- In Brief
- Posts
- In Brief: In June
In Brief: In June
What you need to know on tax debt this month
Editor
June 11, 2025
FOREWORD
Tax Debt Pressure Ramps Up
It’s June — tax time is upon us again. But tax debt isn’t just a June issue; it’s a challenge businesses face year-round.
From 1 July, interest on ATO tax debt — including the General Interest Charge (GIC) and Shortfall Interest Charge (SIC) — will no longer be tax-deductible. While this technical change increases the cost of carrying tax debt, urgency shouldn’t lead to rushed decisions.
For many businesses, the smartest approach remains managing debt within the business, preserving remission opportunities, and avoiding personal financial risk.
In this edition, we explain what’s changed, what really matters, and why clear-headed, strategic advice is more important than ever — plus highlights from the latest quarterly update on the state of tax debt.
TL;DR: Tax debt costs are rising — but a considered plan beats rushed fixes.
QUOTE OF THE MONTH
“There are no problems we cannot solve together, and very few we can solve alone.”
— Lyndon B. Johnson
SPOTLIGHT ON
THE STATE OF TAX DEBT: QUARTERLY UPDATE
For the latest State of Tax Debt update, Tax Assure directors Michael Moon and Olga Koskie break down what’s happening with tax debt — drawing on insights from the wider Tax Assure team.
The bottom line: The ATO is laser-focused on chasing down the $53 billion-plus tax debt, using automation and ramped-up recovery tactics. Everything the tax office does supports this goal.
Highlights:
Engage early and actively — Simply making voluntary payments or informal contact isn’t enough. An enforceable payment plan is the only way to stop recovery action and protect the business.
Lodgement is critical — Late or missing returns worsen compliance history and reduce chances of interest remission. Don’t assume no news means no action; the ATO often works behind the scenes.
Recovery is automated and accelerating — Warning letters like orange or red letters are less common; recovery actions may come without notice.
Persistence matters — If a payment plan application is declined, keep trying. Many clients succeed on the second or third attempt with the right approach.
No one-size-fits-all solution — Every business is unique. Tailored strategies considering funding, structures, director loans, and more are essential.
Avoid quick fixes — Options like Small Business Restructuring may seem attractive but have hidden downsides, including damaging future repayment options or increasing costs.
Prepare for ongoing recovery activity — The current collection environment is likely to continue for at least the next 12 months.
Practical tips for advisors:
Review clients’ full compliance history — including lodged returns, cancelled arrangements, and late payments — not just what’s visible on portals.
Encourage clients to get current with lodgements quickly to maintain remission eligibility and avoid legal penalties.
Help clients understand that ‘active engagement’ means being in a formal payment plan — not just making payments or phone calls.
Advise clients to keep communication open with the ATO and avoid burying their heads in the sand.
If a payment plan is refused, seek specialist help and try again rather than giving up.
Educate clients about the risks of director penalties and personal liability for unpaid debts.
WHAT YOU NEED TO KNOW
1. Interest Deductions Ending — Practical Tips For Advisors
From 1 July, GIC and SIC will no longer be deductible, making ATO debt more expensive.
Implications for Advisors:
Reframe debt conversations
Encourage early, active engagement with the ATO
▶️ For a practical discussion on what this means and what advisors need to know, watch this video with Olga Koskie from Tax Assure and Shane Deane from Dye & Co.
2. Sole Traders Can’t Access SBR — But They’re Not Stuck
A quick housekeeping note from the Tax Assure advisory team following a spike in enquiries from sole traders about Small Business Restructuring (SBR). Remember: SBR applies only to companies. That said, informal pathways remain important options worth exploring.
Implications for Advisors:
Encourage early engagement
Tailor informal payment and remission strategies
Why do Aussie construction companies face some of the toughest ATO tax debts?According to a recent CreditorWatch report, construction businesses represent over 20% of all ATO tax debts exceeding $100,000*.
Tax Assure Director Michael Moon recently spoke with David Lopez from Balance My Books, who estimates that around 75% of his construction clients carry tax debt.
Implications for Advisors:
Don’t assume future work will resolve the issue
Act early to preserve capital
Keep debt discussions open
4. Why Advisors Must Work in Parallel
Clients don’t experience issues in silos — and their advisors shouldn’t work in them either.
