ATO interest to be non-deductible from 1 July 2025

Late last week (1 day before the government called the election), parliament passed law to (among other things) make ATO interest non-deductible from 1 July 2025.

Noting the current rate of interest charged by the ATO on outstanding debt is 11.17%, this law further increases the cost ATO debt and non-compliance.

Impacted taxpayers should consider their options in the lead up to 1 July 2025, which may include prioritising repayment of outstanding ATO debt or refinancing (noting the interest on refinanced ATO debt may still be tax deductible).

Please see the following link for details: https://www.ato.gov.au/about-ato/new-legislation/in-detail/businesses/deny-deductions-for-ato-interest-charges