As announced in the 2023-24 budget, starting 1 July 2025, it has been proposed that businesses will no longer be able to claim deductions for General Interest Charges (GIC) and shortfall interest charges (SIC). While this policy is yet to be legislated, businesses need to plan ahead in the event the policy is passed.
This potential upcoming change could have a significant impact on your business’s financial strategy. If this policy is legislated, now is the perfect time to consider replacing your tax debt with a commercial loan that provides valuable tax-deductible interest benefits. In addition, commercial loans allow for longer terms thus reducing the financial burden on business to repay the debt.
At Equipfin, we specialise in helping businesses like yours navigate financial challenges. If your business is struggling with tax debt, we can review various solutions to help restructure that debt into more manageable and beneficial options.
Here’s How We Can Help:
- Asset Finance: If your business owns vehicles, machinery, or other assets, we can help you raise funds against their value, converting your tax debt into a more flexible commercial facility.
- Business Loans: We can assist in securing a business loan that allows you to pay off your tax debt and potentially access a more favourable interest rate and term, improving your financial situation.
- Working Capital Facilities: From overdrafts to revolving credit facilities, we can help ensure you have the funds needed to ease your cash flow while paying down your tax debt.
- Invoice Financing: If your business consistently has outstanding invoices, we can explore invoice funding options, turning your receivables into immediate cash to pay down tax debt.
Why Act Now?
With the upcoming changes to tax deductions, restructuring your tax debt into a commercial loan will help you take advantage of the tax-deductible interest. By acting sooner rather than later, you can ensure your business remains financially agile and well-positioned for growth.
Don’t wait until the changes take effect. Contact us today to discuss how we can help restructure your tax debt and find a financial solution that works best for your business.
Disclaimer: Please note that Equipfin are not accountants or tax specialists, and customers should always seek advice from their accountants before making any decisions. The above information is publicly available and can be found on the ATO website: www.ato.gov.au/about-ato/new-legislation/in-detail/businesses/deny-deductions-for-ato-interest-charges
