Date posted: 19/04/2024

S4E5: Cost of tax debt to soar

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Do any of your business clients owe money to the Australian Tax Office? There is more than $50B of collectable tax debt to collect. 65% relates to small business so the answer is likely YES. There’s a major change coming on interest deductibility which CA ANZ members need to know about. From July 1, 2025, the general interest charge and the shortfall interest charge will become non-deductible, increasing the cost of tax debt. It means businesses now have a strong incentive to obtain finance from banks instead of sitting on tax debt and they’ll be looking to accountants for help. Senior Tax Advocate Susan Franks CA joins host Gillian Bowen to go through what’s changing, what accountants can do to help their clients and where to find resources.

“By making the general interest charge non-deductible, the government has effectively increased the cost of tax debt.”
“Accountants needs to make their clients aware that there is going to be an increase in the cost of having tax debt and once the clients realise that, it’s likely to create a lot of work for our members.”
Susan Franks CA, CA ANZ Senior Tax Advocate

Resources referred to in the episode:

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