ATO GIC Changes 2025: Sempers Smart Solutions to Save Clients

From 30 June 2025, the Australian Taxation Office (ATO) will remove the tax deductibility of its General Interest Charge (GIC), which currently stands at 11.17% per annum. This change will have a significant financial impact on businesses with outstanding tax liabilities, increasing costs and putting pressure on cashflow and overall business health.

Small and medium-sized enterprises (SMEs), particularly those in industries like construction and property development where income can be irregular, are expected to feel this impact most. These businesses often rely on deferring payments to manage cashflow, but without the ability to deduct interest paid on late tax debts, the real cost will rise sharply.

What This Means for Businesses

Until now, businesses could claim interest charged by the tax office on overdue payments—specifically the GIC—as a tax deduction. This reduced the cost of carrying tax debt and made deferring payments a more manageable strategy. With the upcoming change, that benefit will be lost.

The GIC is already a high penalty rate, and without the tax deduction, relying on the tax office as a fallback lender will become much more expensive. This will reduce profitability, restrict working capital, and increase pressure on daily operations.

For businesses that have used deferring tax payments as a cashflow tool, this marks a crucial turning point that calls for alternative finance solutions.

Smarter Finance with Semper Lending Solutions

Advisers—brokers, accountants, and financial planners—should guide clients toward better funding options. Semper lending solutions provide flexible commercial finance designed to suit business cashflow cycles and growth plans.

Unlike the GIC, Semper’s finance options often have lower rates and maintain the tax deductibility of interest costs. Refinancing tax liabilities through Semper enables businesses to:

• Avoid high-interest penalties

• Protect tax benefits on finance expenses

• Free up working capital for operations

• Minimise damage to their tax payment history

Whether managing short-term liabilities or smoothing cashflow during development phases, Semper’s lending is built to support diverse business needs.

Timing Is Critical

While the tax deductibility removal takes effect 30 June 2025, businesses with existing or imminent tax debts should act now. Early refinancing with Semper protects cash reserves and strengthens financial health before the new rules come into force.

This proactive step ensures companies avoid unexpected costs and maintain better control over their finances.

Why Semper?

Semper lending solutions combine industry knowledge with tailored service. Their experts understand the implications of the ATO’s policy change and work closely with advisers and clients to deliver timely, flexible, and cost-effective finance alternatives.

With competitive rates and customised lending structures, Semper offers a reliable path away from expensive tax debt toward healthier financial management.

Conclusion

The removal of tax deductibility on GIC interest will change how businesses manage tax debts. Continuing to defer payments without better financing options will lead to higher costs and cashflow challenges.

Semper lending solutions offer a practical, flexible, and cost-effective way forward. Advisers and businesses should explore these options now to reduce risk, preserve cashflow, and position for growth before the 30 June 2025 deadline.

Contact Semper today for expert guidance and personalised finance solutions to navigate this important change.