Latest News

Hot Issues
spacer
2025 Tax Planning Guide Part 2
spacer
From 1 July 2025 ATO Interest is no longer tax deductible
spacer
SME confidence and conditions see uptick over Q1 2025, survey reveals
spacer
Depreciation expert urges property investors to leverage tax depreciation
spacer
Buy a business
spacer
Upskilling and self-education costs
spacer
How secure is your super account?
spacer
Freshwater Resources by Country 2025
spacer
Why Might a Lease Dispute Occur?
spacer
2025 Tax Planning Guide Part 1
spacer
$20,000 instant asset write-off
spacer
New Bunnings scam warning
spacer
The Largest Empires in the World's History
spacer
All the documents, fact sheets and downloads to do with this year’s 2025-26 Federal Budget
spacer
Winners and Losers - Federal Budget 2025-26
spacer
Building Australia's future and Budget Priorities
spacer
ATO outlines focus areas for SMSF auditor compliance in 2025
spacer
ATO to push non-compliant businesses to monthly GST reporting
spacer
ASIC pledges to continue online scam blitz
spacer
Tax Office puts contractors on notice over misreporting of income
spacer
Tax planning tips for 2024-2025
spacer
What does the proposed changes to HELP loans mean?
spacer
Vacant Residential Land Tax
spacer
The Most Held Currencies in the World | 1850-2024
spacer
Salary sacrifice and your super
spacer
5 Clauses Tenants Should Look For When Reviewing a Lease
spacer
ASIC continues crackdown on dodgy directors
spacer
Vehicle association calls for stricter definitions with luxury car tax changes
spacer
Government to push ahead with GIC deduction changes
spacer
Exploring compassionate early release of super
spacer
Have you considered spouse contribution splitting?
Article archive
spacer
Quarter 1 January - March 2025
spacer
Quarter 4 October - December 2024
spacer
Quarter 3 July - September 2024
spacer
Quarter 2 April - June 2024
spacer
Quarter 1 January - March 2024
spacer
Quarter 4 October - December 2023
spacer
Quarter 3 July - September 2023
spacer
Quarter 2 April - June 2023
spacer
Quarter 1 January - March 2023
spacer
Quarter 4 October - December 2022
ATO interest charges soar to highest level since GFC

The general and shortfall rates for late tax payments rise for the eighth quarter in a row.

 

 

.

The ATO has raised its general interest charge (GIC) rate and shortfall interest charge (SIC) rates for the eighth quarter in a row with both up by 0.25 per cent to levels unseen since the tail end of the GFC in 2012. 

The GIC annual rate for the October to December quarter rises to 11.15 per cent while the SIC annual rate goes up to 7.15 per cent. The second quarter of 2012 was the last time that either rate was higher.

The ATO said GIC was applied to late payment of most taxes including income tax, FBT, GST and PAYG, as well as excessive shortfalls in incorrectly varied or estimated instalments.

 

The rate compounded daily and was calculated using the RBA’s 90-day Bank Accepted Bill rate plus 7 per cent. Taxpayers were notified when it applied and

 

“You can claim a tax deduction for GIC in the year that it's incurred,” the office said. “On the other hand, you're required to disclose remitted GIC in the year the remission occurs. This applies if you claimed a deduction (or can still claim a deduction) for the GIC incurred.”

 

Taxpayers could apply for remission of GIC in part or in full.

“We may remit the GIC if there are extenuating circumstances, such as:

  • The delay in payment being not due to you (for example: natural disasters, industrial action, the unforeseen collapse of a major debtor or the sudden ill health of key personnel) and you took reasonable action to reduce the delay.
  • The delay in payment being due to you but you took reasonable action to reduce the delay, while it is also fair and reasonable to remit.
  • Payment of the full amount of GIC would result in serious financial hardship for you.”

The lower SIC rate was introduced in 2005 and applied to amended income tax assessments prior to the period of amendment. It was also calculated on a daily compounding basis using the 90-day Bank Accepted Bill rate plus 3 per cent.

“Generally, the SIC applies from the due date for payment of the earlier, understated assessment until the day before we issue the notice of amended assessment,” the ATO said. “The amended assessment or tax shortfall and the related SIC are due 24 days after the amended assessment is issued.”

Both rates were updated quarterly and generally announced two weeks before the start of that quarter.

 

 

 

 

Philip King
14 September 2023
accountantsdaily.com.au

Liability limited by a Scheme approved under Professional Standards Legislation.
© O'Brien and Partners 2024 - All Rights Reserved | 333 Canterbury Road, Canterbury VIC 3126 | Tel: 03 9509 3911 Site by Acctweb