ATO Debt Getting Bigger? It Might Be Time to Look at Your Options

ATO debt has become a serious issue for Australian businesses.

The ATO recently confirmed that collectable tax debt has climbed above $50 billion, while calls to the Small Business Debt Helpline increased 21% last year.

Even more telling, 64% of the Helpline’s cases in 2025 involved ATO debt, with the service assisting businesses carrying $429 million in tax debts. The median ATO debt among those cases was around $70,000.

And carrying that debt has become more expensive.

Since 1 July 2025, General Interest Charge (GIC) incurred on outstanding ATO debt is no longer tax deductible. GIC also continues to compound daily, meaning an outstanding balance can keep growing while a business is trying to manage everything else.

The ATO has also made it clear that reducing unpaid tax debt is a priority, and businesses that repeatedly ignore outstanding obligations can expect collection activity to escalate.

So, what can businesses do?

Depending on the business, refinancing or business finance could also provide an opportunity to clear or restructure tax debt, spread repayments more appropriately and free up valuable cash flow.

That could involve business lending, property-backed finance, refinancing existing facilities or consolidating several debts into a more manageable structure.

It isn’t about simply swapping one debt for another. It’s about looking at the cost, repayment structure and impact on your cash flow and determining whether there is a better way forward.

If your business has an ATO balance that’s becoming difficult to manage, don’t leave it sitting in the too-hard basket.

Talk to Loan Nerds. We can look at your situation, assess the finance options available and help you work towards getting your business cash flow back under control.