- The ATO’s general interest charge is the 90-day bank bill rate plus 7%, compounding daily.
- Since 1 July 2025, the general interest charge is no longer tax deductible.
- Lenders want to see lodgements up to date and a clear reason for the debt.
Why ATO debt is expensive
The ATO charges a general interest charge (GIC) on overdue tax. The rate is set each quarter at the 90-day bank bill rate plus 7% and it compounds daily. Since 1 July 2025, GIC is no longer tax deductible, which increases the real cost of leaving debt with the ATO.
The ATO can also report business tax debts over $100,000 that are more than 90 days overdue to credit reporting bureaus, where the business is not engaging with the ATO to manage the debt. This can affect your ability to get finance later.
Your options
- ATO payment plan: often the first step but GIC continues to apply and missed payments can cancel the plan.
- Secured refinance: borrowing against residential or commercial property usually has a lower rate than the other options.
- Unsecured business loan: can settle sooner and needs no property, but comes at a higher rate and usually for smaller amounts.
- Specialist and private lenders: short-term options for larger or more complex situations, often while a longer-term plan is put in place.
What lenders look for
- Tax returns and BAS lodged and up to date.
- A clear explanation of how the debt arose, such as rapid growth, a one-off event or a timing issue.
- Evidence the business is trading profitably now.
- A current ATO integrated client account statement and any payment plan history.
Work with your accountant
Your accountant can confirm the exact debt, bring lodgements up to date and help you plan for future tax. We can then match the business with a lender that refinances ATO debt and structure the loan around your cash flow.
Source: Australian Taxation Office. Last reviewed October 2026.
This article is general information only and does not take into account your objectives, financial situation or needs. It is not credit, tax or financial advice. Lender criteria and government schemes change, so check current details and seek advice before acting.