053. ATO Debt changes for July 2025
from Money Mindset Hosted by MarK Perkich
https://cabpropertywealth.com.au/ From July 1, 2025, the General Interest Charge (GIC) and Shortfall Interest Charge (SIC) levied by the ATO will no longer be tax-deductible. This means that if a self-employed client (or any taxpayer) incurs these charges on or after that date, they will effectively pay the full, unreduced cost of the interest, which is currently around 11.17% per annum for GIC, compounding daily.- THIS IS GENERAL INFORMATION AND NOT SPECIFIC TO INDIVIDUAL SITUATIONS. CONSULT AND EXPERT(S) BEFORE CONSIDERING ANY INFORMATION ON THIS PODCAST. What this means for self-employed clients: Increased real cost of late payments: Greater incentive for timely payment: Impact on cash flow management: No "grandfathering": What self-employed clients (and their advisors) should do: Prioritise clearing ATO debt before July 1, 2025: Review existing ATO payment plans: Explore alternative financing options: Strengthen cash flow management: Accurate forecasting: Set aside funds: Invoice promptly and chase debtors Manage expenses tightly: Proactive engagement with the ATO: agent or accountant: In essence, the message is clear: being late with ATO payments will become significantly more expensive from July 1, 2025. Proactive management and seeking alternative financing are now more important than ever for self-employed individuals and businesses.
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