Implications for Advisors:
Align early across tax, legal, and funding professionals
Coordinate advice for better outcomes
INSIGHTS FROM THE TEAM
Tax Assure directors Michael Moon and Olga Koskie share their perspectives.
Seeing the Full Picture: Why Strategic Tax Debt Management Matters More Than Ever
Tax debt is rarely an isolated issue. Behind every tax debt, there are often other pressures building — from cash flow challenges to operational hurdles and external market factors.
At Tax Assure, directors Olga Koskie and Michael Moon emphasise the importance of stepping back to see the bigger picture. Acting early with coordinated advice across tax, legal, and funding experts is critical to navigating these challenges successfully.
“Falling behind on tax debt is rarely the whole story. It’s often where other pressures surface. When clients ignore it, they’re usually overwhelmed by other issues. By working in parallel, we help them step back, see clearly — and act early.”
— Olga Koskie, Director, Tax Assure
The stakes have grown with the increasing volume of tax debt businesses are carrying and the ATO’s firm stance on recovery. The message is clear: tax debt is not a cheap source of finance, and ignoring it now is more costly than ever.
“Looking at the data, the cost of inaction has risen rapidly. Businesses must weigh their funding and repayment options with real clarity, not just rush to fix things quickly.”
— Michael Moon, Director, Tax Assure
What Advisors Should Keep in Mind:
Reframe tax debt as a warning sign, not just a problem — dig deeper to uncover the underlying business issues
Encourage early, active engagement — with the ATO and across advisory teams (tax, legal, funding)
Work in parallel — coordinated advice leads to clearer, faster, and better outcomes that protect both the business and its directors
Don’t underestimate the impact of late or missing lodgements — they reduce the chances of both an optimal payment arrangement and interest remission
The bottom line? Tax debt isn’t just about numbers. It’s a complex business issue that requires deliberate, well-informed decisions and the right team working together.
EVENTS: WHAT’S ON
Tax Debt — A Better View (Melbourne)
We recently brought together advisors and specialists across tax, legal, and insolvency at our Melbourne session of Tax Debt: A Better View, co-hosted with Aptum and Dye & Co Insolvency & Turnaround.
The key message? Better advice starts with a full picture.
“These sessions help cut through the pub talk and confusion,” said Olga Koskie, Director at Tax Assure. “They strengthen networks and help advisors see clearly what a business really needs — and how to act.”
When the right specialists work together, clients get clearer advice, earlier intervention, and better outcomes.
📍 To register your interest for future events, including the upcoming Brisbane edition, sign up here.
PUTTING IT IN PRACTICE
Action List For You and Your Clients
Action time: Because tax—and now interest—wait for no one!
More than 26,000 DPNs were issued last year — many without prior warning. Here’s 3 things you can do to not be caught out.
Steps to Protect Directors from Unexpected Penalty Notices
Ensure ASIC and ATO contact details are up to date
Lodge returns even if debts can’t be paid
Act early to protect directors from personal exposure
FINAL THOUGHTS
The recent changes aren’t a reason to panic — they’re a call for clear thinking and considered action.
For most businesses, tax debt is a challenge to manage, not a crisis.
Rushed decisions can increase risk. Paying off debt quickly might seem easiest — but it’s not always the best move.
There’s no one-size-fits-all solution. The best results come from slowing down, weighing options carefully, and involving the right people early.
If you have questions or want to explore your options, the team at Tax Assure is here to help. Feel free to reach out anytime or book a consultation.
ICYMI NEW CONTENT & RESOURCES
THAT’S A WRAP FOR JUNE
Got feedback? We’d love to know what landed—or what missed. Just hit reply and share your thoughts!
*According to CreditorWatch’s March 2024 Business Risk Index, nearly 24% of businesses with tax debt defaults over $100,000 are in the construction sector.
Disclaimer: All figures referenced are indicative only. Interest remission is subject to ATO discretion and depends on meeting the criteria outlined in its practice statements. Outcomes vary case by case. The information provided is for general purposes only and should not be considered as specific financial, tax, or legal advice. We recommend consulting with a qualified tax professional or advisor to discuss your specific circumstances before making any decisions or engaging with the Tax Assure team directly.