- The cost of tax debt will likely increase from 1 July 2025. The Government has proposed that all taxpayers will no longer be able to claim a deduction for ATO interest charges in the 2025-2026 income year onwards.
- Taxpayers with outstanding debts or those currently negotiating repayment plans with the ATO need to consider the potential impact of these changes.
- The ATO interest rate applies to taxpayers who fail to pay their taxes on time. At present, the interest rate is 11.38%.
- Small businesses will be impacted by this measure as the interest rate are akin to an unsecured loan. There maybe other strategies to implement to minimise this measure.
- Contact Max Accountants if you want to discuss this further.
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