall Interest Charges (SIC) incurred on or after 1 July 2025.


What this means if you have existing debt:

  • ATO interest on overdue tax will no longer be deductible, making it a real cost rather than a tax-offset

  • If you currently have tax debt, the cost of keeping that debt will increase

  • Businesses using ATO payment plans may find them significantly more expensive from a tax perspective

  • Refinancing tax debt through a lender (where interest is still deductible) may present a smarter and more cost-effective option.


We recommend reviewing your tax position before 30 June to understand the potential impact and consider your options.


If you require further information or face difficulty in paying your ATO obligations, please contact Collins Hume for assistance on 02 6686 3000.

 

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