According to data from the Loan Market Group (LMG), there has been a 486% rise in business finance inquiries related to tax debt in the 2024-25 financial year compared to the previous year. This surge indicates a proactive approach by business owners to restructure or refinance their tax debts before the new rules take effect.
Andrew Vitucci, a finance broker at My Lending Specialist, noted a shift in client behaviour due to the impending changes. He highlighted that while ATO debt has always been a challenge for small business owners, the ability to claim interest as a deduction previously provided some relief. With this option now removed, business owners are exploring other avenues to manage their tax obligations effectively.
For SMEs navigating these changes, it's essential to:
- Review current tax debt and assess the impact of the non-deductibility of interest charges.
- Explore refinancing options with financial institutions that offer favourable terms.
- Consult with financial advisors to develop strategies for efficient tax debt management.
By taking proactive steps, small business owners can mitigate the financial impact of the ATO's new regulations and ensure the continued stability and growth of their enterprises.
