Reminder: ATO Interest Charges No Longer Tax Deductible from 1 July 2025

Written By Debbie Grace

We’d like to remind you of an important change coming into effect from 1 July 2025 that may impact your tax deductions.

From this date, interest charges imposed by the ATO will no longer be tax deductible — even if the underlying tax debt relates to an earlier income year. This includes interest on income tax, GST, fringe benefits tax, and other ATO-administered liabilities.

Previously, many businesses and individuals could claim a tax deduction for interest charged by the ATO. However, under the new rules, any ATO interest incurred on or after 1 July 2025 will not be deductible, regardless of when the debt originated.

What You Can Do

  • Consider reviewing and refinancing any existing tax debts

  • Speak to us about payment plans or other cash flow strategies to expediate payment of ATO debts.

Please don’t hesitate to reach out to our team if you’d like assistance or advice specific to your circumstances.

Debbie Grace
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