What You Need to Know
Director Penalty Notices (DPNs) are now being issued more frequently, putting personal liability squarely on company directors. On top of that, a major change is coming on 1 July 2025: the general interest charge (GIC) on overdue tax, currently running at 11.17%, will no longer be deductible.
That means, if you continue to carry ATO debt, you’ll not only face hefty interest but also lose the tax benefit of writing that interest off. By contrast, many commercial lenders offer rates around 7% for secured finance (for example, against your home). Borrowing to clear your ATO debt not only keeps the interest deductible beyond 1 July 2025 but also slashes the effective cost of borrowing, eases your monthly repayments and any funds paid down during the first 5 years can be redrawn.
A Quick Example Using $100,000 of Debt
| ATO Debt | ATO Rate | Est Interest Rate | Monthly Saving | Annual Saving |
| 11.17% | 7% | |||
| $ 100,000 | $931 | $583 | $347 | $4,170 |
The Additional Benefits of Switching to a Financier
Switching to a financier to manage your ATO liabilities can free up vital cashflow, improve your bottom line and restore your peace of mind. Better still, being on time with a commercial loan puts you in good standing, helping your credit profile for future funding. Rather than battling high GIC rates and inflexible ATO plans, you can replace them with a single, tax-deductible facility at a lower rate.
If the prospect of mounting ATO debt keeps you up at night, let’s talk today. Our expert team will work with you to understand your short-term and long-term goals before structuring your debt accordingly. We’ll show you how to reduce your effective interest rate, maximise your interest deductions after 1 July 2025, strengthen your relationship with the ATO.
All you’ll need to do then is sleep soundly knowing your business is on firmer financial footing.
