There are a number of recent ATO announcements that ought to impact how your business manages their tax and compliance obligations.
Firstly, interest on overdue tax debts, known as General Interest Charges (GIC), are no longer tax deductible. In the past, businesses could offset this cost against their taxable income and therefore reduce their Income Tax liability. Now, carrying ATO debt will be more expensive so prompt payment or short payment plans will be more important than ever before to manage a business’s cash flow.
Further, from March 2025, small businesses that have a history of failing to comply with quarterly activity statement lodgement obligations may be changed to monthly reporting to ensure the ATO is paid on a more frequent basis. We recommend businesses review their lodgement activity to ensure they are not forced into a more stricter lodgement program.
Finally, the 2025 Federal Budget has allocated $999 million to expand ATO compliance programs. In practice this means more data matching, audits and scrutiny on small business reporting and as such we recommend your business consider taking out audit insurance to assist with the cost you may incur as a result going through an audit with a regulatory body.
Please contact Waterford Accountants if your business needs help managing these ATO changes.