Late on ATO payments? Why delays are more costly now

When a taxpayer is late paying their tax debt, the ATO has the option to charge general interest charge (GIC). This is currently charged at 10.61% pa. As of 1 July 2025, GIC is not tax deductible.           

In recent years, WLF and our clients have had a good relationship with the ATO. The COVID period saw the ATO relax a little on lodgement and payment expectations, and this assisted us and you, our clients, to manage obligations and, for the most part, recover from that time and meet tax obligations in a timely manner. When payment of tax debts was difficult, requests for payment plans and remission of general interest charge (GIC) were dealt with by the ATO with fairness and some compassion. 

We have recently entered a new era in dealing with the ATO. Whilst we would still claim a good relationship with the ATO, the Commissioner of Taxation, Rob Heferen, has made it clear that the remit of the ATO is to collect the tax debt that is due to the government. We have seen a more aggressive approach to debt collection. We have also experienced rejections of applications for remission of GIC which in our experience would, in previous years, have been allowed.  

Clients should therefore be aware that late payments will likely incur GIC, and it seems only extraordinary circumstances are likely to result in a successful remission application. This general attitude from the ATO means that we are less likely to be successful when seeking remission. In addition, a decision from the ATO on a GIC remission request is final, there is no avenue for review. 

Any application for GIC remission draws attention to you as a taxpayer. We will therefore want to discuss with you the chances of success of an application prior to making a request on your behalf. We may advise that the request is not worth doing if circumstances are such that the ATO would not them consider extraordinary.  

If you are experiencing difficulty in meeting your ATO obligations, we encourage you to engage with us as soon as possible. While the landscape has changed, there are still options available if we engage early with the ATO on issues. 

Disclaimer

This information does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness, having regard to these factors before acting on it. This information may contain material provided by third parties derived from sources believed to be accurate at its issue date. While such material is published with necessary permission, WLF Accounting & Advisory and its related entities, does not accept any responsibility for the accuracy or completeness of, or endorses any such material. Except where contrary to law, we intend by this notice to exclude liability for this material.  You should seek specific tax advice from us as your registered tax agent or registered tax (financial) adviser.