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From July 1, 2025, the General Interest Charge (GIC) and Shortfall Interest Charge (SIC) levied by the ATO will no longer be tax-deductible. This means that if a self-employed client (or any taxpayer) incurs these charges on or after that date, they will effectively pay the full, unreduced cost of the interest, which is currently around 11.17% per annum for GIC, compounding daily.- THIS IS GENERAL INFORMATION AND NOT SPECIFIC TO INDIVIDUAL SITUATIONS. CONSULT AND EXPERT(S) BEFORE CONSIDERING ANY INFORMATION ON THIS PODCAST.

What this means for self-employed clients:

• Increased real cost of late payments:
• Greater incentive for timely payment:
• Impact on cash flow management:
• No "grandfathering":

What self-employed clients (and their advisors) should do:

1. Prioritise clearing ATO debt before July 1, 2025:
2. Review existing ATO payment plans:
3. Explore alternative financing options:
4. Strengthen cash flow management:

• Accurate forecasting:
• Set aside funds:
• Invoice promptly and chase debtors
• Manage expenses tightly:

1. Proactive engagement with the ATO:
2. agent or accountant:

In essence, the message is clear: being late with ATO payments will become significantly more expensive from July 1, 2025. Proactive management and seeking alternative financing are now more important than ever for self-employed individuals and businesses.

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