As of 1 July 2025 tax debt has changed and for many medical practices the impact could be substantial.
The Australian Tax Office (ATO) will no longer allow the interest charged on overdue tax debt to be tax deductible, including General Interest Charge (GIC) and Shortfall Interest Charge (SIC). With ATO interest rates currently sitting above 11% p.a., this means carrying tax debt is about to get a lot more expensive, and it could place real pressure on both practice and personal cash flow.
In the past, the deductibility of ATO interest softened the blow of running a tax debt. From July 2025, that buffer is gone, effectively making ATO payment plans one of the more costly finance options available to medical practices.
Banks and lenders tend to treat unpaid tax as a warning sign. If you’re carrying ATO debt, and that debt is receiving interest, you may find it harder to secure finance for property, practice improvements, or new equipment.
With interest continuing to accrue the cost of holding ATO debt can stack up quickly, adding strain at a time when operating costs are already on the rise.
Refinancing tax liabilities into a more manageable and tax‑effective structure can reduce financial pressure.
Some of the benefits include:
This allows you to take control of repayments, minimise unnecessary expense, and preserve cash for what matters most: running and growing your practice.
Our specialist medical accounting team can work with you to:
Our goal is simple: to ensure you’re well‑prepared and never caught off guard by your commitment to the ATO.
If you’re currently carrying ATO tax debt or just want to understand how these changes are impacting your practice, it’s worth having a conversation now. A quick review could save thousands in unnecessary interest and late lodgement penalties.