General interest charge is 11.43% and, since 1 July 2025, no longer deductible. We refinance tax debt into deductible business finance, structured by the accountants who prepare your numbers.
What is ATO debt refinancing? ATO debt refinancing is the process of taking out commercial finance to pay out an outstanding tax liability in full, replacing daily-compounding general interest charge with a structured, deductible loan. Since GIC incurred on or after 1 July 2025 is no longer income tax deductible, the effective cost of carrying tax debt now sits well above most commercial lending rates, which has changed the arithmetic for many Australian businesses.
GIC is quoted at 11.43%, but because it is no longer deductible, the true pre-tax cost is higher. Enter your balance and tax rate to see the grossed-up figure and what refinancing would save.
Indicative only. Assumes simple annual interest for comparability; GIC actually compounds daily, so real ATO carrying costs will be marginally higher than shown. Does not include establishment fees, break costs, or facility charges. Not tax or credit advice. Figures should be confirmed against your integrated client account and a formal lender quote.
Carrying an ATO balance used to be an inconvenient but relatively cheap form of working capital. That is no longer the case.
General interest charge and shortfall interest charge incurred on or after 1 July 2025 are not deductible for income tax purposes. The same headline rate now costs materially more after tax, and interest on a commercial facility used to clear the liability generally remains deductible where the underlying debt was incurred in producing assessable income.
GIC is set quarterly by formula under section 8AAD of the Taxation Administration Act 1953 and has moved from 10.65% in the March 2026 quarter to 11.43% from 1 July 2026. It compounds daily on the full outstanding balance, including previously accrued interest.
The ATO issued 84,529 director penalty notices in 2024-25 covering $5.5 billion in liabilities, alongside garnishee notices, credit bureau disclosure, and wind-up applications. Payment arrangements pause enforcement but do not pause interest.
Recovery action escalates in a predictable sequence. Knowing which rung you are on determines how much time you have and which options remain open.
SMS, letters, and portal notifications. Interest is accruing but no formal action has commenced. This is the cheapest and widest point at which to refinance, because your credit file is still clean and the full lender panel remains available.
A negotiated plan pauses enforcement while you remain compliant with its terms, and prevents credit bureau disclosure. It does not pause GIC. Interest continues to compound daily at the full rate for the life of the arrangement, which is where most of the avoidable cost is quietly incurred.
Where the debt is at least $100,000, at least $100,000 is more than 90 days overdue, and the business is not effectively engaging, the ATO can report the debt to credit reporting bureaus. A notice of intent is issued first. Once disclosed, commercial credit files reflect the default and lender appetite narrows sharply.
A DPN transfers liability for unpaid PAYG withholding, GST, and superannuation guarantee charge to directors personally. A non-lockdown DPN allows 21 days to respond. A lockdown DPN, issued where lodgements were late, cannot be discharged by appointing an administrator. Refinancing at this stage is still possible but the window is short.
Garnishee notices direct your bank or debtors to pay the ATO directly. Statutory demands and wind-up applications follow. At this point the conversation is usually with an insolvency practitioner rather than a broker, which is precisely why the earlier rungs matter.
An ATO debt refinance is a tax problem before it is a lending problem. A broker without accounting capability is working from a number you gave them over the phone.
As registered tax agents we access your ATO portal directly. We see the actual balance, the components, the interest accrued, and any existing arrangement. No relying on a client estimate that turns out to be materially wrong at settlement.
Most lenders will not assess an application on stale financials or overdue BAS. We complete the outstanding lodgements and prepare the lending submission in parallel, rather than you waiting for one firm to finish before the other starts.
Before refinancing, we assess whether part of the GIC can be remitted. Where there are genuine grounds, a remission application can reduce the balance before you borrow against it, which is not a conversation a standalone broker is positioned to have.
The comparison that matters is after-tax cost of carry, not headline rate against headline rate. We model deductibility, entity, security, and cash flow impact so the decision rests on the real number rather than the advertised one.
No judgement and no lecture. Tax debt is a cash flow timing problem far more often than it is a business failure.
15 minutes. Where the balance sits, what enforcement has started, and what time you have.
Integrated client account, lodgement status, trading position. We work from source data, not estimates.
Two or three structures compared on true cost of carry, with the remission angle tested first.
We settle the facility, clear the balance, and put lodgement rhythm in place so it does not rebuild.
We would rather lose the deal than put you in a worse position. Three situations where we will say no.
If the tax debt accumulated because the business does not generate enough margin to meet its obligations, a loan does not fix that. It adds a second creditor to the same shortfall. In that situation the conversation belongs with a registered liquidator or small business restructuring practitioner, and we will refer you.
Converting an unsecured ATO liability into a mortgage over your home transfers the risk from the company to your family. Where serviceability is marginal, that trade is rarely worth making, whatever the interest saving looks like on paper.
If there are genuine grounds to seek remission of the interest, or the underlying assessment is disputable, borrowing to pay a balance that should be reduced is the wrong sequence. We test that first, every time, before any lending conversation begins.
Answers for directors and business owners carrying a tax balance.
Yes. Lenders across our panel provide finance specifically to clear ATO tax debt, including unsecured business loans, property-secured facilities, second mortgages, and caveat loans. Approval depends on your lodgements being current, the size of the debt relative to turnover, and your underlying revenue trend rather than the existence of the debt itself.
The ATO general interest charge is 11.43% per annum for the quarter beginning 1 July 2026, compounding daily. The shortfall interest charge is 7.43%. Because GIC incurred on or after 1 July 2025 is no longer income tax deductible, the effective pre-tax cost is substantially higher: around 15.2% for a base rate company and around 21.6% for an individual on the top marginal rate.
No. General interest charge and shortfall interest charge incurred on or after 1 July 2025 are not deductible for income tax purposes. Interest on a business loan used to pay out that tax debt generally remains deductible where the underlying liability was incurred in producing assessable income, which is the core reason refinancing now makes financial sense for many businesses. Deductibility of the replacement facility depends on your circumstances and should be confirmed with your tax adviser.
No. General interest charge continues to accrue at the full rate and compound daily throughout the life of an ATO payment arrangement. This is a common and expensive misunderstanding. A payment plan pauses enforcement action but does nothing to reduce the cost of carry, which is why the arithmetic often favours refinancing.
It can. Most lenders ask for an ATO portal statement or integrated client account during assessment, and an unaddressed tax debt is treated as an undisclosed liability. A debt being reported to credit bureaus will also appear on a commercial credit file. A documented payment arrangement or a refinance that clears the balance generally resolves the issue. See our home loans page for how we handle self-employed applications.
The ATO may disclose business tax debt to registered credit reporting bureaus where the entity has an ABN, the debt is at least $100,000, at least $100,000 of it is more than 90 days overdue, and the business is not effectively engaging with the ATO. A notice of intent is issued first, creating a window to act. Entering and maintaining a payment arrangement prevents disclosure.
A director penalty notice makes a company director personally liable for the company's unpaid PAYG withholding, GST, and superannuation guarantee charge. A non-lockdown DPN gives 21 days to act. A lockdown DPN applies where lodgements were not made on time and personal liability cannot be avoided by appointing an administrator. The ATO issued 84,529 director penalty notices in 2024-25 covering $5.5 billion in liabilities.
Bringing lodgements up to date is usually the first step, because most lenders will not assess an application without current financials and BAS. As chartered accountants we can complete outstanding lodgements and prepare the lending submission in parallel, which is faster than sequencing the work through separate firms.
Yes, in defined circumstances. The Commissioner has a discretion to remit GIC where the delay was caused by circumstances beyond your control, or where remission is otherwise fair and reasonable. Applications need to be evidenced properly rather than simply requested. We assess the remission position before any lending conversation, because reducing the balance first is cheaper than borrowing against it.
Refinancing is the wrong answer where the tax debt is a symptom of an unprofitable business rather than a timing problem. Converting an unsecured tax liability into secured debt over the family home transfers risk onto personal assets. If the business cannot service the new facility from trading cash flow, a small business restructure or formal insolvency advice is the more appropriate path.
National Accounts Lending is the finance broking division of National Accounts, a chartered accounting firm (CA ANZ) based at Level 2, 70 Hindmarsh Square, Adelaide SA 5000. We hold an Australian Credit Licence and are Xero Platinum Champion Partners.
The lending division is led by Michael Wilczynski CA, a chartered accountant and certified property valuer. Because we are also registered tax agents, we can access your ATO integrated client account, complete outstanding lodgements, and assess remission grounds before any lending decision is made.
We service clients across Australia from our Adelaide office, with all consultations available online or by phone. Our lender panel includes 70+ lenders with no geographic restrictions.
